Mr. GILCHRIST. And I know a great many young fellows who did lose their property by reason of economic conditions over which they had no control, and I would like for it to be so written and administered as to give them an opportunity to come back. But, at least, they would have to be good farmers. Mr. WILSON. Well, worthy. But that does not mean that the man who has lost his property could not come under its provisions. Mr. GILCHRIST. Now, in the county which I referred to a while ago, with which you are familiar, a hasty computation will show that only about one such tenant could be accommodated in Greene County, Iowa, under this bill if Iowa was given its pro-rata share of the money. That being true, I wonder why this bill could be referred to as offering a leaven that would leaven the whole lump, because you are taking one good tenant and giving him a farm, or permitting him to buy a farm and putting him on a farm out in a certain community. If it is the leaven that leavens the whole lump, and his neighbor who is working by him is to get an example from him, then I wonder why will this bill result in any more of an object lesson than the man who is working alongside of him under present conditions; why will it be any more of an object lesson than that man has now, meaning the man, who is a good tenant, with a good landlord on a good farm. Mr. WILSON. Would you not have in Greene County quite a number of people that are worthy people, that have suffered tremendously by the depression? They have had too much debt; they have had too much interest to pay or too heavy an annual payment, and other things. Now, the county debt-adjustment committee has helped them, and they have gotten some credit adjustment, and there is now an understanding around the creditors that the debt-adjustment procedure did something for that man, and that is the man who, because of these severses, as Secretary Wallace said, has been going down the ladder instead of going up the ladder and while he might not turn out to be the best farmer in the community he is certainly an average and yet the banking situation might be such that he could not get any loan and he would be just above the level, possibly, of poverty or something else. But he cannot get a loan from the Farm Credit Administration or from the local bank. He is outside of that category. And this program, as I see it, could make a rehabilitation loan to that man, the man who needs three horses, if he has one horse, or two horses, and in that manner make it possible for him to get a little more machinery, equipment if necessary, and that would be a rehabilitation loan. In that connection, the record of the repayment of these rehabilitation loans throughout the country as a whole has been very remarkable, and when that man gets that loan that loan would be predicated on a farm program. Then it is perfectly conceivable to me that after working under that rehabilitation loan for 2 years many fellows can get up, and many of them have gotten up, to the point in maybe 2 or 3 years to where a committee in the county would say that "This man was down at the bottom, but under this program he will be able to come back and we are going to give him an opportunity to buy one of these farms." Now, this is not a man who started at the top, but who was down at the bottom and who overcame those difficulties. That would be typical of a great many of the cases which I think exist out in Iowa, or who could be put on a farm and who could go on to this farm under a long time-payment plan, possibly, or with some kind of crop payment, and I think that the chances are that that man, even though he was not a top-notcher, I think the chances are that that man would do a great deal more for his community and have a great deal more interest in his community because of this very kind of a program than he would be if he were just left to drift around for 4 or 5 years. And that is why, as I say, these two programs must work together, and work with the idea of helping tenants in every way they can be helped. Mr. GILCHRIST. My thought is that you are only helping one tenant in a county; that is the thought I had in mind. The CHAIRMAN. I think your statement is correct, Mr. Wilson, and I think this further angle might be mentioned: Starting with even this number of tenants who purchase farms, if it is found they make responsible and good citizens and become good workers, we possibly might increase the appropriation from year to year. Certainly we cannot do anything unless we get started. Mr. GILCHRIST. But should it not be undertaken in a bigger way? This bill will afford only one tenant in a county such as I referred to. The CHAIRMAN. I do not think that is a complete statement when you consider the fact that they are making loans in twice the amount of this appropriation through rehabilitation loans, and with this to help build up this class to a better condition it would dovetail in with the more