Mr. MAYHUGH. What I am getting at is this, that the applicant for insurance ought to be able to go to one agency and get the job done there. I think we ought to make it as attractive as we can. If he has to go to several agencies to complete his application, I am afraid a good many of them will stay out. I don't know anything about the law on that, but it seems to me like it could be accomplished with the county committee, and I understand it is to be administered through the county committee.

Senator POPE. Yes; that is the idea.

Mr. MAYHUGH. Now, we have another thing and that is relative to adjustments and payments of claims, and I am thinking again about the board in its interpretation there and its administration there. The farmer might have a total loss. It might occur early in the season and the board might say "Well, that wheat in March wasn't worth as much as it would have been, more fully developed, in May”, and they might naturally talk about penalizing the farmer somewhat through insurance adjustment. On the other hand, they might say— and that may be a good practice, I don't know, about hail insurance. Hail insurance has turned out to be very high down there and we do not use it so much. It may be decided, if the farmer doesn't harvest, that the charge of the harvesting will be deducted in his settlement. Senator POPE. Just a moment. We have a session of the Senate today. I do not wish to hold these farmers here any longer than necessary.

Oh, I am just advised that these farmers have another appointment. When will it be convenient to resume the hearing?

Senator MCGILL. I was wondering, Mr. Chairman, whether these gentlemen would be available during the afternoon. I think in all probability this session of the Senate today is going to be very short and we would probably have this afternoon we could utilize, if it is convenient for the gentlemen to be here.

Senator POPE. What time would it be convenient?

Mr. THATCHER. I think we should all be back here about 2:30 and go right on.

Senator MCGILL. I think we should go right on and be in recess until that time.

Senator POPE. Since the farmers have an appointment, let it be understood we will be in recess until that time.

(Whereupon, at 12 noon, the subcommittee recessed until 2:30 p. m., the same day.)

AFTER RECESS

L. T. MAYHUGH, KRESS, TEX., REPRESENTING THE TEXAS WHEAT GROWERS, INC.-Resumed

Senator POPE. I think we may as well proceed. I believe Mr. Mayhugh was making a statement at the time of the recess.

Mr. MAYHUGH. Yes, sir.

Senator POPE. All right, Mr. Mayhugh, if you know where you left off, you may proceed.

Mr. MAYHUGH. I believe I was discussing adjustments and payments of losses.

I don't know just where I was, but I was undertaking to make a comparison of two farmers on which one had a total loss, whether or

not the farmer who, of course, was excused from the cost of harvesting would be charged against that cost when settlement was made. Our opinion is that should not be done, that he should collect his full coverage inasmuch as he had done all he could do. Now, the other farmer that has a partial loss: It seems to me that the county committee should be empowered by the board to determine whether or not the corporation desired that crop to be harvested. If it did, then the charge of harvesting should be charged to the corporation and the wheat salvaged should be turned over to the corporation as a basis of adjustment and settlement of that claim.

Senator POPE. You may be interested and it might be a good thing to put in the record that the subcommittee has given a great deal of consideration to that.

I think in the first place, it would be a matter of regulation by the board.

Mr. MAYHUGH. Yes; I realize that.

Senator POPE. We could readily see that a man who suffered a total loss and collected the full amount of his loss might be able to put his land in some other crop and we could understand that a man who suffered a partial loss would have to go ahead and harvest his crop and would not get as much as the man who suffered a total loss and would not be able to plant his land to anything else. But that is such a difficult matter that we felt nothing could be put into the law specifically about it.

Mr. MAYHUGH. No.

Senator POPE. But that the board in the administration of the law with the services of the local board might work out regulations that would make that more equitable.

Mr. MAYHUGH. My thought here is that this is for the information of the board.

Senator POPE. Yes.

Mr. MAYHUGH. And my thought is either the liberal or conservative interpretation of the application of the law. If it were interpreted rather conservatively, I don't think it would be applicable to the farmer.

Senator POPE. Of course, this would be true also that a man who suffered a lotal loss this year might suffer a partial loss next year and a man suffering a partial loss this year might suffer a total loss next year; so there would be in a sense an evening up of the process in course of time.

