You must understand, you gentlemen of the committee, that credit in the whole area has been used up. Friendly bankers and lending agencies down there have advanced grants of credit to the limit allowed by the law and they cannot help any further.

The purpose of this bill is to ease that term so that the payments will be easier to make and more time allowed. Then there are certain restrictions in the law about the size of the farms that can get help, and certain other restrictions, such as that if the applicant engages in any other business he cannot get it.

I think that really, you gentlemen, when you consider this legislation might very well indeed consider the situation covering refinancing.

Here is a poor individual, who has had trouble, he has put everything into it, he has worked for 30 years and his credit is gone and he needs refinancing in order that he may move in and try to recoup what he has lost.

I have here, and that is one reason why I pressed you gentlemen to hold this hearing, I have two men from the area, both businessmen. Senator Porter of the Arkansas Legislature is here. Senator Porter is from Mulberry, Ark. He is in the mercantile business and he is a farmer and has worked with the Federal land bank. He knows what credit is. He knows those people, he is acquainted with them and with their problems.

I also have Mr. King of Clarksville, Ark., who is one of the leading orchardists in Johnson County.

Johnson County is the locale of the peach-orchard industry of our area and it is literally ruined. He will be able to give you more details of the situation there. He is a peach orchardist and also a packer of peaches.

Now, I want you gentlemen to listen carefully to these witnesses and I just wanted to use plain old commonsense in considering this bill. And what I want is results. I want these agencies that handle this disaster business to be given more authority to grant these loansbecause if they cannot have the authority and they cannot function, then it would be better for the areas not to be declared disaster areas and have their hopes built up, have the hopes of these poor devils raised and then have them discouraged-it discourages them no end; they don't know what it is all about, because they are led to believe that there will be relief by the Government and then nothing is done. I want this law remedied so that these agencies can do what ought to be done.

That is what I meant, and I also meant to see to it that it was plain, and that is why I made it so plain that even the Member of the Congress from the Third District of Arkansas can understand it, and I am satisfied that if you can do that, then the agencies will be able to understand it, so that they can do the job that I know Congress wants them to do.

I may have to leave, Mr. Chairman, but Mr. Hays of the Fifth Congressional District of Arkansas is here, whose district adjoins ours. And now, Mr. Chairman, I would like to present Senator Porter and Mr. King.

Mr. POAGE. Well, would you like to have Mr. Hays heard next?

96950-57--2

Mr. TRIMBLE. Yes, I would like to have Congressman Hays heard. He wants to make a brief statement, and then, if you would, Mr. Chairman, we would like you to hear the witnesses.

Mr. POAGE. All right, we will be delighted to hear you, Mr. Hays.

STATEMENT OF HON. BROOKS HAYS, A REPRESENTATIVE IN CONGRESS FROM THE FIFTH CONGRESSIONAL DISTRICT OF THE STATE OF ARKANSAS

Mr. HAYS. Thank you, Mr. Chairman.

Mr. Chairman, and members of the committee, there is very little that I can add to Mr. Trimble's statement. I do endorse every word that he has said.

I know from actual observation, Mr. Chairman, that the condition is acute. Two of the counties in his district that adjoin mine were, up until 1950, in the district which I represent, and I am thoroughly familiar with farm conditions in that area.

We have been plagued by too much water in some periods and too little water in other periods.

As Mr. Trimble has said, these people are fine farmers. They are representative of the finest type of the family-sized farm that must be saved.

As I understand Mr. Trimble's bill, it simply provides more flexibility in determining who is entitled to the loans, and then to provide more liberal terms.

Since 5 out of 6 counties of my district are affected we look hopefully to the enactment of this legislation to meet this condition.

I should like to add, Mr. Chairman, that I know the two gentlemen who will follow. They are among the outstanding leaders of our State, and the committee can be assured, as Mr. Trimble has said, that they speak from an intimate knowledge of the situation.

Mr. POAGE. Mr. Hays, we appreciate your comments. I want to thank both of these Members of Congress for coming up here and trying to help in the solution of the problem in their districts.

