Mr. WIGGLESWORTH. If 95 percent of them are $500 or less, would it not be a simple matter to run through the books and give us a list of all over $20,000, or all over $10,000?

Mr. SMITH. I think it would be very expensive and take a great deal of time, and throw our present operations out of gear. Then we would have to find out whether one man had more than one contract. We might find that John Jones got $500 on a cotton contract, but that does not answer for all that he has. You would have to get out all of John Jones' contracts to find out whether he got $1,000 or $2,000 on different commodities. It would be a tremendous job.

Mr. THURSTON. As I understand it, Mr. Wigglesworth, you are not interested in the names of the individuals; what you want to know is how many received over $100,000 or over $50,000 or over $10,000, and then divide them.

Mr. WOODRUM. How will you get that without examining each of the 3,000,000 contracts?

Mr. BOLTON. I should think somebody would have a record of what was paid.

Mr. SMITH. We have 20 million cards which will have to be sorted into counties and States and by names.

Mr. WIGGLESWORTH. With your knowledge of the agricultural set-up, I should think it would be a simple matter to know where the larger amounts would be.

Mr. DAVIS. For instance, say I am the Metropolitan Life Insurance Co., and I have operations in connection with a thousand tenants of farms. The tenants themselves signed the contracts as individuals, and I signed a waiver or consent clause in the contract which agrees to the tenant's participation. Thus individual payments may run to $100 or $200 each on a wheat contract. They do not all appear in one contract with the Metropolitan Life Insurance Co. They would all appear under the names of the tenants who signed the contract. I suppose the Treasury cards would probably be the simplest place to start on that project.

Mr. SMITH. It would take our entire tabulating equipment about 6 months to do that.

Mr. WIGGLESWORTH. You have properties or individuals to which payments have been made. The record must be available somewhere. The Internal Revenue Bureau must have information.

Mr. DAVIS. They are in existence, but the job of running through them with the force working on current work is something we have never attempted.

Mr. BOLTON. Would it be much of a job for the Treasury Department, taking into consideration its value for income-tax purposes?

Mr. DAVIS. I would be much interested to see that question raised in the Treasury Deaprtment. As far as I am concerned, I have no objection to seeing the classification made; I think it would be illuminating to find out what it is. But, basically, the thing which the farm-relief program affects is the farm-price level, to see that its benefits are distributed to the people who control the crop operations in a ratio to their participation in the crop.

Mr. BOLTON. Of course, the other side of that is the man in the city who has to pay higher food costs.

Mr. DAVIS. If Mr. Wigglesworth will present to me, if the committee does not want to take the time, the questions he wants an

swered, we will endeavor to give you all the information we have. In this new field it is not broken down and tabulated, and it would be quite a big job to get it.

Mr. WIGGLESWORTH. Even in the case of the larger crop-reduction projects, you are not in a position to tell the committee what was paid in respect to them?

Mr. DAVIS. Take cotton, for example. When you say crop-reduction projects

Mr. WIGGLESWORTH. Take some big ranch in this country, for instance, which has come under the act. Is not your organization in a position to say what amount has been paid?

Mr. DAVIS. Yes; we could take one ranch and follow it through. If it was one operation it would be fairly simple. If it is split up in tenants, it would be relatively difficult. The point is, it is not just the handling of that one inquiry. There are 435 Members of the House and 96 Senators, and we have had a great many inquiries. We have had a lot of inquiries also from organizations outside, and in order to conserve our working force we have taken the position that we are not going to do that.

ADMINISTRATIVE EXPENSES

(See p. 18)

- Mr. WIGGLESWORTH. In reference to the matter of administrative expenses, you are not in a position to give us a break-down of the contemplated set-up in any detail?

Mr. DAVIS. In the estimate I gave you yesterday

Mr. WIGGLESWORTH. I mean in detail, such as is normally submitted.

Mr. DAVIS. It is a new project, and I am afraid we cannot do that. Mr. WIGGLESWORTH. There is, however, a break-down for the triple A, as contemplated in 1937, in the Budget?

Mr. DAVIS. Yes.

