work with us in such a way as to stabilize this industry so that they will not be placed at any disadvantage.

Senator CAPPER. You think that in the long run it will really work to the best interests of the miller as well as the producer?

Mr. Davis. A satisfatory price to the producer, at a stable price level, Senator Capper, is in the interest of the processor, in the interest of the producer, and in the interest of the consumer.

Senator McNARY. Wherein does the treatment of the miller in this bill differ from that in the McNary-Haugen bill?

Mr. DAVIS. I do not think it differs. I think the miller is protected in either event.

The CHAIRMAN. The method is considerably different, it seems

to me.

Mr. DAVIS. In this measure we are asking that the collection of the equalization fee be made by the miller, as an agency, while in the original McNary-Haugen bill it would have been the elevator man or the grain buyer, who was the agency for the collection; but in either event the charge would rest on the producer of the grain. There are fewer millers than there are grain buyers, so it simplifies the collection problem, relatively, by collecting it at that point, but the principle is exactly the same.

Senator MCNARY. Before leaving hogs, will you get those data regarding the number of hogs that really move to the principal processers?

Mr. DAVIS. I have those in my room.

Senator McNARY. I would like to have them in the record. I shall not be here to-morrow.

Mr. DAVIS. I think they should go in. It seems to us that the pork problem can be handled in such a way that it will stabilize the whole Corn Belt agriculture, and in fact, the Corn Belt men themselves coincide with that view.

The operation of the measure with respect to the several commodities discussed has been touched on briefly, and I would like to suggest, Mr. Chairman, if the committee wishes, that we should be given some time to work with the drafting service so that we can incorporate any changes the cotton men may agree upon in the sections affecting cotton, and then turn that over to you as a recommendation of these combined organizations.

Before I leave it, I would like to go back to something I should have said at the beginning and explain the relation between the North Central States Agricultural Conference, represented by the executive committee of 22, of which Mr. Peek is chairman, and the farm organizations who have been instrumental in preparing and indorsing these measures. The executive committee of 22 represent the conferences held at Des Moines, called originally by the Governor of Iowa, the delegates of which were officially named by the governors of the several States from the business and banking as well as the agricultural groups, and their decision was to support the legislation which the farm organizations wanted.

In other words, they recognized the right to leadership of the farm organizations and simply placed themselves in readiness to support them. The farm organizations generally have indorsed the principles embodied in the Dickinson bill, which was presented in the House, all of those principles being covered by the legislation that I have discussed here this morning.

The CHAIRMAN. The program that you have outlined here is not exactly the same as the Dickinson bill.

Mr. DAVIS. It is the same in principle, with some important structural changes.

The CHAIRMAN. It is the same in principle as the McNaryHaugen bill, with some very important changes.

Mr. DAVIS. With some important changes. It embodies that, but it has been modified by the committee and the recommendations of the commodity marketing groups quite materially.

The CHAIRMAN. It has been modified somewhat by the necessity, recognized, I think, by those who want some legislation with these fundamental principles at the base of it, that there is some very important opposition to a great many features that you are trying to avoid and trying to thresh out. For instance, there were a good many Members of Congress who were opposed to some features there. The Secretary of Agriculture and the President were known to be opposed to some of the provisions of that bill, and 'that has caused some delay in trying to get something that would satisfy those whom you thought stood in the way of this legislation.

Mr. DAVIS. We have tried to go as far as we possibly could to meet the objections that have been raised against the previous bills, and still have a measure which will be effective in action.

The CHAIRMAN. And still maintain that fundamental principle of handling the surplus.

Mr. DAVIS. Yes, sir.

Senator GOODING. You do not fix prices in this bill, though.
Mr. DAVIS. There is no price fixing element in the bill.

I would like to discuss some of the differences between this and the other measure, if you wish.

Senator MCNARY. There is not a price fixing principle comparable, perhaps, to the first export corporation bill, but you do withhold and dispose of surpluses which, in effect, brings about a raising of the level of prices.

Mr. DAVIS. Stabilization and increasing where increases are possible in price levels would be done, however, by the commodity marketing groups themselves, backed by the power of this equalization fund. If there is any price fixing, it is price fixing that is done by the producers themselves in controlling their surpluses.

Senator GOODING. Has not the Department of Agriculture been making an effort to discourage the growing of too much wheat and other things, so that you would be in line if you had an organization to do these things, so that you would not be asked the question that is so often asked, "Why do not the farmers organize as manufacturers often do?" This bill, as I understand, gives him the opportunity to transact business practically along the same lines as the Steel Corporation and other people without fixing prices.

Mr. DAVIS. That is exactly what it does.

Senator GOODING. He would be master of his production and of his prices, just as they are. Nobody could complain if you gave him that opportunity, and you can not do it without legislation.

Getting back to the wheat situation, I presume some one is going to present the wheat case. You presented that, I think when you were here from Montana when the McNary-Haugen bill was up. Mr. DAVIS. Yes.

Senator GOODING. Will it be presented as a separate question, as the cotton people are going to present their case?

Mr. DAVIS. Yes. I would be glad to present it, or other witnesses will.

