month, I could turn out another quantity and cost me no more than that does. That is what I think about the farmer, with the set-up that he has, if the consumers consume less food, then he gets no more money, and I don't think he is very much better off. That is true in the steel business. The steel companies for some unknown reason have been able to maintain their prices. I read some time ago where they hadn't reduced their prices since 1922. I believe they made a concession some place and got a nice big order. When their production is down to 12, 14, or 15 percent, they lose much more money than if their production was probably at a much higher percentage and they were getting less for their steel. I don't know why that wouldn't maintain for the farmer. If the increased price of food diminishes the volume that is sold, it probably won't do him any good.

Senator MURPHY. If that is going to be a persistent condition, I agree with you. Don't you think it is at all possible that when you have given that farmer something more for what he produces and he uses that something more that he receives and goes into the market and spends that, which he hasn't now to spend, that the spending of that money by him will reflect itself in an increased demand for the things that are produced in factories?

Mrs. DONNELLY. But my very point is that the farmer is getting all the money that we have to give the farmer right now.

Senator MURPHY. Pardon me, he is getting only a very small fraction of it.

Mrs. DONNELLY. You are speaking about the bushel or pound? I contend, my very point is that the wage earners generally, and they are the consumers of food, they are the ones that have the big families, are the great number of people consuming the food. They are paying out all the money they have now. What difference does it make if a farmer has a 500-acre or 320-acre farm and is getting in only say $5,000 a year. Well, next year he only gets in $5,000 but they only use two thirds as much of his wheat or two thirds as much of his corn? If it were my factory, it wouldn't make any difference. I need a certain amount of money coming in unless I have an entirely different set-up. I say if the farmer doesn't actually get more money, it won't do him any good, because he has the investment of his farm; he has his implements; the matter of a few more bushels of wheat seed doesn't cost anything.

Senator MURPHY. That is the purpose of this bill, to give him some more money.

Mrs. DONNELLY. But where are you going to get the more money? [Laughter.]

Senator MURPHY. We are going to collect it from somebody you say can't pay it.

Mrs. DONNELLY. You know, I lived in a small railroad town in Kansas. I was brought up there and I have a number of friends there. They are railroad people and those people have 5 days' work or 10 days' work and their pay has been cut and it has been cut again and they have been reduced in rank. I am going to say that you can go into this town of Parsons, Kans., and you will find scarcely one home there that somebody is working that there is not 1 or 2 or 3 other workers that are not working, that are being supported by the ones that are working for this small amount of money. Those people

mostly own their homes, a good many of them are back on their taxes, they are simply spending all the money that comes in from that 1 or 2 wage earners for food and clothing.

Senator KENDRICK. Your opinion is that the farmers have no monopoly on trouble?

Mrs. DONNELLY. I know that they haven't. That is the point. The CHAIRMAN. Mrs. Donnelly, if you have finished your testimony, we will have to hurry along.

Senator KENDRICK. I want to say to Mrs. Donnelly that I am glad to have heard her testimony because as I apprehend, as a witness for the consumers, you will be the sole survivor. [Laughter.]

STATEMENT OF JOHN W. SIMPSON-Resumed

The CHAIRMAN. Mr. Simpson, you may proceed. As I said, we have got to conserve the time. We will have to appoint a conservator. [Laughter.]

Mr. SIMPSON. Mr. Chairman, I will commence where I left off. The next thing that I had in my paragraphs to discuss is I want to give you what I believe is of first importance, it isn't in this bill but it is of first importance. Forty or fifty percent of the farmers are sinking out in the middle of Old River Mortgage and the first thing is to throw him a life-saver. Dry clothes, warm clothes are no good to the fellow that is sinking in the middle of the river, they will be good for him when he gets to the bank but you have got to get him to the bank first. It should be considered an emergency measure, I think almost equal to the banking emergency measure. You must make some provision for refinancing that farmer. There were two agricultural planks in the Democratic platform, and I gave you the one the other day, and the other was a promise to see that farmers are refinanced at lower rates of interest and long time payments on the principal. That must be real and not a makeshift, just as getting the cost of production must not be a makeshift, it must be real. This bill is a makeshift in cost of production. We cannot stand for a makeshift in refinancing. It must be something real. They have talked about in the papers in the last 2 or 3 days of something that will reduce the interest rates to 5 percent. That is not real. That is makeshift. This Government has been refinancing lots of people at less than 1 percent interest on long time, as much as 20 years. It can afford to refinance farmers at a reasonable rate. Seventeen State legislatures have memorialized Congress to pass a refinancing bill here known as the Frazier bill. When the farmers in 17 States have been interested to the extent that they have been able to get joint resolutions through 17 State legislatures memorializing the passage of that bill, I think it should have some weight.

