The CHAIRMAN. If they could pay it at all, it could come out of any of these funds.

Mr. BOILEAU. This is merely a pool and there is no authority for the Government taking the $5,000,000 out of it.

Mr. COBB. No, sir; I do not think there would be.

The CHAIRMAN. I certainly think there would be if it is a part of the fund and you have authority to use that at all.

Mr. COBB. Yes, sir; but we could not pay this out except to those who surrendered certificates to the pool.

The CHAIRMAN. The expense this year would be infinitely less than last year.

Mr. BOILEAU. This last year, he says, they took in $90,000.

The CHAIRMAN. I do not see any use in bothering with that. I think we should wait until we get those figures.

Mr. FULMER. I think this should be cleared up for the record. Moneys paid through that pool were the property of the farmers. Mr. COBB. Private property.

Mr. FULMER. And, you could not use any of that money in reimbursing ginners or anybody else. The question asked by Mr. Marshall was as to whether you would be able to pay your expenses to the ginners out of the processing tax collected or whether you would call on the Treasury of the United States for an extra appropriation. Mr. Cовв. We will not call on the United States Treasury. We propose to pay it out of the processing tax, and in my own judgment there is much opportunity to pay it out of the taxes to be collected under the Bankhead Act.

Mr. FULMER. That should settle that question.

The CHAIRMAN. I do not think there is any question at all that whatever administrative cost is incurred, if you have authority to pay it at all, you can pay it out of any of these funds, including the pool. That is a substitute for the tax, and whatever funds come in from any of this program, if you are authorized to pay the administrative cost out of funds, you could do it. I do not think you would be wise to do it. I think it would be better to do it the other way. But certainly you would have such authority.

Mr. BOILEAU. The $14,000,000 refers to and represents the farmers' own property.

The CHAIRMAN. Not any more than the processing tax does.
Mr. BOILEAU. That is his definite allotment.

The CHAIRMAN. Yes; but his allotments are subject to the administrative costs.

I do not think as a matter of policy you would be justified but I do think you would have legal authority.

Mr. BOILEAU. The effect of that would be to penalize the unfortunate man who did not produce enough.

The CHAIRMAN. I do not agree with the policy, but I am talking about the legal authority. I think you could, if you had authority to do it at all, I think it would be unwise to do it. Wherever it is taken, it will be taken out of the fund that would ordinarily go to the farmers, and I think it ought to be left at as low a figure as is consistent with the reasonable and essential extra expense.

Mr. COBB. The ginners will cooperate with us in that, Mr. Chair

man.

The CHAIRMAN. I think they will.

Mr. COBB. I would just like to say this further that-I intended to say it earlier that many of the expenses, as Mr. Doxey has indicated, and as Mr. Kleberg has indicated, will not recur this year because we will get things under way long before the ginning period begins and ginners will not have to hold this cotton under heavy insurance charges and many of the other expenses that they were put to this year would not arise again.

Mr. Hook. Do you think it will cost 50 cents a bale this year or not?

Mr. COBB. I do not think so.

Mr. FULMER. Is it not a fact that that pool money is private property and it would be impossible under the Bankhead Law, or any other law, to take part of that to reimburse anybody else?

FURTHER STATEMENT OF ALGER HISS, ATTORNEY, SOLICITOR'S OFFICE, DEPARTMENT OF AGRICULTURE

Mr. Hiss. I would like to explain it a little more fully than that. The act, in section 9-D, provides that any and all certificates of exemption may be transferred or assigned in whole or in part-that means by the farmer-in such manner as the Secretary of Agriculture may prescribe, and shall be issued with detachable coupons, and so forth.

The Secretary of Agriculture prescribed that they could not be assigned except through a pool at the minimum price of 4 cents. If the Secretary of Agriculture could and should rule they could not be assigned at all, then the money that went to purchase certificates would have had to go in payment of taxes because the man who needed extra certificates could not have gotton them and would have had to pay taxes.

I fell, personally, as a matter of law, it would be very doubtful whether the Secretary could, under this language, which says they shall be transferred or assigned in such manner as he directs, say flatly they could not be assigned at all. Consequently, it would seem to me that once you allow assignment, then whatever is paid for that belongs to the man who holds the certificate.

The CHAIRMAN. Yes; but the law only permits them to be assigned under regulations issued by the Secretary of Agriculture. Mr. Hiss. That is correct.

The CHAIRMAN. And, the administrative costs come out of funds collected by this bill. That is a part of the administrative cost, and I think certainly if it is collected it would be, as a matter of law, entitled to be used for administrative costs in collecting and disbursing whatever is necessary in any funds that are collected. While it is private property, I think you will find, as you go into it, that any of these expenses can be paid out of any funds collected, any administrative expenses. I think it would be unwise to take them out of that particular fund, but I think if you will look over the act you will find undoubtedly that the administration costs can be paid out of any funds collected, out of the pool or otherwise. I agree it would not be wise to do it, but if you can pay these ginners at all, you can pay them out of these funds.

Well, gentlemen, we were discussing this the other day, and I do not know how long this committee wants to run on this subject. There are a number of Members of Congress who desire to be heard. Does the committee want to run indefinitely on this subject?

Mr. FULMER. I think it would be well to have Mr. Cobb come back and take his time, especially on the various bills pending. We have not had an opportunity to get his views, and I believe it would be helpful to us if we have to frame some legislation.

The CHAIRMAN. Mr. Cobb was unable to get here on time this morning, and I was out of the room when they took him off his feet, but I do not think he has talked much this morning and I expect Mr. Cobb better come back in the morning and we will meet here at 10:30 o'clock.

