Mr. EWING. There is that much approximate excess.

Senator BROOKHART. And that depresses the domestic market and the domestic prices?

Mr. EWING. Yes.

Senator BROOKHART. And breaks down the tariff rate protection? Mr. EWING. Yes.

Senator BROOKHART. So that it no longer protects these products? Mr. EWING. Yes.

Senator BROOKHART. If that surplus were financed immediately and removed from the domestic market, then the 92 per cent or 93 per cent would rise to the top of the tariff in price?

Mr. EWING. Presumably it would in the line of the ordinary trend of events.

Senator BROOKHART. And that could be done immediately by immediately financing the surplus?

Mr. EWING. I would think that that were possible.

Senator BROOKHART. Have you examined the proposition in Senate bill 123?

Mr. EWING. I have, briefly. I have not digested that bill in full. I have read it.

Senator BROOKHART. Would that bring this immediate relief if applied at once?

Mr. EWING. I believe a provision for increasing the fund available and widening the operation would have that effect.

Senator BROOKHART. You think it would be immediate?

Mr. EWING. I should think the minute a surplus is removed from your market your market finds relief. It is like opening a boil.

Senator BROOKHART. And then later we could work out these exchanges?

Mr. EWING. I believe those exchanges should be worked out and that we should find some better way of preserving the relativity of the value of money and the value of goods in line with the commodity dollar.

Senator BROOKHART. So the money for doing this might well be raised by an issue of Treasury notes?

Mr. EWING. I have not digested that bill to the point where I could say.

Senator BROOKHART. This bill does not provide that, but I am suggesting it, you might say, as an amendment.

Mr. EWING. I would say that would be a practical way. I am heartily in accord with the suggestion of the open-market operations. I think that is sound. But the only question is if there be some way of more prompt relief.

And I would like to impress on this committee this further thing. The agricultural marketing act of course was never designed to meet a crisis like we are in and like as has prevailed ever since its passage. And it is not possible for you men to know the measure of progress that has been made under that act. I feel that we who have been working with some of these commodity groups can see that and know it better than you can.

We had marketing operation organizations in livestock for 50 years before that act, but never did we have the vision of what might be possible for livestock in putting itself on a business basis through a national organization to bring into play the economics that underlie

that business or any other business and determine its success or failure. That has been an educational program that has not been easy. But I believe we have gone over the peak of the hill, and that you will see more progress from now on in that work.

Farmers from all parts of the country and stockmen are awakening to the fact that there is something involved there for them that they had never thought of before. And besides that it has been possible under the terms of this act for the past year and with the cooperation of the farm board to render a service of a financial character to stockmen in some 27 States in most places where there was not any service available because their local sources of credit had dried up.

Now, that has been a wonderful saving thing to the livestock interests. And I am confident when I tell you that the benefits that have been so apparently seemingly perhaps slowly achieved, have really been greater than they appear on the surface, and there is a value in the purpose of this act, in its being preserved and carried out and supported, that it will be a calamity at this time to have that work inhibited or curtailed in any serious way. I am convinced thoroughly of that fact from the experience that I have had in this work with this livestock organization.

Senator BROOKHART. Now, the reason for its apparent failure is because it has not been financed to handle this surplus and remove it from domestic pressure. And will not these cooperative organizations always fail when surplus shows up that way if it is not properly financed and handled?

Mr. EWING. Some way should be provided.

Senator BROOKHART. Now, I want to give you an illustration. Here is a Sheaffer pen. Mr. Sheaffer, who makes those pens, is a schoolmate of mine, and he makes 20 per cent now of all the fountain pens in the United States. He is the biggest manufacturer of fountain pens in the United States. I have talked to him about this farm question and industrial question many times. I find him informed on it. He tells me that he plans every year to produce 10 or 15 per cent more pens than he sells in the United States because he wants to keep his plant going and keep up the efficiency of his force, but he does not let that surplus affect his domestic market. He is financed. He has the credit or the money, and he boxes up these extra pens and sells them in the best world market he can find, often at a less price than he charges us in the United States. Now all the big industries in the United States that are exporting a surplus are doing the same thing. And is it not going to be necessary to do the same with the agricultural surplus to give it anything like stability of price?

Mr. EWING. I believe that it is. An industry such as agriculture is not able to handle itself individually like Mr. Sheaffer handles his pen. And a 10 or 15 per cent of surplus that depresses the price and destroys the buying power of agriculture can not help but have a disastrous effect on other industry, when agriculture is other industries' best customer. There is a potential buying power in agriculture to-day if it were reasonably prosperous that would exceed all the foreign outlet industry has ever found under 140 years of protection for its product. And if agriculture could be restored to

a reasonable prosperity it would do more for industry in general than any single factor that can be arrived at.

