FARM RELIEF

FRIDAY, APRIL 29, 1932

UNITED STATES SENATE,

COMMITTEE ON AGRICULTURE AND FORESTRY,

Washington, D. C.

The committee met at 10 o'clock a. m., in room 324, Senate Office Building, Senator Charles L. McNary presiding.

Present: Senators McNary (chairman), Capper, Norbeck, Frazier, Townsend, Kendrick, Thomas of Oklahoma, McGill, Bankhead, Bulow, Caraway, and Shipstead.

Also present: Senator Brookhart.

Others also present: John A. Simpson, president National Farmers Union, Oklahoma City, Okla.; A. W. Bowen, Washington representative of the National Farmers Union; Fred Brenckman, Washington representative of the National Grange; Edward A. O'Neal, president of the American Farm Bureau Federation, Chicago, Ill.; Charles E. Hearst, vice president American Farm Bureau Federation. The CHAIRMAN. The committee will be in order.

Senator FRAZIER. Mr. Chairman, I have a telegram I received yesterday which I would like to read into the record.

The CHAIRMAN. Very well.

Senator FRAZIER. This is dated April 28, from Kankakee, Ill., and addressed to me, and reads as follows [reading]:

Illinois State Legislature in special session yesterday passed joint resolution memorializing Congress to pass Frazier bill, S. 1197. Vote two-thirds in senate; house unanimous. Entire bill was printed and made part of resolution. That Illinois does this is significant.

It is signed "E. E. Kennedy."

As I recall it, Mr. Chairman, that makes six State legislatures that have indorsed my bill. I want to say right here there are a lot of members of this committee who do not realize what the situation is, and do not know what the farmers are up against, and do not know what the business men in these agricultural communities are up against.

Senator BULow. You will have to get three-fourths of the States to get action.

Senator FRAZIER. I think we could get them in time.

The CHAIRMAN. I have a telegram from the president of the Barron County Farmers Union and member of the executive board of the National Farmers Union, coming from Wisconsin, that I desire to have inserted in the record at the request of Mr. John A. Simpson, president of the Farmers Union.

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(The telegram is here printed in the record in full, as follows:)

Hon. CHAS. L. MONARY,

[Night letter]

Chairman and Member of Committee on Agriculture and Forestry,

United States Senate, Washington, D. C.: Every local in Barron County joins the county farmers union urging and demanding immediate favorable report of bills sponsored by National Farmers Union. Food helped win the war at the expense of a bankrupt agriculture. Administrative measures so far passed but mere palliatives, not helping agriculture nor unemployment conditions. Democracy is on trial. Hundred per cent true Americanism and statesmanship needed to save Nation from chaos. Congress has power to cure this financial anemia. Restored purchasing power of the masses and a square deal for agriculture only solution in present crisis. Prosperity starting with producers of wealth, agriculture, and labor, will lock back door to fast-growing unrest and communism, if not spell entire defeat. Present administration philosophy that the masses exist for the few must be changed by a courageous Congress exercising its constitutional powers in representing the people. Demand real investigation of Farm Board, its activities and creatures, not a mere whitewash. Economy programs and balancing Budget useless as long as present conditions are allowed continuing. Senators and Congressmen will be awarded according to their actions and company they keep when the masses exercise their power at the ballot box. F. SCHULTHEISS,

President Barron County Farmers Union and

Member of Executive Board, National Farmers Union. The CHAIRMAN. As stated yesterday, the three farm organizations have agreed upon a modification of the agricultural marketing act, and Mr. O'Neal, who is the president of the American Farm Bureau Federation, as a representative of that organization, said that Mr. Chester Gray would speak to the committee this morning concerning that proposal. Have you any further copies, Mr. Gray? I see that most of them have disappeared from the committee table. Mr. GRAY. Yes, sir.

The CHAIRMAN. Now, Mr. Gray, if you will, you may proceed. STATEMENT OF CHESTER H. GRAY, WASHINGTON REPRESENTATIVE OF THE AMERICAN FARM BUREAU FEDERATION

Mr. GRAY. In order to save the time of the committee it has been agreed by Mr. Brenckman, for the National Grange; Mr. Simpson, for the National Farmers Union; and Mr. O'Neal, for the American Farm Bureau Federation, that I should explain the bill which relates to amending the agricultural marketing act, which bill has been agreed upon by the three farm organizations, and presented to the committee this morning. It has been known that the three farm organizations have come before this committee once this session in regard to amendments to the agricultural marketing act, as well as before the Agricultural Committee of the House. Since that appearance was had, two months or more ago, constant and continuous remarks and comments have come to us that the farm organizations have agreed in principle as to an amendment of the agricultural marketing act, having agreed that the agricultural marketing act should be continued, should later agree as to the exact text of a bill which we desire as an amendment to the agricultural marketing act. We did not desire to assume this responsibility, Mr. Chairman and gentlemen of the committee. We thought, and

we stated as witnesses here, eight weeks or thereabouts ago, that we would present our ideas how the act should be amended, and then hoped that the committee itself, through its own membership and contacting with the legislating drafting service, would formulate the amendments necessary.