Mr. BOILEAU. I would like to suggest Mr. Cobb prepare in the form of suggested legislation such proposals as he desires in the event the committee decides to enact new legislation.

The CHAIRMAN. Have you looked over the various bills, Mr. Cobb, with the thought of which ones are more desirable as legislative matters?

Mr. COBB. We have looked over them rather carefully, Mr. Chairman, and the only suggested amendment that I believe has not been covered in the testimony is that that would set up appeal boards. That question was not asked, and I forgot to cover it. The appeal boards have already been set up.

There was another question and that was the matter of the elections in the various counties and within the States, and that has already been taken care of as a matter of administrative policy, and we are electing the local committeemen.

The CHAIRMAN. Assuming the committee decided it wanted to pass legislation, have you looked over any of these bills with that thought in mind?

Mr. COBB. We have looked them all over and had them all briefed. The CHAIRMAN. You would not care to express an opinion as to the relative merits of the bills?

Mr. COBB. Well, some of the bills have to do with the processing tax and are entirely out of the field of discussion, as I understand it, but I believe that bills having definitely to do with the Bankhead Act have already been analyzed, and the questions you would ask naturally, I think, have been answered.

The CHAIRMAN. I am sure the committee, having gone this far into this matter, would be glad to have you here tomorrow morning. Mr. COBB. I would be glad to come back.

The CHAIRMAN. We will try to avoid bringing other witnesses in while this witness is testifying. If he does not have the information we seek, and either agrees to get it later or have someone else appear later and give the testimony, it will save a good deal of time. I understand Mr. Thompson was called in. After this, let us, as much as possible, stay with the witness; otherwise we get too far afield and we do not get the information we really want.

Mr. BOILEAU. I want to request the chairman to ask the Department to prepare in the form of a bill such changes as they propose and such changes as they recommend, so that we can have it in the

form of a bill, covering such recommendations as they desire to make with reference to amending the Bankhead Act.

The CHAIRMAN. I would be more than happy to do so but for the fact I understand they do not want to recommend anything.

Mr. COBB. We have no proposals to make, Mr. Chairman, that I know of.

Mr. BOILEAU. They are suggesting changes in regulations, and I do not think it is unfair to ask them to make those changes they propose in the form of a legislative proposal for us to consider. They might prefer that we leave it to them to make the regulations, but we would welcome their recommendations and would like to have it in the form of a legislative proposal. I do not think we are asking too much to ask them to put it in that form at least for us.

The CHAIRMAN. How long would it take you to do that, Mr. Cobb? Have you made any effort to do that?

Mr. CоBB. We have made no effort at all. Many of the suggested changes, Mr. Chairman, have already been taken care of. For instance, this question of electing local committeemen and the matter of setting up appeal boards.

The CHAIRMAN. Mr. Hiss, would it be any considerable task to draft suggested legislation to cover the items proposed to be affected by regulation?

Mr. Hiss. I would like to know for sure just which items the committee has in mind. I assume first would be ginners' compensation and second would be the exemption, the two-bale exemption. Are there any others?

Mr. BOILEAU. And the appeal board.

Mr. Hiss. As far as the appeal board is concerned, I do not think the department has any doubt that it has that power today. The other two items

Mr. BOILEAU (interposing). I would like to have those two particularly.

Mr. DoXEY. Has the Department any definite ideas as to the continuation or not of this act? If you have, I am not making any suggestion at this time-my bill takes care of that-but we would like to thrash it out more if we are going to have new legislation. Mr. Hiss. The present view of the Department is that before they suggest the form of Bankhead control which should be in effect next year, they would like to haxe the experience of 1 year where they start from scratch instead of in the middle of the season.

Mr. DoXEY. There will be no Bankhead bill next year, though, until we pass additional legislation.

Mr. Hiss. That is correct.

Mr. DoXEY. And we will not have any chance to pass additional legislation until we convene here next January, and if we put it on next year's program in the rush of things we will not have any chance to get the expression from the people. If the cotton farmers want it or don't want it, I want to know what their wishes are. I was just thinking of the advantages of knowing their wishes when we come back here in January and not waiting.

Mr. COBB. My feeling on that, Mr. Doxey, is this: That we entirely rewrite the Bankhead Act rather than try to patch up what

we have with amendments. I think we are going to be able to function all right for the present season with the bill as it is, but we would like a measure that would in many respects be different to what the Bankhead bill is at the present time; and we will be glad to cooperate with you and with the other end of the capital here, in getting such a measure together, if that seems desirable, for passage at this session of Congress.

Mr. DoXEY. You know what the practical effect would be if we have to start from scratch with new legislation the next session of Congress. We do not know what will come up before next January, and you know we got this last Bankhead bill through quite early in April 1934. Considering what we had before it was quite early. And if we do not have any legislation and want legislation in this regard we may be mighty lucky if we get it through by May, June, or July of next year and then you people would be in worse shape to administer it than you were last year and we would have missed an opportunity to legislate at this session of Congress. Then, too, I want the farmers to have a chance to say whether or not they want the Bankhead Act continued during the crop year 1936.

Mr. COBB. I think that is true, and a little later I think we will have had a good deal of experience in working with this year's program that we would need in rewriting a new measure and I would like to get through with this and get it into the field, and then we can cooperate with you in working out a new measure and passing new legislation.

The CHAIRMAN. We will adjourn until 10:30 o'clock tomorrow morning.