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Case, Lloyd, Associate Director, Grain Division, Commodity Stabiliza-
ASSISTANCE TO FARMERS AND STOCKMEN
MONDAY, MAY 23, 1955
HOUSE OF REPRESENTATIVES,
Washington, D.C. The subcommittee met at 2 p. m., pursuant to call, in room 1014, New House Office Building, Hon. W. R. Poage (chairman of the subcommittee) presiding.
Mr. PoAGE. The committee will come to order.
The subcommittee will consider today H. R. 4915, S. 1372, and others, to amend the act of April 6, 1949, to extend the period for emergency assistance to farmers and stockmen.
(The bills referred to follow :)
[H. R. 4915, 84th Cong., 1st sess.) A BILL To amend the Act of April 6, 1949, to extend the period for emergency assistance
to farmers and stockmen
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, This section 2 (c) of the Act of April 6, 1949, as amended, is further amended by striking the word "two" from the first sentence of said subsection and inserting in lieu thereof “four” and by adding after the first sentence of the said subsection the following new sentence: "After the expiration of the period specified herein, such loans may be made only for supplementary advances to producers indebted for loans made under this subsection.".
[S. 1372, 84th Cong., 1st sess.] AN ACT To amend the Act of April 6, 1949, to extend the period for emergency assistance
to farmers and stockmen Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 2 (c) of the Act of April 6, 1949, as amended, is further amended by striking the word “two" from the first sentence of said subsection and inserting the word “four" and by adding after the first sentence of the said subsection the following new sentence: “After the ex. piration of the period specified herein, such loans may be made only for supplementary advances to producers indebted for loans made under this subsection, but no such loan shall be made in any event after July 14, 1959,"
Passed the Senate April 25, 1955.
FELTON M. JOHNSTON, Secretary. Mr. Poage. We will be glad to hear from you, Mr. Dempsey.
STATEMENT OF HON. JOHN J. DEMPSEY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW MEXICO
Mr. DEMPSEY. I hope the committee will approve this as did the Senate in reducing the interest rate from 5 to 3 percent. When you go into relieving a distressed area, there is not much relief if you increase the interest rate.
I trust the committee will see fit to report one of the several bills out from the committee and if it conforms with the Senate bill, which is the same except in one provision, they will probably get speedy action.
Thank you, Mr. Chairman, for hearing me so early, .
STATEMENTS OF R. B. MCLEAISH, ADMINISTRATOR, AND H. C.
SMITH, DEPUTY ADMINISTRATOR, FARMERS' HOME ADMINIS-
Mr. McLEAISH. Yes, we do.
Mr. PoAGE. Will you make disaster loans to tung-nut growers on the same basis that
make them to any other farmer? Mr. McLEAISH. Yes, we do.
Mr. Poage. Will you explain why you have not made loans to certain tung-nut growers who have applied ?
Mr. McLEAISH. Our policy has been that we make these emergency loans and all other type of loans for people who are principally engaged and who receive the major part of their income from farming.
Mr. POAGE. That is the law, is it not?
Mr. McLEAISH. That is the law and if a man is engaged in the growing of tung nuts and receives his principal income from tung nuts, we will make him a loan.
Mr. Poate. Or if he is growing tung nuts and growing cotton or peanuts in addition and receives the principal part of his income from farming, you will make him a loan, will you?
Mr. MCLEAISH. That is right.
Mr. POAGE. The only time you refuse to make him a loan on the basis of what he is engaged in is when he is not getting the principal part of his income from farming operations, is that correct?
Mr. McLEAISH. That is correct.
Mr. Poage. You do consider tung nut growing a farming operation in the same sense that you would consider wheat or cotton growing a farming operation ?
Mr. MCLEAISH. That is right, we do.
Mr. HILL. It is not in here regarding the rate of interest that you charge on these emergency loans under the heading of this particular piece of legislation ?
Mr. McLEAISH. Under Senate 1372, that applies to the special livestock loan and the law itself provides for a rate of interest at 5 percent.
Mr. Hill. Then do you have areas where you have disaster or emergency loans where you can drop the rate of interest or is this as low a rate as you can ever have?
Mr. McLEAISH. No; under the production emergency or production disaster section of Public Law 38, an economic disaster loan can have the rate fixed at any point.
Mr. Hill. In other words, in a drought area, as we have in some parts of Colorado, where counties and areas were considered drought areas, you could give them a lower rate of interest?
Mr. McLEAISH. Correct.
Mr. Poage. We have to change that in order for you to give them a lower interest rate?
Mr. McLEAISH. That is right.
Mr. McLEAISH. No; there is a bill in the Senate which covers the disaster loans.
Mr. PoAGE. That is what Mr. Dempsey was suggesting.
Mr. McLEAISH. No, there is a bill introduced by Senator Johnston and Senator Thurmond, which specifically does that.
Mr. Poage. That does not have to be done. You can lower that without congressional action.
Mr. McLEAISH. Yes.
Mr. SMITH. Congressman, the Johnston bill and Thurmond bill would provide an amendment to the statute that would provide that the interest rate for the production and economic emergency loans could not exceed 3 percent.
Mr. POAGE. I know that, but you have a right to lower those loans to 3 percent. The statute now lets you bring them down to 3 percent if you
want to do so. Mr. Hill. I would like to ask this question. Before we do that, I would like to ask Mr. McLeaish how are the funds in this particular legislation? Has your organization sufficient funds to carry on this livestock loan program in the various dry areas in which you are now operating?
Mr. McLEAISH. Mr. Smith has the figures that we have. I will let him answer the question.
Mr. SMITH. Yes, sir. We have now available in the revolving fund, $33 million. We anticipate in the next fiscal year, that is, fiscal 1956, collecting approximately $67 million on the loans outstanding which amount would return to the revolving fund and could be used for loans.
Mr. Poage. In other words, you could make about $100 million in loans in the next year?
Mr. SMITH. That is right.
Mr. Poage. Mr. McLeaish, you are familiar with these bills, and would you favor or would you disapprove the extension of this legislation?
Mr. McLEAISH. We would very strongly approve the extension of the legislation to make livestock loans.
Mr. Hill. I might ask you, Mr. McLeaish, if you favor the bill as passed by the Senate with amendments.
Although we may make changes, the way the bill came from the Senate suits your organization?