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taken out of that situation without some protective rungs in the agricultural ladder.

Because of that condition, there has been less and less children in schools. There is a lack of hygiene in the home, and therefore, the health of those affected is involved. Crop insurance will exert a real influence in the farmer's ability to pay a local bill, to go back to the doctor, to attract: a doctor or dentist, out of circulation at the present time, and to provide the need for their services again.

We hope that this legislation and other desirable bills will be approved by Congress; that the doctors and dentists, and others, may be put back to work and thus give back to farm folks some of the life they once enjoyed. The public will be better off as prices become more stable. Price stabilization is desirable because that tends to the stabilization of salaries and wages, and as we come more and more to the stabilization of prices to the consumer, then, we have more and more stabilization of the payment for different services.

Senator Pops. In other words, stabilization of the farmer means stabilization for everybody else in the economic system.

Mr. THATCHER. That is right, because if some of these things move up, working people through organizations want increases in salaries or shorter working hours, and the farmer is not asking for a 30- or 40- or 50-hour week. He seems to be contented with a 60- or 70-hour week if he can have a fair living. So this sort of thing looks toward an improved relationship in the whole economic system. . In that respect it is much better for the Government, as you stated in a radio address, Senator Pope. As you stated the Government has spent in farm doles $600,000,000 in the past 10 years to improve farm conditions and that has gone out in one fashion or another to help agricultural people, something on the average of 60 million a year. Those are undesirable programs and they are undesirable to the people who are required to pay the taxes as they are also very unpleasant to the man so impoverished he must accept doles. He is obliged to ask for it to keep alive. I think it is a more profitable approach to build up the constructive way than to continue on the increasing relief way.

Senator POPE. The difficulty about relief is that it doesn't get you anywhere. There is nothing permanent about it. Mr. THATCHER. It is not only not permanent, but it is inadequate. Senator POPE. Yes. Mr. THATCHER. Terribly so.

Senator POPE. Yes, but if we depend upon relief as the need appears, that does not tend to remove any cause of depression on the part of the farmer. It does not improve anything permanently, it just keeps him going temporarily.

Mr. THATCHER. That is right. This bill asks the Congress to appropriate the necessary money to defray the expenses and cost of storage and that is easily justified.

Senator POPE. As we said the other day, if an average of 60 million à year is spent by the Government for relief, for temporary relief, we may say it would not seem unreasonable to spend 10 million à year toward something tending to permanent relief.

Mr. THATCHER. Something fundamental in effecting a cure; and I believe, at least I hope the Congress and the Nation will be willing to make that small contribution annually until wheat production is

brought to the place where farmers approach parity economy. Certainly, we ought not consider placing the administration expense on the farmer until the distribution of wheat has been perfected and prices stabilized at a price where the farmers can afford to pay it. Obviously, they cannot afford to do it now.

In connection with the corporation which here has been testified about as being a better plan than the department plan. That is perfectly true, and is painfully evident to those who have had experience in such matters. Some concerns have had a great deal of difficulty at times in dealing with the Department of Agriculture even after they have been able to engage the best counsel and write the best contracts, with everything the legal mind could think of written into the contract. We have experienced a great deal of embarrassment and loss in interest on the money tied up in unsettled accounts waiting on the Comptroller General's office and other places to approve. I don't believe our people desire any more business of that sort. There are some three or four hundred thousand dollars yet unpaid and due our corporation, months and months outstanding.

Senator POPE. Of course, one could see immediately that the administration of this act will be difficult. Many points of administration have been raised about it by various ones, but does it not occur to you, who have been familiar with the administration of the A. A. A. and the Soil Conservation Act, that the difficulties of these were perhaps greater than the administration of this act?

Certainly the administration of this act would not be any more difficult than the administration of those other acts?

Mr. THATCHER. That is right. That is right. To my mind, it is impossible to provide satisfactory administrative through a department.

Mr. TALBOTT. Mr. Chairman, might I interject there?
Senator POPE. Yes; Mr. Talbott.

Mr. TALBOTT. That the very fact we have had these very things and have organized the farmers and made them acquainted with a Nation-wide program which, in my judgment will materially assist in putting this program in effect.

Senator POPE. The existence of farmers committees? Mr. TALBOTT. Yes; of organizations. One little statement Mr. Thatcher, I don't want to detract from Mr. Thatcher's statement, but if I may make just one short observation.

