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reported the largest number of mortgages since 1951 and the largest total of loan money since statistics were started on such credit extension in 1934.
Strictly small rural towns have been hard hit due to the farmer's condition. Of course, you are all familiar with the statistics showing the falling prices of each commodity.
Under these depressing conditions the farmer cannot replace his machinery which is up 203 percent from 1939, and all other farm costs are up. Farm machinery manufacturers have just increased their prices again. Walter Reuther of UAW-CIO says that their wage increase and the increase in the price of steel was not enough to warrant such increases. However, the price increase stands.
Thus continues the ever-widening gap between the farmer's production costs and the price he receives for his product. And this is happening at a time when the profits of other industries are at an alltime high. I noticed an article only last week which stated that the profits of one of the Big Three automobile manufacturers for the first 9 months of this year amounted to more than they had made in 21 years prior to World War II.
I believe you will agree that the major factor in both production and distribution cost is labor. Government must accept some of the responsibility for rising labor cost. The recent increase in the maximum wage level from 75 cents to $1 an hour probably had or will have some direct effect on marketing and distributing costs.
The indirect effect on cost all along the line from the farmer to consumer is undeniable. The increase in minimum wages was one of the things that led to the recent round of industrial wage increases. Such increases are reflected in the cost of farm production supplies and in marketing and distribution charges. They double upon us in more ways than one. For instance, with
the fruit people, if you have some gum timber on your swampland that can be made into baskets in which we ship our fruit, the first thing the man will tell you is he can't pay you the customary $15 per thousand stumpage. He can only pay you $12.50 because of the increased cost in the minimum wage. Then, on the other hand, when you go to buy your baskets from the manufacturer he will tell you we will have to increase the price of our baskets from 1 to 2 cents to cover the increased cost in the minimum wage. So we catch it in the neck both ways. It is rather a critical condition.
I have always thought that the Department of Agriculture and the Secretary of Agriculture were supposed to be looking after the best interests
of the farmers of this Nation. I have had grave suspicions that this was not true in times past, but under Secretary of Agricu)ture Benson my thinking has passed that point.
By his implications to the American people, the farmers of this Nation are an indolent, inefficient lot, who are capable of doing a great deal more for a great deal less, yet at the same time are asking the Government for a handout to support them in the manner to which they have become accustomed.
I resent such implications, as do other farmers, because the facts show that fewer farmers are producing more than ever before.
I am not surprised at the loss or the demoralization of the markets if they are handled as the oat support price has been handled in our section. Farm stocks of oats were moving at 92 to 94 cents per bushel
be all wrong:
in May, just prior to cutting time, when Commodity Credit sold out at 68 cents which, of course, stopped all sale of farm stocks of old crop oats and demoralized prices on the new crop oats. And all this in an area which had been declared a disaster area due to drought conditions. Farmers would have been glad to have had oats to help winter their cattle at such prices, and even now, due to the railroads “in transit rates” our local mills are getting Canadian oats delivered locally cheaper than our loan on home-grown oats.
How can this be made better?
1. Let the Department of Agriculture give out some favorable publicity about the farm program occasionally. Surely it can't
2. Get freight rates more nearly equalized. We should be able to ship a car of oats from Macon to Chicago as cheaply as from Chicago to Macon.
At this point, as chairman of the fruit and vegetable committee of the Georgia Farm Bureau, I would like to call to your attention bills which I understand are now before you which would limit the authority of ICC to prohibit trip leasing. This means a great deal to fruit and vegetable growers of this state, and particularly to the peachgrowers. We move about half our peach crop by trucks. A great many of our packinghouses are located on the farms and not on the railroads. Therefore, we can load trucks more economically as well as that in many instances it means as much as 1, 2, and sometimes 3 mornings earlier delivery.
It is very easy to see that they would have to charge a great deal more if they had to return empty than if they could lease their truck for the return trip and make it pay.
Let the State Department attend to their job of winning friends and influencing people and remain out of the job of the Department of Agriculture and its sales of farm surpluses.
In a nation with the best sales know-how in the world, built up by the biggest manufacturing industries in the world, we sit here and wait for someone to buy some of our so-called surplus products. Is that the way big industry sells?
We need to have an international sales setup with the best brains in America to sell these products to other nations. A good salesman does not necessarily have to undersell someone else in order to sell; neither does he have to make enemies of those to whom he sells.
I understand such a system is in existence but being held up by the State Department or by other means.
Discontinue the spending of huge sums of the taxpayers' money in developing new lands at a price of $2,000 to $2,800 per acre—at least until we have disposed of our surpluses and our population growth would make it a necessity.
Give the farmers not less than 90 percent support with rigid acre controls until this surplus can be disposed of. Keep in mind that eren with the rigid acreage control we must only produce the type of grain or cotton or whatever crop is under consideration, which we need, and will move out in both domestic and international channels.