Mr. MAYHUGH. My judgment is if the harvest is applied against the farmer, it will have a lot to do with his coming in. Another thing, it might be said that the corporation was not getting a break in this program, the continued drought and soil conservation program is making rapidly better farmers. We are going to make better crops with less rainfall. We are using the contour method which is rather costly to use, but more than worth it, and I think we are going to find the yield of wheat in that territory is going to be increased because of this better farming practice.

Senator POPE. And that is a very desirable thing.

Mr. MAYHUGH. I believe that is all I have to say.

Senator POPE. Are there any questions from the committee? If not, we thank you, Mr. Mayhugh.

Mr. THATCHER. Mr. Chairman, the next witness is Mr. Oscar Fosheim. He has been in the past an officer of the Farmers Union

of South Dakota as vice president, and more recently State chairman of the Roosevelt Agricultural Committee. Mr. Fosheim.

STATEMENT OF OSCAR FOSHEIM, OF THE FARMERS UNION OF SOUTH DAKOTA

Mr. FOSHEIM. Mr. Chairman-
Senator POPE. Mr. Fosheim.

Mr. FOSHEIM. And members of the committee; I am not prepared to testify before the committee. I really did not expect to be called upon, but I am heartily in accord with your crop-insurance plan. It occurs to me that it will do away with the valley and the mountain in the fluctuation of prices, that it will feed the market an even flow of farm products to the advantage of the producers and consumers alike and, therefore, I am pleased to see that the Federal Government will finance the cost of crop insurance-that is, the administrative cost. That will be a benefit to the consumers and to the producers, and to everyone in the United States. It seems to me that you are on the right track.

Senator POPE. Not only would it be a public benefit, a benefit to the consumers, but it would also tend to save the Government a good deal of money for relief, drought relief, and relief from pests. The Government now is spending a considerable amount of money for relief.

Mr. FOSHEIM. That is true, sir.

Senator POPE. And yet, while it would not entirely relieve the Government it would help relieve the Government from that expense. Mr. FOSHEIM. Yes.

Senator POPE. And those two reasons are the one that motivated the President's Committee and we followed the report of that committee to provide for an appropriation to take care of the overhead expenses of that Corporation, and that strikes you as being the proper thing to do?

Mr. FOSHEIM. The proper thing to do. It is fair to everyone; everyone, including the farmers, who should help pay the administrative costs. And, as a farmer from South Dakota, I will say that I believe that the farmers in my State appreciate the good work you have done and are trying to do. Some of us would like to have you do more and we are also thankful to the President of the United States for taking the initiative in this respect. Perhaps the wheel that squeaks the loudest gets the grease. Some believe we cry for a good deal more than we expect to get, but I am thankful for what you have done and what you are trying to do and hope you can see your way clear to do even more in the future.

Senator POPE. Thank you, Mr. Fosheim.

Mr. FOSHEIM. And thank you, Mr. Chairman, and members of the committee.

Mr. THATCHER. Mr. Chairman, the next witness is Mr. Emil Loricks, president of the Farmers Union of South Dakota.

STATEMENT OF EMIL LORIKS, PRESIDENT OF THE FARMERS UNION OF SOUTH DAKOTA

Mr. LORIKS. Mr. Chairman.

Senator POPE. All right, Mr. Loriks.

Mr. LORIKS. I don't think, Mr. Chairman, that there is very much that I could add to the splendid testimony that has been given here

today by the various representatives of farm groups whom I have listened to with a great deal of interest and I will say that I am not going to discuss the mechanics of this legislation.

As a member of the committee of 15 representing the wheat growing States, and unfortunately, they have not all been here to help on this legislation, so the best thing I can do is add support of another State and that is the State of South Dakota.

I will say, with the exception of my military service during the World War, I have devoted my life to farming.

As president of the Farmers Union, I will give a few facts relative to that organization in my State. We have between four and five hundred live, active associations throughout the State that meet regularly every month, besides a great many marketing cooperatives and other farmer cooperatives. We have on the average upwards of 20,000 voting members in the State.

The Farmers Union is vitally interested in farm legislation. In fact, our National Farmers Union is on record for crop insurance. Naturally we are interested in seeing the development of a workable plan.