Senator BROOKHART. You really feel there is no agricultural surplus now if we had a normal consumption?

Mr. EWING. Well, I think that is true in livestock.

Senator BROOKHART. I think it is, myself.

The CHAIRMAN. Anything further, Mr. Ewing?

Mr. EWING. Nothing, unless there are some questions.
The CHAIRMAN. We are very much obliged to you.

Senator Howell is here. He indicated to the chairman yesterday he would like to refer to a bill that he has pending before the committee, and we would like to hear from you if you are prepared at this time, Senator, and desire to be heard.

STATEMENT OF SENATOR ROBERT B. HOWELL, OF NEBRASKA

The CHAIRMAN. Your bill is before the committee.

Senator HoWELL. Yes, the bill is before the committee. It is S. 4485. It was just recently distributed to the members of the committee.

(S. 4485 is here printed in the record in full, as follows:)

[S. 4485, Seventy-second Congress, first session]

A BILL To amend the agricultural marketing act, approved June 15, 1929, as amended Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the agricultural marketing act, approved June 15, 1929, as amended, is amended by adding after section 10 thereof the following new sections:

MARKETING AGREEMENTS

SEC. 10A. (a) Upon request of the quest of any leading

advisory committee, or upon recooperative association or other organization of producers, the board shall, or upon its own motion may, investigate the supply and marketing situation with respect to

(b) Whenever the board finds upon any such investigation

(1) That there is or may be during the ensuing year a national surplus of ; and

(2) That the operation of the provisions of sections 7 and 9 of this act will not be effective to control such surplus because of the inability or unwillingness of the cooperative associations or stabilization corporations engaged in handling to control such surplus with the assistance of loans made pursuant to such section-then the board shall make public its findings and shall arrange for the marketing of all or any part of such surplus by means of marketing agreements with such cooperative associations or stabilization corporations as hereinafter provided. The marketing by means of such agreements shall continue until the board finds that such agreements are no longer necessary or advisable for carrying out the policy declared by section 1 of this act. (c) Each such marketing agreement shall provide either—

(1) For the withholding by the cooperative association or stabilization corporation, during such period as shall be provided for in the agreement, of all or any part of the delivered to such cooperative association by its mem

bers or delivered to such corporation, and for the payment from the stabilization fund provided for in section 10C of the costs arising out of such withholding; or

(2) For the purchase, withholding, and disposal by the cooperative association or stabilization corporation of other -, for payment from the stabilization fund of the amount of the losses, costs, and charges arising out of such purchase, withholding, and disposal, or arising out of contracts in connection therewith, and for the payment into the stabilization fund (after

repayment of all amounts advanced from such stabilization fund and the deduction of all costs and charges provided for in the agreement) of all profits arising out of such purchase, withholding, and disposal, or arising out of contracts in connection therewith.

(d) The board shall provide in each such marketing agreement for financing the purchase, withholding, and disposal of under any such agreement through advances from such stabilization fund. Such financing shall be upon such terms and condititons as the board may prescribe, but no such advance shall bear interest.

(e) If the board is of the opinion that there are two or more cooperative associations or stabilization corporations capable of carrying out any such marketing agreement, the board, in entering into such agreement, shall not discriminate unreasonably against any such association or corporation in favor of any other such association or corporation. If the board is of the opinion that there is no such cooperative association or stabilization corporation capable of carrying out any such marketing agreement for the purchase, withholding, and disposal of then the board may enter into such agreement with other agencies but shall not discriminate unreasonably between such other agencies.

(f) During any marketing period fixed by the board, the board may enter into marketing agreements for the purchase, withholding, and disposal of food products of — and all the provisions of this act applicable to marketing agreements for the purchase, withholding, and disposal of shall apply to the marketing agreements with respect to such food products.

(g) Any decision of the board relating to the commencement, extension, or termination of a marketing period shall require the affirmative vote of the majority of the members of the board.

(h) The powers of the board under this section shall be exercised in such manner, and the marketing agreements entered into by the board shall be upon such terms and conditions, as will, in the judgment of the board, carry out the policy declared by section 1 of this act.

(i) The United States shall not be liable directly or indirectly upon any such agreements in excess of the amounts available in the stabilization and revolving funds provided for by this act.

