ization would be under the 49 directors elected by the farmers in the West; every class of business, from the farmers' own organization. I want to make it clear, that this is not a plan intended to organize all the agriculture of the United States. There is no man nor set of men that can take a $12,000,000,000 business and organizé it as one. This is planned on the same theory and on the same basis as if you undertook to organize a national bank. You would organize it under the national banking system provided by law. If you organize a commodity organization of grain or of wheat you would organize it under this organization, under the authority of this Federal law granted for the purpose of organization of agricultural commodities; not one commodity. There would be no discrimination.

To illustrate, if the wheat dealers organize and get their business started, which they would do very promptly in each zone, there is a zone headquarters where these directors and their manager would make their headquarters. It would be from that source that the real business of this organization would be done, and if the grain people and the potato people and the other commodities undertook or conceived that it is to their advantage, from an overhead expense standpoint, they would do like all other great industries, they would naturally organize or merge when the time came. I mean merge in operation.

I figure that this organization, as carried out-I have not only figured, but I have had experts figure that this will cost about a million and three-quarters or two million dollars to carry on this organization. You have got to have a class of educating men to lecture and tell the farmers of this, and when you authorize this to be done, and I don't care what it is, if it is wheat or potatoes or tomatoes, and they can organize under this national authority, and make a success of it, the balance of it is easy, because the others can follow. If 4 or 5 or 6 of the whole 18 standard agricultural products were to get together and save overhead expenses, create better efficiency, which they will do, then, that would be a merging of your twelve or fifteen billion dollar organization. It will take time. None of us ought to flatter ourselves to think that anyone can do this in the beginning.

Senator GOODING. What you want to do is to get the farmer in shape so that he can do business like the steel trust and other great corporations? That is, to take care of production as well as the marketing and all of those things?

Mr. YOAKUM. I will just answer that in this way. You can travel from Maine to California and there are 65,000 gasoline and lubricating stations. You all know-you do not have to inquire what is the price of gasoline. You know when you go there. The sign is up. If you say "I do not want this," and you cross over into another county, the sign is up. That is what I mean. It is stabilization. If potatoes can be raised and produced at a profit of $1.50 a bushel, and the organization fixes that at $1.50 a bushel, that would be $1.50 a bushel in every State where this organization prevails, and there would not be a man in any line of business that would stay out when he understands it.

Senator KENDRICK. Will you tell the committee just what steps you propose to take to induce the farmers to join this organization?

Mr. YOAKUM. Yes, sir. I have had correspondence for a year and a half-you can not take them all, of course, but I have letters from potato organizations, and I have written to them, and I gave them my plan. I find that more than half of them have gone out of business or failed or quit on account of their inability to make money. Minnesota is one of them. They had 16,000 cars of potatoes, and they failed on them. One hundred per cent were the answers from the ones that did answer. Some of them said, "For God's sake give us something that we can protect ourselves under." That is all they want. I think it is shown in testimony that in Canada, under the wheat-pooling proposition it cost 1 cent a bushel, and they handled over 100,000,000 bushels. That is concentration. This is centralization of power.

The American Federation of Labor do not ask their members how this shall be done or how they will do this. They give their orders, and it is an interstate organization in that sense. The order is complied with just as closely to-day, issued by that superior power, in Minneapolis or Chicago or St. Louis as it is here. So it is with the miners. The mine organizations do not ask them. They are the most arbitrary. They take out of their envelope and put into another envelope. It never goes to the miners.

The railroads have their organizations for efficiency; the Bureau of Statistics, and all of those things. What do they do? They must all contribute their pro rata to carry on this work. This great institution can not be run without it.

Senator KENDRICK. On what basis would your membership contribute?

Mr. YOAKUM. Well, Senator, that is always a question of men sitting down and figuring those things out.

Senator KENDRICK. I do not mean what proportion.

Mr. YOAKUM. Well, take corn in 1924 at one-fourth of a cent a bushel, it would produce $6,691,000, but take wheat for the same year, 872,000 bushels at one-fourth of a cent produces $2,181,000. And it goes on through. It goes into tobacco, cabbage, and onions. It goes into the whole 18 standard crops. There were 973,000 tons

of cabbage produced.

