FIFTH SUPPLEMENTAL NATIONAL DEFENSE

APPROPRIATION BILL, 1941

THURSDAY, MARCH 27, 1941

UNITED STATES SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, D. C. The subcommittee met, pursuant to adjournment, at 10:30 a. m., in the committee room, Capitol, Hon. Alva B. Adams (chairman) presiding.

Present: Senators Adams (chairman), Byrnes, McKellar, Brooks, Hayden, and Thomas.

ALASKA RAILROAD

FURTHER STATEMENT OF COL. ALBERT E. BROWN, WAR
DEPARTMENT GENERAL STAFF

Senator ADAMS. I think we will go ahead. I believe you wanted to read something into the record, and while we are waiting for more of the members of the committee to come in we will proceed.

Colonel BROWN. Mr. Chairman, with your permission, I will read into the record from the War Department official files two items concerning the request of the War Department for authority and for funds for the relocation of the terminus of the Alaska Railroad.

Senator ADAMS. The Alaska Railroad situation is one we concluded with last night, so this will follow the hearings yesterday concerning the same matter.

ADVERSE TERMINAL CONDITIONS AT SEWARD

Colonel BROWN. Yes. First is the letter from the office of the port commander, Fort Mason, Calif., dated November 1, 1940, to the commanding general, Fourth Army, Presidio, San Francisco, Calif.; subject, Adverse terminal conditions at Seward, Alaska:

During the 1928-29 October storm that swept into Reserve Bay and which caused local fog our Army transport Etolin was forced to leave the Seward dock, where she was discharging freight, in order to seek safety. However, before leaving she so seriously damaged the dock that its usefulness has been diminished by half for the time being. While measures are being taken to repair the dock, a serious delay in our Alaskan shipping schedules must result, since only one vessel at a time can now discharge on the Seward dock. Further delay will also result in the scheduled movement of the Etolin for several days due to the local fog. Similar trouble due to local weather conditions at Seward has been experienced by our other transport, as well as by the commercial steamers touching at Seward during the storm season.

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These conditions emphasize the need of building a more satisfactory sea terminal for the Alaska Railroad. The new site recommended by you to the War Department is practically landlocked and is never subjected to adverse storm conditions above Seward. It is therefore recommended that an allotment of emergency funds be requested of the President to initiate without further delay the construction of a new terminus for the Alaska Railroad at the gate of passage on Prince William Sound.

(Signed) Gen. C. H. LEE, Brigadier General, United States Army, Port Commander.

General Lee is an engineer officer. Senator ADAMS. Who is the letter addressed to; I did not catch that? Colonel BROWN. To the commanding general of the Fourth Army. The second letter is a letter from the Division of Territories and Island Possessions of the United States Department of the Interior, dated November 29, 1940, addressed to Col. S. H. Sherrill, War Plans Division, War Department General Staff:

I will read only extracts from this letter:

Mr. Corbin has informed me of the request made by Colonel Dasher of the Bureau of the Budget for a written statement concerning the proposed change of the tidewater terminus of the Alaska Railroad from Seward to Portage Bay.

ICE CONDITIONS IN PORTAGE BAY

Ice conditions in Portage Bay. Portage Bay is known to be ice free. The Alaska Railroad sta.ioned a weather observer at the head of the Portage Canal for 1 year. His report indicated no ice drift in the passage nor in the bay. The report of the geologists of the Alaska Railroad on the feasibility of the proposed route shows the following quotation from Capt. G. T. Rude of the United S ates Coast and Geodetic Survey as contained in the report of the Alaska Engineer Commission in 1914:

Fogs in this vicinity are the exception and not the rule. During the seven seasons spent in this section very little difficulty has been experienced from this source. In regard to the danger due to drift ice in the passage canal, I consider that nil. During the part of two seasons spent in these waters, and that during the time the glaciers are working and throwing off ice. No ice obstruction has been seen in the waters of Portage Bay, nor in the approaches to this bay. No ice is discharged into Portage Bay itself, as all the glaciers are dead and receding up their valleys. At the head of Blackstone Bay, a glacier is discharging some ice into that bay. But none of it has been seen as far out as the waters of Portage Bay. Ice is also being discharged from a number of glaciers well up the valley to the northwestward, but none of this has been seen as far south as the entry to Portage Bay.