I might observe that we have exactly the same sort of thing down in Texas, and we have had the drought portion of it for years-that same condition for 9 consecutive years-then we had 6 weeks of unprecedented floods. Now we have had 7 weeks without any rain. whatsoever since those floods stopped. And so that leaves us in worse shape than you are. We have the same situation except that it is worse, and also that it has lasted longer.

So I can say that I certainly do know the problems that are facing you; I understand and appreciate those problems among your people.

I am wondering just how far this bill can go toward both solving that problem-and I do not mean this by way of criticism of what they have done, because I am inclined to agree with you that we should liberalize the credit, and we should help these people as much as possible from a credit standpoint.

However, I have looked upon credit not as the solution of the problems of the farmer but only an aid. It is one of the things that we need; it is one of the essential things. But I think that you could open the doors to the United States Treasury, and still many of our farmers could not continue to operate in the face of these adverse weather conditions and price conditions that we have.

How much help do you think there may be from such a measure as this, directed at the credit angle? And you do understand, I know, that I am not saying that we should not give every type of help to all of these people. I agree with that.

But you pointed out, Mr. Trimble, that if we declare these areas to be emergency areas, we ought to do something for those people rather than build up their hopes, and then let them down as has been done in so many instances. I think that if we pass legislation, that legislation ought to do something for them rather than simply to build up their hopes. How far do you think we can go?

Mr. TRIMBLE. I think it ought to go far enough, Mr. Poage, to at least let the man keep his farm, and give him enough for this basic stock, so that he can go ahead and not be foreclosed.

Mr. POAGE. Well, I certainly do agree with that. I do agree with the idea of helping him keep his farm, and with the idea of letting him go ahead, and I think we can say that generally across the board.

But the situation has become so bad, as I was saying, in the instance of Texas, where we have had more of that trouble than you have hadwell, I would not say worse; I believe I said worse a minute ago, but I would not say that, but I would say that we have had that condition for more years. You were making crops when we were burning up

for 5 years.

Now some of those people down there owe so much money, many of them owe so much money-good men, men who have been good farmers, men who have been provident managers-they now owe so much money today that merely bringing in more money does nothing except to add to their debt, a debt that they can never pay off. Even if it rains from now on, they would still be in debt.

I do not share your optimism that the Government will get that money back. I think it will get a portion of it back, but I think that conditions are so desperate-and that is no criticism of the agencies or anyone else-so desperate, that many of these people will never pay out; they can never pay out. They owe so much that they are going to have to be relieved of their indebtedness, so it is not going to be just a matter of adding more and greater debt. It has come to a situation where we must give them some relief from that debt. I think we have arrived at that stage.

Now, that is the situation down in Texas. Of course, I do not know; maybe your people are not in that desperate condition.

Mr. TRIMBLE. Basically, Mr. Chairman, I do not think that the majority of our people are to such a degree in disaster that they could not, if they had their loans refunded for a reasonable length of time they could not recover, because they could.

As an example of our situation, I might give you the example of a rural electric co-op. That was a co-op that served our farmers, and they had about 11,000 connections. 2,100 of those connections are idle now, because the people have moved away, they have gone, they have left the farm. Those people who have left-I do not mean to say that they are out completely, but they have gone away—but the farmer who has stayed, and who is working there, I think he should have an easement on his credit.

Mr. POAGE. I agree, and I do not think you will find any disagreement here with you on that, and I feel that they should have all of the help that they can get in the form of credit. But I am wondering

as to how many of those people, what percentage can be helped with credit. I do not think that the man who owes for a herd of cattle bought at 30 cents, when cattle were at the highest prices, in the boom days of livestock, is going to be able to pay out.

That livestock lost its value and then the drought forced them to sell it all, and they may have gotten into a situation where they owed $10,000, and have $3,000 to pay on it, and that means that they owe $7,000 after they got rid of their livestock-and in addition to all of that, somebody had to buy the food for the family for the past several years.

Now, many of those people who owe $10,000, or who owe $12,000, are tenant farmers, and there is not a chance in the world for many of those people ever to pay out.

Mr. TRIMBLE. I think, Mr. Chairman, in your area, your conditions are perhaps more critical than ours, because in general we have greater diversification.

Mr. POAGE. I know you do.