Senator SACKETT. How are you going to collect that one-fourth of a cent?

Mr. YOAKUM. That is the business of the interstate zone directors. That brings up the question that Governor Lowden has so strongly emphasized, that the farmers would not stand together. That is as old as the days.

The CHAIRMAN. How would you compel them to pay up? How would you gather them in?

Mr. YOAKUM. I would do this: You have got an interstate zone director. That interstate zone director is going to be an experiment. It is provided in the proposed law for the interstate zone directors to pass upon their classification, to pass upon their marketing and all things pertaining thereto, practically as the United States Government does to-day. That interstate zone board passes upon all interstate shipments. The local passes upon the intrastate shipments. We have had this for 35 years.

The CHAIRMAN. Still I do not see. Suppose you were handling cabbage and I was raising cabbage, how would you get me into the organization?

Mr. YOAKUM. If you did not come, your interstate shipment would pass through your board of directors.

The CHAIRMAN. If I did not come in?

Mr. YOAKUM. If you did not come in. We have had that for 35 years.

The CHAIRMAN. Suppose I was not in and I wanted to ship, can I not ship independent of your organization?

Mr. YOAKUM. You have got to make a law that is enforcible.

The CHAIRMAN. You could make a law, could you, that would compel every man to come in?

Mr. YOAKUM. Every other big organization in the United States does it.

The CHAIRMAN. Name an organization where, by law, they are compelled to come in.

Mr. YOAKUM. It is a Federal law, and this is a regulation of the Federal law.

The CHAIRMAN. Yes. I understand it.

Mr. YOAKUM. Follow the law, as long as it does not discriminate— if you have the privilege of coming in and you do not want to come in, but you want to stay out and take a free ride and let the other fellows pay the bills and have all the benefits, then the interstate board would pass upon your shipments. If the market was glutted somebody else would get busy.

The CHAIRMAN. And I could not ship?
Mr. YOAKUM. Thirty-five years ago-

The CHAIRMAN. But, let us take a concrete case.

Mr. YOAKUM. Of course you could not.

The CHAIRMAN. Suppose I wanted to ship cabbage to Chicago, and this interstate board said, "We have more cabbage in Chicago now than we need. You can not ship." Would that be lawful? Mr. YOAKUM. Yes, sir.

The CHAIRMAN. If that is what you are going to do by law, we are up against the Constitution of the United States, are we not? Mr. YOAKUM. I don't think so.

The CHAIRMAN. You can not compel me to come into your organization if I did not want to come in.

Mr. YOAKUM. Yes, sir; or stay out. If you stayed out you would not be on the same basis as the fellow who was paying the expenses of the organization.

The CHAIRMAN. Suppose I stayed out, then you would prohibit me from shipping in interstate commerce?

Mr. YOAKUM. You would be punished.

The CHAIRMAN. I understand that, but what I am trying to get at is how could you, by law, say that because I did not come into the organization, therefore I could not use the railroads, for instance, to ship? That would be discrimination.

Mr. YOAKUM. Oh, no. That is not the intent.

The CHAIRMAN. Then I would ship my cabbage into Chicago when you did not want me to. What would happen then?

Mr. YOAKUM. This would happen: Thirty-five years ago that was all fought out between the great corporations and the employees of

transportation. They were designated as scabs. They did not last long. Why? Because you are trying to interfere with the legitimate organization of the railway employees. It has happened in the past.

The CHAIRMAN. Now, keep to the cabbage business.

Mr. YoAKUM. I am telling you that if you take that position and would not comply with the rules authorized by law to place a shipment of interstate commerce in the hands-not that you could not ship, you understand, but your classification would be affected. You can ship and nobody would say that you could not, but your classification and your standards and your distribution must pass through this body. There is no other way you can do it, but you can ship.

The CHAIRMAN. But I am trying to get, Mr. Yoakum, just what this proposition of your means. If I understand it, the man who did not come into the organization would be interferred with in his shipments, so that it would practically put him out of business? Senator GOODING. No. I do not understand that he would be interfered with, but he would not have the grades.