If docks be built at the head of Portage Bay on the south side, I am of the opinion that vessels can dock in that area.

Sincerely yours,

RUTH HILTON, Acting Director.

That completes the record, Mr. Chairman.
Senator ADAMS. All right, sir.

QUARTERMASTER CORPS, CLOTHING AND EQUIPAGE,

ARMY

FORBIDDING OF PURCHASE OF FOOD OR CLOTHING NOT GROWN OR PRODUCED IN THE UNITED STATES

STATEMENT OF HON. JOHN THOMAS, UNITED STATES SENATOR FROM THE STATE OF IDAHO

Senator ADAMS. Now, Senator Thomas, I understand that you want. to give us some views, and also have some others who are also here as to

the proposal to strike out of the bill under consideration the portion of it which appears at the bottom of page 5, which would forbid the purchase of food or clothing not grown or produced in the United States or its possessions, except under certain very limited conditions. Senator THOMAS of Idaho. Mr. Chairman, in that connection I just have a very brief statement I want to leave with the committee, and then I would like for Mr. Marshall, who is the secretary of the National Wool Growers, to also make a brief statement.. It is not our thought to take up very much of your time, and we will be as brief

as we can.

I might say in connection with this provision the reason I am making this statement at this time is that it happens to be a matter we are very, very much interested in in all of the Northwest country, and I assume it is a matter that affects every State in the Union very greatly.

It is not what the Army officials may have done or what is being done; but it is a question of policy that this committee is going to establish relative to the purchase of farm products of all kinds, both food and clothing, in the future for the Army. And so I have prepared on that line a very brief statement. I might say I have been in conference with General Corbin and his associates down there relative to this purchase of Argentine meats, and also wool and other farm products. And I do not want anything that I might say here to be interpreted as being a criticism as to the administration of their affairs. They have a most difficult problem to handle.

But I hope the committee will keep in mind all the time that they are simply following the policy that is being handed down to them. And in their operation of it I hope the committee will remember that they are appearing as buyers, and I am here supposed to be representing the producers, and there is quite a difference between the attitude of the buyer, in the purchase of products and the attitude of the producers.

I wish to call attention to the language of the provision in H. R. 4124, which is now under consideration. This provision specifies "that no part of this or any other appropriation contained in this act shall be available for the procurement of any article of food or clothing not grown or produced in the United States, except articles of food not produced in sufficient quantities" to supply the demand. I wish to call the committee's attention to the broad scope of that language. It means all articles of food and clothing.

RETENTION OF RESTRICTION OF EXTREME IMPORTANCE TO FARMERS

Retention of this provision in the act is of extreme importance to the farmers of this Nation, who produce the mass of the raw materials that will be needed.

I can see no logical or justified reason why the Government should, in buying materials and supplies for its military forces, go outside the boundaries of the Nation for articles, either food or clothing, so long as there is a sufficient abundance produced and available in the United States.

FINANCIAL CONDITION OF FARMERS TODAY

Farmers of our Nation have not been prosperous for many years. Even Government subsidies in form of parity payments have failed.

to bring farm incomes to a basis of economic equality. Our raw materials markets are admittedly cluttered with surpluses.

Under these conditions, in my opinion, it is the obligation of the Government that every possible market should be discovered for our surplus home products.

I do not believe we should send our defense dollars, which in the final analysis must be raised by taxes, to foreign markets until American farmers and producers have had the first chance to supply our needs.

ARTICLES PRODUCED BY FARMERS AFFECTED BY RESTRICTION

I should like to call your attention to the many articles produced by our farmers which come under the provision of this bill. Not only are beef producers affected, but also those who produce mutton, pork, and poultry. Under the general classification of foods are potatoes, beans, wheat, vegetables, fruits, cereals, sugar, flour, lard, butter, cheese, dairy products, and many other items which are produced in abundance in our own Nation.

