STATEMENT OF J. L. COULTER, PRESIDENT OF THE NORTH DAKOTA AGRICULTURAL COLLEGE

The CHAIRMAN. Please state your name for the record, Doctor. Mr. COULTER. J. L. Coulter; president North Dakota Agricultural College.

The CHAIRMAN. How long have you been president of that institution, Doctor?

Mr. COULTER. For eight years.

The CHAIRMAN. Have you ever had any experience in farming? Mr. COULTER. I was reared on a farm just a few miles from the college, and most of my life has been spent either on the farm or in connection with it; and at the present time I continue to operate the original home farms, farming several hundred acres all the time. Therefore, I think I know, from the standpoint of the active producing farmer, what he is up against, as well as in the capacity of a student of agriculture.

I think the committee would not want me to spend any time reviewing basic reasons for the agricultural distress or the fact that there is agricultural distress.

The CHAIRMAN. I think we will all admit that there is agricultural distress. Can you tell in a brief word the reasons for that distress!

Mr. COULTER. The reason for it is, clearly and very briefly, this: That in this country we are attempting to live on a very much higher standard of living than the farmers of other countries. The farmers who are producing eggs in China and shipping millions of dozens for use here in Washington and Baltimore and Boston and New York and Philadelphia, are living on a handful of rice, a few pumpkin seed, and other very frugal fare, and they are not expecting to buy radios and have telephones in their homes or to own automobiles or to wear the clothes that we wear or pay the taxes that we pay.

Our farmers are perfectly willing, I think, to pay 50 cents to a dollar an acre tax in order that their children may have an education. They have to pay it in order to have schools, and we can not have a democracy without an educated mass of voters.

But those folks who are producing things in competition with us are living as serfs, peons, and peasants.

I personally believe that since this country has chosen to live on a new and higher plane of living, our farmers must have that same privilege if we are going to maintain permanently a democracy, and our industry is so much more efficient than the industry of other nations that with our system of government they are able not only to survive but send hundreds of millions, even billions, of dollars' worth of finished products into those other nations, whereas it is unthinkable that foreign people can compete.

Further than that we are now importing from those cheap lands and cheap labor and no tax or low tax countries hundreds of millions of dollars in food stuffs. We choose to maintain this new standard of living. We have reduced our consumption of wheat a bushel per capita in a period of 10 or 12 years, and with 115,000,000 or 120.000,000 people that means that we have lost the market for 115.000.000 or 120,000,000 bushels of wheat which becomes the major part of our surplus and which we must empty on the world's market.

And we have reduced our consumption a bushel of potatoes per capita. There is another hundred and fifteen or a hundred and twenty million bushels of a staple product, the market for which is gone, but we can not dump it on the world market because transportation is prohibitive.

Those things we have quit eating because we are eating instead a few nuts, a little coconut, salads with salid dressing, and so forth. You know that if you eat three or four spoonfuls of oil on a little salad of fruit or vegetables you do not want a spoonful of lard on your meat. You want a little piece of very lean meat. You do not want it fat. You have vegetable fat. You have already eaten your oil. The human body only takes a certain amount of fat. If it takes it in one form, it will not take it in another.

The result is that we are exporting six or seven hundred million pounds of lard because we have no American demand for it and, in turn, we are importing six or seven hundred million pounds of vegetable oils which we are sprinkling on our salads and eating in lieu of American lard.

The same thing identically is taking place in our industry in general. When I was a boy we made all of our soap in the United States from animal fats, and if any of you have been brought up on farms you will recall that during the year they carried the ashes from the stove out and put them in a barrel and let the rain soak down through it and made lye, and then when we killed a hog we took some fat and made some soap.

The same thing was done in the factory on a larger scale. But now we are not making use of our own home-grown fats and oils We buy sesame seeds. It sounds nicer to wash your face in sesame or coconut oil soap, or soap made from some vegetable oil instead of from animal fats. In fact, I suppose 90 per cent-I can not give the exact figures, but I believe it would run as high as 90 per centof all our soap for all of our millions of people, probably 117,000,000, is made from vegetable oil. Even if we used only a pound of soap each, that would be 117,000,000 pounds; and we are actually importing a billion pounds of these oils. They have displaced the market for our home-grown products.

