NEW MEXICO RELIEF. COMMITTEE ON AGRICULTURE, HOUSE OF REPRESENTATIVES, The committee met, pursuant to adjournment of yesterday, at 10 o'clock a. m., Hon. Gilbert N. Haugen (chairman) presiding. Present: Representatives Haugen (chairman), Voigt, McLaughlin, Tincher, Williams, Sinclair, Thompson, Clague, Clarke, Ketcham, Aswell, Kincheloe, Jones, Fulmer, Rubey, Johnson, and McSweeney. The CHAIRMAN. The committee will kindly come to order. The committee has met this morning to consider Senate Joint Resolution No. 52, for the relief of the drought-stricken farm areas of New Mexico, which is as follows: JOINT RESOLUTION For the relief of the drought-stricken farm areas of New Mexico. Whereas many sections of New Mexico are impoverished because of a continued drought that has persisted for the past three years, and farmers so affected have borrowed money from all sources until now their credit facilities are exhausted, and they can no longer obtain funds to continue the cultivation of their farms; and 1 Whereas weather conditions now prevailing in New Mexico point to a very successful year for farming providing the farmers of these drought-stricken areas can obtain the necessary funds to operate their farms and thereby be able to recuperate their losses caused by repeated crop failures: Therefore be it Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of Agriculture is hereby authorized, for the spring and fall planting of 1924, to make advances or loans to farmers in the drought-stricken areas of New Mexico, where he shall find that special need exists for such assistance, for the purchase of seed, and feed, for actual farming purposes, not including the purchase of equipment, as he may find need for the culti vation of farm lands within the said State, not to exceed in any instance the sum of $6 per acre. Such advances or loans shall be made upon such terms and conditions and subject to such regulations as the Secretary of Agriculture shall prescribe, including an agreement by each farmer to use the money obtained by him for the production of such crops as the Secretary of Agriculture may designate and to give a valid lien on the growing crops to be produced from money obtained through such loan or advance in manner and form as required by the laws of New Mexico, which said lien, when recorded, shall have priority in payment over all other liens or encumbrances of whatsoever kind on such crops. A first lien on the crop to be produced from money obtained through this loan or advance made under this act, shall, in the discretion of the Secretary of Agriculture, be deemed sufficient security therefor. All such loans or advances shall be made through such agencies as the Secretary of Agriculture shall designate, and in no instance shall any portion of funds obtained through the administration of this act be used for the payment of obligations other than those incurred under the regulations as provided by the Secretary of Agriculture in the administration and in accordance with the provisions herein contained. SEC. 2. That for the purposes of this act there is hereby appropriated, out of any money in the Treasury not otherwise appropriated, the sum of $1,000,000, to be immediately available, and not more than $10,000 may be used in the District of Columbia by the Secretary of Agriculture in the administration of this act. SEC. 3. That any person who shall knowingly make any false representation for the purpose of obtaining a loan or advance under the foregoing section upon conviction thereof shall be punished by a fine of not exceeding $1,000 or by imprisonment not exceeding six months, or both. Passed the Senate February 26, 1924. Attest: ALE (OUGEORGE A, SANDERSON, Secretary. Mr. MCKEOWN. Mr. Chairman, I would like to ask permission of the committee to consider House Joint Resolution No. 202, which is similar to Senate Resolution 52, except that it applies to Oklahoma. The CHAIRMAN. We will hear you, Senator Jones. STATEMENT OF HON. ANDRIEUS A. JONES, UNITED STATES SENATOR FROM THE STATE OF NEW MEXICO. Senator JONES. Mr. Chairman and gentlemen, when I introduced this resolution into the Senate I felt somewhat humiliated to think that it was necessary to do it, but conditions in New Mexico have been such within the last two or three years that I felt that it was justified under the circumstances. Ordinarily I do not believe in the Federal Government giving relief to States or sections of the country unless in an emergency or where the necessity is very great. Conditions in New Mexico have been such that I felt justified in coming to the Congress of the United States and asking for relief. We have a large State geographically, but the population is very sparse. Our State is about 350 miles wide and nearly 410 miles long, and our population is only about 450,000. For more than two years we have been suffering extreme drought, such as the State has never known before. I have lived there