Mr. POLK. Thank you very much, Mr. Jenkins. If you wish to prepare a statement for insertion in the record, you may do so.

Mr. JENKINS. I will just depend on what I have said here.

Mr. WATTS. I have no questions, but I certainly wish to welcome Mr. Jenkins to this committee. I have bothered him on his committee many times about taxes on tobacco, and I welcome the opportunity for him to bother us a little.

Mr. JENKINS. We have to have tobacco and we have to have taxes. Mr. WATTS. That is right.

Mr. Bass. Mr. Jenkins, you are on the Ways and Means Committee. I should like to ask this one question: What do you think about eliminating the privilege of taking a tax reduction or tax exemption from the tax which is paid on the overproduction of tobacco, the tax which is paid on the overplanting, as a tax matter? You understand what I am referring to, of course. If a farmer pays a tax now of 50 percent and he pays back to the Government $500 for overplanting his tobacco, he can use that as an income-tax deduction, you see.

Mr. JENKINS. You are asking me about something that I am not posted on. Taxation is ramified in so many different ways. I could get you the answer if you wish.

Mr. Bass. I have been informed by people in the tobacco industry and by farmers, and also by other people, through letters, that some of the overplanting has been stimulated by the fact that if they overplant and pay a tax, they can use the money paid to the Government as an income-tax deduction, and some of the larger farmers have taken advantage of it and that has stimulated overplanting.

Mr. JENKINS. I can see you have a real problem there. I see that somebody could take advantage over somebody else by doing that. Mr. BASS. That is right. I would certainly like to see legislation brought out from the Ways and Means Committee which would eliminate the privilege of taking that as an income-tax deduction.

Mr. JENKINS. You raise a problem on which I am not familiar with the way it works out, but I shall find out, and I will let you know.

Mr. BASS. I would appreciate your investigating that. I have already mentioned it to the chairman of the Ways and Means Committee, and I have asked him to suggest something on it. I would appreciate your investigating that.

Mr. JENKINS. I see that there is an opening there so one man could take advantage of someone else.

Mr. BASS. Thank you very much.

Mr. POLK. Thank you, Congressman Jenkins. We appreciate your very excellent statement on this subject.

Mr. JENKINS. Thank you very much.

Mr. POLK. Our next witness is a very distinguished Member of Congress from Kentucky.

Mr. Perkins, we are certainly glad to have you here.

Mr. PERKINS. Thank you, Mr. Chairman.

STATEMENT OF HON. CARL D. PERKINS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF KENTUCKY

Mr. PERKINS. Mr. Chairman and members of the committee, my name is Carl D. Perkins, Representative from the Seventh Kentucky Congressional District. I appear here today to urge that the tobacco

base not be cut below 0.7 of 1 acre. I wholeheartedly agree that acreage measurements should be tightened. I am particularly concerned about economic conditions in the area which I represent.

The only industries that we have in the district which I am privileged to represent are coal mining and farming. Today more than one-third of the coal miners are unemployed. Many of these unemployed miners have managed to establish a little tobacco base. Then again, particularly in Elliott, Morgan, Wolfe, Lee, Breathitt, Magoffin, and Johnson Counties, the economy is largely dependent upon the raising of tobacco. In several of these counties just mentioned we find more than 1,500 small growers. These small growers are wholly dependent upon the income derived from tobacco sales for their living. This means that the small tobacco farmer must maintain his farm, maintain his family, clothe and educate his children, on the income derived from his small tobacco base. The purchasing power of these tobacco farmers in this whole area is small because of their small allotment. I am hopeful to see the day arrive in the future when our burley-tobacco markets may be expanded and the bases enlarged. If we are able to expand our markets for burley tobacco, I feel that the bases should be increased in the proportion in which they have been cut.

Mr. Chairman, I wholeheartedly agree with the statement of one of my constituents that to cut tobacco bases below

0.7 of an acre would work an intolerable burden upon the people here in this county.

He further stated that

two-thirds of them depend almost absolutely for their living for themselves and their family upon the money that they get from their tobacco. Many of them could not support their families with any other product that they could raise.

Mr. Chairman, it has been the law for quite a while that tobacco bases could not be cut below 0.7 of an acre. I feel that we should not crush the little farmer in this squeeze. Cutting the tobacco bases below the present law of 0.7 will greatly affect the economy in several of these counties in eastern Kentucky and greatly impair the needed purchasing power of thousands of families to support and educate their children.

Mr. Chairman, I wish to thank you for the opportunity of appearing here today. In closing, I would like to again request that your committee give the utmost consideration to the little grower and not cut his acreage below 0.7, which is the present law. Naturally I feel that any growers who do not have as much as 0.7 of an acre at the present, likewise should take no cut.

