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Senator BANKHEAD. About how much?
Senator BANKHEAD. You think a billion dollars would restore it to the price level of 1926, approximately?
Mr. ELBERT. Senator, it is a wild guess. There is no man living can tell you.
Senator BANKHEAD. I realize that, but I wanted your opinion. Mr. ELBERT. My opinion is about a billion dollars.
Senator BANKHEAD. How long do you think it would require to bring about that result?
Mr. ELBERT. You have got to watch just what happens in the credit structure, of course, and how much these member banks and commercial banks will cooperate in the movement. When you see that thing really start, then they should stop right away.
Senator BANKHEAD. I want to see the start first.
Mr. ELBERT. It is just like this: It is like a sled going down the side of a hill that has got snow on it. When it first starts it does not take much effort to stop it, but as it gets going down the hill and gathers speed, it requires quite some force to stop that sled. No one on earth can answer that question.
Senator SHIPSTEAD. Mr. Elbert, I started to ask you a question and you did not have a chance to answer it. From what
have said I got the impression that you think a great deal of this trouble is due to the mismanagement of our banking and credit system.
Mr. ELBERT. I should not say that, but I do.
Senator SHIPSTEAD. I do not want to argue with you, but with reference to what you have said about Congress taking your money for taxes, let me remind you of this: That these bankers came here and got $500,000,000 out of the Treasury, and then they were helped again when Congress canceled the debts of foreign governments, making a charge upon the Treasury this year of something over $500,000,000. That is a billion dollars. The moratorium was put over to help the banks of London and the banks of New York, costing $250,000,000. There is $1,250,000,000 of extra expenditures out of the Treasury this year, and you, whose money will now be taken to make up that deficit, were not here protesting against those things at the time they were put over.
Mr. ELBERT. I was. I was trying to do everything I could to stop it, but what could I do, what could an individual do in this whole thing, as an individual? Let them take you and put a uniform on you during war, and what can you do? They can not make you fight, but they can take you to it. It is the same way with this situation.
Senator BROOKHART. But the suggestion you make now is for the benefit of the banks first. You are going to give them more credit, expand the credit base of the banks.
Mr. ELBERT. Yes.
Senator BROOKHART. I think you are beginning at the wrong end of the proposition.
Mr. ELBERT. Senator, it will work right through the whole economic structure. That is the only way I see it.
Senator BROOKHART. If you begin at the bottom and go up, it would, but this beginning at the top, it often does not reach down to the bottom.
Mr. ELBERT. You are confusing effects with causes.
Senator SHIPSTEAD. You think we can restore the price level by increasing the credit base ?
Mr. ELBERT. I do not think there is any question about it.
Senator SHIPSTEAD. When you increase the credit base, you increase the indebtedness of the borrower.
Mr. ELBERT. No.
Senator SHIPSTEAD. When anyone borrows from the bank, they go heavier in debt.
Mr. ELBERT. I don't see where they go heavier. They may go in debt more, but they will start the wheels of progress moving by doing it.
Senator SHIPSTEAD. If I had a credit at the bank for $100 and I go and use that credit, I am $100 more in debt than before.
Mr. ELBERT. Yes.
Senator SHIPSTEAD. So, when you start to restore prosperity by increasing the credit base, expanding the use of credit, you are going to do it by increasing the amount of indebtedness of the people.
Mr. ELBERT. No; you are making it possible for people to borrow, which is a form of debt. And you are quite right on that, Senator; you do do that. But at the same time, by that process you bring up the price of things and reduce the value or the buying power of the dollar, which will enable debtors to get out of debt through this process.
Senator THOMAS of Oklahoma. It is now 12 o'clock and Senator McNary asked me to suggest to the committee that we stand in recess till 10 o'clock to-morrow, at which time the representatives of the three farm groups may present a proposition which I understand they want to submit to the committee.
Mr. ELBERT. Are there any more questions you want to ask me?
Senator THOMAS of Oklahoma. No; but on behalf of the committee, I want to thank you, Mr. Elbert, for your statement.
Mr. ELBERT. I don't know whether I have contributed anything. Senator BROOKHART. Yes; you have.
(Whereupon, at 12 o'clock noon, Thursday, April 28, 1932, the committee adjourned to 10 o'clock a. m. of the following day, Friday, April 29, 1932.)
FRIDAY, APRIL 29, 1932
UNITED STATES SENATE,
Washington, D. C. The committee met at 10 o'clock a. m., in room 324, Senate Office Building, Senator Charles L. McNary presiding.
