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REPORT No..

NAME OF GIN

LOCATION

(This form was devised by and its design is the property of The Ginner & Miller Publishing Co., Dallas, Texas. (Graphic Arts Code, sec. 27, par. I.))

3. Monthly return on this form must be executed and filed In duplicate for each place where ginning is done. Report with respect to each bale of cotton ginned must be made on a separate line. The respective affidavits (on G. T. Form 106), in duplicate, must be attached in support of exemption from the tax on ginning of any cotton in class (b), (c), or (d) set forth in paragraph 2 above. The owner of cotton in class (a) (par. 2) must surrender to the ginner exemption certificates covering the weight in pounds of lint cotton ginned; any excess cotton ginned is taxable unless the cotton is returned to the producer to be stored by him. In such case affidavit A on G. T. Form 106 must be executed in triplicate, one copy retained by the ginner, one copy filled with his return, and the third copy delivered to the producer.

4. Bale tags, certificates of tagging, and lien cards. Each bale of cotton ginned other than a bale returned to the producer to be stored by him must have a bale tag securely attached thereto and a certificate of tagging on G. T. Form 104 must be issued to the owner of the cotton. Each bale of cotton returned to the producer to be stored by him must have a properly executed lien car attached. Bale tags, certificates of tagging, and lien cards must be accounted for as provided on this return.

5. Payment of tax.-All taxes are due and payable without any assessment by the commissioner or notice from the collector. Return on this form, under oath, in duplicate, with supporting affidavits attached, all exemption certificates received, and remittance for any tax due, must reach the collector of internal revenue for the district on or before the last day of the month following that for which the return is made.

6. Records. Each ginner must keep an accurate record of all transactions involved in the ginning of cotton, of all bale tags, certificates of tagging, and lien cards received, issued, and on hand. Such record must be safeguarded and open to inspection by a duly authorized agent of the Bureau of Internal Revenue.

7. Penalties. If the tax is not paid when due there shall be added as part of the tax, interest at the rate of 1 percent a month from the time when the tax became due until paid. Severe penalties for willful failure to collect tax, pay tax, keep records, file returns, or for false or fraudulent return, are imposed by law.

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[graphic][subsumed][subsumed][subsumed]

REPORT NO...

NAME OF GIN

LOCATION

(This form was devised by and its design is the property of The Ginner & Miller Publishing Co., Dallas, Texas. (Graphic Arts Code, sec. 27, par. I.))

Hon. WALL DOXEY,

UNITED STATES DEPARTMENT OF AGRICULTURE,
AGRICULTURAL ADJUSTMENT ADMINISTRATION,
Washington, D. C., February 27, 1935.

House of Representatives.

1

DEAR MR. DOXEY: In compliance with your request and my promise of Monday, am attaching information pertaining to the minimum allotment to small producers.

Sincerely yours,

C. A. COBB, Director Division of Cotton.

THE GENERAL EFFECTS OF ISSUING A MINIMUM ALLOTMENT OF TWO BALES OF TAXEXEMPT COTTON TO EACH PRODUCER UNIT WITH AN ADJUSTED AVERAGE BASE PRODUCTION OF THREE BALES OR LESS

The making of a minimum allotment of two bales of tax-exempt cotton to each producer would have the following effects:

1. One of the most serious effects would be to materially increase the acreage and production of cotton in 1935. Each producer who had in the past produced less than 2 bales annually would increase his acreage so as to produce about 3. bales in order to be certain that in case the season is unfavorable he would produce at least 2 bales.

2. Any additional cotton allotted to any particular group of producers would necessarily have to come out of the allotments due other producers. It would also be necessary to include in the 2-bale minimum group all growers who produced up to 3 bales during the base period, otherwise producers who had averaged 3 bales would receive an allotment of less than 2 bales. The inclusion of this group of producers would materially increase the amount of cotton necessary to make a minimum allotment of two bales to each producer.

3. The majority of producers who would be benefited by a minimum allotment of two bales would be those who are located in areas of a State where cotton is not the only source of cash farm income. Producers who grow tobacco, peanuts, wheat, and livestock for market, as well as cotton, would receive the increased allotment up to two bales. The cotton necessary to make such allotments would have to be taken from producers who depend almost entirely on cotton for their farm income.

