the machinery to bring about what everybody will have to concedeeven a court is a very justifiable and worthy purpose.

Senator SACKETT. Perfectly; but you do have a right to say it shall be 10 cents, or it shall be 5 cents, and that is really a tax on production. Every farmer has to pay it in some form or other. Whether Congress would have the right to delegate that power, it seems to me, is a thing we ought to have some light on, if there is any light.

Senator RANSDELL. In a way, Senator, it is a tax on production, but the result of the tax is to make the product more valuable than the amount of that tax. The enhancement in value is more than the amount of that tax.

Senator SACKETT. I think undoubtedly Congress would have the right to levy that tax of 5 or 10 cents, or whatever it wants to, but whether it can delegate that power or not is a question that I would like to have some light on.

Mr. HIRTH. I will say, Mr. Chairman, that Mr. Davis and others who have had the construction of the bill in hand for the last 30 days have sought competent legal advice and that advice is to the effect that it is constitutionally sound, but it seems to me to be subject to very grave doubt as to whether you could regard this as a tax in the ordinary sense of the word at all. It is not that, in effect. It is what the words indicate, an equalization fee.

Senator RANSDELL. Mr. Hirth, is it not in the nature of a forced contribution for local improvement? Courts have held repeatedly, for instance, that you can make a man pay a perfectly outrageous tax for the pavement or the street in front of his house. They do not call it a tax. They call it a forced contribution to enhance the value of his property enormously by the paving tax, or the street tax, and this enhances the value of that property. It is not a tax. It is a contribution, I grant you, as Senator Sackett says, but it is not a tax, in my judgment. It is comparable to a forced contribution for local improvements. Down in my section they make people pay enormous taxes for levees. They actually tax oysters down there. A barrel of oysters is taxed, because if you let the muddy water of the Mississippi flow out the oysters are unfit to eat. It is a forced contribution for local benefits derived. You would levy this contribution on the people because it is going to enhance the value of their product. Is that a forced payment?

Mr. HIRTH. I do not think it is. It is done under your general welfare clause. You have rather broad powers anyway, but surely nobody has a right to interpret this as a tax, in the sense that a tax is usually understood, because it is not that sort of thing, in substance. I want to give it to you as my humble opinion, Mr. Chairman, that this is about the last bill that will be brought before this Congress on this question, so far as the farm organizations are concerned. I am expressing that as an individual opinion. I do not mean that we are not subject to suggestion, because, of course, we are, and the province to change the bill and pass the bill in whatever form it likes is the province of Congress, but what I rather mean is this: For three or four years we have fought this thing up one side and down the other, and we have tried finally to bring a bill here that not only takes those at their word who say that the proper way to solve the farmers' troubles is through cooperation, but we have simplified the

vital phases of the bill just as much, in my judgment, as they can be simplified.

Repeating what I said a moment ago, your surplus is your trouble. In order to get that surplus out of the country, and in order to maintain a price within the United States that gives the farmer a dollar of even purchasing power, somebody is going to lose something. Of course, that does not apply in the same sense to cotton, because there it is a question of price stabilization and orderly marketing, to a greater extent than in respect to wheat, or pork, or a commodity of that sort. Again, I repeat that you are going to have to take that out of the Treasury of the United States, or you are going to have to take it out of the producers. If we mull over this thing for a thousand years, we could not come here with a different proposition than that.

Senator RANSDELL. Let me ask you a question or two, please. I am a cotton grower and intensely interested in this whole subject. I understand that the wheat people have got together on this legislation. You have had representatives of the producers, of the executives of your 12 States, of your banking interests, and, in fact, everybody.

Mr. HIRTH. Yes.

Senator RANSDELL. You are a practical unit, if I understand you? Mr. HIRTH. Yes.

Senator RANSDELL. So far as wheat is concerned?

Mr. HIRTH. Also pork and beef.

Senator RANSDELL. I am going to ask you about that. You are a unit on pork and beef.

Mr. HIRTH. Yes.

Senator RANSDELL. We have not had anybody telling us these details about pork and beef, as you have with respect to wheat, although you did yesterday give some very interesting information about cotton.

Mr. HIRTH. As I said yesterday, Senator, the cotton men are here. Senator RANSDELL. The cooperatives are here, but is there anybody else here?