Present: Senators McNary (chairman), Capper, Norbeck, Frazier, Townsend, Kendrick, Thomas of Oklahoma, McGill, Bankhead, Bulow, Caraway, and Shipstead.
Also present: Senator Brookhart.
Others also present: John A. Simpson, president National Farmers Union, Oklahoma City, Okla.; A. W. Bowen, Washington representative of the National Farmers Union; Fred' Brenckman, Washington representative of the National Grange; Edward A. O'Neal, president of the American Farm Bureau Federation, Chicago, Ill. ; Charles E. Hearst, vice president American Farm Bureau Federation.
The CHAIRMAN. The committee will be in order.
Senator FRAZIER. Mr. Chairman, I have a telegram I received yesterday which I would like to read into the record.
The CHAIRMAN. Very well.
Senator FRAZIER. This is dated April 28, from Kankakee, Ill., and addressed to me, and reads as follows (reading]:
Illinois State Legislature in special session yesterday passed joint resolution memorializing Congress to pass Frazier bill, S. 1197. Vote two-thirds in senate; house unanimous. Entire bill was printed and made part of resolution. That Illinois does this is significant.
It is signed “E. E. Kennedy.”
As I recall it, Mr. Chairman, that makes six State legislatures that have indorsed my bill. I want to say right here there are a lot of members of this committee who do not realize what the situation is, and do not know what the farmers are up against, and do not know what the business men in these agricultural communities are up against.
Senator Bulow. You will have to get three-fourths of the States to get action.
Senator FRAZIER. I think we could get them in time.
The CHAIRMAN. I have a telegram from the president af the Barron County Farmers Union and member of the executive board of the National Farmers Union, coming from Wisconsin, that I desire to have inserted in the record at the request of Mr. John A. Simpson, president of the Farmers Union.
(The telegram is here printed in the record in full, as follows:)
Hon. CHAS. L. MONARY,
United States Senate, Washington, D. C.: Every local in Barron County joins the county farmers union urging and demanding immediate favorable report of bills sponsored by National Farmers Union. Food helped win the war at the expense of a bankrupt agriculture. Administrative measures so far passed but mere palliatives, not helping agriculture nor unemployment conditions. Democracy is on trial. Hundred per cent true Americanism and statesmanship needed to save Nation from chaos. Congress has power to cure this financial anemia. Restored purchasing power of the masses and a square deal for agriculture only solution in present crisis. Prosperity starting with producers of wealth, agriculture, and labor, will lock back door to fast-growing unrest and communism, if not spell entire defeat. Present administration philosophy that the masses exist for the few must be changed by a courageous Congress exercising its constitutional powers in representing the people. Demand real investigation of Farm Board, its activities and creatures, not a mere whitewash. Economy programs and balancing Budget useless as long as present conditions are allowed continuing. Senators and Congressmen will be awarded according to their actions and company they keep when the masses exercise their power at the ballot box.
Member of Executive Board, National Farmers Union. The CHAIRMAN. As stated yesterday, the three farm organizations have agreed upon a modification of the agricultural marketing act, and Mr. O'Neal, who is the president of the American Farm Bureau Federation, as a representative of that organization, said that Mr. Chester Gray would speak to the committee this morning concerning that proposal. Have you any further copies, Mr. Gray I see that most of them have disappeared from the committee table.
Mr. GRAY. Yes, sir.
STATEMENT OF CHESTER H. GRAY, WASHINGTON REPRESENTA.
TIVE OF THE AMERICAN FARM BUREAU FEDERATION
Mr. GRAY. In order to save the time of the committee it has been agreed by Mr. Brenckman, for the National Grange; Mr. Simpson, for the National Farmers Union; and Mr. O'Neal, for the American Farm Bureau Federation, that I should explain the bill which relates to amending the agricultural marketing act, which bill has been agreed upon by the three farm organizations, and presented to the committee this morning. It has been known that the three farm organizations have come before this committee once this session in regard to amendments to the agricultural marketing act, as well as before the Agricultural Committee of the House. Since that appearance was had, two months or more ago, constant and continuous rémarks and comments have come to us that the farm organizations have agreed in principle as to an amendment of the agricultural marketing act, having agreed that the agricultural marketing act should be continued, should later agree as to the exact text of a bill which we desire as an amendment to the agricultural marketing act. We did not desire to assume this responsibility, Mr. Chairman and gentlemen of the committee. We thought, and