Senator HEFLIN. That is true.

Mr. PLUMMER. And the industrial commodities have been deflated but very little, and in some instances they are higher than they were then.

Senator HEFLIN. You know what occurred. They fixed the progressive interest rate and they applied it nowhere except in the agricultural South and West. They never applied it in the East and North, and the farmer who had been able to get money on his cattle and grain and land and who had extensions granted him from time to time, who got money as he needed it to carry it along, was denied right outright. He could not get any more money. He was called upon to pay, and, as he had to pay, he had to throw himself on the market in the South and in the West, and the trouble began. That was the very beginning of the bankruptcy of the cotton producers of the South, as it was of the grain growers of the West. Mr. PLUMMER. I am sure that that statement is correct.

Now if there are no further questions, I had prepared no statement at all. I did not know until a few minutes before I was called that I was going to testify, or I could have prepared some statement and gotten the actual figures.

The CHAIRMAN. You do not care to testify as to the details of this proposed legislation at this time?

Mr. PLUMMER. Well, I think it would be taking up unnecessary time.

The CHAIRMAN. Probably it would.

Mr. PLUMMER. I believe I am familiar with them, but there would be other members that have been on the committee, and it seems to me that it will be taking up your time unnecessarily.

The CHAIRMAN. All right.

Mr. PLUMMER. Thank you, Mr. Chairman.

STATEMENT OF J. F. COX, REPRESENTING THE GOVERNOR AND COMMISSIONER OF AGRICULTURE OF THE STATE OF MICHIGAN

Mr. Cox. My name is J. F. Cox. I am representing Governor Groesbeck and L. W. Watkins, commissioner of agriculture, who is a member of the committee of 22.

The CHAIRMAN. The Des Moines conference?

Mr. Cox. Of the Des Moines conference.

In speaking for the State of Michigan I am representing a State of a wonderful diversified and highly developed agriculture, but nevertheless a State in which industry has gained the ascendency during the past 10 years.

Michigan, in agriculture, ranks as one of the leading States in dairy products; it is a leading livestock production State; it is either the second or third sugar-beet State of the Union; it is the first State in the production of field beans, and one of the high ranking potato producing States, and a leader in horticultural products and poultry products. Its basic agriculture, however, is general farming.

During the past 10 years the population of Michigan has increased very rapidly. I think it is now the sixth State in the Union, its population having recently passed Massachusetts.

Industry, chiefly the automobile industry and all industry depending on it, has brought to the State a wonderful agricultural prosperity. There are those who think that all this Nation needs is to wait a few years until our industrial prosperity gains more and agriculture would be benefited. You would think with this great industrial prosperity and with this increase in population Michigan's agriculture would now be on a very sound basis. In other words, I think she is 10 years ahead of the Nation. No matter how rosy your promise of industrial prosperity may be, Michigan has undergone such an increase in her industry and in the gain from it she is an outstanding leader, but her agriculture is in this position, as represented by the 1925 farm census. In land values there has been a decrease from $959,000,000 to $768,000,000, or a decrease in land values of approximately $191,000,000 for the State of Michigan. Senator RANSDELL. Is that for the 10-year period?

Mr. Cox. That is for the five-year period from 1920 to 1925. A decrease of approximately $191,000,000. That money is gone from our farmers.

There has been a decrease in the land which was farmed from 19,032,000 acres to 18,036,000 acres, or approximately 1,000,000 acres of farm land of Michigan is no longer included as farm land, which means a decrease of 5 per cent in the five-year period. At that rate it will not belong until the agriculture of Michigan will suffer tremendously.

Senator RANSDELL. Is that land growing up in weeds and brush, or what?

Mr. Cox. That land is growing up in trees and brush and has been abandoned as farm land.

Senator HEFLIN. It was not abandoned because of lack of fertility? Mr. Cox. It is mostly farm land, marginal land, the lighter type of soil, the less valuable soil, but it was once farm land that maintained a farmer with his family.

The CHAIRMAN. Of course, it would be true, that if there was a decrease it would be the poorer land that first would go out of business. Mr. Cox. I do not care to spend much time in talking about the conditions, but here is a letter from our tax commissioner, who ought to be in a position to know of the financial condition of our people.