That is exactly what is happening with reference to a great many of our products. We are importing twenty-five or thirty million pounds of starch under another name. It comes in as tapioca, sago, cassava flour, and other pure starches, taking the place of potato and cornstarch in our mucilage and glue and various other starch purposes.

We are importing the same number of millions of pounds of casein, which is milk reduced to a powdered form.

We imported thirty-odd million dozens of eggs from China for use in our coast cities, because it is cheaper to get them there than it is to bring eggs down from the farms in Iowa and North Dakota to Washington or New York or Philadelphia.

We are flooded, then, with a surplus of cheap food materials from the rest of the world, where they have low land values, low labor wages, low standards of living, low taxes, low transportation charges, and what not.

I have said at different times that we are importing our entire surplus. Our surplus, it is true, is in hogs and lard, and wheat, and

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so on, but, as a matter of fact, we would not have 1 ounce of that surplus were it not for the fact that we are importing more than $800,000,000 a year of food to take the place of these things which represent a surplus on our hands.

Senator NORBECK. Notwithstanding that, the prices of farm products have held up pretty well, have they not?

Mr. COULTER. Everything considered, it is remarkable the way they have held up.

Senator NORBECK. And, as a matter of fact, our farm products are a little higher now than they were before the agricultural depression?

Mr. COULTER. Yes.

Senator NORBECK. And therefore we must look to other causes than those you mention. I hope that you will go into those also. Mr. COULTER. I would put as the first cause, and the greatest cause, this tremendously rapid movement of the cheaper substitute materials from other quarters.

Senator NORBECK. Did not that come subsequently to the agricultural breakdown?

Mr. COULTER. It is a growing cause.

Senator NORBECK. Yes; but it has been coming on more and more of late years?

Mr. COULTER. Yes.

Senator NORRIS. While we are on that subject, do you think that this change that has come about in the use of imported foods that are displacing the foods you have mentioned has been a desirable thing for the people who consume them?

Mr. COULTER. Perfectly all right with me; yes.

Senator NORRIS. If that be true, then is it desirable that we try to prevent this substitution that has been going on?

Mr. COULTER. No, sir; but we should pass legislation which would still make our agriculture self-sufficing.

Senator NORRIS. You would not prevent the use of imported oils and the eating of salads insteads of meats; you would not want to prevent that?

Mr. COULTER. No.

Senator NORRIS. That has been a development that has come along scientific lines, has it not?

Mr. COULTER. Yes; but inasmuch as there is a foreign surplus dumped on our shores, I would work out a plan to make our agriculture self-sufficing and I would make the imported substitute pay the bill and make the home-grown stuffs profitable.

Senator NORRIS. I get your point:

Mr. COULTER. I would do it in a very different manner from that suggested in the general discussion.

Senator NORRIS. You mean by that that you would not do it by leving a tariff on those articles?

Mr. COULTER. Oh, yes; that is what I would do; I would levy à tariff, but I would, if necessary or if thought desirable, make use of the drawback privilege. For every pound of imported beef I would reserve the privilege to export a pound of pork, if our people preferred beef to pork.

Senator NORRIS. You would have to find somebody else, then, who would eat our pork. In other words, you would have to require

other people to do the things that we do not want to do for our own happiness and our own health.

Mr. COULTER. I would not require them to; but the market will absorb that.

Senator NORBECK. These statements are interesting, as they always are. As I understand your position, it is this, that farm products are higher in dollars than they were in the pre-war period?

Mr. COULTER. Yes.

Senator NORBECK. But the purchasing power is less?

Mr. COULTER. Yes, sir.

Senator NORBECK. Do you mean that these importations have reduced the purchasing power of our dollar, or simply kept it from going up as it should?"

Mr. COULTER. They have kept it from recovering, as I am sure it would have recovered.

Senator NORBECK. Then it could hardly be the main cause of what you are talking about.

