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COTTON EXEMPTIONS, APPEALS, AND COMPENSATION

OF GINNERS

WEDNESDAY, FEBRUARY 20, 1935

HOUSE OF REPRESENTATIVES,
COMMITTEE ON AGRICULTURE,
Washington, D. C.

The Committee on Agriculture met at 10:30 a. m., in the committee room, New House Office Building, Hon. Marvin Jones (chairman) presiding.

The committee had under consideration H. R. 5578, as follows:

[H. R. 5578, 74th Cong., 1st sess.]

A BILL To continue the Cotton Control Act, to exempt a limited quantity of cotton from the tax thereunder, to provide for the better administration of such Act, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the second and third sentences of section 2 and the first sentence of section 3 (a) of the Act entitled "An Act to place the cotton industry on a sound commercial basis, to prevent unfair competition and practices in putting cotton into the channels of interstate and foreign commerce, to provide funds for paying additional benefits under the Agricultural Adjustment Act, and for other purposes ", approved April 21, 1934, as amended, are amended by inserting after the phrase the crop year 1935-1936" wherever such phrase appears, the phrase or the crop year 1936-1937."

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SEO. 2. (a) Section 4 of such Act, as amended, is amended by inserting at the end thereof the following new subsection:

"(h) If the allotment of tax-exempt cotton to land of any producer of cotton (on his behalf as share-cropper or tenant) is less than two bales for the crop year 1935-1936, there shall be exempt from the tax imposed under this Act so much of the cotton harvested on such land during such crop year as is in excess of the allotment but not in excess of two bales. No producer shall be entitled to exemption certificates on the amount of cotton exempt from tax under this subsection, but, upon proof of the right to exemption under this subsecion in accordance with regulations prescribed by the Secretary of Agriculture and the Secretary of the Treasury, bale tags shall be issued for such cotton. For the crop year 1935-1936, the quantity of cotton allotted under section 3 (a) shall include the amount which the Secretary of Agriculture estimates will be tax-exempt under this subsection and the amount of cotton apportioned under section 3 (b) shall be the amount so allotted minus the amount of tax-exempt cotton so estimated.” bale "),

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(b) Section 23 of such Act, as amended (relating to the definition of is amended by inserting after "3," in the last sentence thereof "4 (h).”. SEC. 3. Section 6 of such Act, as amended (relating to allotments to producers) is amended by inserting "(a)" before the first sentence thereof, and by inserting at the end thereof the following new subsections:

"(b) (1) The Secretary of Agriculture is authorized and directed to establish, as soon as practicable, in each State a board to be known as the 'Allotment Appeals Board', which shall consist of a representative of the Department

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of Agriculture designated by the Secretary, and, with the consent of the State, the attorney general of the State or a person designated by him, and the secretary of agriculture of the State or a person designated by him.

"(2) Subject to such rules and regulations as the Allotment Appeals Board may prescribe relating to the time, place, and manner of hearing and disposing of appeals, any producer of cotton or any share-cropper or tenant who has been granted an allotment by, or whose application for an allotment has been denied by, the county committee, may appeal to such Appeals Board from the action of the county committee. The Appeals Board shall consider such appeal and, on the basis of the law and facts, shall affirm, modify, or set aside the action of the county committee. The decision of the Appeals Board shall be final and the Secretary of Agriculture shall make provision for carrying out such final decisions.

"(3) The members of the Appeals Board shall be allowed compensation at the rate of $5 per day while actually engaged in the work of the Board, except that the representative of the United States Department of Agriculture shall be paid such compensation as the Secretary may fix. Subject to the approval of the Secretary of Agriculture, the Appeals Board may appoint such clerical and stenographic assistants as may be necessary and may incur such expenses as may be necessary. An itemized statement of salaries and other expenses so incurred shall be submitted to the Secretary of Agriculture at such times as he may require and shall, when allowed by him, be paid out of moneys available for administrative expenses under this Act.

"(c) The allotment to each producer in each county for the crop year 19351936 shall be made public either by posting on the Bulletin Board of the Court House in that county, or by publication once in a newspaper of general circulation within the county, the name, address, and amount of allotment to each producer."

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SEC. 4. Section 9 (d) of such Act, as amended (relating to transfer of exemp tion certificates), is amended by inserting after the first sentence thereof the following new sentence: "No rule or regulation of the Secretary of Agriculture shall prohibit the transfer or assignment by a cotton producer of certificates issued or reissued by him to another cotton producer who is a resident of the same State."

SEC. 5. Section 17 of such Act, as amended, is amended by inserting “(a)” before the first sentence thereof and by inserting at the end thereof the following new subsection:

"(b) Appropriations for administrative expenses under this Act are authorized to be made available to enable the Secretary of Agriculture to pay any person, who, in connection with the operation of any cotton gin, was obliged to collect tax imposed under this Act on any cotton harvested during the crop year 1934-1935 or during the crop year 1935-1936, and who applies to the Secretary therefor, compensation for the collection of such tax at the rate of 25 cents per bale of four hundred and seventy-eight pounds (and fractional parts of a bale in proportion) for collecting the tax on each such bale."

The CHAIRMAN. The committee will come to order, please. A number of Members of the Congress have spoken to me about various suggestions which they have to make and have requested hearings on the Bankhead bill. In view of the interest and the number of bills that have been filed the committee felt it would be proper to have some hearings and have some of the administrative officers appear in connection with the subject.