That not having been, evidently, the opinion of the committee, and the opinion coming to us that the organizations should write the bill, we have done so; and are coming to you this morning with a measure, not having been introduced, but to submit it to you, and if the committee desires to act along the lines that this bill outlines, it is our hope and desire that the committee, as a committee bill, will introduce this measure.

Senator THOMAS of Oklahoma. Will you at this time furnish and have placed in the record a copy?

Mr. GRAY. I will at this time, Senator, unless it was done yesterday, put it into the record. My information is, Senator Thomas, that the chairman asked that it go in yesterday, and that it did go in. Senator THOMAS of Oklahoma. Very well.

Mr. GRAY. The bill which you have before you in mimeographed form sets out that it is a part of the agricultural marketing act. It displaces nothing that is in the act at the present time. It will not put into effect anything to make useless any part of the agricultural marketing act now in operation.

The bill is an amendment in three sections, or in three titles, to the agricultural marketing act; the three sections or titles being the equalization fee, the debenture plan, and the so-called allotment plan. "Some have criticized the farm organizations by saying that "You are trying to amend the marketing act by giving too many plans by which the board can handle the surpluses.

Let me say that we view this in agriculture, with no exceptions in these three farm organizations, as being a surplus control instrumentality. I think Congress, when it enacted the agricultural marketing act three years ago, thought that it was to be a surplus control act. Congress had twice passed and had had vetoed a former measure, the McNary-Haugen bill, which was designated surplus control act. And, as I say, Congress thought when it passed the marketing act, that it was a surplus control act. But this title, that is to say, this name, does not disclose such to be true, because the name of the agricultural marketing act, which we commonly call it in usual phraseology, is a Farm Board act. The last section of the agricultural marketing act, so called, denominates it as a Farm Board act. In other words, the Congress, thinking that it was passing a surplus control act, passed a Farm Board act.

The CHAIRMAN. Now, Mr. Gray, pardon me. I think I know something about the condition and state of that legislation. I was on the floor at the time. Nobody was deceived by what was done. I said repeatedly on the floor that it was no control act; it was purely a marketing act.

Mr. GRAY. Well, we in agriculture were not deceived.

The CHAIRMAN. Well, let us put it on the same ground. The President said he wanted this bill. Former President Coolidge had vetoed the McNary-Haugen bill twice. We all knew what was in the bill and all knew its limitations.

Mr. GRAY. I am willing to accept the correction of the chairman, that the Congress knew it was not a control act; but I know that we and the Senate committee knew of the deficiencies in the marketing act. The main deficiencies were that it did not have the mechanism in it which would permit it to be called a surplus control act. Senator BROOKHART. It does mention the control of surpluses as one of its purposes.

Mr. GRAY. It mentions, in section 1, the control of surpluses as being one of the objectives. But the machinery later in the act, to control surpluses, is deficient.

Now, in the farm organizations we come to you after three years of administration of the agricultural marketing act, which we, in the main, have supported, with the amendments to make it what it should be now and what it should have been from the beginning, a surpluscontrol piece of legislation. As I said a while ago, some would say that the farm organizations are at fault because they have not singled out one design, one plan, to be written into the law to make it a surplus-control piece of legislation.

May I observe that the National Grange, for which I speak this morning only in so far as this bill is concerned, has fought for years for the debenture plan. It is a good plan, with its limitations. At the beginning I think the Grange advocated that the debenture plan would be all-sufficient as a surplus-control piece of legislation. I believe-and I am subject to correction by a more authoritative representative of the Grange than I am-that at the present time the Grange is willing to say that the debenture plan in every case will not be all-sufficient.

Formerly the American Farm Bureau Federation also, in the McNary-Haugen fight said that the equalization fee plan, if put into the bill, would control the conditions relative to surplus, and no other plan was necessary. I am frank to say, subject to correction by my superior officer who is here this morning, that the American Farm Bureau Federation in the last two years has modified its position to say that other plans than the equalization plan have merits. I think under certain conditions, the equalization fee plan might not be thrown into operation as quickly and orderly as some other plan. Might I say that with a commodity that has a small surplus, like butter, it might be that some other plan could be thrown into operation more expeditiously and be handled in a more expeditious manner than the equalization fee plan could handle that sort of a surplus.

And then, more recently, the allotment plan has been receiving a more careful analysis and consideration than it has ever received at times prior. That plan has some features in it which are also related to the equalization fee and the debenture plan. A characteristic of the allotment plan is that it wants to have the licensing powers of the Federal Government enlarged and extended. I know the policies of the Grange and the American Farm Bureau Federation well enough to say that for years each of those organizations has thought that the warehousing facilities of the Government should be expanded so that there should be more control over the handling of the grain and cotton crops. We have advocated the enlargement of the marketing act so that a farmer, if he has cotton on hand on his farm, might put that cotton crop into a warehouse, or in his local