Senator MCCUMBER. Practically all of it?

Mr. BELL. Pretty nearly. It is our own fault if it is not.

Senator MCCUMBER. We export practically none of this spring wheat as wheat, do we?

Mr. BELL. I hope not, sir. If we let any get by it is our fault. Senator MCCUMBER. 160,000,000 is a short crop for that section, is it not?

Mr. BELL. 160,000,000 without durum wheat is not such a short crop; no, sir.

Senator MCCUMBER. As a matter of fact, you can grind considerably more than 160,000,000 bushels and find a market for it in the United States?

Mr. BELL. Oh, there is no question about that.

Senator McCUMBER. And abroad.

Mr. BELL. I say, if we let any get by it is our own fault.
Senator MCCUMBER. I understand it. I am glad of it.

Mr. BELL. May I interject this into the situation? We are faced with a pathological condition up there in the Northwest which is very far-reaching in its significance. Unless we eliminate and exterminate this rust, Senator McCumber, the Northwest will cease to grow wheat. I have come here from some meetings that we have been holding.

Senator MCCUMBER. I can mention another danger that is greater than that. Unless they get better prices for their wheat they will cease to grow it.

Mr. BELL. I agree with you thoroughly on that. Prices will be improved through the extermination of this rust. We are raising approximately $200,000 to exterminate rust. We are working toward having a real efficient organization. I believe it will accomplish a great deal. The Government has not come to our assistance, so we have taken the matter up through private subscription. If we can raise $200,000 and have it continue for two or three years so that we can spend $600,000 or $800,000 in our operations I believe that we will succeed.

Senator McCUMBER. How much of this same kind of grain does Canada raise?

Mr. BELL. Canada is practically in the position of raising all of that kind of grain. I mean that all she raises is that kind of grain. Senator MCCUMBER. She raised for 1921 about how many bushels? Mr. BELL. About 329,000,000 bushels.

Senator MCCUMBER. She will use for home consumption how much? I mean by that what will be ground into flour and used for food and consumed in Canada?

Mr. BELL. I have been trying to get at those figures for a long time, Senator McCumber, and the best estimate I can give you is somewhere along between 140,000,000 and 160,000,000 bushels.

Senator McCUMBER. You think it would be 160,000,000?

Senator CURTIS. I have seen estimates in the newspapers that ran from about 120,000,000 to 140,000,000.

Senator McCUMBER. I do not know what they would use it for. There is about 10,000,000 population in Canada. They consume a little over a barrel per capita, as I understand it.

Mr. BELL. I have some figures here. The Tariff Commission published these figures. I will say that I was not figuring on the seed.

During the time that we were trying to allocate these wheat allotments Canada brought these figures forward and showed that her consumption was higher than our own.

Senator McCUMBER. You say that we will raise 160,000,000 bushels and that Canada will raise about 170,000,000 that she is to export. She has to export every bushel in some market, does she not? Mr. BELL. Yes, sir; in some form.

Senator MCCUMBER. Suppose we put 25 or 30 cents a bushel upon the Canadian wheat and we are a little short of the American wheat: If we are short and the millers want that American wheat and it does not come in fast enough to suit them, they necessarily bid the price up a little.

Mr. BELL. A very considerable amount.

Senator MCCUMBER. And the shorter the crop, of course, the greater the price.

Mr. BELL. Yes, sir.

Senator MCCUMBER. We will suppose that we are on the deficit side, and at the time at which we need a greater price per bushel because of that deficit, we find Canada on the other side of the line. The American miller then says, "I do not need to look to the American field; I can go across the line to Canada; I can take every bushel there, or as much as the American crop raised in the Northwest, and inasmuch as I am exporting a considerable amount, whenever I want to export I can use the Canadian wheat and thus keep my mills going without the payment of 1 cent per bushel, considering the drawback." For the life of me, I can not see what particular advantage we can get from a protection of 30 cents a bushel if you can reach right over on the other side and tap the Canadian bin and supply your every demand.

Mr. BELL. At 30 cents we could not, unless the American public demanded a certain grade that we were unable to furnish. Then we would have to walk up over the tariff wall, but our American price has been protected to the extent of 30 cents. We can not use it in the United States.

Senator MCCUMBER. If you grind Canadian flour you can keep the mills going. We have to keep the foreign export trade.

Mr. BELL. Yes, sir.