nearly 40 years, and there has never been anything approaching it. Not only the drought, but financial conditions generally have been more adverse than I have ever known them. I have been through financial depressions there before, but there has never been anything such as we have there now. During the last year and a half we have had 43 bank failures in the State. During the month of January we had 7 or 8 bank failures, and the result is that there is no liquid money there which the people could get at even if they had the collateral security. Mr. RUBEY. How many banks have you in the State? That will give us an idea of the percentage of bank failures. Mr. MORROW. We had 135 banks before the failures, and we have had between 45 and 50 bank failures. Mr. ASWELL. Were any of those banks which failed national banks? Senator JONES. Some of them, yes. Mr. ASWELL. Do you know the percentage? Senator JONES. I think about one-third of them were national banks. Mr. SINCLAIR. That is, over 30 per cent, almost 40 per cent of failures? Senator JONES. Yes. I presented in the Senate a statement of the diminishing bank resources of the State. The resources of the banks of the State have been reduced about 25 per cent in actual banking facilities. No banks have increased their deposits that I know of. There is no bank in the State to-day to which I can point that is functioning in a normal way. They have been reducing their loans wherever possible. That is the thing the banks are doing now, instead of helping to carry the business of the State, they are simply collection agencies and are drawing in all the time instead of making any new loans... q Mr. CLARKE. How long do you anticipate this condition is going to exist, of liquidating these frozen credits? Senator JONES. We feel very much encouraged, because last fall and during the winter and spring we have had more moisture to go into the ground, as I have been informed-I have not been out there this spring-but as I am informed, we have had more moisture last fall and this winter and spring than perhaps ever known before, so there is a splendid outlook for crops this year. If we can make a good crop this year it is going to relieve the whole situation, in my judgment. I have telegrams in great numbers, and letters, and with one accord they are appealing to Congress for aid at this time. Only yesterday, or the day before, I believe it was, I received from New Mexico a resolution adopted by the Republican committee recently, which had a meeting, urging the adoption of this measure. Mr. FULMER. What is the money crop in New Mexico? Senator JONES. We have a variety of crops out there. In one section of the state they raise beans, and in the Sanchez Valley two years ago they shipped out two and a half million dollars' worth of beans. Since that time they have not raised seed, even, and the banks in that section have failed. We have a number of counties in the State where there are no banking facilities whatever; the banks have been closed out. Mr. ASWELL. Would you be willing to strike out all except seed→→ that is, "food, and for actual farming expenses"-found on line 4 of page 2? Mr. JOHNSON. In that connection, I would not be willing to let the word "food" stay in there. Mr. ASWELL. I said strike out all except "seed." Mr. JOHNSON. Of course the feed means for the horses. Senator JONES. That is what it means. Mr. JOHNSON. I am talking about the word "food." Senator JONES. I am perfectly willing to strike that out if any considerable number of the Congressmen feel that it should be stricken out. Mr. TINCHER. We have a precedent for that. We loaned $10,000,000 to feed the Germans. Mr. JOHNSON. Yes. Those were sick babies. This is a different proposition. Mr. TINCHER. I do not like the idea of it. Mr. CLARKE. I am quite in accord with Mr. Johnson on that. Senator JONES. I am willing to strike out the word "food" and leave it seed and feed. I have talked to some of the Members, and that has been suggested. I really believe it will facilitate the passage of the resolution if we strike out the word "food." Mr. THOMPSON. This is qualified by the words "for actual farming purposes, not including the purchase of equipment.' I don't think it includes people. Mr. CLARKE. It says "food." Mr. JOHNSON. The "feed" refers to the stock, but "food" refers to people. Mr. SINCLAIR. You farm on a large scale there? Mr. JONES. In some sections we do. Mr. SINCLAIR. You have large ranches? Mr. JONES. The farm ranches are not large in the main. Mr. SINCLAIR. I was thinking that the need for this might be in the case of a man going out that would need a grub-stake for the season in order to carry on his farming operations. Senator JONES. That was the idea of putting it in there. These people haven't raised anything for two years or more. I think if you strike out that word "food" there is no question but what a number of people will not farm this year who otherwise