4. Landlords in areas where cotton is a minor source of cash income would find it to their advantage to increase the number of tenants, or croppers, in order to increase the allotment to their farm; however, such tenants, or croppers, could not be given a large enough acreage of cotton to insure a decent standard of living. It would merely be a case of the landlord exploiting the the tenants and croppers in order to qualify for an increased allotment for his farm. On the other hand, owners of cotton farms in many cases would be required to reduce the number of tenants, or croppers, because of the decreased allotment they would receive if such a plan was put into effect.

5. To give a minimum allotment of two bales of tax-exempt cotton to each producer would make it impossible to fit the voluntary program and the Bankhead Act together in 1935. Some producers would find themselves with taxexemption certificates sufficient to gin considerable more cotton than they could possibly produce and comply with the terms of their 1934 and 1935 contracts, while other producers would be permitted under the terms of 1934 and 1935 contracts to produce cotton in excess of their allotments of tax-exemption certificates.

6. It would be impossible to administer an amendment to the Bankhead Act providing for a minimum allotment of two bales to all producers. It would be necessary to ascertain in all cases which producers would benefit under such an amendment before county allotments could be determined or allotments made to other producers. Such procedure would involve more time than is available if delays such as occurred in 1934 are to be avoided. It would also greatly increase the cost of administration. On the other hand, if the 2-bale exemption should be taken out of the county allotment, there would be cases in which the county allotment would not be sufficient to make an allotment of 2 bales to each of the producers who could qualify for such an allotment, and at the same time provide reasonable allotments for other producers in the county.

7. If a minimum allotment of 2 bales is made to producers in the State of North Carolina 31.5 percent of the estimated allotment for 1935 would go to producer units with an adjusted average base production of 3 bales or less. If the situation in North Carolina is typical of the remainder of the States in the Cotton Belt, approximately 3,460,000 bales would be required to make a minimum allotment of two bales in 1935 to all such producers in the United States.

THE EFFECT IN NORTH CAROLINA OF ISSUING A MINIMUM ALLOTMENT OF TWO BALES OF TAX-EXEMPT COTTON TO EACH PRODUCER LOCATED ON A FARM WITH AN ADJUSTED AVERAGE BASE PRODUCTION OF THREE BALES OR LESS

There are slightly more than 87,000 producers in North Carolina who would qualify for a minimum allotment of two bales. One hundred and seventy-four thousand, eight hundred and six bales of 478 pounds net weight would be required to make a minimum allotment of two bales to each such producer in North Carolina. This is 31.5 percent of the estimated allotment for North Carolina in 1935.

These growers produced 18.4 percent of the adjusted average production for North Carolina during the base period. We would thus find growers who had in the past produced approximately 18 percent of the cotton in the State receiving in 1935 slightly more than 31 percent of the State's allotment. The allotment to such producers would have to come out of the allotment due to growers normally producing about 82 percent of the State's crop of cotton.

The producers on farms with an adjusted average production of 3 bales or less received an allotment of 95,961 bales in 1934, or 18.2 percent of the total allotment to North Carolina in 1934. These growers produced 18.4 percent of the adjusted average production for North Carolina during the base period. It is thus seen that in 1934 the allotment to such producers was approximately the same percentage of the total allotment to the State as their production was to the total production in North Carolina during the base period.

While 87,000 producers in North Carolina would get an average increase of 82 percent in their allotment in 1935 over that received in 1934, the remaining 102,000 producers would receive a 12-percent smaller allotment in 1935 than they received in 1934, and this in spite of the fact that the allotment to North Carolina in 1935 will be 26,400 bales larger than the allotment received in 1934. TABLE 1.-North Carolina A comparison of 1934 allotments to producer units having an adjusted average production of 3 bales or less with estimated allotments to such producers assuming a minimum allotment of 2 bales

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87,403 X 2 bales=174,806 bales or 31.5 percent of estimate allotment in 1935. North Carolina 1934 allotment, 528,688 bales.

North Carolina 1935 allotment, 555,122 bales (estimated).

The 1934 allotment to producer units with adjusted average production of 3 bales or less was 95,961 bales or 18.2 percent of the total allotment to North Carolina in 1934.

174,806 bales-95,961-78,845 bales increase in 1935 over 1934 to these growers.

144,946÷786,342 bales=18.4 percent of the adjusted average production for North Carolina.

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