Mr. HIRTH. Of course, I am not as familiar with southern agriculture as I am with Corn Belt agriculture, but I would say, Senator, that the men who are here are more nearly able to speak for the broad interests of cotton than any other group of men in the country.

The CHAIRMAN. Let me interrupt you there. I will say, Senator Ransdell, that these cotton men have been in conference with these western men for about a week. I have been in conference with the cotton men this morning myself. They have been considering this bill, to see whether it needs any change to cover the cotton situation, and they think there are one or two amendments, as compared to the confidential print that we had yesterday, and they are now engaged with the drafting service

Senator RANSDELL. I am aware of all that, Mr. Chairman.

The CHAIRMAN. They will be before us just as soon as they complete that work. They will be here Monday.

Senator RANSDELL. I am aware of all that, but I am intensely interested. I want to see this legislation go through at this session of Congress if it is humanly possible. As I see the situation, you had

a united effort of all the people interested in wheat, and in corn, through hogs and cattle.

Mr. HIRTH. Yes.

Senator RANSDELL. But so far as my investigation goes-and it is only since we left here yesterday that I have been talking to these cooperatives we have representatives of the cooperatives in cotton alone. We have not the banking interests. We have not that vast army of commission merchants throughout the South who furnish the money to the small men to make the cotton, and who handle his cotton after it is made. I was wondering if we could do anything to get the same kind of united effort on the part of the cotton people that you have described so forcibly, Mr. Hirth, as having been undertaken for three years on the part of the wheat people, and that you finally got together on.

The CHAIRMAN. Senator, I do not think, even with respect to wheat, that they have the commission men with them. There is no opposition from them, so far as I know.

Senator RANSDELL. They have the bankers. The CHAIRMAN. The bankers are with them; yes. These cotton men, as I understand it, are representatives from all the cotton States, of the regular cooperative organizations, and they have, as you know, Senator, large ones.

Senator RANSDELL. And strong ones. But in my own study, for instance, I talked to a gentleman yesterday, a friend of mine, and a very able man. They are handling 51,000 bales in Louisiana this year in the cooperative marketing association. The State made over 900,000, and the whole country has made over 16,000,000 bales of cotton, according to the official Government reports, and this man tells me that the cooperatives will handle in the neighborhood of one and a half million bales. That is scarcely 10 per cent of the whole. Mr. HIRTH. Yes.

Senator RANSDELL. I am not saying this to throw any obstacles in the way. I am saying it to try to be helpful, because the end of the Congress is approaching rapidly.

The CHAIRMAN. Senator, I do not believe I am guilty of disclosing anything confidential when I say that from my conference with the cotton men I realize, and I think they do, that the sentiment through the South, in the Cotton Belt, has not been built up as strongly as it has in the Wheat and Corn Belt, and the hog belt, so that they do not have behind them as unanimous a sentiment, probably. That is, perhaps, a handicap now. They are discussing the proposition of whether, on that account, it might be well in this bill to treat cotton, for the first two or three years, the same as this bill undertakes to treat corn, in order to let the sentiment grow, and for the first two or three years confine themselves to an orderly marketing program of cotton with a view to carrying it to the full limit later. The cotton men are going to settle that, I suppose, themselves, as to whether they want to defer it or not.

Senator RANSDELL. I hope they can. The only thought I had was that we ought to let the cotton world know that this thing was seriously considered, because I have not heard very much about cotton being put into this bill until very recently.

The CHAIRMAN. I think that point has been raised.

Senator RANSDELL. The cotton world ought to know something about it.

The CHAIRMAN. The sentiment through the South in the cotton belt is not as ripe or as organized for legislation of this kind as it is through the western States.

Senator HEFLIN. What is the amount they propose to take from a bale of cotton at the gin?

The CHAIRMAN. Senator, the amount of any of these equalization fees could not be fixed by law, because that will depend upon the crop. They will have to make an estimate. In the case of cotton, where, it seems to me, they can control it more easily than in the case of wheat

Senator HEFLIN. Have they not suggested so much per bale?

The CHAIRMAN. They can handle the world crop. If they hold the American crop off the market, they can control the world price of

cotton.

Senator HEFLIN. As I understand this bill, it is provided to collect at the mill so much per bushel on wheat and corn.

