Statement of— Anderson, Hon. Clinton P., Secretary of Agriculture - 37, 60 Butler, Senator Hugh, a United States Senator from the State of 77 Campbell, Malcolm E., dean, school of textiles, North Carolina State 119 Clark, Dr. Noble, associate director, Wisconsin Agricultural Experiment Station___. 38 Davis, John, executive secretary, National Council of Farmer Cooperatives. 101, 223 Davis, P. O., director, extension service, Alabama Polytechnic Insti- 219 Dodd, N. E., Under Secretary of Agriculture.... Dorman, Dr. Clarence, director, experiment station, Mississippi State College..... Garner, Albert J., commissioner of agriculture, State of Maine Harris, Miss Jessie, director, school of home economics, University of Holman, Charles W., secretary, National Cooperative Milk Producers Johnson, Cecil, Hinsdale, Ill.. Jones, J. M., Wool Growers Association, Salt Lake City, Utah.. Kildee, H. H., dean of agriculture, Iowa State College, Ames, Iowa__ Page 1 223 Wilson, George H., American Farm Bureau Federation. 50 180 82 54 225 139 Lambert, W. V., Assistant Administrator, Agricultural Research 8 Oley, Warren W., chief of bureau of markets, New Jersey Department of Agriculture__ 176 O'Neal, Edward A., president, American Farm Bureau Federation.__95, 207 140, 123 Schenck, Hassil Ê., Indiana Grain and Livestock Industries_ 33, 133 Scott, W. Kerr, commissioner of agriculture for North Carolina, Smith, Russell, representing National Farmers Union Todd, Leon, chairman, national poultry committee, American Farm III 66 97 77 103 130 Thatcher, H. K., director of division of agriculture, State of Arkansas 164-181 Wilcox, F. R., assistant general manager, California Fruit Growers 167 163 179 136 224 34, 135 124 227 Serial M CONTENTS director, n. Clinton P., Secretary of Agriculture egislative representative, National Quage North Carolina ir Hugh, a United States Senator Trom the Naa, of Agricultural Experim holm E., dean, school of textiles, North Carodia Stace le, asscelate director, Wisconsin Agriec band bapete entive secretary, National Council of Peace Coop ector, extension service, Alabama Polytechne b er Secretary of Agriculture arence, director, experiment station, Wickedy commissioner of agriculture, State of Mame ster of the National Grange director, school of home economics, University of secretary, National Cooperative Milk Producera lale, Ill. rowers. A soclat on, Fult Lake City, Utah Vargand Agrie „tural Experiment Nation, ful Iowa State College, Ames, Iow4 ent, Linted Frosh Finit and rator, Agricultural Research maguete, New Jet wy Departmmad 101, 254 44 URE, on, D. C. Flannagan We have for › for further culture. The nkhead-Jones stary of Agriu at this time, CRETARY OF I think first of nent will make on proval of our sugrmally we like to e Department's atrt has been there a the Bureau of the . I intend to go ahead iculture and then we date, if that is satis-. 7. sed the greatest indusis remarkable develop› of mechanical power, anagement. Expansion ade possible greater use personnel to apply new 1 made by increasing the of machines. New procuse of technology. These ustry a greater output per onsumers of these products ed in the benefits. ; Mr. ANDRESEN. That has not been my experience. I remember here about 10 years ago when the Federal land-bank system was foreclosing on over 100,000 farm mortgages. Do you remember that? Mr. DUGGAN. Yes; that is true. I think that all agencies foreclosed. Also, our usual findings are that individuals do not appraise farms and lend on normal agricultural values; they will lend more on present market value and speculative prices. Mr. ANDRESEN. I think they are quite careful at the present time. Mr. DUGGAN. And they usually lend for a shorter period of time, which makes the payments heavier on the borrower if he is intending to hold the farm and operate it over a period of years and not speculate on it. He usually needs to have rather small annual payments. Mr. ANDRESEN. Of course, the average individual likes to see the loan paid up during the productive years of the borrower rather than to let it run on for 30, 40, or 50 years. Mr. DUGGAN. Yes. The average term of farm mortgages recorded during March of 1945, by classes of lenders, was in the case of insurance companies in the United States, 15 years; in the case of commercial banks, 41⁄2 years; in the case of individuals, 4.9 years; and in the case of the Federal land banks and Land Bank Commissioner, 22.9 years; and in the case of miscellaneous lenders, 