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Mr. WOODRUM. As to this unexpended balance, you do not have any claims on that, do you?

Mr. MORGAN. Not at this time.

Mr. BOLTON. You show on page 4 of your justification, do you not-you show you received by transfers between appropriations a total of $20,266?

Mr. MORGAN. That is right, Mr. Bolton.

VALUE OF AGRICULTURAL TRADE WITH CANADA

Mr. BOLTON. I would like to know the agricultural exports into Canada for the last 5 years by years and the agricultural imports from Canada for the last 5 years.

Mr. MORGAN. When it comes to the word "agricultural”, Mr. Bolton, how far do you wish us to go?

Mr. WOODRUM. Will you furnish that information to Mr. Bolton? Mr. MORGAN. Yes, sir.

Mr. WOODRUM. All right, gentlemen, thank you.

(The information requested is as follows:)

United States: Value of agricultural trade with Canada, 1930–341

[Foreign Agricultural Service Division. Compiled from Foreign Commerce and Navigation of the United

States]

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2 Excludes exports of wheat and flour to Canada, since this is in transit to Europe and other countries. Excludes imports of wheat for grinding in bond and export to countries other than Cuba; and wheat ground into flour for export to Cuba, and are based on imports for consumption figures from June 18, 1930. to Dec. 31, 1932.

4 Imports for consumption.

THURSDAY, DECEMBER 19, 1935.

INVESTIGATION OF THE MILK INDUSTRY BY THE FEDERAL TRADE COMMISSION

STATEMENT OF MILTON HULT, PRESIDENT OF THE INTERNATIONAL ASSOCIATION OF MILK DEALERS, DAVENPORT, IOWA

Mr. WOODRUM. Gentlemen, in the appropriation for the Federal Trade Commission there were carried some funds for continuing an investigation of the milk industry. Mr. Hult is here representing that industry and desires to speak briefly to the committee on that subject.

I have endeavored to explain, not personally to Mr. Hult, but to some gentlemen who are interested in speaking for the milk industry,

that this committee is an appropriating committee, not a legislative committee; that the milk investigation was ordered by a specific resolution of Congress; that practically the only inquiry of this committee is whether or not the funds are needed and whether they are adequate.

Of course, no doubt it is true we could withhold funds, and in that way perhaps shut off the investigation. But the Appropriations Committee, since I have been a member of it, has never taken such action without going back to Congress and submitting the matter to Congress.

I will say that we have concluded our hearings on the independent offices bill, but we are very glad to give you, Mr. Hult, an opportunity to make a very brief statement to the committee, which statement you may, if you think it necessary, extend reasonably in the record, in order that the position of your industry may be made clear to the Members of the House when they come to consider this matter. You may proceed, Mr. Hult.

Mr. HULT. Thank you, Mr. Chairman.

Gentlemen, I wish to identify myself. My name is Milton Hult. I come from Davenport, Iowa, where I am a small milk dealer, in partnership with three brothers.

Also, I am president of the International Association of Milk Dealers, which is an association that has been in existence for 28 years and is composed of milk dealers located in all of the principal cities and towns of the United States-towns of all sizes.

We have followed, of course, with a great deal of interest, and lately with a great deal of anxiety, the work of the Federal Trade Commission, and while I recognize the point that the chairman has just called my attention to, of the relationship of this committee as contrasted with the legislative committees of the House, I am here to try to present the opinion of the members of this association and to ask that if there is any action that this committee can take to encourage or discourage the activities of the Federal Trade Commission, I respectfully urge this committee to discourage those activities.

I would like very briefly to run over several points, that I have enumerated in this statement which I do not intend to read to the committee, but will file for the record. After all, gentlemen, I have come a considerable distance. This is a matter of tremendous importance to a great industry.

I would like very briefly to point out three points that I would like to have you bear in mind on this question of the activity of the Federal Trade Commission.