Mr. TRIMBLE. We have poultry, and we have dairying, beef cattle, and canning. At one time there were 300 canning plants in the district, where they canned beans, tomatoes, spinach, and other things. We have greater diversification, but even so, despite the greater diversification of farming, there is disaster.

Of course, I realize that down in your area, they have all of their eggs in one basket.

I think that if we had better credit terms that we might salvage a great part of the situation, because of this very reason of diversification. Now, Mr. Chairman, may I again thank you for this hearing, and I would like to introduce Senator Porter, who is a member of the Arkansas Senate, and, as I said, he is also a merchant, he is also a farmer, and for 14 years he was with the Federal Land Bank, and he processed thousands and thousands of loans in this whole area. He knows the people there. He knows their condition, and he knows that they are going to be ruined financially, unless there is relief given, and he does know that although they will be hurt, they will not be broken in spirit, if they are just given a chance to come through. Mr. POAGE. We are delighted to hear from you, Senator Porter.

STATEMENT OF J. O. PORTER, STATE SENATOR, STATE OF ARKANSAS

Mr. PORTER. Thank you, sir.

Mr. Chairman and committee members, first, I want to thank you and the committee, and Congressman Trimble for an opportunity of this kind, to try to talk with you for a few minutes, and present evidence of the seriousness of our farm problem down home in western Arkansas, along the Arkansas River, and in the upland section, too. We have a problem that faces our people that we are hoping, and we pray that this committee will alleviate for them, and help them. Of course, I know the situation throughout the country is serious, too, and a lot of other sections are in the same category as ours.

I have dealt with these people for-well, I grew up with them, and I have served them for 45 years in the credit business, and I have listened to their problems, and I have advised with them, and assisted them wherever possible. I have watched their conditions

go from bad to worse; and with this drought period in the last 4 or 5 years, and then with this flood, which I think is the worst in our history-and I have been experiencing those from 1898 on up to the present time-I think it is a major disaster that may extend our economic pressures and our economic problems into a 10-year period. I think that these people need longer term credit than is now available, in an effort to try to keep these good people on the farmsand a lot of them are leaving; some of them have boarded up their windows and doors, and have tried to find income in other fields. They do intend to return if and when they have an opportunity, and it has been because of absolute necessity that these people have gone from their homes.

I think that it is a "must" for somebody to take care of this situation. And these people are looking to our Government, which we think is the greatest government on earth, just to give them a chance to pay out so that they may be rehabilitated and live amongst us again as the same substantial citizens that they once were, and I think then that they will be good credit risks for the local lenders who have now gone their limit, according to the file full of letters that I have here, and telegrams.

In addition to the twenty-odd letters and telegrams that I have here, I have had a number of phone calls before I left home, and since I have been here, from farm leaders and merchants, and county judges, and county officials, and others, all of them expressing the same urgent plea for assistance to these disaster-ridden people.

I think that the short-term credit now available through the various lending agencies is the greatest retarding factor, hampering the continuance of what we like to call a fine farm program in our section.

Mr. Chairman, with your permission, I would like to read a few of these letters. I do not want to take up your time reading all of them, but I do have 4 or 5 of them here that I think are really pertinent to this hearing, and for your information I would like to read them, and then I would like to file this folder with you for your further study and consideration.

Mr. POAGE. The committee will hear you; proceed and read whatever you please.

Mr. PORTER. Thank you, Mr. Chairman. This information I have here comes from men in the area who have long experience in the credit field, and I have some from dirt farmers themselves.

Now, these are people, Mr. Chairman, who I do not think are the same type of people that you were speaking of, or might have been referring to, when you were talking of your people in the cattle country and perhaps it is the fact that you are probably in worse shape than we are-but they are small farmers, and I know them, and I have dealt with them, and they now are in trouble, and they are the same type of farmers, the same people that I had dealt with during the years of the depression when I was with the Farm Credit Administration. I worked in western Arkansas in 42 counties, and I serviced about 11,000 small loans that comprised about $21 million in volume.

It was deplorable, the condition those loans were in from the standpoint of delinquent payments. They reached a high of just about 68 percent facing inevitable foreclosure. Then, with proper loan treatment, extensions, and reamortizations, and refinancing, in a