Talking now about the export trade, to reduce the tariffs-you can reduce the tariffs, you can obliterate them, abolish them, and you will not be able to sell the products of this country to other countries. That isn't the thing that is keeping China from buying of us and Japan from buying of us and Canada from buying of us. The thing that is keeping other countries from buying our products is the fact that we have a very high-priced dollar and they have a cheap one.

Senator WHEELER. Because 44 countries are off the gold standard and we are on the gold standard?

Mr. SIMPSON. That is correct, Senator. No nation that has a high-priced dollar can sell their products to a country with a lowpriced dollar. Canada smiles. You talk to our merchants along the Canadian border and they will tell you their folks go over there every week and buy their necessities and bring them back home. Why? Because they can take our high-priced dollar over there and change it into a low-priced dollar and have a profit and a trip.

Senator NORRIS. You omit one thing, Mr. Simpson, it seems to me. Even though we are starving and suffering, ought we not to be recompensed for that by the knowledge that we are still on the blessed gold standard? [Laughter.] Wouldn't it be something if you were starving to death to know that you starved in the interest of the gold standard?

Mr. SIMPSON. I had a letter from one farmer who said they went over and saved a neighbor's farm from being foreclosed through the pressure method, and the fellow whose farm was saved got to discussing different kinds of money. He said "I sure wouldn't want to go off the gold standard. We don't want any fiat money.' That must have been a great recompense, the fact that he had a gold dollar that is higher than anybody's in the world. That is about all the consolation he gets out of it.

Senator NORRIS. It isn't very often he has the dollar.

Mr. SIMPSON. I mean his country has it. Let me put in this remark, too, Don't get excited about prosperity. The test of prosperity is whether you have more money in your pocket. It is time enough to be whooping it up that you have prosperity when the money is flowing in your pocket faster than it has been before.

Senator WHEELER. I take it that it is your view that no matter what farm legislation you may pass, it can't possibly be a success unless and until we cheapen this dollar at the present time?

Mr. SIMPSON. It is my absolute conviction from deep study of the thing that the one big thing to do is to bring down the price of your dollar where it will not buy so much. Like Mrs. Donnelly says here, Where are you going to get the money? Where are you going to get it under a gold standard? You can't do it. As I put it before a committee in the last session, it is the bull wheel. Those of you familiar with farm machinery and with a grain binder know the source of all power is the bull wheel. If that thing stops, your sickle stops, your canvas stops, knotter, kicker, everything. As long as the bull wheel is going, there is nothing very serious with the machine, but it is certainly serious when the bull wheel stops. The medium of exchange of a country is the bull wheel of all prosperity. When it stops, when there is no medium of exchange, anything you do will not have much effect.

Senator WHEELER. You have given some considerable thought, have you not, Mr. Simpson, to the question of remonetization of silver?

Mr. SIMPSON. Yes, sir.

Senator WHEELER. And is it your conviction that that would do more to help the farm industry in this country than any farm legislation that we might pass?

Mr. SIMPSON. I think it is of prime importance. It should come first. That opens up your trade. When you remonetize silver in this country, you immediately double and treble the cost of production in all other countries. The higher your money goes, the higher your dollar goes, to that extent you cheapen the cost in other countries. That is the reason they can come over here and pay your tariffs and sell to you. But you can't sell to them.

Senator MCGILL. You think a price-fixing bill such as you described here the other day would be an advantage to the farmers immediately with the exception of the portion of his commodity that must be sold in a foreign market?

Mr. SIMPSON. Yes, sir. An immediate price fixing that will cover cost of production is the only kind of a price fixing bill that will be satisfactory to the farmers of the Nation.

Senator MCGILL. That would help him immediately, wouldn't it? Mr. SIMPSON. Yes, sir; and Senator, I make this challenge to anybody that is a responsible party, head of a farm organization, Secretary of Agriculture, any responsible party; I will take the House roll 3835 and attack it and they defend it, and we will go to not less than 10 States or as many more as they want to, advertise the meeting, and I will take the McNary bill, the Farmers Union plan of fixing the price at cost, and I will advocate that and let them attack it, and at the close of the meetings we will let the farmers present—and there will be thousands of them go to that kind of meeting-vote as to which bill they prefer. If the aggregate of the vote does not exceed 2 to 1 in favor of the McNary bill, I will come back before your committee and say "This bill is satisfactory." I am here to tell you the farmers are against this bill.

