taken any definite position, this proposal has the support of just as many farm organizations of the country, almost, as it is possible for any measure to have had.

Now, coming to this matter that you mentioned, Mr. Chairman, the organization of which Judge Bingham is chairman

The CHAIRMAN. That is known as the National Council? Mr. HIRTH. The National Council of Farm Cooperatives, or whatever the name is. I think the correspondence which you had placed in the record the other day speaks pretty much for itself. I do not know that I have to make any particular comment on it. My own organization, the Missouri Farmers' Association does not belong to it, and certainly we would resent, if we did belong to an organization of that sort, an effort on the part of the officials of the organization to tie our hands with reference to a matter of this kind. Mr. Plummer, of Colorado, was before your committee the other day. His organization does belong to the National Council, and I think that Mr. Plummer said that that attitude did not represent them, and his own plea for this bill, before this committee, shows what the wheat growers of Colorado think.

The CHAIRMAN. I would like to ask you, if you are familiar with it since your organization is not a member, perhaps you are not familiar with it did the various organizations constituting the National Council know that their officers had tied their hands by this kind of an agreement? Was this a secret agreement that was made?

Mr. HIRTH. Mr. Chairman, I am not in a position to say.
The CHAIRMAN. Had you heard of it?

Mr. HIRTH. No; I had not. I very seriously doubt whether the member organizations knew of it.

The CHAIRMAN. You see the point I am trying to get at. I would like to know whether these people, in making this agreement, made a secret agreement without consultation with their constituents and the various organizations that compose the national council. I think it would be important to know that. If they made the agreement without consultation and it was secret and perhaps not fair to their own membership if they did know about it, then we have lined up against this legislation here those various organizations that comprise the national council, which constitute quite a large number of farm organizations.

Mr. HIRTH. In view of the fact, Mr. Chairman, that my organization is not a member I think it would be somewhat indelicate for me to assume to comment upon it, but I am sure you will have some of their people before your committee before you get through, who will be capable of testifying to that point.

Now, I want to go back to the character of the bill, and in doing that I want to comment on the proposal that Doctor Siewart made the other day. He completed his testimony yesterday. I do this in a friendly sense, not with the idea of precipitating any controversy but just to show the difference between the kind of a plea that the Dickinson bill makes and the kind of a plea that others make, because I do not think you could get the contrast in any finer form than it is offered between those two different proposals.

In the first place I again want to reiterate that the President and others have said that the correct solution of the matter is through

91358-26-PT 1—8

the farm cooperatives themselves. I want to again repeat that that is the method of approach through the Dickinson bill.

The debenture proposition which Doctor Stewart so ably presented gives you the keenest contrast between the two characters of propositions that you could possibly have. In the first place, the farmers have always said that they are not asking Congress for a subsidy; that they do not want any special privilege legislation; that they simply want the existing tariff to be made as effective for them as it is for industry, and as it is for labor, indirectly; so that the dollar they get for their toil will have the same purchasing power as the dollar that enters into their production costs, and over which they have no control. That is the heart of the plea that these people make, who are back of the Dickinson bill. The measure that Doctor Stewart presented on the other hand is a different kind of proposal which would shift the burden onto the Treasury of the United States. Speaking for myself, however, near complete is the collapse of agriculture, and however vital it is that something be done, I would oppose any measure that took a single dollar out of the Treasury of the United States. I would oppose it not merely on sentimental grounds but because I do not think the farmers of the United States can afford to place themselves in an attitude of that kind. It is not a question as to whether or not the Treasury could stand the strain. It is the principle of the thing itself.

Senator RANSDELL. It is the idea of a bonus that you object to? Mr. HIRTH. Yes, sir; all along we have said we do not want any subsidy. The Corn Belt does not want it. The Corn Belt is willing to carry its own burdens.

Senator RANSDELL. It would help me greatly if you would put in a few concrete sentences just what you want to do with this Dickinson bill, because I do not understand it.

Mr. HIRTH. I will get to that in just a minute. In the next place, I am frank to say--and I am saying it as publisher of a farm paper and as an extensive producer of livestock-in the desperate condition in which the average farmer finds himself at this time, any measure that guarantees him or assures him of a fair price, I want to say to you that the next hurdle you have to watch out for is that of overproduction, because the condition of desperation is such that you can not afford to take that into account, and your bounty plan has absolutely no check against anything of that sort.