EQUALIZATION FEE

SEC. 10B. (a) In order to carry out marketing and price insurance agreements with respect to without loss to the revolving fund, each marketed unit of produced in the United States shall, throughout any marketing period with respect thereto, contribute ratably its equitable share of the losses, costs, and charges arising out of such agreements. Such contributions shall be made by means of an equalization fee apportioned and paid as a regulation of interstate and foreign commerce. It shall be the duty of the board to apportion and collect such fee as hereinafter provided.

(b) Prior to the commencement of any marketing period with respect to and thereafter from time to time during such marketing period, the board shall estimate the probable losses, costs, and charges to be paid under marketing and price insurance agreements with respect to as hereinafter provided. Upon the basis of such estimates, the board shall from time to time determine and publish the amount (hereinafter referred to as the equalization fee) for each unit of weight, measure, or value designated by the board, to be collected upon each such unit of during the marketing period. At the time of determining and publishing any equalization fee the board shall specify the time during which the particular fee shall remain in effect and the place and manner of its payment and collection.

(c) Under such regulations as the board may prescribe, any equalization fee determined upon by the board shall be paid, with respect to each marketed unit of upon either the transportation, processing, or sale of such unit. The equalization fee shall not be collected more than once with respect to any unit. The board shall determine, in the case of each class of transactions, whether the equalization fee shall be paid upon transportation, processing, or sale. The board shall make such determination upon the basis of the most effective and economical means of collecting the fee with respect to each unit of marketed during the marketing period.

(d) Under such regulations as the board may prescribe, the equalization fee determined under this section shall in addition be collected upon the importa

tion of each designated unit of

imported into the United States for consumption therein, and an equalization fee, in an amount equivalent as nearly as may be, shall be collected upon the importation of any food product derived in whole or in part from and imported into the United States

for consumption therein.

(e) The board may by regulation require any person engaged in the transportation, processing, or acquisition by purchase of United States, or in the importation of any

produced in the or food product thereof

(1) To file returns under oath and to report, with respect to his transportation, processing, or acquisition of produced in the United States or with respect to his importation of or food products thereof, the amount of equalization fees payable thereon and such other facts as may be necessary for their payment or collection.

(2) To collect the equalization fee as directed by the board and to account therefor.

(f) The board, under regulations prescribed by it, is authorized to pay to any such person required to collect such fees a reasonable charge for his services.

(g) Every person who, in violation of the regulations prescribed by the board, fails to collect or account for any equalization fee shall be liable for its amount and to a penalty equal to one-half its amount. Such amount and penalty may be recovered together in a civil suit brought by the board in the name of the United States.

(h). As used in this section

(1) The term "transportation" means the acceptance of the commodity by a common carrier for delivery; (2) The term "processing for market or the first processing in any manner for market (other than cleaning or drying) of not so milled; and

means milling of

(3) The term "sale" includes a sale or other disposition in the United States of for milling or other processing for market, for resale, or for delivery by a common carrier, occurring during a marketing period, but does not include a transfer to a cooperative association or stabilization corporation for the purpose of sale or other disposition by such association or corporation on account of the transferor; nor a transfer of title in pursuance of a contract entered into before, and at a specified price determined before, the commencement of a marketing period with respect to of title in pursuance of a contract entered marketing period with respect to and at a specified price determined at a time during which a particular equalization fee is in effect, then the equalization fee applicable with respect to such transfer of title shall be the equalization fee in effect at the time when such specified price was determined.

In case of the transfer into after the commencement of a but entered into at a time when,

STABILIZATION FUND

SEC. 10C. (a) There shall be established, in accordance with regulations prescribed by the board, a stabilization fund for Such fund shall be administered by and exclusively under the control of the board, and the board shall have the exclusive power of expending the moneys in such fund.

(b) There shall be deposited to the credit of the stabilization fund for (1) advances from the revolving fund as hereinafter authorized, (2) profits arising out of marketing agreements with respect to (3) repayments of

advances for financing the purchase, withholding, or disposal of equalization fees collected with respect to

and (4) and its imported food products. (c) In order to make the payments required by a marketing or price insurance agreement with respect to and in order to pay the salaries and expenses of experts, the board may, in its discretion, advance to the stabilization fund out of the revolving fund such amounts as may be necessary. (d) The deposits to the credit of the stabilization fund shall be made in a public depositary of the United States. All general laws relating to the embezzlement, conversion, or to the improper handling, retention, use, or disposal of public moneys of the United States shall apply to the profits and equalization fees payable to the credit of the stabilization fund and to moneys deposited to the credit of the fund or withdrawn therefrom but in the custody of any officer or employee of the United States.