In the first place, I would like to go on record as citing the fact that the dairy industry has done a wonderful job in maintaining stability of farm income, the income of the American farmer. I would like to bring those points out, that the dairy industry is working cooperatively with the farmer in stabilizing farm income. I would like to develop that thought.

The dairy industry, as you probably know, contributes 25 percent of the total farm income of the United States.

I would like very briefly to touch on some of the high lights of the Federal Trade Commission investigation, to indicate that as far as constructive action and practical good are concerned, its results have been nil; that, on the other hand, it is working to the detriment of the

dairy industry which, as I have said, contributes 25 percent of American agricultural income.

I would like also to leave a third point in your mind. That is, after all, we have already in the A. A. A., particularly since the amendments have been adopted, given the A. A. A. complete control over the dairy industry. They have the right to examine and compel production of the books and records of all these establishments, and to control the establishment of prices to producers.

I would like to come back to point no. 1, and discuss that briefly with you gentlemen. Back in 1930 and 1931 and 1932, when American agriculture was in a completely chaotic condition, it was the dairy industry that was the backbone of American agriculture. From the standpoint of pay, contribution to the farm income of this land, we went from a percentage of 14 percent of the total income to a percentage of 25.

Prior to the depression, back in 1929, the dairy industry contributed to the farmers of this land approximately 21⁄2 billion dollars.

Other farm commodities, all grains and tobacco and cotton and cottonseed, gave approximately 3 billion dollars; and all livestock, all cattle and sheep and pigs, even including the wool that they took from the sheep-gave approximately 3 billion dollars.

So that you can see that back in the days of prosperity, the dairy industry was perhaps 20 percent below all these other farm commodities taken together.

During the period of the depression, the income to the American farmer from these other commodities fell approximately 65 percent. On the other hand, farm income from dairying fell only about 45 percent.

So we find that during that same interval, when this teriffic slump in returns to the American farmer took place on account of the depression, that in the depth of the depressoin, in 1932, the American farmer was receiving from the dairy industry approximately $1,250,000,000, whereas he was receiving approximately $1,000,000,000 from all of the livestock industry and another $1,000,000,000 from all of the grains, cotton, wool, and tobacco.

The point that I want to emphasize is the ability of the dairy industry to remain stable, because that has a rather important bearing on some of the inferences that the Federal Trade Commission is trying to draw from its investigation.

These various statements that I am making are all taken, so far as figures are concerned, from various Government documents, which you either have or have access to.

The index numbers of farm prices are reported regularly by the Department of Agriculture. We find that from the years 1930 through 1934, including the low year of the depression, 1932, the index number of dairy prices maintained consistently higher than the index numbers for grains, cotton, fruits, chickens and eggs, meat animals, and miscellaneous crops. That refers to the return that we gave to the

farmer.

The N. R. A. investigated our industry. We had a hearing here to discuss the matter of codifying our industry. These figures that I am about to give you are N. R. A. figures. Take the matter of employment. The record of employment in our industry is that in 1934 it was almost 98 percent of what it was in 1929; and the amount of pay roll for 1934 was 80.5 percent of the 1929 pay roll.

That was a greater percentage than any other comparable industry; greater than such industries as the meat industry, retail and wholesale trade, manufacturing, and other like industries which at that time N. R. A. was investigating.

I make the point, then, that this industry has maintained higher prices for the farmer; they gave him a bigger return, maintained a higher index price, higher employment, higher pay rolls, all through the depression.

As a matter of fact, if it had not been for the dairy industry, American agriculture would have been completely demoralized. We would have had a completely chaotic condition on the American farms. There is an interesting sidelight to that which I would like to mention. By reason of the fact that we were able to maintain a stability there, give the farmer a cash income at regular intervals for the milk that he sold, producers of other commodities were drawn into the dairy industry and, of course, over a period of time, the dairy industry could not support all of the farmers of the United States. This situation created the problem.