Mr. THATCHER. Mr. Talbott. Senator POPE. Go ahead. Mr. TALBOTT. No one mentioned this fact, and I think it runs in the minds, Mr. Chairman, of most everyone in the Nation; that we, especially in the drought area, and this applies to your territory, Senator McGill, have been unfortunate and maybe we are just a poor risk on any basis. I think Mr. Vesecky took a little of that out of the people's minds who have been listening this morning, but I want to point out one outstanding thing; and this will occur to you, Senator Frazier.

I said in my testimony this morning we had a series of crop failures running back 5 or 6 years in South Dakota and eastern Montana, but in 1935, with a wheat crop of such small value, it could not be considered at all, and barley went down to less than 25 cents a bushel right in the middle of the drought period, and oats to 12 and 13 cents

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haydenty. Right in ruinous the he little bit even thou

a bushel. Now, 1 year later in the fall of 1936, the same farmer is purchasing back barley, not as good as barley that he sold, at a price as high as 85 cents a bushel and having to pay 60 cents a bushel for very common oats. Now, it is evident that even though we have had short crops that it only takes one little bit of surplus of any period that the price is so ruinous the farmer is still on relief in the midst of plenty. Right in the middle of the drought we had a fairly good hay crop, but we could not get people to thresh.

Senator MCGILL. In 1935 did you have a surplus? Mr. TALBOTT. Feed grains, no wheat. The same condition occurred there.

Senator McGILL. Barley and oats.
Mr. TALBOTT. Barley and oats.
Senator McGill. That is, you had a surplus?
Mr. TALBOTT. Yes, sir.
Senator MCGILL. And the prices of those commodities went down?
Mr. TALBOTT. Went down to nothing.
Senator McGILL. So that a material surplus-

Mr. TALBOTT (interposing). I would not say it was material, but there was enough. The market was completely beaten down. There was probably considerable improvement in other areas.

I just wanted to bring that out. It was in the midst of the drought and all we had to do was raise one little crop. I just wanted to interject that sentence.

Senator POPE. Thank you, Mr. Talbott.

Mr. THATCHER. Before leaving the Corporation aspect of this, I believe that a provision should be added to this bill yet I have not thought out the language to suggest. I should like to have the opportunity to visit with the chairman in his office about it before the committee finally considers the bill, to discuss the language of the provision I desire placed in the bill; Not mandatory but directive language should be written into the bill suggesting to the authority of the corporation, that so far as feasible in its operations, yet comparable in costs, services of cooperatives and their warehouse facilities shall be used.

Senator POPE. I might say since you have mentioned that matter to me: A few days ago the subcommittee prepared such an amendment and agreed upon it to recommend to the whole committee.

Mr. THATCHER. If I may say it, it doesn't seem to me a very profitable way for the Federal Government to do business if, after setting up the Farm Credit Administration to loan money to cooperatives on a rather generous scale, that at that same instant the Federal Government in another department gives its business to competitors of the cooperative. I do not think there should be any donations. Such relationship ought to occur if it is feasible and on a comparable basis. In all this sort of legislation, I believe that should be a cardinal principle.

Now, getting back again to the question of how much benefit to expect from this bill.

I am not one who is going to preach to the farmer that this bill is going to save him, not under the present system which fixes prices for the producer and the consumer, if that is not a

Senator FRAZIER (interposing). Did you say "for the consumer"? Senator Pope. For the consumer?

a few own or poin

Mr. THATCHER. I do not want to be misunderstood. Our prices are fixed for wheat in relation to a speculative or futures price level in the Chicago market, and that future price in the Chicago market is affected by what the foreign countries do about it. I just very recently read a very informative article in the National Miller, I think it is, I have forgotten the name. I would be glad to furnish it to the chairman of this committee, pointing out that this next year's prices of wheat may be down or the sky limit, we don't knowand they don't know, for a few reasons.

First, we do not know what the production is going to be in this country or in Canada this year. And, a rather very important factor is, we do not know what Italy and Germany and England are going to do about their requirements for flour. States like Italy and Germany perforce handle their trades and transactions through the financial institutions of London and Liverpool. Such business is very secretive. The millers of this country are unaware of what those three countries may do. The article also points out that England on their own account and for those of other countries are (though detailed information is unknown to our Government) substantially in the Chicago speculative market, sometimes on one side and sometimes on the other. Here are three foreign countries determining whether or not there is likely to be a war in Europe, and determining whether or not they are going to buy supplies, and dealing in our speculative markets—and dealing unbeknown to the people and especially the people whose responsibility it is to live out of the prices paid for wheat.