Under the classifications of clothing are both wool and cotton materials, making the provision of great importance to all sections of the United States. With our present supply of wool and the huge surpluses of cotton, and all kinds of foodstuffs in this country it seems utterly foolish to go elsewhere to purchase these materials.

DOMESTIC SUPPLY OF WOOL SUFFICIENT TO SUPPLY DEMANDS

I am reliably informed that, commencing with June 1941, there will be sufficient domestic wool available to supply all of our demands. The wool growers of my State have operated for many years on a very slim margin of profit when they did not suffer actual losses. I believe that it is their right to have the first chance to fill the Government's orders for blankets and clothing.

The condition of the American farmer has been so desperate that for more than a decade we have tried to devise ways and means of helping him, even to granting him Government subsidies. Now, for the first time during that period, we have a situation that will assist the farmer to regain his financial feet without help from the Government. Now there is a way in which these surpluses of farm products that have been accumulating may be put to a beneficial use. Our Government needs these materials for immediate consumption. Could anything be more fitting or right than for the Government to go to its own citizens for these articles rather than securing them from foreign sources?

I would like to give you some figures that will illustrate the economic condition of the farmer. Let us consider some of the crops which are produced and the prices that are being received for them. We will consider these figures on the parity price basis that has been established by Congress. As you well know, this indicates the prices which the farmer should receive for his products in order that his purchasing power will be on an equality with other industrial groups. Senator MCKELLAR. Would it interfere with you, Senator, if I asked you a question right there; so you can address yourself to it? It was testified here the other day by a number of gentlemen that

the price of wool was already beyond the parity price; and as to beef, that it was about parity, as I recall-what was it?

Senator BYRNES. Beef was above.

Senator MCKELLAR. Beef was above, and wool was above; both above.

Senator THOMAS of Idaho. Senator, if you will pardon me just a

moment

Senator MCKELLAR. That is all right; I beg your pardon, if it is not convenient at this time.

Senator THOMAS of Idaho. I hope you will call my attention to it at the proper time.

Senator MCKELLAR. Yes; I will; yes, sir.

PARITY PRICES ON FARM PRODUCTS

Senator THOMAS of Idaho. Now, as to parity prices-potatoes, for instance, on February 15, 1940, sold for 87 percent of parity. On February 15 of this year the price was only 62 percent of parity. And potatoes do not share in the parity program. The same is true of a great number of other farm-produced commodities. Eggs, on February 15, 1940, were selling at 82 percent of parity. Last February 15 they brought only 68 percent of parity. Rye last year sold at 61 percent of parity. On February 15 of this year it sold at 45 percent of parity. The price of wheat on February 15, 1940, was 75 percent of parity. A year later it was 60 percent of parity. Similarly the price of oats on February 15, 1940, was 74 percent of parity. By February 15, 1941, it had fallen to 64 percent of parity. The price of sugar beets in December 1939 was 70 percent of parity. In December 1940 this price was 67 percent of parity. The price of dry beans in December 1939 was 70 percent of parity. By December 1940 the price of dried beans was only 62 percent of parity.

INCOME OF 32,000,000 FARMERS IN 1939

According to figures from the Bureau of Foreign and Domestic Commerce, the income of the 32,000,000 farmers in this country for 1939, the last year for which figures are available, was $5,635,000,000, or 8.1 percent of the total national income for that year. In other words, 25 percent of the population was receiving only about 8 percent of the national income. The same Government source reveals that national income in 1939 had recovered to 83.7 percent of the 1929 total. Farm income was only 77.6 percent of the 1929 total. This was in spite of the fact that in 1929 business and industry were in the midst of boom times, while the farmer, even then, was in a depression.

Translate these figures into terms of the farmers' standard of living and you find that the situation at present is simply intolerable. If we are to yield now to the advice of those who say we must abandon the farmer, if we give in to those who tell us we must stop the pitiful relief we have been giving him, we shall be betraying our own people.