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Mr. Thatcher, are you ready to make a statement now as to your view of this matter, representing one of the large farm organizations? Can you give us the benefit of your experience in considering the matter during the last year or two?
STATEMENT OF M. W. THATCHER, REPRESENTING THE NORTHWEST FARMERS UNION, THE WHEAT CONSERVATION CONFERENCE, AND THE FARMERS NATIONAL GRAIN CORPORATION
Mr. THATCHER. Mr. Chairman, with reference to the Wheat Conservation Conference, that represents a group of farmers who came here to Washington on the invitation of the Secretary of Agriculture to participate on December 2 and 3, 1936, in a general discussion of crop insurance, particularly in reference to wheat. There were some 42 representatives of the wheat States and all of the wheat States were represented by one or more gentlemen who have some long-time standing in connection with some cooperative organization or State farm organization. They met here in Washington during those 2 days and created a standing committee of 15 with a chairman, with the responsibility of pursuing this question of legislation, crop insurance, and exerting efforts looking toward the successful conclusion of legislation in the matter. I was chosen chairman of that conference, and by arrangement with the chairman of this committee and to save time, it was agreed and approved by the chairman of this committee that owing to the fact that different phases of the subject were handled by their respective groups of the Department and sometimes the chairman would not be able to sit at meetings here, having other plans, the so-called “farm group” might make appearance before this committee beginning on the morning of March 8, and have time for that group continuously until that testimony is concluded. At that time we shall want to present the farmer's side of this. They will be here for 2 or 3 days and will have an opportunity to read over the record that has been made by the representatives of the Department who have testified here, and we will try to present the testimony succinctly, avoid duplication, conserve your time, and try to make the record complete as to the producer notions about it.
I had not anticipated that I would be called on at this time, but I do wish to make this one observation at this time: I think it is very important that we go into it—that in connection with the question developed by Senator Schwellenbach, in connection with the discussion of Mr. Roy Green on the effect on price caused by a certain amount of wheat premiums being put away in a reserve stock, premium stock—as to what effect putting those premiums away, not subject to the discretion of somebody to move them out onto the market, but resting thereunder, I hope, a legal restriction that the stock may only be moved out in harmony with the provisions of the contract between the agency and the farmer, and what effect movement of the wheat in and out under such a program of legal restriction will have in comparison with the experience and the history of the farm board operations, I, of course, believe that it will have some effect, some good effect, but it does have—I will not attempt to reply to Senator Schwellenbach, but it does suffer the limitation of the possibility of lower price, and the effect of domestic stocks so impounded under this crop-insurance program could, of course, except
where we are, as we are now, on a deficiency basis—could have an effect on domestic prices, although stock so impounded and withheld would be small in relation to the world's carry-over of wheat stocks, but even then, that could at times be quite appreciable.
Ordinarily, the world carry-over of wheat stocks runs around six or seven hundred million bushels, and if we had an excess of production under the crop-insurance program, very conceivably our stocks could be as much as 70 or 75 million bushels, and that is 10 percent of the carry-over, and we would have the situation where, with the world carry-over of some six or seven hundred million bushels ordinarily, the possibility that this 10 percent might be dumped into the market at any time might affect the price. Here is a case where we have 10 percent of the world carry-over put away in such form that the buyers in the world market would know that that was carry-over against future social needs, but it would only be delivered on the market under certain legal restrictions, as compared to dumping it on the market at the discretion of an individual or group of individuals governed by considerations as to profits, and so forth.
I think you have raised a very important point in your question, Senator Schwellenbach, and I do think that this program is going to affect price to some extent, and it is a suggestion to me to give the matter considerable study, and when we make our appearance here I will try to have more definite data to present to the committee on that subject.
Senator POPE. Here is a rather interesting suggestion with reference to the matter of insurance that was made by Prof. Nathaniel Royce of Harvard in quite a remarkable essay on war and insurance. He was assuming that the demand for wheat or for our products might be very great, coming from foreign nations, and he said this (reading]:
Flood, famine, pestilence, earthquakes, and volcanoes may interfere in various fashion with the economic as well as the rest of the social life of people thus afflicted. Apart from actual famine, considerable failure of their crops may impair for a season the normal supplies of individual nations.