Senator McCUMBER. You have to retain that market and you will retain that market if it is possible, even if you make no profit, rather than lose it. That is proper business.

Mr. BELL. Yes.

Senator MCCUMBER. You will seek in every way, of course, to maintain it without losing, and if the competition on account of the world's crop is so great that the price of wheat is driven down in Canada and throughout the world, but the particular grade that we raise in these Northwestern States as a result of being on the deficit · side and standing alone with no competitor is very much higher in price, you are able by the drawback provision to practically nullify the tariff protection entirely, or at least nullify it to a great extent. That has been true, because, while we maintained 25 cents a bushel for years, we have never had 25 cents a bushel better price for our American wheat, even though we had an exceedingly short crop. I think there was only one year in which we had a poor crop, and at that time for months we nearly measured up with the Liverpool price.

Mr. BELL. Of course, it would be hardly fair to take the average of the whole American crop and say that it is not up to the duty between Canada and the United States, because there is a marked difference in the quality of the wheat.

Senator MCCUMBER. I am segregating this hard spring wheat entirely from the rest of the wheat that is raised in the United States, because that is all that we raise and that is practically all that you grind in your section of the country.

Mr. BELL. Yes; but there are some hard wheats from the Southwest. It is coming to be quite a factor.

Senator MCCUMBER. That will, of course, affect it.

Mr. BELL. That finds its way abroad.

Senator McCUMBER. That will be a sort of substitute for the northwestern wheat.

Mr. BELL. To a certain extent.

Senator MCCUMBER. I have tried to present to you just as nearly as I could what appears to me to be the great danger to our farmers in North Dakota and Minnesota, especially western Minnesota, in being deprived of tariff protection at the time when they most need it; that is, when there is a short crop. If you can explain that to me, I shall be very glad of it.

Mr. BELL. I shall try to do so.

Senator MCCUMBER. I want to say that I have asked Senator Ladd, who has made a special study of the matter, to be present and ask you any questions that he desires to ask.

Mr. BELL. I shall be very glad to answer them here, or I shall be glad to meet you and Senator Ladd and go into a longer discussion than we can have at this time.

Senator McCUMBER. I think it would be well to make it as clear as possible now.

Senator SMOOT. In your answer to Senator McCumber's question I should like to have you differentiate as between a condition where you export a product to a country and where you do not export but have to import for American consumption.

Mr. BELL. I am afraid that I did not follow you, Senator Smoot. Senator SMOOT. I will put it this way: We import and must import sugar from Cuba.

Mr. BELL. Yes, sir.

Senator SMOOT. I know that under that condition, where we are compelled to import and we do not export anything at all, that their request here would have a detrimental effect upon the producer of sugar in this country.

Mr. BELL. Yes, sir.

Senator SMOOT. In your answer I would like to have you differentiate so I can follow it.

Mr. BELL. I think I understand you now.

Senator SMOOT. What is the difference between the condition as to sugar and the condition as to wheat, wheat being produced in this country to an extent greater than it is consumed?

Mr. BELL. There being a surplus?

Senator SMOOT. Yes; a surplus.

Senator MCCUMBER. I want to ask Senator Smoot to keep in mind all the time that the wheat produced in the northwestern section is never greater than the amount that can be consumed right at home.

Senator SMOOT. That is what I wanted him to do this for.
Mr. BELL. I understand, I think.

Senator SMOOT. We have a surplus with us.

Senator MCCUMBER. We have a surplus of winter wheat.

Mr. BELL. Canada's great surplus gives her a dominating influence in the world's markets. She to-day sets the standard for price and quality. She has for many years had a big influence on quality and on price, and to-day she has practically a dominating influence. When we say that we are meeting the world's competition, it really means that we are meeting Canadian competition.

Now, we could go over into Canada and get a mill over there and we could buy under the same conditions they do and sell under the same conditions they do. However, we do not want to do that. We have an American mill over here. If we go out and sell from this American mill in the world's market we have to meet that Canadian standard of quality and price. Now, the American price for similar grades of wheat is higher by reason of the duty or by reason of the heavy demand that exists in the United States, because I believe the demand itself is sufficient to raise the price from Canada regardless of the duty, although I have no objection to the duty. In fact, if it. will encourage production, I am strongly in favor of it. Therefore we can not sell in the world's market against Canadian competition except at a loss. We want to operate our mills continuously. Continuity of operation is the thing which enables us to operate successfully and efficiently and economically and helps to reduce the margin as between the consumer and producer in the United States market. If we lose the export business it stands to reason that the English wheat that formerly went abroad as flour and sold in the domestic: market at the domestic price is going at the world's price level.