As a member of the committee of 15 representing the wheat-growing States I regret exceedingly my inability to attend these conferences heretofore, however, we are more than pleased with the good work that has been done to date in formulating a crop-insurance program.

I want to commend this committee for the great interest it has taken and the fine work done in formulating legislation to create a workable crop-insurance plan. We feel particularly fortunate too that the President of the United States has taken a keen interest in the matter under consideration here today.

My statement to you will be very general. I will not go into detail as to the mechanics and administration of this proposed legislation. That has been so well covered that further consideration of it would be repetition. However, I want to concur in the statement of the president of the North Dakota Farmers Union, Mr. C. C. Talbott, in stressing the need for a longer base period. The North Dakota Legislature by resolution asked for a base period of 15 years. I would go even farther and ask for 20 years or an all-time base period if that were possible. We have just passed through 6 years of drought. We may not have a recurrence of such a protracted period of drought in 50 years or 75 years. All insurance is based on law of averages and using only recent drought period as a base would be unfair.

The farmer is up against the greatest uncertainty, because of the elements of nature, insects, and so forth, of any individual on the face of the earth. Suppose the drought is over for a while. We have had floods, early frosts, hail, grasshoppers, and other elements of adversity. Suppose that we have normal and favorable conditions and a bumper crop ensues. What happens? Prices crash. As someone so aptly stated this morning, favorable prices for the farmers are always contingent upon calamity in some section curtailing the crop. That is entirely true. In South Dakota, my own State, farming is always a failure. That is a broad statement to make, but it is true and speaking from my own standpoint, we have known nothing but failure. If it hasn't been crop failures, it has been price failure, one or the other as sure as night follows day. The only thing that has been certain in the farming game has been uncertainty, and maybe that is the reason for the alarming condition that exists in our state

relative to tenantry. We recently made a survey and discovered that 63 percent of the land in South Dakota is tenant operated; and in my own county, 74 percent is tenant operated, and that tenantry has been increasing since 1880 regardless of good years or bad. So, there is something radically wrong.

We feel sure that a workable crop-insurance program would benefit, not only the farmer, but society as a whole. It would benefit the consumer who is likewise the victim of uncertain and fluctuating prices. It seems to me the most logical, sane, and sensible feature of any farm program that has ever been devised. We recognize the fact that it is not in itself a solution of the farm problem, but merely one very necessary and important feature to be integrated with a general farm program.

I just want to add another thought, and that is in regard to public opinion on this proposed legislation.

Crop insurance seems to have the most universal and widespread appeal of anything thus far proposed. Not only are the farmers vitally interested in it, but I find people in all walks of life, from the humblest citizen to the chief executive of our State embracing the idea, businessmen, manufacturers, processors of farm products, all agree that it is a very sensible and worth while program to develop. In conclusion, let me say that while South Dakota does not hold the important position as a wheat State that we formerly did, we are still in the wheat business, and we are interested in this program. We look at it from a national standpoint, realizing that it is a national problem. We appreciate very much the splendid progress that is being made in development of a workable crop-insurance program.

We realize too that all good legislation designed to remedy social and economic ills is darkened by the threatened shadow of unconstitutionality, veto by the courts. No one realizes this better perhaps than you gentlemen of the committee, and we hope the time will come when the road to progress will not be barricaded by this overhanging threat. We feel that the President of the United States in advocating Court liberalization has touched the very core of the boil that is festering our social and economic body.

Senator POPE. Any questions?

Senator FRAZIER. Do you have State hail insurance in South Dakota?

Mr. LORIKS. We have hail insurance. It was repealed 4 years ago. I think the insurance interests of our State got together and saw to it State hail insurance was done away with.

Senator FRAZIER. Was it fairly successful while it did operate?

Mr. LORIKS. Yes; it operated on much the same basis as your insurance in North Dakota. I happen to know that because I own a farm in your State and I know something about the operation of hail insurance in North Dakota. It was very successful. It saved millions and millions of dollars in reduced premium rates to the farmers of our State.

Senator MCGILL. Was that done by the State government?
Mr. LORIKS. By the State; that is correct.

Senator POPE. Any other questions?

Thank you very much for your thoughts on that, Mr. Loriks. Mr. LORIKS. Thank you, Mr. Chairman and members of the committee.