Mr. Cовв. And we would have to bring his allotment up to the point of two bales.

Mr. DoXEY. That is right.

Mr. COBB. And the four-bale producer or those producing slightly more than three bales brings in another group.

Mr. DOXEY. Well, the intent of the Congress-that is my intention, speaking for myself, is to take care of this two-bale farmer, the producer being classed as owner, tenant, and share-cropper.

Mr. COBB. Yes.

Mr. DoXEY. How many bales do you estimate that would amount to, deducted from the 10,000,000 bales allowance, if you are going to have the 10 million as a figure?

Mr. COBB. I am sorry; we do not have the figures on that.

Mr. DOXEY. Well, about how many? How many farms do you estimate produced cotton last year? Four hundred thousand or two hundred thousand or just how many?

Mr. COBB. Well, there were 211⁄2 million farmers who made application for allotments under the Bankhead bill.

Mr. DoXEY. Of course, I am talking about the two-bale man; that is the point I had in mind, and let us not get away from the two-bale man for the moment. The man who has the two-bale exemption; how many bales of cotton do you estimate that would be, that would be tax free, exempt, under normal conditions, in the 1935 crop?

Mr. COBB. I could not tell you that, because we have not finished the calculations or the tabulations of the Bankhead application at this time. That is under way and has been under way for 2 months. We have gotten the figures back from most of the States and are now going over these Bankhead application lists, according to the type of producer.

Now, coming to

Mr. DOXEY (interposing). When do you think you would have that information available for us? I think that is important.

Mr. COBB. It is very important to us.

Mr. DoXEY. Yes.

Mr. Cовв. Because we cannot proceed to make any of these allotments until we get that information finished.

Mr. DoXEY. Yes.

Mr. COBB. I should say that in perhaps 10 days. You understand it involves a great deal of calculation, first, in its application to the two-bale man; going over all that and calculating how much is going to be set aside for him; and then the three-bale man, making the calculations in his case, and then the four-bale man. It is a rather intricate series of calculations that have to be made before we can get the information and data in tabulated form. We have the information tabulated from most of the States, and we have several people who have been going through that and working on it and I will be glad to submit it all to you just as soon as it is in any definite shape. But any estimate that I would make here this morning would be at best just a mere guess.

Mr. DOXEY. Well, you are in better position to make that guess than any man I know of.

Mr. CоBB. Perhaps so, but it would be a mere guess, Mr. Doxey.

Mr. DOXEY. I think I understand the idea you have in mind and I believe you know what I am trying to get at, the two-bale man. I am not going to go into a lengthy discussion, but as I understand you are making the allotment to the farm and not to the individual producer.

Mr. CоBB. Yes.

Mr. DOXEY. Now, just suppose I own a farm-we will indulge in a little presumption-and I had an 18-bale allotment for the year 1934, and I had six tenants on that farm; the general average would be three bales, the general average per tenant; some might make a little more and some a little less. If that plan goes into effect, I do not know what is going to happen, but anything is likely to happen: Suppose I have a tenant on there that raised over two bales of cotton; he will get no exemption at all, will he? Now, he is the fellow this committee is trying to help, but he really will not be taken care of under your regulation, will he?

Mr. Cовв. No.

Mr. DOXEY. No, if I am trying to help my tenants- I am human, just as all of us are human-I am going to try to get just as much exemption as I can. So on my farm last year, to carry the illustration further, I have an allotment of 18 bales, tax-exempt cotton, and instead of having 3 tenants I am going to have 6 more, and have 9 tenants this year, and I still would not be getting any exemption, would I; that would be to the farm?

Mr. COBB. Yes.

Mr. DOXEY. So that is the reason why you fixed it so you cannot get around it by any subterfuge and permit anyone to get an exemption that he is not entited to?

Mr. COBB. Yes.

Mr. DOXEY. I appreciate your position and I know you have a most complicated and complex problem involved here. But still I want to reach this 2-bale farmer that has been on my place and has not been able to raise on an average more than 2 bales, and, as I understand you, under the present act and under your program, you do not think you can find any way to help that farmer, under your regulation?