I do not care how you figure it out, that is the sum total of it. If the surplus moves as flour, it goes at our price; if it moves as wheat it goes at the world's price. We say that we could use domestic wheat for domestic requirements. When it comes to the export wheat, we say let us step over into the Canadian lines. We do not ask for the privilege of 100 per cent on that wheat and of meeting competition based upon 100 per cent. We simply say, "Let us step over the line and take a portion of it and mix with it 43 per cent American wheat." That 43 per cent is either going out of the country in the form of wheat or flour. If it goes as flour, it is going to bring about a better price. There is no question about that. I can not use that Canadian wheat under the proposal which I make here unless I pay a duty. I can not use it unless I incorporate with it 43 per cent of the American wheat. That is what we ask. We are asking the privilege of going up against Canada, against Great Britain, and against French mills under this handicap, and yet I say to you that because of American methods and American efficiency and America's position with reference to the markets of the world, we will be able to carry the load. That load means 43 per cent of the higher priced commodity blended with a lower priced commodity going out to meet 100 per cent of the lower prices.

Senator CURTIS. What effect will that have upon the people of Kansas and Nebraska?

Mr. BELL. What effect?

Senator CURTIS. Yes. We export flour.

Mr. BELL. You have the same privilege.

Senator CURTIS. Yes; but the freight rates would be such that we could not afford it. We could not afford to bring wheat from Canada and pay freight rates and compete with you people on the line.

Mr. BELL. I think you will find that the railways would come to you. To-day you can come down from the Lakes and come down through the valley and to the Gulf on just as good a basis as we can—a better basis than we can from Minneapolis. In some sections this will not help, but what helps a large portion of the industry must help the whole. Competition in the milling business has reached a point where it is destructive. There is not enough concentration of volume at one time and one point to insure the greatest economy of operation, and the American public pays the bill.

Now, if we can cut off pressure that comes that way and gives the mills a greater per cent of operation, this cutthroat competition is going to cease, and the American public is going to get the benefit of economy of production.

That movement of this Canadian wheat through this country has been valuable in a great many ways. It has represented practically 200,000 carloads of tonnage a year. Canada is doing her level best to divert that movement over Canadian rails. That she has succeeded is evident from figures for the last few years. Without the magnet of commercial attraction to bring that Canadian wheat through the United States, all that valuable tonnage will be lost. There is no question about that.

Now, we need feed, we need fertilizers, we need everything that we can get, gentlemen, to have our wheat ground at home. We have lost 43 per cent of our export trade, and we will lose all in a short time unless we are put on a basis of equal opportunity with other exporting nations, and I say to you that this proposal that we have made does not put us on a basis of equality with the other nations, but it gives us an opportunity to go out and see if, through efficient methods, we can not meet and beat them. We realize that it is a difficult proposition, but we are willing to take our chances, and I say to you that through this means, which is one of the most constructive things ever offered, we are going to increase the demand in the home markets for American wheat of all kinds and character. Senator CURTIS. Have you a printed brief there?

Mr. BELL. Yes, sir.

Senator CURTIS. You had better make it a part of the record. Mr. BELL. Have I made myself clear in answering your questions? Senator SMOOT. Yes; I can see the difference.

Mr. BELL. If I may have the privilege after the first of the year to come to see you, I shall be glad indeed. I think, gentlemen, that I have nothing else to say unless you want to ask me more questions.

BRIEF OF JAMES F. BELL, REPRESENTING THE WASHBURN-CROSBY CO., MINNEAPOLIS, MINN.

We assume it is the desire of this Congress not only to encourage American wheat production, but equally American manufacture and the use of American facilities in the growth and development of the Nation's export trade.

In full confidence of this attitude, we, as representatives of one of the greatest of our national industries, one in fact that is fourth in rank, beg to call your attention to certain administrative features of the tariff which should be amended to harmonize with the protective character of any tariff imposing a duty on wheat which Congress may make at this time or later.

As we are without knowledge of the proposed duties upon wheat and wheat products which your committee in its wisdom will recommend, we must as