But through that trying period of 1930, 1931, and 1932, it was the dairy industry that, through its efficient operation, through its cooperative efforts with the American farmer, maintained a semblance of stability. And, strange to say, the very fact that our industry was stable during this particular period and through these means that I have suggested, we are having these things turned back against us. Mr. FITZPATRICK. In other words, you were able to keep up the price to the consumer where the commodities of other farmers experienced a fall in price, is that true?

Mr. HULT. Yes.

Mr. FITZPATRICK. In other words, the consumer had to pay.

Mr. HULT. Of course, there was a marked slump in all prices, but the price to the consumer did not suffer as much as the other prices. Mr. BOLTON. May I add this? The consumer has had to pay a price, but the farmer has been squeezed to death. There has been a lot of juggling in between that has upset the whole condition.

Mr. WOODRUM. The complaint has not been what the consumer has been paying, but the complaint was that the farmer was not getting what he should have, considering what the consumer was paying. That was the purpose of this investigation.

Is it your position, Mr. Hult, that there has not been any good come from this investigation?

Let me

Mr. HULT. We do not feel that any good has come from it. speak from the point of view of the farmers. The National Cooperative Milk Producers' Federation, which is a large organization of milk producers in the United States, are on record with an indictment of the report of the Commission. At their annual convention in October 1935 they passed, by unanimous vote, a resolution condemning the work of the Federal Trade Commission as being a detriment to the advancement of the dairy industry.

Mr. FITZPATRICK. What is their objection to the investigation, if everything is on the level?

Mr. HULT. I would like to read from their report. It will take but a minute. But before I get to that I would like to discuss this point which you have just raised. After all, we have tried to work with the administration. We have tried to take care of the con

sumer, but we have also tried to take care of the farmer and the laborer, and we think we have done a fairly good job. The statement of facts that I have made here clearly establishes a record of protection of the producer and the laborer and, as I have said, the consumer has benefited as well.

The Bureau of Labor Statistics of the United States Department of Labor reports with regularity retail-price trends for all food products. Retail cost indexes of 42 foods in large cities, combined in commodity groups, as reported by the Bureau of Labor Statistics, on page 54 of their issue of Retail Prices, dated December 1934, shows that the retail cost indexes of dairy products maintained during the period of depression at a lower index than did cereals, meats, and other foods, as well as the average of all foods. Carrying this into the year 1935 from the records of the same Bureau, the retail cost indexes for dairy products consistently maintained this lower-cost relationship.

Hence, gentlemen, for years this industry paid the farmer more, maintained employment with higher pay rolls, and sold to the consumer at lower prices than other comparable industries.

Mr. WOODRUM. That statement that you make is very seriously challenged; that is that you paid the farmers more and paid your employees more. I think the claim is made by the Federal Trade Commission that their investigation shows that the farmer did not get the benefit of advancing prices; on the other hand, that prices to him were held down, and that the industry made, even during all of the depression years, very large profits and paid unconscionable salaries to its executives.

Mr. BOLTON. What do you mean by "the industry"?

Mr. WOODRUM. I mean the organization.

Mr. BOLTON. Not the farmer?

Mr. WOODRUM. Not the farmer.

Mr. FITZPATRICK. The dairy organizations.

Mr. WOODRUM. I have not read the report, but that is what I understand the Commission's position to be. You have probably read the report?

Mr. HULT. I certainly have.

Mr. WOODRUM. It is a matter of record, of course.

Mr. HULT. I would like to make this observation. I come from Davenport, Iowa. It is very easy for folks here in Washington, particularly with all the agencies and activities that are going on here, to consider the United States in the light of New York, Chicago, and Philadelphia, and a few other metropolitan centers. But, after all, the dairy industry is very extensive. It goes into every little hamlet, every little center in the United States, as well as every large center. We are all a part of it.

I am just a small dealer. I have a small business that I am conducting with three brothers as partners. I defend nobody else's salary. Every man ought to be able to defend his own salary to his own board of directors or his own stockholders. That is a problem for each individual for himself; it is not my problem.

The members of this association resent the general indictment of our whole industry, such as the report makes, on the basis of merely a few statements which are attributed to a few specific instances.

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