m, and wanting to read about it, but apparently not. Apparently ey do not grasp its significance. There is no use getting excited nd saying harsh things about them on that account. I only mention to call attention to the fact that it is all-imporant that this board ould be composed of people who are not urban-minded, who are ational-minded. Senator HEFLIN. Do you not think that a majority should be farmrs, men who have had experience in farming and in thorough symathy with the farmer? Mr. VROOMAN. I do not know about that. It is easy for us farmers > think that we ought to be the main ones, but after all, this problem not only a problem of cutting production but also one of getting id of our surpluses. We want somebody who knows how to do both; ho not only knows conditions on the farm but who also knows the markets of the world. Senator HEFLIN. It is a question of selling at a price that will cover he cost of production plus a profit. Mr. VROOMAN. It is like that question that Doctor Coulter menioned concerning the farm loan board. It is essential that its bondolders be safeguarded. No credit system can endure, prosper, and grow in which the bondholder does not have absolute security. But here is more than one way to do this. One way is to do this with in eye solely to the interest of the bondholder. The other way is to take care of the legitimate interests of both bondholders and farmers. Senator NORBECK. Do you feel that the interest rates on these bonds at present are high? Mr. VROOMAN. I do not feel that I can answer that; but I do feel that in every problem that comes up there are two ways of looking at it-one from the standpoint of the whole country, and one from the standpoint of a few. We as farmers do not ask that anybody be appointed who has only the narrow point of view of the farmer. We want men who will take into account the welfare of the consuming public as well as that of the producers, but we do not want anyone on the farm loan board or the Federal farm board who represents enly the consuming public or the bondholding public. We don't want anybody with a narrow urban mind. There are more people in this country who are narrowly urban minded than there are who are narrowly country minded. Senator NORBECK. Therefore, if the administration appoints the board and pays due heed to the public sentiment throughout the land, our agricultural situation might be endangered by not being well represented. Mr. VROOMAN. I think that there would be no such danger, if you have men appointed who take into accounts the needs of the farming population as well as those of the urban population. Senator HEFLIN. You do not want somebody on the board who will defeat the purpose of this legislation? Mr. VROOMAN. No. Senator HEFLIN. That might be somebody who would administer the law to defeat the purpose of the Congress. Mr. VROOMAN. That is very true. Senator FRAZIER. Judging from past experience of Government boards putting into operation so-called farm legislation, do you not think that the farmers are justified in being a little skeptical of these boards? Mr. VROOMAN. I think that that might be natural, and yet there has never been a time before when apparently so sincere and so widespread an effort was being made to help him as at the present time. Senator FRAZIER. I think that is true. Mr. VROOMAN. I think it is up to us to take this matter up in a sincere and wholehearted way, regardless of party, in an effort to assist the administration in putting through a bill in the interest of the farmer. Senator HEFLIN. We have had some witnesses before this committee who have solemnly testified that it was not necessary to figure the cost of production to farmers and a profit on top of that. What do you think about such advice as that to a committee that has to frame a law for farm relief? Mr. VROOMAN. That is not the way I think is the wisest way to go at it. In the first place, I am suspicious of figures. I have had people pull figures on me right along for 25 years on these farm projects and in most cases when I took them out and tested them on the farm I found them inaccurate. I am suspicious of figures, even when people are trying to figure in my interest. Senator HEFLIN. The point I am making is, the manufacturer, when he sells his goods to the wholesaler and others, figures the cost of production plus a profit, and he gets it. Mr. VROOMAN. Yes, sir. Senator HEFLIN. When the merchant buys or sells, he gets that cost of production, plus a profit. Mr. VROOMAN. Yes, sir. Senator HEFLIN. But when the farmer goes to sell his goods, they do not want him to count the cost of production and add a profit, and I think that he has as much right to do it as anybody else. Mr. VROOMAN. Yes; but when the manufacturer figures that way he generally gets a good deal more than is coming to him. Most tariffs are very much higher than are needed. Senator HEFLIN. The farmer does not get any of it that is coming to him. Mr. VROOMAN. I always like anything that is simple. That may be a farmer's