that following the war you had industrial prosperity and not agricultural prosperity; that the slumps came in the agricultural country just at the very time when bank deposits were increasing and the flush money was especially rife in the eastern section? Mr. STONE. Senator, we did not have that in our section of the country until 66 Senator NORBECK. When you say our section" you mean what? Mr. STONE. I mean the Kentucky section of the United States. Senator NORBECK. You did not have the agricultural depression, you mean, down there? Mr. STONE. I will give you an illustration of my own experience. From 1922 until 1926 or 1927 I sold my cattle for prices ranging from 12 to 16 cents during that period. I will not try to recall the years. I sold my tobacco at prices ranging from 20 to 25 cents a pound. I sold my lambs from 15 to 18 cents a pound. I sold my wool from 40 to 60 cents a pound. And the other crops were in line with those during that period. Senator NORBECK. In other words, your theory is that agriculture was above par instead of below par in that period? Mr. STONE. No; I do not think that it was above the par, the level Senator NORBECK. If that would have been the general condition of the farmer throughout the United States, they would have been above par. of industry. You asked me about that. Mr. STONE. I was going to give you the result in my immediate territory. Senator NORBECK. Yes; but I mean take the whole United States instead of taking a little spot of it. Mr. STONE. I will give you that and then discuss the whole United States. I gathered some information in regard to the mortgage debt in my own county. During that period of those prices they were the prices that were generally prevalent in that section at that time. We did not decrease our mortgage debt any during that period. I called a meeting of a group of men to discuss that particular phase with them. I think one reason of it was that we had general industrial business improvement during all of that period. Senator NORBECK. And you had a local market for some of your products? Mr. STONE. Yes; that is true. Senator NORBECK. In other words, you were not in the same fix as those who depended on their foreign markets to fix their price? Mr. STONE. That is true, too. Senator NORBECK. In other words, your situation locally was exceptional and not comparable with the conditions of the United States? Mr. STONE. It was not entirely exceptional, because we had many other sections that were in the same shape that we were in. Senator NORBECK. But you admit that the farmers' purchasing power was below par in the United States in the very years you are talking about? Mr. STONE. In relation to industrial income; yes. Senator NORBECK. And that it was due largely to the increase in those production costs? Mr. STONE. Production costs were higher, charges were higher, and taxes were higher. Senator NORBECK. And machinery was higher? Mr. STONE. Machinery was higher. Senator NORBECK. Coal and lumber were higher and clothing was higher, and everybody was getting a good earning except the farmer. Mr. STONE. Well, in our particular section he was getting along pretty well at that particular time. Senator NORBECK. You told us three things, Mr. Stone: First, that he got a good price for his products; second, that his operating costs were higher; and, third, that he did not reduce his debts. Mr. STONE. That is true. Senator NORBECK. Would that be a good condition? Mr. STONE. I was not saying it was a good condition. I am just leading up to the point that we were not relieved of the condition which we are in. I think that the industrial situation was due largely to these factors. I remember a public statement which was made by Mr. Schwab, of the Bethlehem Steel Corporation, in 1921, I think it was, in which he stated that the overproduction or the overbuilding of industrial plants in this country due to the World War was around 40 per cent, and he predicted then that it would be impossible for us to run our industrial plants at full capacity and be able to sell the products everywhere. Senator NORBECK. Is not what he said of the industrial plants true of the gasoline stations and the hotels just as well as it was of the other industries? Mr. STONE. Undoubtedly. Senator NORBECK. Is not that true of every line? It is only a matter of opinion anyway as to whether it is overbuilt. Mr. STONE. That is true. No doubt the reason that he came to that conclusion was, apparently, that he overlooked the fact that the continental European countries could not come back to their normal productive basis in a short time. In other words, during the war the countries of continental Europe went practically out of production of all kinds except for war purposes. Therefore, they were not in a position to furnish goods and manufactured articles to their trade all over the world, and during the war other countries went in and took that trade which continental European countries originally had. Immediately after the war-I mean for four or five or six years after the war-naturally the European countries were trying to get back on a pre-war production basis. It took them up till 1928 to do that. When they got back on a production basis, they found that their foreign markets had been taken away from them by other countries during this reconstruction period. Senator NORBECK. I wish you would clarify that a little. You say "other countries." I would like to know more specifically what you have reference to. You say they found their markets had been taken by other countries. Who found that? Mr. STONE. The continental European countries which were in the war found that their foreign markets were taken away from them, were being supplied by other countries. Senator NORBECK. For instance, who? Mr. STONE. The United States, Australia, Argentina. Senator NORBECK. Did our foreign exports increase in that period? 