PERSONNEL

(See pp. 19, 25, 30)

Mr. WIGGLESWORTH. That shows about 6,283 permanent employees, which you say is now reduced.

Mr. DAVIS. To 5,000.

Mr. WIGGLESWORTH. In addition there appear to be several hundred temporary employees. Yesterday you also mentioned State and county representatives, which, I believe, have numbered as many as a hundred thousand.

How are those people paid, and what is their function?

Mr. DAVIS. In the past, except in the case of cotton, they were paid by the county associations which deducted that from the benefit payments coming into the county, pro rata from each individual's payment.

In the case of cotton, we made the reduction here and paid them direct through the Extension Service. The Extension Service man made the payment to the county committee. Under the new set-up, it will not be paid direct, but they will be selected by the election of the farmers in each county, and they will have to be certified and paid from here.

Mr. WIGGLESWORTH. It will be a charge on the Federal Budget? Mr. DAVIS. On the $440,000,000. That is included here, when I said that approximately $14,000,000, or 3 percent, will be covered in handling the program. Three percent out of the 7 will be used to pay that directly.

Mr. WIGGLESWORTH. And the other 4 is for the contemplated force here?

Mr. DAVIS. No; 2 percent would be for Washington, and 1 percent was put in as an emergency, or for safety, for all purposes. But the 4 percent would be for the field and 2 percent for Washington, and those are the two main items. The 1 percent may or may not be required.

Mr. WIGGLESWORTH. Under the Soil Conservation Service set-up under the act of last spring, is there any similar county and State situation?

Mr. DAVIS. No.

Mr. WIGGLESWORTH. They appear to have almost 5,600 permanent employees and several thousand temporaries under their present set-up.

Mr. DAVIS. They are handling their day's work directly and managing these individual administrative projects themselves, and although they do require a large direct personnel, they have no county committees.

Mr. WIGGLESWORTH. In spite of the cooperation in the future between your force under the new act and the force under the old act, you still think you will need 80 percent of the present force required to administer the A. A. A.?

Mr. DAVIS. During the temporary period I would say 4,000 people compared with the 6,000 shown in the Budget estimate, which would be 66% percent. That is only during the period in which we are dealing directly with the individual farmers. After we get on the State basis, I would expect that would get below 1,000 for Washington and the field.

Mr. BOLTON. I have before me the A. A. A. report for 1934. When will the 1935 report be ready?

Mr. DAVIS. It is almost completed, as far as the data is concerned. Mr. BOLTON. Have you any idea what this cost?

Mr. DAVIS. I will get that figure and let you know.

NOTE.-Cost of printing Agricultural Adjustment Administration Annual Report, $12,296.27 (40,000 copies).

30-PERCENT CUSTOMS' FUND

Mr. MORAN. You have the customs money available during the present year also?

Mr. DAVIS. It is a permanent appropriation on the statute books. Mr. MORAN. How much does that amount to?

Mr. DAVIS. It amounted to $93,000,000 for the current fiscal year because it was 30 percent of the collections up to the end of the last calendar year. It is estimated that during the coming year it will run in the neighborhood of a hundred million.

Mr. MORAN. Can you briefly tell us what has been done with the $93,000,000?

I will tell you what I am driving at. I am wondering whether, in view of the circumstances, that is such a good way to do.

Mr. DAVIS. Let me say, Mr. Moran, that, of course, it did not originate with the Department of Agriculture. Section 32 originated in the House of Representatives. We have obligated about $45,000,000 for the allotment payments on cotton, to try to bring the cotton price level in this country into line with the world-market price for cotton, and those price differential payments are being paid

out of section 32.

In addition to that, we have projects ranging all the way from prunes to walnuts, citrus fruits, and so forth. We can give you a break-down of that, up to date.

We have put through two or three things recently, such as cotton fabric, and have arranged with certain textile manufacturers to make no fabric supplies above a given amount

Mr. MORAN. That is what I was driving at whether or not that money could be used in the internal program. My first impression was that that was not to be used for export marketing at all.

Mr. DAVIS. We find that while the cotton price differential payment is assisting a few items, when we get to pursuing a particular project, dumping it abroad, there will be 8 out of 10 of them that just will not stand up.