point of view. Here are several methods, each of which will tend to decrease the amount of the surplus that is reducing the price to the farmer of his crop. If you store the surpluses from year to year and consume them in years of shortage, it is an advantage to the farmer. In like manner, when you sell on credit abroad, that is a method of helping boost the prices of farm products. When you plant 10 per cent of your land to legumes to be plowed under as fertilizer, that is another thing. When you reforest millions of acres, that is another thing. It seems to me that these various methods combined would take care of problem. It is a very difficult matter to figure out the cost of production of farm crops on account of the number of unknown factors, weather conditions, insect pests, and so forth. Senator HEFLIN. But the farmer should be able to get a price that would cover the cost of production and give a profit? Mr. VROOMAN. But I do not believe that you can get any hard and fast amount. One Illinois man figured that it costs over $2 a bushel to grow corn. If you figure in the value of the fertility in any given crop or the cost of commercial fertilizer, I suppose that might not But I have never believed in the cost-plus plan. be so far afield. I think that one of the greatest mistakes made by the administration with which I was connected in a modest way, was the cost-plus plan of paying our war-time expenditures. This is a very difficult problem. But if you had a farm-relief bill such as I have outlined, I feel confident that the farmer would get a reasonable profit. Senator HEFLIN. I think in the estimate you referred to the figures were not misleading, but the figures lied. Mr. VROOMAN. Very often that is the case. Senator BROOKHART. When you store this surplus, you must store it at some price. What kind of a price are you going to offer the farmer? Mr. VROOMAN. I think that that will take care of itself. I think that you figure the Government should go out and buy a surplus. I do not think that is necessary. The farmer should be enabled to store his own surplus in his own cooperative elevator. Senator BROOKHART. The stabilization corporation would have to do that. Mr. VROOMAN. They could handle that. Senator BROOKHART. In the first instance, it would have to be financed by the Government. Mr. VROOMAN. Yes, sir. I believe that the financing should be by the Government, but the rest should be left to the natural operation of economic law through the natural channels of commerce. Senator HEFLIN. Would you suggest the amount that we put in to start with? Mr. VROOMAN. I think that you must have a larger amount than is named in the present McNary bill. I think you would have to have perhaps $500,000,000 as a minimum and it might be possible that you would want to issue some new bonds on that. I think that you ought to be empowered to do that. I think that that board should have very large powers and very few restrictions. Of course, one of these powers would be the power to recommend to the Congress needed additional legislation. I do not think you can figure it all out now. Nobody is capable of figuring out in advance all that must be done in behalf of the farmer during the next 10 years. But from time to time this board can figure out additional legislation that is needed, and probably that will be the most valuable service they will render to agriculture. The Department of Agriculture has thousands of what they call "projects." They mean problems. They are studying them all. The problem of the surplus is just one of these problems. It is our most acute agricultural problem at the present time. Senator NORBECK. Do you figure that if we go back to the prewar period it would help to restore normal conditions? Mr. VROOMAN. No; I do not think agriculture was on a satisfactory basis before the war. Senator FRAZIER. The sad part is there are so many farmers going out of business in the meantime, losing everything they have. Mr. VROOMAN. Yes; that is why I suggest this export bonus or export-debenture plan. That could be made to produce results in 90 days. Senator HEFLIN. Do you think that part of the duty of this board. would be to consult the farmers in the various States and ascertain as nearly as possible the cost of production, and having done that, to give out a statement for the purpose of building up the minds of the farmers generally so that they may find that the cost of the production of wheat or cotton is so much, and the farmer should receive a certain price? That statement from that board would have a tremendous effect on the market right at the outset ? Mr. VROOMAN. Yes. Some statement of that sort would help, but do not make it the basis of any hard and fast rule of procedure. Senator HEFLIN. You remember when Mr. McAdoo announced that he would put $500,000,000 into the South to finance the cotton, when certain Federal Reserve Board gentlemen were going to cut off their money supply? He didn't have to furnish but very little of it. The mere announcement