Mr. COBB. This particular thing would not help him. Let me say that I am not unsympathetic at all with the thought you have in mind. Mr. DoXEY. It is not a question of sympathy; we are talking about how this thing can be done. I want a workable plan to give the exemption to the small farmer.

Mr. COBB. Yes; I was coming to that.

Mr. DOXEY. And sympathy does not get us anywhere.

Mr. COBB. Not a bit.

Mr. DOXEY. It is a practical problem.

Mr. COBB. I do not know just how you can do it without breaking the present program down, and it would work a very grave injustice, if we should do that, because that class of farmer did not suffer last year like the group that we have in mind would suffer. This gives an exemption in a certain way to a group of farmers who suffered greatly last year. It will get down to the little man; this does not get down to the quarter-bale or half-bale limit you are discussing, and I do not see how we could reach that without breaking our program down.

Mr. DOXEY. I appreciate that.

Mr. Cовв. And this will take care of him.

Mr. DoXEY. The point I am after is: Have you at this time any authority to exempt this fellow that we want to be reached by our regulation, or has been reached by regulation already, or what effect it would have to reach him by legislation?

Mr. COBB. Well, the legislation that would help him, Mr. Doxey, would have the effect of forcing a plan that would be utterly unworkable.

Mr. DOXEY. You made that statement in a general way, but just tell me why legislation that would help him would have the effect of breaking down this program?

Mr. COBB. It would do this: There are countless thousands of tenants in that group who produce tobacco and other crops who would never make more than 1 bale of cotton to the farm, and if you give them 2 bales it would greatly increase the total production of cotton. Mr. FULMER. You mean to the farm?

Mr. COBB. Yes; to the farm-would result in an excess production of cotton. For instance, take the territory, certain districts in North Carolina and South Carolina, and in Georgia and Mississippi and Arkansas, and in Texas, particularly, and in Oklahoma, it would draw away from some of those who were allotted a large baleage to take care of this additional exemption for tenants elsewhere and cut down the production on these farms where they use their own labor. Mr. DoXEY. How much would that be?

Mr. COBB. Well, I would estimate it would take a quarter million bales, or perhaps more than a quarter million bales to take care of those who are producing less than two bales. There is not any place for us to get this cotton except from other producers. But I would say this for the Cotton Belt, that so far as I have been able to get the reaction from the producers, both of these classes, they will welcome this sort of a provision. They realize the difficulties that are involved in the case of a small producer and they are willing, if they should be called upon to do so, to make the small sacrifice involved. As a matter of fact they do not regard it as a sacrifice because they believe it is going to add up, in the end, to the satisfaction of the small producer and get him out of his difficulty and mean additional income and smoother operation to ali of them.

Mr. DoXEY. And, Mr. Cobb, just what basis do you use in arriving at your figure, when you say that to bring them under this 2-baleallotment provision would involve a possible quarter million of bales? Take your arrangement here under which you are making a tax exemption to the farmer; it only affects the farm that raises less than 2 bales, does it not?

Mr. COBB. No; it affects the rest, that raise 2 or 3 or 4.

Mr. DoXEY. I know, by the reduction in percentage of the threeor four-bale producer?

Mr. CоBB. Yes.

Mr. DoXEY. It does affect them?

Mr. COBB. Yes; it affects them also. I did not get your question perhaps.

Mr. DoXEY. Using that as a basis, how many bales do you think that would involve in tax-exempted cotton?

Mr. Cовв. A quarter of a million.

Mr. DoXEY. The same as the other?

Mr. COBB. The same thing.

Mr. DOXEY. The same amount?

Mr. Cовв. Yes.

Mr. DOXEY. You mean it involves the same amount if you do not help this little two-bale farmer, or the man who raises less than two bales, that there will be an excess of a quarter million?

Mr. COBB. I think perhaps I did not understand your question. You have in mind the 10 tenants involved, I believe, in your

illustration.

Mr. DoXEY. Yes.

Mr. COBB. That would involve more than a quarter of a million bales.

Mr. DOXEY. That is what I am getting at.

Mr. Cовв. It would have the effect of piling up an exemption into the millions of bales. If you are going to put him on the same basis as the farmers who are above two bales and the large farms. you are going to pile up a very great quantity.