1 Mr. STONE. Yes. Senator NORBECK. In what line? Mr. STONE. Well, in various manufacturing lines, and also, for instance, in the production of wheat it continually increased in those four countries during that period. Senator NORBECK. I think that statement is too narrow to portray the picture correctly. Would you be willing to put in the record here what our exports of wheat have been for a period of 20 or 30 years? Mr. STONE. Yes. Senator NORBECK. It will be quite illuminating. I contend there has been no recent increase in the export of wheat. You can get that out of the Agricultural Year Book, which is an official publication. Mr. STONE. What I had reference to, Senator, was not any one of those particular four countries as individual units. The production of wheat and the exportation of wheat in those countries did increase during that period. The CHAIRMAN. It is now 12 o'clock. The session will be closed at 12 o'clock. If you are not through with Mr. Stone, at the request of any member we will ask him to come back. Are you through, Senator Norbeck, with your questioning? Senator NORBECK. I would be through with him in two minutes if I could go on. If not, I want him to come back for two minutes this afternoon. Mr. STONE. I would rather have the Senator take these two minutes right now, if you will. The CHAIRMAN. The session will be recessed until 10 o'clock to-morrow. Senator FRAZIER. Mr. Stone, I want to ask a few questions in regard to this bill, S. 1197. The CHAIRMAN. Mr. Stone, we will be glad to hear you again to-morrow. Senator FRAZIER. Mr. Chairman, I want to put in the record four telegrams I have here bearing on S. 1197. The CHAIRMAN. Without objection the telegrams are made a part of the record at this point. Senator LYNN FRAZIER, Washington: ST. PAUL, MINN., April 26, 1932. Convey to the Agricultural Committee that the Minnesota Farm Bureau Federation is desirous of passage of the Frazier bill. This in our judgment would do much to relieve the stress now so tense upon us. Farmers should be given the opportunity to retain their farms. If no aid is given, ownership will pass out of their hands. A low rate of interest is imperative at this time. A. J. OLSON, President Minnesota Farm Bureau Federation. ST. PAUL, MINN., April 26, 1932. Senator LYNN J. FRAZIER : Passage of the farmers' farm relief bill in its present form of greatest importance to all classes of people. No raising of interest rate should be permitted. Measure will not only save agriculture but will solve most of Nation's ills. People from all walks of life are for this measure. R. A. TROVATTEN, Secretary Agriculture of Minnesota. ST. PAUL, MINN., April 26, 1932. LYNN J. FRAZIER, Your bill is the best relief measure offered yet, and should be passed at once. The international bankers were taken care of, why not the farmers. And by all means don't raise the interest rates beyond 11⁄2 per cent. ADAM A. LEFOR, Banker, of Dickinson, N. Dak. FARGO, N. DAK., April 25, 1932. Senator LYNN J. FRAZIER, Senate Office building, Washington: Majority of the people in this section of the country are 100 per cent back of the Frazier farm relief bill. Farm indebtedness ought to be refinanced at not to exceed 12 per cent interest, and we urge that you do everything in your power to pass the bill without amendment. A. T. LYNNER, Mayor. Senator SHIPSTEAD. There is one more which might be put in the record. The CHAIRMAN. Without objection it is also made a part of the record. Senator CHARLES L. MONARY, IVANHOE, MINN., April 23, 1932. Chairman Senate Agricultural Committee, Washington, D. C.; Grief and sorrow is nation-wide over loss of homes through mortgage foreclosure. Thousands writing me to explain to Congress. My plea in behalf of our members is: Don't forsake us on Frazier bill, S. 1197, and Thomas-Swank marketing bill. My personal appeal to you: Read telegram to your committee; recommend bill without further amendments. Awaiting the final day, Tuesday. In the meantime my prayers in behalf of agriculture are: My God, my God, why should Congress foresake agriculture? C. R. LUNDBERG, Secretary-Treasurer Minnesota Farmers' Union. (Whereupon, at 12.05 o'clock p. m., an adjournment was taken until Thursday, April 28, 1932, at 10 o'clock a. m.) FARM RELIEF THURSDAY, APRIL 28, 1932 UNITED STATES SENATE, COMMITTEE ON AGRICULTURE AND FORESTRY, 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, Thomas of Idaho, Townsend, Kendrick, Thomas of Oklahoma, McGill, Bankhead, Bulow, Caraway, and Shipstead. Also present: Senators Howell, Brookhart, and Nye. Others also present: John A. Simpson, president National Farmers' Union, Oklahoma City, Okla.; A. W. Brown, 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 come to order. Mr. Stone, will you take the chair at the head of the table? STATEMENT OF JAMES C. STONE, CHAIRMAN FEDERAL FARM BOARD, WASHINGTON, D. C.-Continued The CHAIRMAN. I am advised that there are some additional questions that members of the committee desire to propound to you, Mr. Stone. Senator Norbeck must leave shortly, and he wants to ask you a few questions. Senator NORBECK. We were talking about this problem when the committee adjourned yesterday, and there were only one or two questions that I wanted to ask for the benefit of the record. I do not think it is anything on which we disagree at all. I had reference especially to the supposed increased production in wheat from decade to decade and from year to year. Is it not a fact, Mr. Stone, that the per capita production of wheat has fallen off? That while the total bushelage has increased we raise less wheat per capita than we did some years ago? Mr. STONE. The consumption per capita has decreased from about 5 bushels down to 4 and a fraction bushels in the last few years. Senator NORBECK. The consumption has? Mr. STONE. Yes. Senator NORBECK. Now, what about the production? Mr. STONE. Our largest production occurred in 1915. Mr. STONE. You are speaking now of the United States? |