In addition to that, we have been not only supporting the dairy industry but all the miscellaneous fruits and vegetables, purchasing rather heavily for relief distribution in the United States, under section 32. We were held up on that for a long time by the Comptroller General's ruling on one or two cases which, of course, applied to all of them, and that was that purchasing for relief distribution did not constitute a diversion from normal channels of trade.

Only in the present act, passed on the first of this month, was that cleared up so that we are now free to make purchases.

Mr. MORAN. You have quite a lot of unallocated and unobligated money in that praticular fund, regardless of the purpose?

Mr. DAVIS. Out of this year's program I would say there is approximately $27,000,000 unallocated now. But I cannot tell you what needs will develop because of the amendments of 1934, largely. We have a radical change in the cereal picture and livestock products. The number of hogs and cattle were sharply curtailed, and the anticipated dependence for agricultural price levels on section 32 has not developed, but it has been used mainly in the specialty crops.

Mr. MORAN. Do you think that particular balance now unallocated and unobligated could be utilized so as to reduce this $440,000,000? Mr. DAVIS. I would say that is up to the committee to determine. For this current year there will be a balance, I think, out of this section 32. But for next year I do not think any man can foresee what we may have to do with it.

Mr. WENCHEL. I would like to call the committee's attention to this fact, that the $440,000,000 has been estimated for the purposes of sections 7 and 14, but has not included any amount for section 12, which is the diversion part of the soil conservation and domestic allotment act. Therefore, the only money you would get for diversion. purposes would be under section 32.

Mr. WIGGLESWORTH. There is no money contemplated for the diversion of farm crops?

Mr. DAVIS. No; we are depending on section 32 for that.

POLICY OF RECLAMATION OF ARID AND SEMIARID LAND

Mr. THURSTON. Mr. Davis, I want to ask you a question about & matter which ultimately will be very important and will affect the the total amount you will expend.

Of course, you are aware that the Government in the last 2 or 3 years has allocated probably three-quarters of a billion dollars to the promotion of irrigation and reclamation projects, which, of course, will bring into cultivation large tracts of land which, I take it, you have not considered in your phase of the plan you have now in mind. You see new lands coming into use, and they have the advantage largely of Government funds for 10 years without interest. Will they not be accorded the same consideration as the land that has been in cultivation, and if so will we not be in the inconsistent position of bringing new land into cultivation, with no interest payments to make for 10 years?

Mr. DAVIS. There is no line of distinction drawn at the present time between reclamation and irrigation lands and any other type.

Mr. THURSTON. So, as these tremendous new tracts come into cultivation, you will be obliged to give them the same consideration that you give land which is now being put into cultivation, or which recently has been in cultivation?

Mr. DAVIS. Yes; if this program is a continuing program, operating at the time these new lands that you refer are in use, I would say that is true.

Mr. THURSTON. So, while the object of this really is to hold down production of grain, we will be in the inconsistent position of reducing production in one section and greatly accelerating it in another.

Mr. DAVIS. I think one of the results will be holding down acreage in the main. I do not want to permit it to go without noting my exception, the statement that the object is to hold down the acreage of grain. The Supreme Court says that you cannot do that. If the Government is going to follow its past policies of reclaiming land by irrigation, should it not balance that by requiring the distribution of whatever funds are available, on the principle that areas of land of equal productivity should be taken back into Federal hands and removed from the field of production?

Mr. THURSTON. Of course, while the act may contain certain recitals, I think that many farm districts have been led to believe that the program will reduce the amount of grain that has been heretofore produced.

Mr. DAVIS. I think that will be one of the results.

Mr. THURSTON. We are then faced with this inconsistent situation that is bound to develop and greatly embarrass you and your associates in being required to pay for the nonuse of new lands brought into cultivation, unless there is some exception, or some restriction imposed.

Mr. WOODRUM. Is it not entirely reasonable to suppose that as this program develops and such situations arise there will be changes of policy and amendments to the law? I do not suppose anyone expected that this law would be perfect.

Mr. DAVIS. Experience will be my teacher.

Mr. THURSTON. If payments are made to the new lands, it will require much more money than if we were dealing with a problem we