Mr. COULTER. It is the thing right now which is keeping us down. Senator NORBECK. But it was not the thing that broke us down? Mr. COULTER. Oh, no. That is water that has gone over the dam and it is hard to shovel it back up. We had deflation and I took my medicine.

Senator NORBECK. I was not thinking of the financial deflation alone. It is only a part of the agricultural deflation.

Mr. COULTER. That is something that we should never have let happen, of course; but we quarreled among ourselves as farmers and quarreled with other folks and did not get across, for some reason or other, and it is a very disgraceful thing, I think, in our history. Senator HEFLIN. The deflation hurts not only the farmers, but bankers and merchants in my section.

Mr. COULTER. Yes.

Senator HEFLIN. And I think that is true all over the country. Mr. COULTER. But the others were able, because of the organization of industry and business, to recover when we could not.

Senator HEFLIN. The farmers have not yet recovered in my section of the country.

Mr. COULTER. Nor have we. I could have sold my farm for $100,000 more in 1919 than I can to-day, and I have only relatively a few hundred acres. I have had offers better than $100,000 more for the farms I operate now.

Senator NORBECK. What are the comparative land values in North Dakota as compared with the pre-war period, having no reference to the war period or the inflation period?

Mr. COULTER. I think they are back now very nearly the same as they were in the pre-war period.

Senator FRAZIER. You do not mean that there is sale for land? Mr. COULTER. No; it is very slow and hard to get any sale, but when a farm actually sells it is close to the pre-war basis.

Senator FRAZIER. That might apply to certain sales, but you can buy land a great deal cheaper than you could.

Mr. COULTER. Oh, yes. I can go to an insurance company and buy a lot of land

Senator FRAZIER. At almost any price?

Mr. COULTER. Yes; very much lower than the pre-war price. That is distressed land.

Senator BROOKHART. That deflation has been about $20,000,000,000 in the United States, but at the same time real-estate values in industrial centers have advanced more than $20,000,000,000?

Mr. COULTER. Yes.

Senator BROOKHART. That indicates to me that it is not the question of this importation that caused it, because the American people are producing 52 per cent of new wealth. A railroad comes in and takes out 534 per cent on a valuation of $7,000,000,000, with a great deal of water in it, and then the Steel Trust comes in, and the report made the other day showed that they took out over 12 per cent, and they had a still larger amount of water in their capital. By the time these special blocks of capital get through dipping out their earnings there is nothing left.

Mr. COULTER. Yes; but it goes without saying that if we did not have these $800,000,000 worth of eggs and chickens and turkeys and millet seed and other seeds, molasses and starches, and other things being poured in on us at low prices, we would get more for our products-if we had our domestic market.

Senator BROOKHART. That would be $800,000,000, if we could produce that. That would help a little, although it would cost us most of that to produce $800,000,000. But we need five or six billion dollars in order to get even.

Mr. COULTER. It would take a very short time to bring us back: that is, the present situation, irrespective of what caused this break. It is a question now as to what we are going to do about it. One of the things we must do, I think, if we are going to make agriculture in the United States support itself prosperously, is to provide some way by which these cheaply produced substitutes will help to bear the burden of our domestic products, or not displace them on our home market.

Senator BROOKHART. I think if we could reduce the price of steel enough and increase the price of wheat and corn and cotton enough, it would equalize it until agriculture could be as prosperous as steel could.

Senator NORRIS. Do you not think there is something in that? I am not trying to find fault with your analysis. I think it is exceedingly interesting, but this point that Senator Brookhart makes the farmers are very much distressed and are producing food at less than actual cost of production, and there are other classes of our people that are making too much money. Speaking at least in a comparative sense, ought we not to take that into consideration, and while we are trying to stabilize the farmer's product ought we not to stabilize, if we can, prosperity as between different industries?

I read in the paper this morning that the annual report of the Pennsylvania Railroad Co. is just out, and it shows that they have produced a net dividend of between 14 and 15 per cent on their capitalization; and their capitalization, I think it is fair to say, is very much above what it ought to be. So that if we had a real investment we would probably have a return of 20 per cent or perhaps more in one year.

Mr. COULTER. My impression was that Congress was taking cognizance of that in three ways: First, in providing the Interstate