Mr. POLK. Thank you, Mr. Perkins.

Our next witness is a very distinguished Member of Congress from the Commonwealth of Kentucky, and I am going to ask Congressman Watts to introduce him to the committee.

Mr. WATTS. Mr. Chairman and members of the committee, it gives me a great deal of pleasure to welcome to our hearing this morning a distinguished gentleman from the southeastern section of Kentucky, a section which has always played a very fine part in the development and progress of Kentucky, a section which today has many problems in common with the rest of the country. Mr. Siler.

Mr. POLK. We are glad to have your statement, Congressman Siler.

STATEMENT OF HON. EUGENE SILER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF KENTUCKY

Mr. SILER. Mr. Chairman, I have a short and simple statement. The burley tobacco growers of my district down in southeastern Kentucky run into the hundreds, but they are practically all little growers. We do not have any big producers.

These little growers, according to the letters I have been receiving, do not favor any change in the law which will reduce the present minimum tobacco allotment below seven-tenths of an acre for each little farmer that sweats under the southeastern Kentucky sun.

Our part of the country has been depleted by the closing of many coal mines due to the disappearance of the coal-burning market. It has also been depleted by the gradual exhaustion of the timber with which we were once endowed. It has also been depleted by the transition in the railroad industry from steam locomotives to diesel locomotives with resulting termination of railroad shops down in my district. How far can these depletions go? We people in my part of the country never had any industry except the three mentioned-coal, timber, and railroading-unless you would say that farming is also an industry.

Now I have seen many hard-working farmers in our county seat towns of southeastern Kentucky on Saturdays with patched overalls and with mostly only a few tobacco dollars for their spending money. Most of them have several children and out of their meager tobacco money they buy a few clothes and the household stuff they may need over the weekend. These are the seven-tenths-acre folks, and they simply cannot afford to be further reduced if they are to still survive with a little family spending money wrung from an unwilling soil. There is an irreducible minimum in anything, and it has already been reached as presently fixed by law in the tobacco-growing field, in my opinion.

We recognize minimums in other places and we dare not drop below them. In fact, we are constantly trying to raise such minimums all the time. We have a minimum wage for interstate commerce employment now fixed at 75 cents per hour, and yet we are now trying to raise it to 90 cents per hour or $1.25 per hour, if you please. We have a minimum-wage scale fixed for production upon Government contracts involving $10,000 or more, and furthermore we say it would certainly be "hell for breakfast" if that minimum should ever be violated. We have minimums fixed for lawyers by bar associations and minimums for doctors by medical associations and minimums for workmen by organized labor. Now it is time for a minimum of not less than seventenths of an acre for burley tobacco growers to be endorsed and continued by Congress for all the little farmers that have made this country a big America by their blood and sweat and toil and tears through all these years.

It is time for us to recognize that there is a logical difference between big burley growers with many acres and little burley growers with only a few acres, just as we now recognize a logical difference between big income people and little income people by placing them in entirely different tax brackets for taxation purposes. We have never been a Government that took bread out of children's mouths, and it is

far too late to begin that practice now. What amounts to necessary limitation for big burley growers may often mean bread removal for little burley growers. It seems to me the seven-tenths minimum for the 25-acre-or-less man living on his own place should be continued by Congress at the present time.

Paraphrasing the statement of Abraham Lincoln for the sake of this particular occasion, I close by saying, "The Lord must have loved the little burley growers down in my part of the country because He made so very many of them," and I truly hope our Congress will never drop their little acreages below the seven-tenths level, for that is, in my opinion, the irreducible minimum for the little man trying to make a common family living out of growing his tobacco on southeastern Kentucky soil.

Thank you very much, Mr. Chairman, for the opportunity of appearing here.

Mr. POLK. Thank you very much, Congressman Siler, for your very excellent statement.

Are there any questions?

Mr. BASS. I would like to say, I believe he has been reading some of my mail, because that is a forceful statement and it sounds like some of those forceful letters I have been getting from my small tobacco growers down in Tennessee.

Mr. Siler, we appreciate your coming to the committee, and we enjoyed hearing your testimony.

Mr. POLK. Thank you, Congressman Siler.

I have before me a statement from Congressman Hugh Alexander, of the Ninth Congressional District of North Carolina. Without objection, Congressman Alexander's statement will be incorporated as part of the hearing this morning.

I also have a request from Hon. Woodrow W. Jones, of North Carolina, for permission to extend his remarks in the record, and without objection that will be done.

Also a request from Hon. George A. Shuford, of North Carolina, who wishes to place a statement in the record. Without objection, that will be done.