complete program. Mr. WILSON. I consider it, Mr. Gilchrist, as an educational program. Mr. LORD. I have one or two questions, Mr. Chairman. The CHAIRMAN. All right, Mr. Lord. Mr. LORD. Mr. Chairman, according to the figures that Mr. Gilchrist gave, we would have only one loan in the average county, such as Chenango. Mr. GILCHRIST. Only one farm purchaser. Mr. LORD. Would it not cost three times the amount we would be justified in spending to administer the cost of that farm? The bill would be expensive on account of the administrative cost with farms so far apart. Mr. WILSON. Well, I think this program has to be related to the general farming type of farm throughout the country. I would not say that it would be unwise to start with this amount of money, or that you would have only one farm in a county, as suggested by Mr. Gilchrist. I think the administrative features of it would have to be worked out with a view to putting into effect the whole program throughout the country. Mr. LORD. You do not think that this would go to one particular section of the country? Mr. WILSON. I do not think so. The CHAIRMAN. We desire to thank you. The committee will stand adjourned until 10:30 tomorrow morning. (Thereupon, at 12 noon, the committee adjourned until 10:30 o'clock the following day, Friday, Jan. 29, 1937.) FARM TENANCY FRIDAY, JANUARY 29, 1937 HOUSE OF REPRESENTATIVES, The committee was called to order at 10:30 a. m., Hon. Marvin Jones (chairman) presiding. The CHAIRMAN. The committee will come to order, please. On yesterday we were hearing representatives of the Department, and I believe Mr. Wilson had concluded. We have with us this morning Dr. Gray, whom we shall be glad to hear. We had a part of Dr. Gray's testimony last session. STATEMENT OF LEWIS C. GRAY, DIRECTOR, DIVISION OF LAND UTILIZATION, RESETTLEMENT ADMINISTRATION, WASHINGTON, D. C. Mr. GRAY. Mr. Chairman, and members of the committee: As you know, we have under way the preparation of the report which we expect to turn over to the President the first of the week, so I shall not attempt to cover the subject of tenancy in any broad way, but merely discuss the particular bill that is before you. I think the point has been brought out that tenancy is a very broad problem, and one that has been with us for a long time; that the evil aspects of it we now recognize have been really developing for 150 years or more. Therefore, no one measure, no one piece of legislation is likely to overcome all of those unfortunate aspects of our American system of farm tenancy. But I think this bill, in principle, embodies at least one sound way of attacking the problem. With such modifications in detail as might be found desirable, it would be a significant segment in a well-rounded program for farm tenancy. In many respects the tenancy problem is a problem of about onefourth of our agricultural population. As the result of the operation of our system of land tenure and as a result of the various catastrophes that agriculture has been subjected to, including a long period of the depression, and many years of drought and floods, about one-fourth of our agricultural population is now living on such a low level that it amounts almost to a national disgrace. About onehalf of all our farmers, at least, have an abnormal relationship to the land, being subject to insecurity in the occupancy of land on which they work. The bill has a number of features which I think are to be commended. In the first place it represents an attempt to reinforce the (59) ideals of land ownership that are strongly entrenched in the consciousness of our rural people. That consciousness is unusually strong. It is a psychological factor that we cannot afford to disregard in any broad program which we may develop. I think we have to realize that the value of such a measure is not confined merely to the people who may immediately benefit from it; that it has important consequences in holding out hope to a large number of people who still cherish the idea of farm ownership without immediate prospect of realizing that ambition. I am particularly pleased with that part of the bill which endeavors to correct some of the unsocial aspects of our system of land tenure. Unfortunately in our early land policy we put land in the hands of private owners without any restriction on the disposition of that land and without any restriction on the methods of its use. As a result the owner of agricultural land feels that he has an absolute right to use it, or to abuse it as he wishes. We have made it possible for land to be owned by those who do not work it, and, of course, that is one of the basic reasons why we have an extensive tenancy. Now every civilized nation in the world has come to realize that agricultural land is its basis of life, that the nation has an important social interest in the land, that it has a right to assert its social interest, and that individuals should not be given the right