We have bills pending which affect the matter in various ways— bills by Mr. Doxey, Mr. Vinson, Mr. Miller, Mr. Martin, of Massachusetts

Mr. DOXEY. That bill does not apply, however. That has to do with processing.

The CHAIRMAN. Also a bill by Mr. Whelchel, of Georgia; Mr. Colmer, of Mississippi; and Mr. Eagle.

Mr. DOXEY. Mr. Eagle's bill does not apply to this matter.

The CHAIRMAN. Also a bill by Mr. Johnson, of Texas; a bill by Mr. Zimmerman, of Missouri; one by Mr. Cartwright; and I un

derstand that Mr. Fulmer on yesterday introduced a bill, which has come in. Mr. Doxey's bill is no. 5578, and Mr. Fulmer's is 5922.

I have prepared for the general session two or three amendments in which I am interested. Mr. Doxey's bill seems to cover the question of the exemption for the small farmer and the question of appeals from the action of county committees, and, I believe, the question of some compensation for the ginners who collect these funds. I think in one way or another the other bills cover one or more of those questions; perhaps some of them cover all of the questions.

We have Mr. Cobb here. Mr. Cobb, we would be glad to hear from you as to any suggestions you may have to make, especially as to these three propositions or suggestions, and any explanation you may care to make to the committee as to the operation of this bill, or anything that you may desire to have amended.

STATEMENT OF C. A. COBB, CHIEF OF THE COTTON SECTION OF THE AGRICULTURAL ADJUSTMENT ADMINISTRATION

Mr. COBB. Mr. Chairman, I believe you had particular reference to Mr. Doxey's bill and the provisions embodied in that. I will answer the first proposition there, Mr. Chairman, later, after we have discussed the others.

The CHAIRMAN. All right.

Mr. COBB. Provision no. 2 in H. R. 5578, by Mr. Doxey, makes provision for a minimum allotment of 2 bales. This is in line with the President's commitment earlier in the year, and the cotton section is proceeding to carry that commitment into effect, and it is our feeling that we will not have to have an amendment to the act to make it possible to do that. We are already setting aside the necessary amount of cotton to take care of a 2-bale exemption in accord with the President's announcement. If it is found that legally it is impossible to do that, then we will request an amendment to be made, but in our judgment that will not be necessary, and we are proceeding with that in mind.

The third provision, which would create an allotment board or an adjustment board, is already taken care of in the administrative rules and regulations governing the application of the voluntary program. Those rulings and regulations are now being printed and will be in the field next week. I can give you the details of how that is to be constituted, if you would like to know that. If not, I will simply let

the statement rest.

The CHAIRMAN. You may go ahead and make the statement as you wish to make it, and then the committee members will ask such questions as they desire to ask in connection with any of these topics.

Mr. COBB. If you would like to know the mechanics of how appeals will be made and how adjustments will be made, we will give you that as fully as you would wish us to make it.

The CHAIRMAN. There has been considerable interest expressed in this matter of provision for an appeal, and it might be well for you, in your main statement, Mr. Cobb, to explain just how that will be arranged, so those who are interested will understand just how you expect to handle that matter.

Mr. COBB. I am going to ask Mr. Gaston to answer that question in detail. He is of our force and has been engaged with other members of the force in working out the details of that particular problem. He has with him the copies of the rules and regulations, which can be read into your record. That will give you in detail exactly the steps that will be taken in making appeals and in settling the appeals. The CHAIRMAN. I think you might just as well let him do that now, and then you may resume when it suits you.

Mr. COBB. Mr. Gaston, if you will, answer that please.

The CHAIRMAN. In that way we will have the picture before us.

STATEMENT BY T. L. GASTON, REGIONAL CONSULTANT, COTTON PRODUCTION SECTION, AGRICULTURAL ADJUSMENT ADMINISTRATION

Mr. GASTON. Mr. Jones, in the previsions relating to the appeals for the acreage reduction and the Bankhead programs, the appeals in the main will be handled by the State adjustment boards, consisting of the State boards of review and/or the State allotment boards. Any producer who is not satisfied with the determinations of the county committee has the right to appeal. That appeal goes first to the county committee. They decide what their recommendations will be and give a full written report on the circumstances in the case, and their recommendations go to the State adjustment board, which in the main will consist of the same members composing the State allotment board and/or the State board of review.

In some States it will be necessary, of course, in order to handle the situation, to have more members of the State adjustment board than is provided just for the handling of the duties of the State allotment board or the State board of review alone. For instance, in the State of Texas we have five members of the State board of review at the present time. If appeals come in in 1935 as they did in 1934, it will be necessary to elaborate-I mean, get a large number of members on that State board, and perhaps for those men to be allocated to districts within a State, in order to, within a reasonable time, hear and act upon the appeals.

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The written report and recommendations of the county committee will go to the adjustment board, and that board will make their recommendations or make their decision and recommendations, and in case proper authority has been given by rulings, regulations, or instructions, the decision of the board shall be final; if not, the board will submit the complete case to the Division of Cotton of the Agricultural Adjustment Administration for action in case the producer is not satisfied there.

If it is desirable, I can read the section of the tentative draft of the regulations under the Bankhead Act on appeals, which corresponds very much to the rulings which are now being printed on appeals in the cotton-acreage program.

The CHAIRMAN. We would like to have those put into the record, if there is no objection to doing so.

(The section of the tentative draft referred to is as follows:)

APPEALS

The State allotment board will hear appeals by producers. In all cases the county committee shall make a recommendation or determination, and such

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