and being able to name a price that he will receive for those products on a basis comparable to the prices he has to pay for the things he

uses.

Organized agriculture, gentlemen, is committed to a certain definite way for disposing of the surplus, and it is outlined in that bill. These surpluses may be disposed of and the transaction financed as suggested by the last witness upon the stand by paying a bounty out of the Treasury of the United States, which is a subsidy, but the farmers of the United States do not want it handled in that way, and they are opposed to a subsidy. All our group are absolutely opposed to a subsidy.

Senator HARRELD. Is that what you would take the McKinley bill to be a subsidy?

Mr. MURPHY. It seems to me that it certainly is a subsidy inasmuch as money is paid out of the Treasury under that plan to take care of the surplus of our farm commodities. It has been suggested, further, that these surpluses may be taken care of by setting up some private agency, some corporation in which farmers and business men may become stockholders. We do not agree to that plan for different reasons, but for one very substantial reason that it can not be done in that way. No such agency can be developed, in our judgment, to handle it.

Senator HARRELD. May I ask you a question?

Mr. MURPHY. Yes.

Senator HARRELD. In section 8 (c) you define cotton, wheat, cattle, and swine as basic agricultural commodities. How do you arrive at that list? Why is corn not included, and various other things?

Mr. MURPHY. In developing this legislation we had in mind the establishment of a permanent agricultural policy for the United States. In dealing with products of which we have strictly domestic surpluses, as in the case of apples and potatoes, that presents a problem that some day will have to be met and solved. As to corn, of which we export a very small portion of the whole crop, that is a substantial product of the United States, and in our bill that we urged before the House committee, we omitted it, for the reason that it is not a cash crop, as wheat, hogs, cattle, and cotton are cash crops, because it is a feed crop, because only a very small part of it moves in trade at all. Only about 10 per cent and not to exceed 15 per cent of it moves in trade even from one farm to a farm nearby. As corn should be marketed on the hoof, and as the intention of this bill is to stabilize the hog and cattle population of the country over the years as they lie ahead of us, so that this corn will be consumed, as it should be consumed, and go to market on the hoof, it was not thought necessary to include it in the bill, though I would not be surprised if corn will be included in the bill either by the House committee, or probably here, and maybe will come along in the suggestion from some of our friends as a basic agricultural commodity. There are difficulties, not insurmountable difficulties, but difficulties in the way of collecting an equalization fee upon corn.

Senator HARRELD. In addition to that, would you include perhaps other feed crops.

Mr. MURPHY. Another thought in answer to your question. This bill should not be so ambitious as to put upon this board the tremendous obligation of stabilization of the price level of every farm

commodity in this country, and the further thought, Senator, if you stabilize the price of hogs and cattle and of wheat, you will, to a very large degree, stabilize the price of oats and barley and corn. They all have relative or substantially relative relation in price to each other, and since they are feed crops and go to the market on the hoof, largely, it probably will not be necessary to go any further, and then we do not want to burden this board, to begin with, with too big an undertaking. If they can handle the four principal commodities named in the bill and do that successfully experience will demonstrate whether that should go on and they should add additional commodities to the bill, and the bill provides that the board may come back to Congress with a recommendation that other commodities be added, and that it be given authority to deal with respect to them.

The CHAIRMAN. We will have to adjourn now until 10.30 o'clock to-morrow.

(Whereupon the hearing was adjourned until 10.30 o'clock a. m. to-morrow, Friday, April 2, 1926.)

AGRICULTURAL RELIEF

FRIDAY, APRIL 2, 1926

UNITED STATES SENATE,

COMMITTEE ON AGRICULTURE AND FORESTRY,

Washington, D. C.

The committee met, pursuant to adjournment, at 10.30 o'clock a. m., in room 326, Senate Office Building, Senator George W. Norris presiding.

Present: Senator Norris (chairman), Gooding, Harreld, Sackett, Ransdell, Heflin, and Ferris.

The CHAIRMAN. The witness who was on when we adjourned had not finished, but Mr. Hirth desires to get away, as I understand it, so, if it is agreeable to everybody we will hear from Mr. Hirth now.

STATEMENT OF WILLIAM HIRTH, PUBLISHER OF THE MISSOURI FARMER AND CHAIRMAN OF THE CORN BELT COMMITTEE

The CHAIRMAN. You may state your name and your connection. Mr. HIRTH. William Hirth; publisher of the Missouri Farmer and chairman of the Corn Belt committee.

I realize, Mr. Chairman, as a number of the members of the committee have said during the time that I have been present in the hearings, what you are interested in most is some effective remedy for the present agricultural situation rather than a continued discussion of what condition agriculture is in now. I want to bear that attitude of the committee in mind as much as possible.

The CHAIRMAN. If I might interrupt you, some time during your testimony I want to have you take up this matter: One of the difficulties, that not only this committee but the Congress has had, has been to get together those who favor legislation of this kind, so that they will not be fighting among themselves. I realize from conferences I have had for the last two or three years, that one of the great difficulties that confronts you and it has confronted me all the time, has been that there is disagreement not only among some of the farmers but in Congress, and the administration has not been friendly to the kind of legislation that at least a large number of farmers, which I think includes you and your people, think is the kind of legislation that should be passed. I say that without any idea of criticizing anybody for having those ideas. They can have any idea they want to, but it is well known that it would be useless to pass a bill and have it meet with failure in the Senate or in the House, or meet with a veto. So I know from my conferences that these people are exceedingly anxious to avoid that if they can.