Senator GOODING. It seems to me there is something that everybody should know and should take notice of. If it had not been for the drought in Canada two years ago, when their wheat crop was reduced practically 200,000,000 bushels, no wheat grower would have been able to stay in business. They would all have been broke. If it had not been for the reduction of the wheat crop from 865,000,000 bushels to 660,000,000 bushels, practically 200,000,000 shortage in this country, what would have happened to the wheat grower, with the increased production of wheat in the world? Do you not see the situation the wheat grower is in, with the increased cost of production forced on him by his own government, having to sell on the world markets? It is impossible for him to exist. He is sitting on the top of a volcano. If he has a normal production this year of 865,000,000 bushels of wheat, and Canada comes back with an increase, and the world has a normal crop, the price of wheat will be greatly depressed. Under those conditions what are you going to do with it?

Mr. DAVIS. I do not imagine there is time for me to go into that in detail this morning.

Senator GOODING. Not this morning, but I would like to have a carefully prepared statement on all those matters. That is my honest conviction, because you can see what happens to America. There is no doubt about it in my mind.

Mr. DAVIS. There will be witnesses who will be able to present it. Senator GOODING. I hope so, because there is such an effort to show the country what is likely to happen in the future and what must happen, because you can not reduce his cost of production, and he is not to blame for that increased cost of production. His story is a simple one, and if anyone looks at it with open mind he will understand it. When you increase the cost of production 100 per cent, whether he is in the steel business, the hog business, the sheep business, or the cotton business, and he can not get a corresponding increase for what he produces, he is in bankruptcy, and that is the reason the farmers are in bankruptcy, simply because, through legislation brought about by our own Government, we have increased the price of labor on railroads nearly 200 per cent. That has been done by the Government. In the Adamson law we changed the base labor on the railroads from a 10 to 12 hour day to an 8 hour day. All those things have been accomplished through legislation. The farmer has had forced upon him an increased cost of production. The freight rate has been increased 78 per cent. It is not strange that organized labor was not slow in taking advantage of it. In 1917, 1918, and 1919 they brought on 11,500 strikes, with the result that they increased the cost of production in every industry. There was an increase in everything the farmer has to buy. If you will go into any implement store-at least in my State-you will find that everything the farmer has to buy has been increased 100 per cent. That is the position he is in. I have occasion to buy farm implements and other things that enter into farm life myself, and I know from actual experience. In response to that condition it is not strange that you have had 3,000 bank failures, most of them in agricultural districts, since 1920, more than you had in half a century before 1920. You have fewer bank failures in

the industrial districts than you had before the war. That is the situation.

I would like to see the wheat story put in so that we will have it as a matter of record for information.

The CHAIRMAN. Mr. Davis, will you be ready to go on to-morrow? The idea was expressed to me by you and Mr. Peek that you probably wanted a day or two to consult with the cotton men before you went further into the hearings. The committee is ready to go on to-morrow if you are. I think it is generally conceded that we can postpone it, if you like, for a day to two, to give you an opportunity to consult with a view to agreeing on amendments, if any are necessary to your proposed bill.

Senator MCNARY. At this point, Mr. Chairman, I want to state, briefly, that I am profoundly interested in this legislation. I do not know whether the record shows that I introduced a modification of the McNary-Haugen bill at this session, in December, known as S. 1911. I do not think it is in the record. I want to discuss that in some of its phases and modifications with Mr. Davis and Mr. Peek. This is my situation. The committee of which I am chairman, the Reclamation Committee, must take up for final disposition during this week, commencing to-morrow, the Boulder Canyon project, a very large development enterprise in the West, which the committee has studied, and I have made a personal investigation in this field. I will not be able to be here, but I can read the record.

The CHAIRMAN. I am very sorry you can not be here, but, of course, we have to go ahead.

Senator MCNARY. The record will be kept, and before any decision is made on any of these bills, of course, we will go into executive session and consider them, so that there will be not any rush about that proposition.

The CHAIRMAN. There is no intention to rush it, but, at the same time, we would like to keep it going.

Senator McNARY. I hope I shall be able to be here one day. There are some questions I would like very much to discuss.

The CHAIRMAN. From my conversation with these gentlemen I do not think it will take more than three or four days to finish that. Perhaps the Agriculture Department will want to be heard, and very likely some others.

Mr. DAVIS. Mr. Chairman, I believe we can complete our recommendations. The cotton men will have completed their recommendations this evening. If we could have an opportunity to confer with some men from the drafting service it might be possible to have that measure ready to-morrow morning. If we may do that, with the committee's approval, we will get in touch with some men from the drafting service and make these changes which the cotton men desire.

The CHAIRMAN. On Wednesday we will hear Senator McKinley's witnesses. If you prefer, we will not meet to-morrow. We will meet Wednesday and hear Senator McKinley's witnesses, and you people can go on again Thursday.

Mr. DAVIS. I believe we had better go on to-morrow if it meets with the approval of the committee.

The CHAIRMAN. We will adjourn until to-morrow at 10.30. (Whereupon, at 12 o'clock noon, the committee adjourned until to-morrow, Tuesday, March 30, 1926, at 10.30 o'clock a. m.)