put the price up and held it up and did a lot of good. Mr. VROOMAN. Yes; that was constructive leadership. Senator HEFLIN. I think that if this proposed board would make the announcement that if they find wheat, corn, or cotton should bring so much, it would have a tremendous effect on the market price right off the reel. Senator NORBECK. How do prices of land in your neighborhood compare with the pre-war period? Mr. VROOMAN. Not quite up to it; I think 25 per cent under it. The CHAIRMAN. Thank you very much, Mr. Vrooman. Before we conclude I want to place in the record a letter from Mr. Chase, of the American Chamber of Agriculture, who was called away. It reads as follows: AMERICAN CHAMBER OF AGRICULTURE, Atlanta, Ga., Washington, D. C., April 1, 1929. The SENATE COMMITTEE ON AGRICULTURE, Washington, D. C. GENTLEMEN: Representing the American Chamber of Agriculture, an organization created at the first agricultural congress of landlord farmers and business executives of the Southern, Southeastern, and Southwestern States, held at Atlanta, Ga., on January 30 and 31, 1929, and in which creation, officers and committees were chosen and elected, I have the honor as executive officer, presiding, of said organization, to appear before your committee in session, for which distinguished privilege, I beg to express personally, officially, and in behalf of my associates, in the work undertaken by the Chamber of Agriculture, their appreciation. The American Chamber of Agriculture, being built up along lines followed by chambers of agriculture to a degree, and more especially following the practices of clearing-house service, most respectfully tenders its services through your committee, to the President of the United States and the Congress soon to convene, for the purpose of endeavoring to render Federal aid to the Nation's agricultural industry, farming, and farm-life affairs; and the chamber asks the privilege of making three suggestions as a token of its desire to aid as above: 1. That your committee accept our unqualified approval and indorsement of the plans, etc., set forth before your committee by Col. B. B. Yoakum, of New York. 2. That a farm board be chosen from among recognized business men and farmers of established success in a large way. 3. That the Chamber of Agriculture urges the creation of separate commodity-marketing boards, carefully chosen, to confer and act in conjunction with the farm board. Respectfully submitted. WM. C. CHASE, Executive Vice President. We will stand adjourned until 10.30 to-morrow morning, when Secretary Hyde will come before the committee. (Whereupon, at 4.45 p. m., the committee adjourned until to-morrow, Wednesday, April 3, 1929, at 10.30 o'clock a. m.) FARM-RELIEF LEGISLATION WEDNESDAY, APRIL 3, 1929 UNITED STATES SENATE, COMMITTEE ON AGRICULTURE AND FORESTRY, Washington, D. C. The committee met, pursuant to adjournment of Tuesday, April 2, 1929, at 10.30 o'clock a. m., in room 324 Senate Office Building, Senator Charles L. McNary presiding. Present: Senators McNary (chairman), Norris, Capper, Norbeck, Frazier, Thomas of Idaho, Heflin, and Caraway. Present also: Senator Brookhart, of Idaho. The CHAIRMAN. The committee will please be in order. I am pleased to state that the committee will have the advice and assistance of the Secretary of Agriculture, who is present this morning. Mr. Secretary, if you will make your statement as you desire, the committee will be greatly pleased. STATEMENT OF HON. ARTHUR M. HYDE, SECRETARY OF Secretary HYDE. Mr. Chairman and gentlemen of the committee, the necessity for farm relief is no longer debatable. The discussions of that point upon every platform in the country during the last eight years have unified public opinion to a complete conviction of its necessity. The fact is frankly recognized that agriculture is not in the position of equality of other pursuits. This fact presents its own challenge to all of us that we do all we can, sanely and constructively, to reestablish for agriculture an equality of opportunity and open the way to the same standards of living that we are enjoying by industry. I wish to state that in discussing the subject I am speaking for myself alone. I have not within less than a month had the opportunity to consider the problem in detail and I shall not attempt to present any detailed piece of legislation. You gentlemen are very much more fitted for that task than I. I have long been interested in the ends to be accomplished by relief rather than by the legislative method. While I make no pretense of being an expert, I do claim the same earnestness of purpose which dominates your body in its quest for solution of this vexing problem. It was entirely natural and to be expected that there should be differences over that specific measure around which the great political and forensic battle has for eight years been raking. Stimulated by that battle certain principles were developed. They were largely settled by the recent election. The broad principles were set out in |