I am mentioning this, as I said a moment ago, in a sense of controversy, but simply to give you an idea of the difference between the two characters of proposal.

Now, coming down to your proposition, Senator Ransdell, as to what this bill provides, I want to give that to you in just as few words as I can.

In the first place, it provides that a caucus or a mass meeting or whatever you want to call it, shall be held by the existing farm organizations in the 12 Federal land bank districts of the United States. Those farm organizations, under call issued by the Secretary of Agriculture, and under regulations of procedure prescribed by him, shall come together and select five outstanding farmers who shall become members of the national council.

There is some discussion as to whether it would not be wise to let the Secretary of Agriculture name one of those five men from each

of the 12 Federal land bank districts, with the idea of bringing in the public interest in that sense. It may be that a bill will be submitted with that included, bus in any case, the existing farm organizations in the 12 Federal land bank districts will appoint five men to this national council. That then means a council of 60 members in the aggregate. Those 60 members are to nominate three men from each Federal land bank district, and out of those three men the President is authorized to select one who shall become a member of the Federal farm board, which means that you will have a board of 12 members out of the 12 Federal land bank districts of the country. That is the process by which it is proposed to set up the machinery. It proceeds from start to finish through the farm organizations themselves, as we have been repeatedly told is the sound way to proceed. If it is true that that is right, then this is the most completed method by which you could avail the existing farm organizations and make them effective, that I think anybody could conceive of. That, once your Federal board has been created, the proposal tentatively, in the bill now is to place at the disposal of the board a revolving fund of $250,000,000. Whether that is the correct sum or not, of course remains to be seen, but any way, that is the tenative figure. Again, it is not the idea that that shall be done at the expense of the Treasury, but that the farm organizations participating in the movement of these surplus commodities shall pay into the Treasury, interest of 4 per cent per annum on the actual amount of the revolving fund used.

Senator GOODING. Had you not better say "at the current rate of interest"? It may be less than 4 per cent or it might be more than 4 per cent. Nobody can say that you are getting something for nothing. It seems to me the bill should provide for the current rate of interest on the money. That may go up or it may go down. I do not know why the farmer should pay any more than the actual cost to the Government of its money. It might be a little more. If it is, he ought to pay it. I like your thought. You are conveying all the way through that the farmer does not want anybody to give him anything except a square deal; to just undo some of the things that they have done in destruction of agriculture, and give him a chance.

Senator RANSDELL. That is a question of detail-for the rate of interest. That is not essential. I want to get the essentials. I agree with the Senator on that, that it ought to be the current rate. I do not think anybody would differ on that.

Mr. HIRTH. Now, then, we realize that for the time being the different organizations are not sufficiently developed and do not have the strength to immediately deal, for instance, with a commodity like wheat or pork products or cotton. Therefore, for a period of two years this board is authorized to not merely proceed through its different existing cooperative organizations, but to contract with private agencies, if they think that is wise. For instance, if you had a surplus of 100,000,000 bushels of wheat this year and the different wheat pools and wheat growers' organizations can not give all the assistance that is necessary in handling the matter, then this board, under the terms of the bill, would be authorized to contract with private agencies as they now exist, for a period of two years. It could contract for a period of two years with the packers in handling surplus pork products and other meat products, if they existed, but after the two

year period has expired, the power to contract through private agencies ceases. Then it throws the entire responsibility from that time on onto the farmers' organizations of the United States. It seems to me it is a pretty nervy way to go at it on the part of the farmers.

Senator SACKETT. What do you mean? What are they to do? What is this board to do? You say they contract with private agencies, but, what sort of contracts would they make?

Mr. HIRTH. Now I am just coming to that, Senator.

Senator SACKETT. Remember, we do not know anything about this.

Senator RANSDELL. We are anxious to get the details. approaching it logically, I think, sir.

You are

Mr. HIRTH. Now, suppose, as I said a moment ago, you have 100,000,000 bushels of surplus wheat this year. Your existing wheat tariff is 42 cents a bushel, and therefore your board would be confronted with the necessity of protecting 600,000,000 bushels that are ordinarily consumed in the home markets, so that they would receive the benefit of your 42 cents a bushel tariff, which means it would have to get 100,000,000 bushels out of the United States. Along with that, it would be confronted with the obligation of, by some process, raising a fund that will cover the loss on this surplus. The surplus, of course, would be the difference between the world price and that price, plus transportation and other items, and plus your 42 cents per bushel tariff. Therefore, the board would assess what we term in this bill, an equalization fee of so much per bushel against all wheat in the United States, except, of course, that which passes out in export, which they can not get at, but which is not necessary because the exporter would buy it on the basis of the market that took it into consideration.