would. But the feed and seed will aid a very great number. Mr. SINCLAIR. Personally I think seed and feed are absolutely essential. They go hand in hand and if you do not have the feed you might just as well not have the seed. Senator JONES. Of course the word "food" was put in on account of food for the families of the people who work the ground. Mr. VOIGT. Do you think it is necessary to have the language in here, "for actual farming expenses"? Senator BURSUM. That is a limitation, so it can not be used for any other purpose, and I think that helps the bill. Senator JONES. That was the purpose of it, so that the feed and seed should only be furnished to those who would use it in actual farm operations. Mr. VOIGT. But it says for actual farm expenses, and that would include the hiring of a hired man. Senator JONES. The purpose was just as I have stated. We can strike out the word "and" if you want to do that, so that we would strike out the words "food and." Mr. JONES. And put the word "and" before the word "feed" and make it "seed and feed." Senator JONES. Yes; making it read "seed and feed." Mr. VOIGT. Don't you think it would be better if you said for actual farm purposes, instead of "farm expenses"? Senator JONES. I am perfectly willing to have that change made also. Mr. JONES. You raise some wheat in the eastern part of New Mexico, do you not? Senator JONES. Oh, yes; we raise quite a lot of wheat in certain sections of our State. This is intended to aid those people. Mr. VOIGT. I notice here in line 15, page 2, you provide that "said lien, when recorded, shall have priority in payment over all other liens and encumbrances of whatsoever kind on such crop." course an act of Congress can not supersede an existing lien. Of Senator JONES. You notice the word "recorded." That is in accordance with the laws of New Mexico. I might say that that language was framed by the solicitor for the Department of Agriculture, so as to make it conform to the laws of the State, and actually give the Government a first lien on the crop. Mr. VOIGT. Suppose you have this situation, that a man has a mortgage on his crop already. Senator JONES. He could not do that. Mr. VOIGT. And the mortgage is on file. Senator JONES. He can not do that, Mr. Congressman; he can only mortgage a growing crop, and the crop has not grown yet. It would be a first lien. Mr. VOIGT. But if you can only mortgage a growing crop, then you can not give a valid mortgage to the Secretary for that seed. Senator JONES. That is true. That is why it is put in that there shall be an agreement-the bill says, "including an agreement by each farmer to use the money obtained by him for the production of such crops as the Secretary of Agriculture may designate and to give a valid lien on the growing crops to be produced from money obtained from such loan or advance in manner and form as required by the laws of New Mexico, which said lien, when recorded, shall have priority in payment over all other liens or encumbrances," etc. Mr. VOIGT. In other words, the farmer agrees to give the mortgage? Senator JONES. He agrees to give a mortgage when the law will permit it to become effective. Mr. KETCHAM. That is one of the conditions upon which he gets the loan? Mr. TINCHER. The department has been consulted about this. Senator JONES. This resolution, you might say, was really framed in collaboration with the Department of Agriculture. Mr. ASWELL. Why is it necessary for the Department to spend $10,000 in Washington? Senator JONES. We just put that in there to cover any contingent expenses that might occur. Mr. SINCLAIR. I think they have had experience in making northwestern loans and this $10,000 is for office administration here. I think in administering the $2,000,000 in loans made in North and South Dakota, Montana, and Washington, that it cost about $15,000. Mr. ASWELL. How much of that loan was returned? Mr. SINCLAIR. About 87 per cent of it. Mr. ASWELL. Of the $2,000,000? Mr. SINCLAIR. Yes. Mr. VOIGT. I am for your bill, Senator. I am only trying to get a little light on it. In line 16, on page 2, it is provided that the line shall have priority, etc. Senator JONES. Yes. Mr. VOIGT. Suppose a man signs an agreement but later, when his crop is harvested, he actually mortgages it to some one else. Senator JONES. The agreement would be recorded, and I think that would prevent that. Mr. VOIGT. What is that? Senator JONES. The agreement should be recorded by the Secretary of Agriculture, if it is advisable to do that. Mr. VOIGT. But the agreement does not relate to chattel mortgages, from what you have stated. Mr. JOHNSON. It would be notice that he has agreed to give a chattel mortgage. Mr. VOIGT. But that, of course, is not a chattel mortgage. Mr. JOHNSON. But anyone is put on notice that such an agreement is in existence. Mr. ASWELL. That is about as far as you can go, I think. Mr. JOHNSON. But it would be notice to the other fellow. |