Mr. George Lord, chairman of the Michigan tax commission, writing to the Hon. Peter Lennan, my colleague, as a representative on the committee of 22, states that the average farmer to-day is not making any net income from the operation of his farm in many instances. He says that many farmers are obliged to borrow money with which to pay their taxes on their farms; that farms had to be abandoned by the owners thereof because they were unable to make both ends meet in the operation of their farm. He says that this is a condition that is hardly known in the industrial centers of our State, and that it ought not to be. Further along he states that the farmer is getting almost his life-blood squeezed out of him; that this is an economic wrong.

In a recent address Mr. Lord suggested if he could have his way he would exempt from taxation certain classes of farm land until economic conditions changed, so that the farmers could pay their taxes and stay on them.

Mr. Lord, I might add, is not a farmer. He is the State tax commissioner, and I believe is a lawyer from Detroit.

91358-26-PT 1-4

I was at a sugar-beet meeting in one of our prosperous sections, Sanilac County, on Saturday before coming down here, a meeting of some 1,200 farmers. The sugar industry during the past year suffered exceedingly adverse conditions, and they need this year a large acreage. They are giving a favorable contract, $7, with the usual sliding scale based on current prices of sugar. In talking with the manager of this plant I asked him if they would get their acreage. He said yes he thought they would, but the chief detriment, the one thing that kept so many farmers from signing up, was the fact that they were already in such sore financial condition that if it was known that they had 10 acres or 20 acres in beets which would be sold on contract to a factory, their creditors would gain access to that money through legal proceedings, and they would have their season's work without return, and that they chose to grow other crops where they can not get as much profit, but where they would control the marketing and control the amount that they paid their creditors. Now, that is a sad condition in a rich soil area for farmers to be in.

Senator RANSDELL. I did not quite understand that. I may be stupid. But you seemed to differentiate between the beet farmer there and the other farmer.

Mr. Cox. I did not mean to differentiate between them. Beets are quite generally grown by the farmers in favored areas, where the soil is fertile and they can be successfully grown, but their financial condition, even in these rich soil areas, within 60 miles of Detroit, is such that they chose to grow other crops rather than beets.

Senator RANSDELL. Yes, I understood you to say that they would grow other crops rather than beets.

Mr. Cox. General crops. The soil is fertile soil that will grow beans, will grow corn, will grow hay.

Senator RANSDELL. The other crops are more profitable than beets, then.

Mr. Cox. No; they are less profitable than beets, but they are not sold at one place.

The CHAIRMAN. The point he made is that the beet farmer sells his product under a contract, and all his money comes from the beet sugar factory.

Senator RANSDELL. You indicated that his creditor could get hold of that product of the farmer better than he could the production of other crops.

Mr. Cox. Yes, he could seize the farmer's whole year's work. The beet sugar factory manager considers that as one of the reasons why he could not get his acreage, even though they wanted to grow beets. Senator RANSDELL. That would seem to be very unfortunate. Mr. Cox. Referring to the principles of this plan which will come in the form of an unnamed and unnumbered bill, many of our farmers -I speak for the master of our State grange, representative of the farm bureau, officers and others, who have studied this bill-see in it the means of improvement of this condition through the more successful handling of the market situation and prevention of the great fluctuation that now exists due to occasional surpluses or imaginary surpluses.

The principles of the Dickinson bill, from the Michigan standpoint, that are involved in this plan, place the responsibility of handling the surpluses directly on the growers, the producers. It is not Govern

ment prices. That is not favored in our State. It will stimulate the cooperative movement. Michigan is now highly organized, but they can not influence these prices on the basic, staple grain products. They sell at the same low prices that prevailed. They can not put them up. Then the aid that will be given to the cooperative movement is necessary at this time.

Through the creation of a board such as is provided in the bill, we believe that the farmers will get a representation that they do not now have. Take, for instance, the recent bean situation. The Federal statistics, which I have here, show that beginning way back in July there was a tremendous acreage. They prepared the way, by these statistics on a tremendous acreage, for a psychological condition that developed, leading the buyers of beans to believe that there was a great overproduction, but our fall season was unusual. Beans were greatly damaged, and it took until February before the real statistics came out to the effect that there were only 99.2 per cent of what there were before. In the meantime our farmers had sold their beans at low prices. They are still at low prices. There never was a surplus of white pea beans. Had there been such a board as this, I believe it could have given interpretation to the farmers of the actual facts that would have aided them. Or, if a real surplus existed, they would have aided them under the provisions of this bill. Although it mentions only four staple crops, it nevertheless charges the members of the board with the duty of giving their immediate attention to other products. It would have been able, possibly through existing financial structures, if not directly through the loan asked from the Treasury, to handle that surplus, say drawing off of the market a million bushels, or whatever was necessary to hold beans at a fair price for our farmer.