For instance, suppose demand were so great that we had no surplus crops or no surplus wheat in this country, and then we should have a very large crop failure, it might affect the whole economic situation in our country. There might be an actual need of wheat. Well, the fact that we might have stored 70 or 75 million bushels that could not be sold, whatever the demand was, except in the way indicated here, might mean that we would have on hand at least some wheat in storage which we otherwise would not have. That he pointed out as far back as 1914, and it seemed to me as I read that, that this might at least be somewhat in line with his suggestion at that time.
I thought there was interest enough in that to mention it.
Now, I have arranged with some other representatives of farm organizations to be heard, if they desire to be heard, the representative of the National Grange, a representative of the Farmers Union and who does Mr. Robin Hood represent?
Mr. THATCHER. The National Cooperative Council.
Senator POPE. Yes. They are all expected to be here. It was not expected that we would get through in time for them to be heard today, but they will be ready to present their views on this matter at any time we call them.
Mr. THATCHER. Has the Farm Bureau made an appearance?
Senator POPE. Yes; I called Mr. Gray and also Mr. O'Neal. Mr. Gray was here yesterday and said that they would be ready when we wanted them. I am just advised that Mr. O'Neal or Mr. Gray will be ready to be heard tomorrow morning, and I think also Mr. Robin Hood and Mr. Brenckman will also be ready tomorrow morning.
Unless there is someone else who wants to be heard between now and 12 o'clock, we might have a recess until tomorrow morning at 10 o'clock, at which time the farm leaders will be here and give their views on the subject.
(Whereupon, at 11:40 a. m., the subcommittee adjourned until 10 a. m., Saturday, Feb. 27, 1937.)
FEDERAL CROP INSURANCE
SATURDAY, FEBRUARY 27, 1937
UNITED STATES SENATE,
SUBCOMMITTEE OF THE
Washington, D. C. The Subcommittee met, pursuant to adjournment, in the hearing room, 324 Senate Office Building, at 10 o'clock a. m., Senator James P. Pope presiding.
Present also: Senator McGill and Senator Frazier.
Senator POPE. The committee will be in order. Mr. O'Neal of the Farm Bureau Federation is here this morning.
Are you ready to proceed, Mr. O'Neal? Will you state your name and position for the record?
STATEMENT OF EDWARD A. O'NEAL, PRESIDENT, AMERICAN
FARM BUREAU FEDERATION, CHICAGO, ILL. _Mr. O'NEAL. My name is Edward A. O'Neal, president, American Farm Bureau Federation, Chicago, Ill.
Senator POPE. Mr. O'Neal, you have given some thought to the matter of crop insurance and to the proposal contained in the report of the President's Committee, which is embodied in the bill now under consideration by this committee.
Mr. O'NEAL. Yes, sir. I came down to Washington with a group of farmers when we had a conference on the crop-insurance matter and discussed it in a general way. I have not studied the bill itself, Senator. At that time the group approved the experiment of trying out insurance, and suggested that we try it out with the relief farmers, if they wanted it on a voluntary basis.
Again at the general farm conference meeting on February 9 the whole group of farm organizations endorsed it as part of the program that we would bring to Congress.
Senator POPE. What farm organizations were represented at the last conference?
Mr. O'NEAL. The National Grange, the Farmers Union, both Mr. Everson and Mr. Thatcher, both divisions, and myself of the Farm Bureau, and the Cooperative Group, the Cooperative Council; and in addition to that there were a great many of the farm leaders from States in which they had no farm organization, and they were unanimous. That was part of the recommendation.
Senator POPE. What was the reason they gave or talked about as to why we should start with wheat?
Mr. O'NEAL. Well, they felt that it would probably be more practical in its operation with wheat and that the wheat farmer seemed to
AS Mr. O'NEALUTThatcher, boGroup, the