and expect to get the high rate from those who can pay. I do not like that kind of treatment. Mr. LEMKE. Let me make this further suggestion, Senator, that in this case it is only at the time that this act goes into effect. It is not for future indebtedness. It is only an emergency measure at this time, limited strictly to the emergency in the past. One Senator asked me if there was any real objection if we would say indebtedness existing six months prior to the passage of this act. That is up to Senator Frazier here. I have no objection to that, to avoid speculation. But I think in this emergency and crisis that exists, it is essential to give the farmer this necessary assistance. If he has sufficient real estate, the stock would not come in at all. Senator NORRIS. In your case where he does not have sufficient real estate, that throws into a business man's mind at once some doubt. There are men-I feel sorry for them-whom we can not save, because they are too far gone. If you have a farm worth $10,000 with a mortgage of $20,000 on it, you could not expect the Government to loan you $20,000 on that farm. If a man has got his farm in debt so much the Government could not give him enough money to get out of debt, or, at least, it should not, that man has probably gone beyond the power of the Government or anybody else to save. Mr. LEMKE. That is true in a few exceptional cases, which is true in any industry. For instance, the Federal land bank has made loans where that very thing has happened. One of the troubles in all of this, Senator, is that at one time these values were high, and the loan was only 40 or 50 per cent of its then value, but the deflation has destroyed the value. Senator NORRIS. Yes. Mr. LEMKE. I feel that if this loan is made and you put two or three billion dollars of new money out with the people, not with the banks, so that it gets real circulation and takes up obligations, that the values will come back. Senator NORRIS. Do you suppose there would be any danger if we did that, like we did during the war, for instance, that this may become a fever and everybody get it, and go crazy again, and the farmer, as well as everybody else, buy land at two or three hundred dollars an acre that is only worth a hundred? Mr. LEMKE. I think they have had some object lessons from what they have gone through that are sufficient. And in the next place, this is not the war hysteria, when most of us lost our balance, business men as well as farmers. Senator NORRIS. There were a lot of fellows in the Senate who lost their balance. Mr. LEMKE. So we just went wild. But that spirit does not prevail now, and the price will not go up to $3.89, even if this bill were passed. But I think it will go up, together with this other bill, to the cost of production, and by the cost of production, I mean allowing the farmer and his family wages for their work and interest and depreciation on their machinery and on land value. It seems to me, with this other bill passed in conjunction with this one, you really have control of both ends of the situation. I feel these two bills should go hand in hand, with the exception that this one is an emergency measure, that while the other bill may help us, it is the emergency that we need in our country, otherwise there will be no farmers left. This bill is of the more importance now. As I say, if you took a referendum up in our State you would find, I think, that this was of the more vital importance, that while this other one is permanent, this is an emergency, a crisis that exists up there, and unless something is done the crisis will simply go ahead and the corporations will simply get all of the land, and in that way this permanent bill will help the corporations more than the farmers. They have gotten more now than they want, and if you pass this other bill, without this emergency, you will be helping them further. I know the spirit of the people out our way. Up in North Dakota they are issuing three bills now. You know the people in our State have the right to make their own laws. Mr. LEMKE. For instance, they are passing now around the people, in sufficient time for the June primaries, a proposal for a partial moratorium, allowing the mortgagor to foreclose his mortgage, but he can not get a title to it if the mortgagee will pay 1 per cent for the next five years, or until the Congress shall have passed the Frazier bill. You see, they have hopes in the Frazier bill. Senator NORRIS. Suppose that happened and Congress passed the Frazier bill; that would end that up there? Mr. LEMKE. That would end that up there; yes. Senator NORRIS. And then the President would veto it and you would not have anything. Mr. LEMKE. Excuse me for saying it, but we expect to have a new President next November. We are through with the present incumbent, as far as we are concerned. Senator NORRIS. I don't know whether you are or not. Mr. LEMKE. Well, we will try to be, because we feel the President of the United States is the servant and employee of the American people, and if he does not function for all of them he ought to be left at home. I do not wish, however to indicate that I think that he would veto it. I think he will sign it. Senator NORRIS. I