Now, such a combination of factors for price making savors of the ridiculous, and in some respects I call it a racket.

First, we know of huge speculator activities in the Chicago market. I am informed on competent authority we are now headed toward a squeeze in the Chicago wheat market in the near future. We don't know, we can't know, the farmer doesn't know the future price for wheat.

Now, let us look at this wheat price-fixing system in connection with the Resettlement Administration under which we are planning for a farm-tenancy corporation to keep the farmers alive while we start buying back poorer land for them. If that isn't crazy-quilt economy, I don't know what you could call it. No business could thrive under such a program as that. I am inclined to believe Senator Frazier's bill is headed in the right direction. Under his bill we would avoid all foolishness and look toward a substantial set-up to provide stable prices for our people, stabilized prices for both those who produce and those who consume. I certainly agree with the direction. I believe we are coming to the time when we will make a straight-laced program for prices and carry marketing allotments down to the “nth” degree and if necessary regiment the farmer, put a tag around everybody's neck, so he can be a businessman on the farm.

I want to repeat what I have said earlier in the afternoon that we hope to have another opportunity to discuss with members of this committee the findings of the Federal Trade Commission; and there, if we find two or three more rungs of the ladder that need to be put in through Federal legislation, then, such other bills will come in to further strengthen the producer's program. We are not able to assure the farmer that this bill alone will move him up into good company. To further illustrate the farmer's instability, spring wheat is not yet seeded into the ground. Yet, future prices for next September delivery are now being speculated in. I hope the Congress will favorably consider this legislation as one of the important rungs in the ladder. I desire to thank you again, Mr. Chairman, and members of the committee, for the time you have given us. May I have the opportunity to file for the record in a day or two a comparative statement?

I didn't expect to testify today. I wish to present a comparative statement and some comments about it, projecting the comparable benefits on this bill for some of our States, compared to the benefits those States received out of the triple A.

As a matter of fact, in the State of Kansas and the State of North Dakota during these last few years, it appears certainly, had this crop-insurance bill been in effect, there are some years that the benefits accruing under the crop-insurance bill of this type would have exceeded the benefit those States received under triple A wheat checks, and I think you will want that for the record, and I shall be glad to file it.

Senator POPE. Yes.

Mr. THATCHER. And in closing my testimony on behalf of the producers whose organization I have the privilege to represent, may I file for the record the resolutions adopted on December 3, 1936, by representatives of wheat producers and presented to the Secretary of Agriculture as chairman of the President's Crop Insurance Committee. And may I also offer for the record a list of the members who participated in that conference.

Senator POPE. Very well, they will be received.

(The resolutions referred to and list of members that participated in the conference referred to follow:)

RESOLUTIONS ADOPTED ON DECEMBER 3, 1936, BY REPRESENTATIVES OF WHEAT

PRODUCERS AND PRESENTED TO THE SECRETARY OF AGRICULTURE AS CHAIRMAN OF THE PRESIDENT'S CROP INSURANCE COMMITTEE

1. It is moved, seconded, and carried that we recommend to the general body that it resolve itself into a formal conference body to be known as the Wheat Conservation Conference, and that it solicit the participation of all interested agricultural groups.

2. It is moved, seconded, and carried that we recommend to the general body the adoption of broad general principles which we may insist shall underlie any legislation proposed to or in Congress covering crop insurance or crop conservation for wheat; and that the following be accepted as outlining such fundamentals:

As an implement to established farm programs, the President has created and directed a Crop Insurance Committee to study the farm problem, to consult with farmers or their representatives, and to report to him a program for legislative consideration which may provide increased assurance of:

A. Equality of social security for agriculture.
B. An ample supply of food and fiber to meet the full need of our Nation.

C. Relief from the devastating influences of violent swings of farm prices resulting from abundance at one time and scarcity at another.

As a result of rugged agricultural individualism and an archaic system of distribution-society has suffered an irreparable loss, through a low standard of living for the farm family, and the erosion of farm land and the destruction of improvements. The social loss is icalculable.

Because of lack of plans, and plans declared unconstitutional, the taxpayers have been required to pay hundreds of millions of dollars into the Federal Treasury to provide many types of agricultural relief to bankrupt farmers—subsidies in many forms. Some of these subsidies may be listed as including those for feed, seed, doles, made work, charity, and what not. · In lieu of the many subsidies presently being paid from the Federal Treasury agriculture desires, as apparently the President also desires, that as soon as possible a business plan with a lesser annual cost to the taxpayers and with a fair

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