Mr. DOXEY. That would be just your guess, and one man's guess would be as good as another, would it not?

Mr. COBB. No; it would not be just my guess; that is a fact. Mr. DoXEY. Of course, I am not trying to argue, but I am just trying to get at the facts.

Mr. COBB. Yes.

Mr. DOXEY. You know how it will work, or I think you ought to, and I am trying to find out how this bill or how your regulations are going to work out this year. Now, if that is your view, I want to say that and you say you are going to ask Mr. Hiss to tell us about the authority to do it under this act-is there any question in your mind about your authority to do this by basing the baleage on the farm?

Mr. DoXEY. Two bales will be the maximum?

Mr. COBB. Yes; two bales will be the maximum amount; but you will recall that the 3-bale producer as well as the 4-bale producer comes within that group also.

Mr. DoXEY. The 4-bale man has some coming out?

Mr. CоBB. Yes.

Mr. DoXEY. The man who produces more than three bales and makes the 35-percent reduction?

Mr. COBB. Let me see if I can illustrate that.

Mr. DOXEY. Well, you are going on the contract reductions, and I am asking you if they could raise as much, for exemption, under this basis that you are working on or if you could give us some idea of what it would be. I do not want to go too much into detail.

now.

Mr. COBB. Here possibly is the answer to that thought: The man who produces three bales-1,434 pounds of lint-produces, I think, 23 pounds less than two bales, if he makes a 35-percent cut

Mr. DoXEY (interposing). In other words, he will have that much less than the 2-bale man and would come under this regulation?

Mr. Cовв. That is right. He would get 23 pounds.
Mr. DoXEY. To bring his production up to two bales?

Mr. Cовв. That is right.

Mr. DoXEY. Very well.

Mr. COBB. But it takes a very much greater number of farms when you go to putting in that number. Bringing in the man who produces three bales, you reach out into hundreds of thousands of farms that are not included if it were confined to the 2-bale farm.

Mr. DOXEY. May I make this observation and then I am through: We all know just from practical knowledge that under the regulations of the kind you propose for handling this 2-bale exemption that is going to affect quite a few farms and farm owners, but will not reach the tenant or share-cropper.

Mr. COBB. There is going to be a very large group of farms; yes. Mr. DoXEY. That is all.

Mr. Cовв. That will be affected by it.

The CHAIRMAN. Mr. Owens.

Mr. OWENS. Mr. Cobb, isn't it your idea that a large percentage of the votes in favor of continuing this program for 1935 was on the basis that it would apply to the farmer and not to the farm, the two-bale exemption?

Mr. COBB. I cannot answer that.

Mr. QWENS. I think that is true.
Mr. COBB. I will say this-

Mr. OWENS (interposing). And I think that is practically the President's statement; I think that was back of the large majority for the continuation of this program for 1935.

Mr. COBB. I will just say this, however, that in nothing we have sent out in the field has there been any indication that the application of a 2-bale program of that kind could be carried out without breaking down the whole program. I think they understand that. I think they understand that this thing was to done for the small farm.

OWENS. And the small farmer is the man that needs it.

Mr. OWENS. Now, the allotment to the farm would not reach the small farmer, the man who was the tenant

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Mr. COBB (interposing). Mr. Owens, I think the definition of small farm" would not be the same as the definition given for a tenant. I know we have regarded as a small farm the small farmer who operates his own farm or holding-I conceive the definition of small farmer to be the farmer who owns and operates the land, cultivates the land, and who has produced, habitually produced, less than 2 bales of cotton. I think that has been made clear in their minds, reasonably so, at least.

That is what we regard as the small farmer. Cropper and tenant is never, in my judgment, referred to as a small farmer.

Mr. OWENS. That is not the situation in my section. The man who farms 10 acres, or 5 acres, or a smaller amount, whether he is a tenant or not, is regarded as a farmer.

Mr. COBB. He is a farmer, of course, Mr. Owens; he is known as a farmer, of course, in Georgia, but the small farmer, in my mind, is the man who owns his own property. Now the tenant and the share cropper we consider in a different class.

Mr. CоBB. He is never a small farmer.