haven't any idea that he will sign it. I want to read you what one of the members of the President's Cabinet said last night. It seems there was a meeting of a lot of patriotic societies down here of various kinds, quite a number of them. They were all in favor of various things, and Secretary Wilbur was there and made a speech, in which he said this: 66 We find our ideal of majority rule "—that is one of the fundamental principles of democracy, as I understand it-"We find our ideal of majority rule in conflict with the need of control by an elected or selected expert who alone is capable of guiding our involved and elaborate governmental mechanism through its many difficulties." Well, there is only one elected expert. That is the President. He was elected an expert, and according to Mr. Wilbur, we have got to modify our ideals of majority rule. Mr. LEMKE. We have modified ours in North Dakota so much that we increased the Democratic vote 150 per cent in the last election. 117902-32-12 Senator NORRIS. It is a question in my mind whether you are not jumping out of the frying pan into the fire. Mr. LEMKE. I may say that it is for the particular candidates that they did that, rather than for the party, because I might say we find the situation, regardless of party politics, where there is a growing feeling among certain people in a very limited class whose ideas Mr. Wilbur expresses, but they are not going to prevail in the United States of America. Senator NORRIS. I mentioned Mr. Wilbur as a member of the President's official family because you said you thought the President would sign this bill. Mr. LEMKE. I think he will. Senator NORRIS. If he thinks that instead of a majority ruling, that when an expert gets in there, an engineer, that the people ought to have nothing to say except to acquiesce, do you still feel the same way? Mr. LEMKE. But, fortunately, this export has to submit to the will of the people and an election is coming on, so I still feel that he will sign the bill, if for no other reason than that the demand is so universal. Senator NORRIS. Suppose he is nominated by the Democratic Convention as well as the Republican Convention, how are you going to prevent his election? Mr. LEMKE. Then you and I will have to form a third party. Mr. LEMKE. I will say, as a matter of fact, that unless there is a liberal candidate nominated, you will find a large sentiment expressed somewhere else than in either one of the old parties. Senator CARAWAY. Senator Norris, do you think there is a likelihood of the Democratic Party nominating Mr. Hoover? Senator NORRIS. Either Mr. Hoover or somebody just like him, so it does not make any difference whether it is Hoover orMr. LEMKE. Or Owen D. Young? Senator NORRIS. Yes, Owen D. Young, or Raskob, for instance. Senator FRAZIER. Another question that has been raised about this bill is whether it would not be well to limit the amount that could be borrowed by any one individual or any one farmer, under the principle of the Federal land banks, limiting the amount to $10,000 to each farmer. What do you think about that? Mr. LEMKE. Well, Senator, that is not sufficient in this recent crisis, because the farms we have in our States up there, excepting Illinois and Iowa, perhaps, are large, and as long as the loan is safe and the Government makes a profit on it, why should we be so skeptical about letting the Government for once taking charge in a limited way of the money business rather than New York. It seems to me to be clear that if the security is good and ample, there should be no restriction to begin with, because in our States I know a lot of people that have farms, bona fide farmers, who have $75,000 in indebtedness outstanding, say, on five or six or seven thousand acres of land, that they actually farm. Why should those people be penalized just because they got into this situation any more than your Reconstruction Corporation allowed Mr. Morgan and Kuhn, Loeb & Co. five million and some odd dollars out of the first loan advanced? If a restriction had been put there of $10,000, would that corporation have been able to function? Senator FRAZIER. That is different. Mr. LEMKE. I know, but not to us. Senator THOMAS of Oklahoma (presiding). Are there any further questions by any member of the committee? If not, thank you very much, Mr. Lemke. Mr. Bowen, we will now hear you, if you have something to say. STATEMENT OF A. E. BOWEN, OKLAHOMA CITY, NATIONAL ORGANIZER NATIONAL PRODUCERS ALLIANCE Mr. BowEN. My name is A. E. Bowen, Oklahoma City. I am the national organizer of the National Producers Alliance, and I speak for that organization and also for the Farmers Union organization. Mr. Chairman, I had hoped this afternoon to be able to talk to the full committee here. As I look around the table I see that practically every Senator here is a person who thinks almost exactly as I think. Ten years ago these hearings were going on on farm relief legislation. I think Senator Norris will remember that eight years ago this winter I appeared before the agricultural committee of the Senate two different days, arguing in favor of the Norris-Sinclair Grain Marketing Act that was before the committee at that time. We who represent