I also have a statement from Hon. Frank Chelf, of the Fourth District of Kentucky, and without objection his statement will be made a part of the record of our hearing this morning.

(The statements referred to follow :)

STATEMENT OF HON. HUGH ALEXANDER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH CAROLINA

My name is Hugh Alexander, Congressman from the Ninth Congressional District of North Carolina.

In North Carolina we have 19,685 burley tobacco allotments and 17,833 of these allotments consist of 0.7 of an acre or less. In my own district there are two burley tobacco markets and approximately 5,000 burley tobacco allotments of less than 0.7 of an acre; therefore, I am vitally interested in Federal legislation which will solve the surplus burley tobacco problem.

In my opinion one helpful step in the solution of this problem would be to follow the recommendation that has been made by many leading authorities on this subject by increasing the rate of penalty on the marketing of excess tobacco from 50 to 75 percent of the average market price during the previous year. Furthermore, I believe it would be helpful, as has also been widely recommended, if the present law were amended to provide that any acreage of tobacco harvested in excess of the allotted acreage, for any farm, for any year, shall

not be considered in the establishment of the allotment for the farm in succeeding years.

The burley tobacco growers in my district feel, and I agree with them-based upon information I have received-that if these two proposals are enacted it would not be necessary to decrease burley tobacco allotments below the 0.7 of an acre for each farm allotment as now provided by the Agriculture Adjustment Act.

STATEMENT OF HON. FRANK CHELF, A REPRESENTATIVE IN CONGRESS FROM THE FOURTH DISTRICT OF KENTUCKY

Mr. Chairman and gentlemen of the committee, first I want to take this opportunity to thank you very much for your kindness in allowing me to sit with your splendid committee during these tobacco hearings. The fact that you allowed me to attend was greatly appreciated but when you were considerate enough of me and my people and their problems to permit me to ask questions and to actively participate during the conduct of the hearings that, in my opinion, is over, above, and beyond the normal and customary courtesies extended to Members of the Congress.

Mr. Chairman, I shall be very brief because you have heard from the experts in the Department of Agriculture, the growers, the warehousemen, and all other interested parties.

At this time I would like to submit for the record a petition signed by some 600 Barren County farmers who urge this great committee and the Congress— "to increase the tax on tobacco raised over the legal acreage allowance from the present tax to not less than 80 percent." Also, I would like to offer and make part of this record a petition signed by a considerable number of farmers of Larue County (also in my congressional district) which states: "We the undersigned are in favor of increased tax on excess tobacco above allotments." In addition thereto, Mr. Chairman, I have many letters and telegrams from not only the presidents of several county farm bureaus within my district but also letters from leading citizens and farmers, who are all growers of burley tobacco, urging me, as their representative, to petition this fine committee to increase the tax on excess tobacco from 50 percent to as high as 90 percent-and to do everything else necessary, in the discretion of this committee, in order to preserve and protect the entire tobacco program which, gentlemen of the committee, is the very economic lifeblood of my people.

I was very much impressed on Thursday (March 10, 1955) by the statement of Mr. Burl S. StClair, president of the Kentucky Farm Bureau Federation, when he said, among other things, the following: "We favor legislation for the reduction of acreage allotments on a basis that would apply to all growers alike." This policy conforms with a telegram to me dated January 14, 1955, from Mr. Ben F. Newman, Nelson County Farm Bureau president, in which he suggests changing "allotment decimals from tenths to hundreds of an acre so all allotments would be cut at uniform rates."

I have a communication from the Woodford County Farm Bureau and also a letter from Mr. Owen Rouse, chairman of the ASC committee, which state among other things: "National increases and reductions should apply to all tobacco farms." Also, that increased tax on excess tobacco should go from 50 to at least 75 percent, and that the so-called red card ought to be publicized on tobacco warehouse floors-while reducing the amount of the allotment for new growers from one-half of 1 percent to one-fourth of 1 percent.

I also have a wire from Mr. Earl Butcher, president of the Lincoln County Farm Bureau, Stanford, Ky., under date of March 5, 1955, which urges that the present penalty be increased to 75 percent and recommends that "any cut in acreage be across the board."

A telegram from the Shelby County Farm Bureau, signed by the president, Mr. G. N. Buses, Jr., and dated March 5, 1955, states among other recommendations: "We wish particularly to emphasize the fact that everybody large or small must take future cuts equally if the program is to survive."

I have a communication from the Metcalfe County Farm Bureau president, Mr. C. P. Simpson, dated January 19, 1955, which states: "Urge you to do all in your power to do away with privilege of selling burley tobacco in excess of allotments for farm and earning allotment by excess production either by increasing penalty or by some other way."