The CHAIRMAN. Tell me what he would do then.

Senator GOODING. He would not have the grades to ship onto the market. He would not have the cooperation that this organization would have on the part of the Government in passing on grades and those things, and if that means anything, it means standardization of agricultural products and means the placing of a market for them. The CHAIRMAN. If I were shipping cabbage, and out of the organization, and you were shipping cabbage and inside the organization, how would I be discriminated against so as to compel me to come in? Senator GOODING. You could not be compelled to come in. You would not be discriminated against more than the fact that you would not have a place on the markets that I would have for my cabbage after it was passed on and had a certain standard.

The CHAIRMAN. Then this zone board would stamp your cabbage and say, "It is grade so and so." Then I present my cabbage and he would refuse to stamp it. Is that the point? If it is not, tell me what it is?

Mr. YOAKUM. It is one of those fine points that anyone can bring up in the discussion of a law. There is a great deal outside of the legal phase of this particular question. You have got your terminal markets. Certainly the interstate zones are not going to let you break in and break the market.

The CHAIRMAN. Why would I break the market?

Mr. YOAKUM. Because you would help glut the market.

The CHAIRMAN. Suppose I belong and some other men belongs to the organization, and we both produce, would it not glut the market the same way?

Mr. YOAKUM. No. They would not permit the market to be glutted.

The CHAIRMAN. What would they do with the product?

Mr. YOAKUM. They would distribute it.

The CHAIRMAN. I think that would be a fine thing. I think there is a great deal to this, but, we can get to the proposition that you have got a surplus. What are you going to do with it?

Mr. YOAKUM. It is not a surplus in all these cases. It is a question of the dealers. It is reported thousands of times, and it has happened in my own observation hundreds of times, that the dealers are shipping a thousand carloads of stuff to a market to break the market. Now, when they break the market at a central point they break it on the farm, don't they?

The CHAIRMAN. Yes.

Mr. YOAKUM. Now, this interstate zone director-that would be their business, to see that that was not done. If you have 50 car loads of cabbage the interstate zone directors would not countenance your shipping that 50 car loads to Chicago when it could be shipped to five or six other points where the cabbage was needed.

The CHAIRMAN. Exactly.

Mr. YOAKUM. The glutting of the market is the greatest menace to-day in the country.

Senator GOODING. There are plenty of records, thousands of them, that show 10 car loads of cabbage coming into some market where they only need 5 car loads.

Mr. YOAKUM. Absolutely true.

Senator GOODING. And they have been dumped out, had to be hauled out and dumped out; cabbage and fruits the same way. All of this perishable_stuff.

Mr. YOAKUM. Yes, sir.

Senator GOODING. Your idea is to bring about an intelligent direction of marketing?

Mr. YOAKUM. Yes, sir.

The CHAIRMAN. That is a remarkably fine thing to do.

Senator GOODING. There are a few farmers who are going to stay out. That is to be expected, the same as with the labor men, but the majority of them will come in.

The CHAIRMAN. Now, let us take wheat. We produce a surplus of 200,000,000 bushels of wheat. What are you going to do with it? Mr. YOAKUM. Two hundred and twenty million bushels of wheat is the average wheat exported for the last four years. Sixty-five per cent of the human table food is perishable.

The CHAIRMAN. All right. We are talking about wheat.
Mr. YOAKUM. I have to answer your question right.
The CHAIRMAN. Yes. I want you to.

Mr. YOAKUM. Therefore, it leaves us 35 per cent nonperishable which includes wheat. The great argument is to find a place for that surplus. That surplus is 25 per cent of the average crop of the United States. That surplus of 25 per cent of 35 per cent of the total crop is 82 per cent of the total crop of the United States. There are other great questions to be considered. Therefore, that has to be handled in the best possible way. I do not object to any legislation that will help exports. I do object to it going into the hands of the Government. The farmers, if organized, can handle it just as well as the Standard Oil Co. handles its business, and just as well as the Pan American handle their business.

The CHAIRMAN. Still that does not answer the question. What are you going to do with the surplus.

Mr. YOAKUM. What is the export corporation going to do with it? 91358-26-pt. 2- -7