to abuse and destroy, in a few years, something that may be needed as a foundation for national life for thousands of years to come. This bill takes certain steps to provide restrictions on those who acquire land under the bill so that they will not be left free to treat their farm land in ways that are opposed to the social interest. Mr. FULMER (interposing). May I interrupt you there, Doctor, to inquire if you can point out the provision in the bill under which you can tell a farmer what he is to do or what he cannot do in the way of keeping the land fit for use? Mr. GRAY. There are a number of provisions in the bill, as I read it, which would have that general effect, although I have not been able to study the bill very thoroughly. In the first place the bill provides that the Federal Government not merely give to individuals money to go out and buy fee-simple title; it acquires the land itself and for a considerable time, at least, retains the title, so that as I read the bill the individual is in the position of a lessee, maybe for as long as 10 years, after which time he would be given a land con tract. Mr. FULMER. Is it the purpose, Dr. Gray, to superintend these farming operations just as I would run my own farm where I have a number of tenants operating a farm; they will be under the supervision of the organization that is set up under the bill? Mr. GRAY. Mr. Fulmer, I do not believe that states my position. Of course, I did not shape the draft of this bill. But as I read the bill it would, at least for a time, result in some such restrictions. I do not mean by that that the bill would require intensive supervision over the individuals' farming operations, but it would give the Federal Government the same right as any other lending agency would have to see that the security back of the loan was not abused until such time as the individual was given full title. The CHAIRMAN. It also places restrictions around the transfer, does it not? Mr. GRAY. Yes. The CHAIRMAN. And checks speculation? Mr. GRAY. Inasmuch as the Department of Agriculture has been asked to submit its detailed suggestions and criticism with respect to the bill, it was not my intention this morning to discuss in detail the merits or demerits of particular sections of the bill, but I would like to emphasize that point. Now, in ordinary mortgage loans the lender, of course, could put into the contract provisions for the upkeep of the property. But it is my understanding that courts have not been inclined to enforce those provisions by foreclosure unless there had been a defalcation in payment. The ordinary tendency is to restrict the foreclosure provisions to failure to make payment and not include provisions referring to the abuse of the soil and matters of that kind. So it seems to me this puts the Federal Government in a stronger position to avoid that abuse during the period in which it holds title to the land. Mr. FULMER. Dr. Gray, right at that point: Under the decisions of the United States Supreme Court do you believe that any attempt to construe the authority granted under this or any other bill as you have indicated whereby you could tell the farmer how he should use his land, what crops he should plant, and how much of that crop would be sold and how much placed in storage? Mr. GRAY. As I understand your question, it is whether the Supreme Court would support that provision? Mr. FULMER. Permit you to do that. Could you tell the farmer just how he was to operate the farm? Mr. GRAY. Well, in the first place, Mr. Fulmer, in anything that I said I did not mean to imply that I would have the Government meticulously interfere with farm operation but merely assert the obvious right of protecting its security Mr. FULMER. That is the question I am trying to get answered. Mr. GRAY. For the loan which it has made to protect its security. Mr. FULMER. The question that I am trying to get answered is just what would you be able to do that is not being done at this time; how would you be able to bring that about? Mr. GRAY. Well, if we make a loan now to a farmer for the purpose of buying land, we do not-and I was trying to bring out this fact we do not have any adequate power in making a loan with which a man acquires fee-simple title, to prevent the borrower himself from abusing the land, which is the security for that loan. Mr. FULMER. And is there anything in this bill that would give you that right? Mr. GRAY. Not after he gets full title to it. No. But until he gets full title the Government would be in a position to protect its interest by such a provision in the contract. The CHAIRMAN. In making the loan, you could put any conditions in the contract that are necessary, as the maker of the loan; that is the privilege any institution would have which makes a loan. How far you should go might be a question of wisdom or policy, but certainly there is no legal difficulty in requiring that the purchaser of 127413-37-ser. a- -5 |