Mr. HIRTH. Yes.

The CHAIRMAN. That amount is not fixed in the bill, Senator. Senator HEFLIN. Do they propose to do the same thing with cotton at the gin?

The CHAIRMAN. Yes.

Mr. HIRTH. Yes.

Senator HEFLIN. But no amount has been suggested?

The CHAIRMAN. No.

Mr. HIRTH. That would have to be determined from time to time by the Federal farm board.

The CHAIRMAN. Yes; that is one of the duties of this board.

Senator HEFLIN. If a farmer should take 1,000 bushels of wheat to the mill, this 5 cents, or 10 cents, or whatever it is, per bushel, would be collected right there?

Mr. HIRTH. As I said yesterday, Senator, if, including your tariff you had a general price level of $1.75 per bushel for No. 2 wheat, say, f. o. b. Chicago, then the wheat grower would simply receive that amount of money per bushel less the equilization fee, whether it was 5 cents per bushel, or 7 cents, or whatever it might be, and in the same way the cotton men would simply have the price at the mill less the amount of the equalization fee, whatever it was, or at the gin, or wherever it might be collected.

I want to say, Senator, that the reason we have not said very much about cotton is because we wanted to leave that to the cotton men. We did not want to come here from the Corn Belt and talk about the cotton problem or the tobacco problem. Those people know that we are perfectly willing to go along with them and let them interpret that phase of the bill as they think it ought to be interpreted. If we had 30 days more time, with the consideration that the bill has had up to date, or, in other words, if you could go back 30 days, and then call, somewhere in the South, a conference of southern bankers, business men and farmers, just as we did in Des Moines several months ago, in January, I think you could get that expression gladly from all the influences in the South. I do not think there would be any question about what the southern planters would do or what the southern bankers would do once they caught the gist of this bill.

I wish I could feel one-fourth as confident about the future of Corn Belt agriculture as I think you people have a right to feel about

cotton.

Senator RANSDELL. Why?

Mr. HIRTH. Because you are the dominant factor in the world market of cotton.

Senator HEFLIN. We have been for a long time, too.

Mr. HIRTH. For the last 50 years, if the South had had the proper finances so as to have held its cotton off and prevent indiscriminate dumping for the last 50 years, the South could have practically set its price on cotton. That price, of course, ought to be fair. It is to be assumed that it would be. But you could not have had more vivid examples than those Senator Ransdell referred to yesterday, with reference to English rubber and Brazilian coffee. They have been right under your noses here within the last few months, and they illustrate what can be done with a commodity where a country is in a position of dominance.

Senator SACKETT. Mr. Hirth, will you give me this idea? Is it your impression that the result of this bill would be to stabilize the price of wheat throughout the season at, we will say, $1.75, counting the tariff and everything? Would it run through the season? Mr. HIRTH. Substantially so.

Senator SACKETT. It would do away with the fluctuation in price of the crop, whatever crop it was?

Mr. HIRTH. It would.

Senator SACKETT. And the board would practically say that "This is the price we are going to work on through this crop"?

Mr. HIRTH. Yes. Your tariff wall, Senator, would determine your price, generally speaking.

Senator SACKETT. And it would add 42 cents to the price.

Mr. HIRTH. Yes.

Senator SACKETT. To what price?

Mr. HIRTH. To the world price.

Senator SACKETT. That world price would vary somewhat, would it not, through speculation elsewhere?

Mr. HIRTH. It does, and whenever it varied to a point where your price within the United States got out of line with your world price, then, of course, it would have to come down or you would have imports against your domestic price.

Senator SACKETT. Would you have to change the equalization fee during a session?

Mr. HIRTH. I do not think so, because that would apply purely to the surplus of that season. If you got it a little too big, you could make an allowance in the next equalization fee on that particular commodity.

The CHAIRMAN. Because the surplus would go into the equalization fee.

Senator SACKETT. Yes, I appreciate that. I just wanted to get his idea as to whether it would stabilize it and do away with speculation in these products.

Mr. HIRTH. It would do away, undoubtedly, with price fluctuations, as agriculture has known them almost from time out of mind. Mr. CHAIRMAN. I just want to repeat that I do not see how we can ever bring a bill here essentially different from this one. There