Just for the sake of argument, suppose that you need a fund of $100,000,000, or $75,000,000 to cover your losses on the surplus, you would levy that through the flour mills of the United States, big and little, whether it amounted to 5 cents per bushel or whether it amounted to 7 cents per bushel, or whatever it might amount to. As your surpluses vary, and in accordance with the difference between the world market and the domestic market, naturally your equalization fee would have to be adjusted to that estimated loss, whatever it might be; but, the board would assess through the flour mills of the United States, so that you would not come in contact with the wheat grower.

Senator GOODING. Just a minute. Your thought is to give the American farmer the full amount of 42 cents protection on wheat? Give him that benefit as far as the domestic price is concerned? Is that correct?

Mr. HIRTH. Yes; generally, that is correct. Therefore, it would assess against the mill whatever the amount of the equalization fee was. If it amounted to 25 cents per barrel, it would require every mill in the United States to pay into the Treasury 25 cents per barrel for every barrel of flour that it ground. The mill, in turn, would reflect back in the price paid to the farmer.

Senator SACKETT. Why would not the mill reflect that into the price paid to the consumer?

Mr. HIRTH. Essentially, Senator, I think it would do that to a large extent, but what I mean to say is we are proposing to take the

loss on the exportable surplus out of the producer's pocket. Therefore, if your world price, with the factors that enter into it, plus the existing tariff, put wheat on a basis of $1.75 in the United States, and if the miller were required to account for 5 cents per bushel to the Federal farm board, then the farmer, instead of receiving $1.75 for his wheat, would receive $1.70 per bushel.

Senator RANSDELL. Whereas the world price would be what?

Mr. HIRTH. Less the tariff and transportation and other factors. Senator SACKETT. Would it not be easier to get it by putting it on the price of flour than to go back to the farmer on the price of wheat? Mr. HIRTH. You do not go back to the farmer. You put it on the flour, but the miller simply would buy the wheat in the United States for the amount, less the amount of the equalization fee. Just as I said a moment ago, if you make the tariff effective, it would give you a domestic price of $1.75 and the miller would, under those conditions, buy wheat on the basis of $1.70, which means that it does come out of the farmer's pocket.

The CHAIRMAN. In other words, Senator, under the old McNaryHaugen bill, to get these losses we levied it on the farmer and the elevator man had to collect it. This proposal that this committee has agreed to and the confidential committee print which we have before us, proposes in all cases to make this levy upon he processor. If it is wheat, it is on the miller. If it is pork, it is on the packer, and the miller knows in advance, for instance, that he is going to have to pay into this revolving fund, we will say, 10 cents a bushel on every bushel of wheat that he grinds into flour, because this board will take action in advance. The miller knows that before he buys his wheat of the farmer, so, he will regulate his price accordingly, and he will have to pay the world price plus the tariff, less 10 cents a bushel to the farmer. That is the way it is intended to work out.

Senator GOODING. And this organization takes care of the surplus and exports it and takes its loss.

The CHAIRMAN. Of course, when they take the surplus, they raise the price up to the limit of the tariff wall.

Senator SACKETT. It seems to me the easier way is to put it on the price of the flour and let it go at that.

The CHAIRMAN. This is a simpler way to get the money than to go back and try to levy it on the producer himself. The producer pays it. It comes out of the producer's price, of course.

Mr. HIRTH. Now, then, with reference to meat products, just as the chairman has said, you would levy it against the packer, and I think fully 90 per cent or more of the meat of the United States is handled in the big packing centers, and then shipped back to your consumption points. That is true even in your little country towns. In other words, the local slaughter of meat animals is almost a thing of the past.

The CHAIRMAN. On the question of meat-of course, it would not apply to wheat at all, because there is only the miller who can grind it, but, I have examined this proposed bill and consulted about it long before it was introduced, and the definition that is in there would, for instance, make it necessary to levy a tax on hogs. Anybody who kills a hog and sells his product would have to pay the tax. If a farmer raised hogs and butchered the hogs and sold a ham or bacon in town or to his neighbor even, he would come under this bill.