101⁄2 years. Mr. POAGE. In answer to a question a minute ago you suggested that you proposed this extension in view of the crisis existing at the present time in the hope that we would work out of a crisis. That was a word by Mr. Zimmerman, but you agreed that it was correct. What is the present crisis that confronts us? Mr. DUGGAN. The Federal land-bank system? Mr. POAGE. That is right. Mr. DUGGAN. The reduction in the volume of business to such a point that it cannot be self-supporting and extend the services Nationwide that it is now extending. Mr. POAGE. I take it that any time we are paying off more loans than we are making we are faced with a crisis. Would that be true? Mr. DUGGAN. Not necessarily. It is when you get down to a certain volume of business that is smaller than your operating expenses, and then that particular institution is facing a crisis. Mr. POAGE. Any time that you are getting more loans paid than you are making, you are approaching that point, are you not? Mr. DUGGAN. In some degree; yes. Mr. POAGE. And you are just about as far away from that point at the moment as you have been at any time during the existence of the land-bank system? Mr. DUGGAN. No. Mr. POAGE. You are not? Mr. DUGGAN. No; we have collected much more than we have loaned since 1940. Mr. POAGE. I know. Mr. DUGGAN. We have reduced the volume of outstanding loans from $2,499,000,000 in 1940, in round numbers, to $1,207,000,000. We have cut it more than 50 percent. We have encouraged farmers to pay off. We are still encouraging individual farmers to pay off their debts. Mr. POAGE. Then the danger will be that any time we begin to pay off more than we are borrowing we are working toward a crisis, and when half of the indebtedness is paid off we have reached a crisis period somewhere around that point; is that about right? Mr. DUGGAN. I would say for any institution when the income from the volume of business it does is less than the expenses it has to do either one of two things-cut expenses or increase the volume of business. Mr. POAGE. That is true. Is the income of the land banks now less than the expenses? Mr. DUGGAN. No. I say that we have not reached that point, but Mr. Zimmerman's question was, as I understand it: If the situation continues we will reach that point, and in some of the districts it is nearer to that point than in others. Mr. POAGE. That is right. Then the only crisis that exists at the moment is the tendency. Mr. DUGGAN. Based on the study this past year, a large percentage of the loans that were made would not have been made if the loans had been limited to 65 percent of the normal agricultural value, because the loan would not have met the needs of the borrower. would have had to go elsewhere for his loan. He Mr. POAGE. Why? I am trying to find out at what point we are going to throw this crisis in reverse. Perhaps I had better start this way. We established the Commissioner loans because of the crisis, did we not? Mr. DUGGAN. Yes. Mr. POAGE. That crisis was because farmers could not borrow enough. The credit was not available to them. That was the crisis that existed then. Mr. DUGGAN. We had a different type of crisis, yes. Mr. POAGE. That is exactly the point. Mr. DUGGAN. I do not say that we have a crisis today. Mr. POAGE. The crisis was different at that time. The crisis was a farmer's crisis at that time and now it is a bankers' crisis, is that it? Mr. DUGGAN. Well, I look at the Federal land bank as a farmer's bank because 11 of them own all the stock. There is only one bank that has Government paid-in capital or surplus. Eleven of the banks recommended the extension of the lending authority of the Federal Farm Mortgage Corporation. They reiterated that statement last week. Mr. POAGE. That is right, but the one that did not reiterate was not entirely farmer-owned, and that is the Houston bank, of course, and the Houston bank was the first one paid out. Mr. DUGGAN. Yes. Mr. POAGE. I think that perhaps they operated on a sound basis all the way through the war. Mr. DUGGAN. Only 29.5 percent of the loans made in the period we referred to that is, from July 1 to December 31, 1945-by the Houston bank were straight Federal land-bank loans. Mr. POAGE. I would like to get back to this crisis proposition and The first crisis that try to distinguished between the two crises. created the law was a lack of credit, was it not? Mr. DUGGAN. Well, there were a lot of factors-the whole economic situation. You know what they were. |