I want to read from the statistical report of the United States Department of Agriculture that came out in January, 1925. It states that the average price on December 1 was $2.95 a bushel, making a total crop value of $24,500,000. Without considering the picked and damaged lots that were not picked, on this basis the returns per acre would have averaged $39.82, the highest since 1919.

These facts are relevant, but not a bean is sold in Michigan except on a hand-picked basis. If you take the pick they give away of 10.7 per cent and apply that, Michigan farmers, instead of getting $24,500,000, got approximately $15,000,000. If you take into account further the beans that are not harvested, it is doubtful if Michigan farmers receive $10,000,000 for their beans.

If you go back to the original statement, which shows the whole grain crop products in Michigan, and take off $10,000,000, it puts them considerable under the crop year before.

I think the farmer needs a board to function in his interest, to interpret for him available figures on his crops and prevent a condition arising where the market is prepared psychologically for a surplus that never comes, as well as in handling the surpluses when they do come.

Senator RANSDELL. Do you construe this act as taking care of products like beans and sugar-beets and corn, for instance, and many other commodities that are not named? As you say, the act provides for four basic commodities. Would it be helpful to agriculture, and if so, how?

Mr. Cox. It is with the understanding that it will be so helpful that those who have taken part in this movement are so much interested in it. A beginning must be made and plans must be put into effect and developed, and it must be proven through their execution that they are entirely workable, and, furthermore, they will be greatly improved when this board functions, but the board is charged in that plan to immediately pay attention to other surpluses and do what they can.

The CHAIRMAN. Of course, the theory is it may be after a year or two operation they will ask Congress to extend the act to other products besides those mentioned.

Mr. Cox. No doubt that will follow, but a beginning must be made. The CHAIRMAN. We must make a beginning.

Mr. Cox. We have in Michigan, in the handling of milk, a plan very similar to the general principles of this Dickinson bill in the way milk is handled. I know Senator Ferris knows very much about that. A board has been created, was created during the war period, that represents the producers, the consumers of milk, and the handlers of milk. It is a board of 11, with 3 from each class and 2 at large. This board meets in Detroit monthly and on call and sets the price on milk, considering what the cost to the farmer is to produce it, what it costs to distribute it, and what the consumer will_pay. They have been able to function amicably and agree on prices. If the cost of feed goes up they have been able to add to the price. If the cost of handling increases, they have been able to make an increase there, and the public has had the benefit of a higher quality of milk than ever before. And this is the way they handled the surplus situation. I was at the little town of Portland at a farmers' meeting recently when a tank car came in-one of the thermos, new type, glass-lined, steel tanks mounted on a truck, to pick up the surplus at Portland. I asked where that was going. They said to Toledo. They sold it down there at about 2 cents under the Michigan market. The loss in getting that down there was handled by a fractional deduction on every milk can that was handled throughout Michigan under this plan.

Senator RANSDELL. By simply removing the overproduction at Portland.

Mr. Cox. They removed that surplus. It was the best market that they could get. They took a loss on it, and equalized it by taking a fractional deduction on all milk, and they have been able to hold that to a steady position.

Senator RANSDELL. Instead of selling the whole product in Michigan at low prices they simply sold that surplus at a low price.

Mr. Cox. Yes. The surplus is usually a small part compared to the great bulk of milk produced, just as in the case of most of our general crops the surplus is comparatively small, though it may greatly reduce the price.

We have another feeling, too. For instance, of corn there is no surplus over a five-year period. If America can consume it all, if a plan can be perfected, and we believe this plan is sound, and one that will hold our livestock, our hogs, and our cattle to a more stable population, and encourage the manufacture of products that can be held over that are manufactured from corn, that we can very nearly solve the situation right here. In any three years we have got a