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Now, at various times, not in this particular hearing, but in others, we have had men here representing the National Council of Farmers' Cooperative Marketing Associations, of which Mr. Bingham is chairman and Mr. Peteet is secretary, and I put in the record the other day in the Senate some correspondence between the officers of this association, which showed that the officers, at least, of the National Council had agreed with the President and with the Secretary of Agriculture that they would not favor at this session of Congress any legislation dealing with the so-called surplus. I do not know whether you read that correspondence or not.

Mr. HIRTH. I have read it.

The CHAIRMAN. Now, this national council claims to represent 612,000 farmers, and the officials of that organization, it seems, have made that kind of an agreement with the administration. I have wondered, first, if those officials informed their constitutents that they had made that kind of an agreement and, second, if the people whom you represent are connected with the national council and if so, do those officials represent your organization in making that kind of an agreement. You need not discuss that now, but sometime during your testimony I wish you would take up that question. We would like to know what the real facts are.

Mr. HIRTH. I think I know what you have in mind, and before I get through I will refer to it, and should I overlook it, which I do not think I will, I hope you will call my attention to it again.

I think the most disheartening phase of this so-called agricultural problem is that a lot of Members of Congress seriously question whether there is a sound remedy that can be applied to it. In other words, whether it is not a problem that is unapproachable with any sound measure of any kind, and I think the psychological situation is very unfortunate, and it has been brought about for two reasons. First, because a lot of men have addressed themselves to a question that they themselves do not understand, and therefore their suggestions as to remedies have not been sound; and in the next place, the issue has been very much befogged by certain people who have deliberately misrepresented the facts, with the result that out of that situation there has grown a question which I am sure is entirely honest on the part of many Members of Congress, and on the part of many editorial writers in the country, that perhaps there is not a feasible remedy that can be applied.

I do not think that the farm organization men who have been interested in this matter now for the last three or four years had had anything to combat that is as hard to get hold of as the idea that I have just emphasized and which throws a shadow of doubt over the entire question as to whether a sound remedy can be applied. I think that is entirely beside the facts.

Stripped of all surplusage, the trouble with the farmers of the United States is that they are doing business on a free-trade basis. That is, their surplus commodities, both with reference to exportable surplus and that which is domestically consumed, is on a free-trade basis, while, on the other hand, their production costs are fixed under the highest tariff law perhaps ever enacted by Congress, and under the highest wage scales that have ever obtained in any country. Stripped of surplusage, I say, that is the real issue, and the problem we have got to solve is to create some device by which the surplus,

whether wheat or meat products or cotton or whatever the commodity may be, does not establish the price of that which is consumed in the home market. Surely that is not such a tremendously involved question. It simply means the separation of the surplus, from year to year, with reference to these big basic commodities, as I say, so that that surplus can not establish the price in the home markets, and so that the existing tariff can be made effective with reference to the home markets, and that any burden incurred in handling the surplus, in getting rid of it or whatever you do with it, shall be equitably distributed between all the producers of that commodity, and instead of it being a problem that is so profound that ordinary minds can not comprehend it, I think the reverse is true. If we can only get the real thing firmly fixed in our minds it will be an easy task. That is the trouble.

Now, without going into any great detail as to the condition agriculture is in I want very briefly to refer to the commonly expressed editorial opinion about it, and then to make a few brief observations in connection with it.

Taking the newspaper comments of the country, generally speaking, the first idea is that it is simply the great law of supply and demand working out in its own agonized way, and that if we will only let it alone, in due time it will work out its own solution. That is a deadly sentiment to combat.

The next proposition is the absolute refusal on the part of those who are opposed to any remedial legislation, to realize what the trouble is. As I said a little bit ago, the farmer is on a free-trade basis with reference to these big surplus commodities, and on the other hand, he is buying in the highest protective market and the highest labor market the world ever saw-the stubborn refusal to realize or to confess that that is true.

Senator RANSDELL. May I ask you right there if you can briefly define what you mean by "a free-trade basis" on the commodities where there are exportable surpluses?

Mr. HIRTH. What I mean, Senator, is that with reference to wheat, for instance, of which we usually produce a surplus

Senator RANSDELL. Two or three hundred million bushels surplus, I believe.

Mr. HIRTH. This year, perhaps we did not have over 50,000,000 bushels, but the point is that from time out of mind wheat has taken what we call the world price. The world price has been effective on the approximately 600,000,000 bushels that we consume in the United States. That is what I mean. That means that with respect to a commodity like that the farmer is on a free-trade basis. Senator SACKETT. You mean that the domestic supply has sold practically continuously at the world price?

Mr. HIRTH. I do

Senator SACKETT. There has been no better price in this country than abroad?

Mr. HIRTH. No, sir.

Senator RANSDELL. I gathered that idea, but I did not quite understand what you meant by a free-trade basis on that, because I did not see how we could have a protective tariff on an article that we export. We do not import wheat. We export it. Of course, we bring in some from Canada, I realize.