Senator MCGILL. What I am getting at is that a price-fixing bill such as you advocated in your testimony the other day I think we all understood it would operate immediately to benefit the farmers of the country?

Mr. SIMPSON. Yes, sir; it is simple. The plan as outlined is just as simple as the price fixing for electricity and gas and railroad transportation and all that.

The CHAIRMAN. Mr. Simpson, you said a moment ago the farmers are against this bill. To what extent would you apply that statement?

Mr. SIMPSON. I just said I would challenge anybody that is responsible to go into 10 meetings, 1 meeting to a State and as many more as the other party might want, and at the close of the meetings we would leave it to a vote of the farmers and if they were not 2 to 1 against it, I would come back and advocate this one. I will pay my own expenses and if the other fellow hasn't money enough to pay his, I will take up a collection for him. A lot of representations have been going out, the big daily newspapers have been saying what a fine thing this is, and some of the farmers are saying "Put it through" but they don't know what it is. If you write and ask them if they have seen it, there won't be one in a hundred that has.

The Secretary of Agriculture told us on Saturday about the large surplus on hand now, said there was 350,000,000 bushels of wheat on hand. That is not too much to have on hand for safety. We are very likely this year not to produce as much wheat as we consume ordinarily. The winter wheat is about the poorest prospect in years

and years. If spring wheat should turn out as badly as we know winter wheat will, I doubt if we produce 600,000,000 bushels of wheat in the United States, and that is the ordinary portion needed for consumption. Last year we only produced 700,000,000 and had only a hundred million more than consumption.

So, to my mind, we need have no fear of the surplus we now have on hand. Three hundred and fifty to four hundred million bushels is not too much to maintain. The secretary also was confused as to how the elevators and mills, and so forth, would keep the domesticconsumption part separate from the exportable-surplus part. Why, it is as simple as can be. Each elevator that handles wheat is licensed and bonded to do that very thing. The mills in this country today can ship wheat in from Canada and under regulation of the Government and bond they are permitted to grind that Canadian wheat and that portion of it that they export they do not have to pay tariff on. They get a refund. The exportable-surplus portion would operate the same way on the part of the elevators and mills.

Senator MCGILL. There would be no necessity for a segregation of wheat?

Mr. SIMPSON. Not at all. The elevator is under the regulation of the Government. An elevator may buy a half a million bushels or a million bushels. If it buys a million bushels, 250,000 has to move into export, if 25 percent is the figure. If you are hunting confusion, try to regulate 30,000,000 men, women, and children on the farm. That is confusion for you. And try the taxing method to raise the money to give to the farmer. Fix the price right where the buyer buys it. That is the way to do in all price-fixing legislation.

Here is one thing that is largely overlooked. I had hoped someone would ask Mrs. Donnelly this question: What do you sell a dress for? Then the next question: How much cotton does it take to make one of your dresses? And then, how much did the farmer get for the cotton that went into one of those dresses? I will tell you what you would have discovered under that kind of questioning. You would have found the farmer didn't get 10 cents, and if you had increased the price of cotton, it wouldn't amount to anything in what the consumer paid. That is always true. Take a suit of clothes made of wool today. You pay $35 or $40 for a good suit of clothes. In that suit of clothes, the price that the farmer gets for the wool was not over a dollar. Suppose you doubled his price of wool and he got $2. The suit of clothes would have retailed the same. There is every reason to believe that wheat could be $1.25 per bushel or $1.50 a bushel in Chicago and bread not go up a penny, just be the same price to the

consumer.

Senator FRAZIER. Mrs. Donnelly was not worrying about the price of the garments she had to sell, but the money that the workers had to spend for food products. That was her whole story.

Mr. SIMPSON. And I am sure they would not have to pay a penny more a loaf, not a penny, not a particle of increase in the price of a loaf of bread if you made wheat twice as high as it is. And the same thing would be true of everything that is manufactured from cotton and wool. There would not be a particle of raise in price to the consumer. All the testimony in investigations made by the Senate of those things, like the bakers-they have testified that the price