farmers' organizations feel that we have made some progress. The committee has recommended legislation, and, as Senator Norris says, the Congress has passed that legislation and sent it to the White House. The President has vetoed that legislation. The farmer is worse off to-day than he was 10 years ago. Senator FRAZIER. And the farmers will blame Congress for not passing these measures over the President's veto. Mr. BOWEN. Yes; Congress is to blame for not passing the legislation over the President's veto, but the men who voted for the legislation and to pass the legislation over the President's veto are not to be condemned. These three organizations have agreed on a bill that has been submitted to the members of the committee to-day. The organizations are not all agreed officially on the Frazier bill, but I want to say that the organizations that I speak for are 100 per cent for the Frazier bill in principle. Several times before this committee in the last week the question has been asked: "Well, if you finance the farm mortgages, as the Frazier bill proposes, it just means that you will start the printing presses up and print an unlimited amount of money.' Every time anybody discusses the money question it seems they are afraid if we leave the gold standard we will go to the very opposite extreme, as they did in Germany, where they started the printing presses going and printed bales of money. It is reported over there that they would take a bale of paper and make money out of it, and after they got the money printed, there was not enough money printed to buy another bale of paper, money was so cheap. Whenever I think of this money question it reminds me of two men who died. One of them died with what the doctors call, I believe, anemia, where you do not have enough corpuscles in the blood. An other man over here died with a blood clot on his brain. One man dies because his blood is too thin. The other man dies because his blood is too thick. The man who dies with a blood clot on his brain has got just as much blood in his body after he dies as he had before, but it is not moving around, it is not circulating. That is the situation we have come to in the United States to-day. In my experience in lecturing, which I have done for 20 years, before farmers' cooperatives and political organizations, whenever I have suggested that anything be done for the people, I always run up against this question, "Where are you going to get the money to do it with?" They never say, "Where are you going to get the overalls, where are you going to get the food?" They never ask you where you are going to get the bread and butter. They always will ask you where you are going to get the money. Now, they ask that because everybody knows that money is scarce. They do not ask where you are going to get the food and clothes, because everybody knows that food and clothes are plentiful. Money ought to be a medium of exchange. The only reason we want money is because it is convenient. It is more handy for the farmer when he goes and buys some sugar to pay for it in money than it is for him to take in a certain number of eggs or a certain part of a beef, or something of that kind, and make a trade. Money is a measure of value and ought to be based on the articles that are being measured. The gold standard has just got us where we are. The gold standard was adopted because gold was scarce. As long as you have got the gold standard, money is going to be active. If land, as provided in the Frazier bill, is not the best security in the world for an issue of money, then I don't know what is. Senator NORRIS. Mr. Bowen, I want to ask you something on that point. I think that is very interesting. Without trying to offer any criticism on your suggestion that land be made the basis, perhaps if I were going to make any objection at all to it, it would be that it is not practical, because we have not got the votes. We can not convince the people who have followed this other scheme for so many generations and years. We would have to go on an educational expedition that would last for 10 or 12 years before anybody could be converted. Would the same thing be brought about now if a measure that I understand is now on the House calendar were passed? I have not read it, but from what I have been told about it the fundamental principle is this. It has for its object the raising of commodity prices, just like you said, that money should be based on what these commodities are worth, and they take as a basis, artificially, the report of the Labor Department, wherein they get an index figure for several hundred commodities that are in general use, and direct the Federal Farm Board to issue currency by the buying and selling of Government bonds, and keep that commodity price, based on a series of years when it was believed, at least, that the commodity prices were fair, and inflate the currency or deflate the currency up and down, to keep those commodity prices on that basis. Would that accomplish the same result? Mr. BOWEN. I think it would help, Senator, but I do not think that anything can solve the farm problem that permits Old Man Six Per Cent to live. I believe it says in the Bible some place that he |