I would suggest that the extension services in different States would have information on the proper varieties.
I heartily endorse the soil-bank principles of taking these diverted acreages out of production as outlined by Mr. Wingate and Mr. Pace.
At the same time these things are being done, we could do a great deal of constructive thinking for some better way of handling this situation. It might be the two-price system or it might be something else.
But at any rate we must get out from under these products which haven't been sold before we are able to start out with something else.
I am sure you found in the past and will continue to find in the future that the farmers of this Nation are ready and willing to cooperate in any way to build a strong and healthy overall economy. The CHAIRMAN. Thank you very much, sir. Mr. Blackett, please, sir.
TESTIMONY OF HILL BLACKETT, NEWTON, GA. Mr. BLACKETT. Mr. Chairman, my name is Hill Blackett. I have a place down near Albany, Ga., 20 miles south of Albany, Ga., near the village of Newton. I have had to become a white collar farmer on doctor's say-so, but I have owned and operated farms in various parts of the country for about 25 years.
Permit me to say I have been tremendously impressed with the broadminded, nonpartisan, humanitarian attitude of this committee. Only two of you I knew personally. My old friend, Andy Schoeppel and my Congressman, Mr. Pilcher. All I ever read about the rest of you was what I read in the Chicago Tribune.
The CHAIRMAN. I hope that was good.
Mr. BLACKETT. In addition to my farm experience I have had 38 years' experience in the mass marketing of food products. Before proceeding with what I have to say I thought you might like a sug. gestion in that regard. I have been connected with some of the most successful cooperatives in the United States and I want to point out that one of the things Senator Schoeppel pointed out is one of the most difficult things we had in dealing with farm organization, and that was to get them to agree to quality controls.
Now there can't be successful marketing without definite, stiff, quality controls. Sometimes, as in the case of Sunkist oranges, we had to work 5 years to get the farmers to agree to those controls. But it is absolutely necessary for successful marketing,
Now I would like to make a suggestion to you. One of the costs of foods should be looked into. Former Congressman Pace discussed it in part. If you look into this I believe a committee should be appointed to investigate it, part of the problem of the high cost of food is the big-city problem. Most of the food distribution centers in the big cities today are located in the wrong places. They are antiquated, still literally back in the horse and buggy days. The city has outgrown the location.
If you examine, as I have, Chicago, Detroit, Boston, New York, and some other cities, you will realize without any chicanery or excess profits on the part of anybody why it is that most of our food products, when they come into a big city the price doubles from the time they enter the city limits until they reach the grocers' shelves.
In the old days South Water Street might have been all right in Chicago, an old cobblestone street underneath, but the city has grown away. It might have been all right with a fellow with an old wagon
and a horse who got a dollar a day to haul his stuff in, but the city has grown away from it and when you take a man with a $5,000 truck at $2.50 an hour that has to wait on one of those cobblestone streets on South Water Street and haul it all the way back again 15 miles, gentlemen, it raises hell with the price of a bunch of carrots.
That is the thing I think should be studied because while you ask a farmer to save cents we are losing dollars.
The CHAIRMAN. Is that not a local problem?
Mr. BLACKETT. You could make a survey because it is not confined to one State. It is spread.
The CHAIRMAN. I understand that, but is that not a State problem? Should that not be handled by the local State government?
Mr. BLACKETT. I think the Federal Government has led the way in many things later handled by the States, and are in a position to make that survey and point out those costs. I recommend that, in passing, out of years of experience in this field.
European cities are away ahead of us in that regard. One of the costliest things to distribute is vegetables; average about 16 percent on the dollar. Those cities have established rings of vegetable and fruit markets in the newer areas as Senator George will know. I have seen them in France and North Africa and other places, and even in Mexico; rings around the city with plenty of space, with proper warehousing for cold storage, plenty of room for trucks on broad streets where they can move easily. I'hey have reduced their cost.
It isn't anything that is diabolical on the part of these people. It is just that they can't help the costs with all the labor going up.
I wanted to talk specifically about what I have seen in the matter of acreage controls. I happen to be in a line of farming where I have never received any price support of any kind. I just happen to be in that line of farming; receive no price support. So at the present time my ox isin’t being gored. My ox was gored plenty 3 or 4 years ago when the bottom fell out of the cattle market. I have been interested in finding out what happened to my neighbors.
I have become thoroughly convinced that if we continue this acrossthe-board flat acreage reduction, if we persist in that, in a very short time the small farmer won't have enough left for a burial plot. It is becoming so small.
Now I like to go back to what the intent of the original farm support program was. During the 1930's when we were passing a great deal of social legislation, I had a sort of hobby; I collected the preambles to this legislation. I read them. At the time when most of them were being written by some of the apt pupils of the dean of the law school at Harvard some were quite fanciful but well written, but over a period of years I found that the reading and study of those preambles is a very important thing because you can go back to see what the original intent was and you can see what the results have been.
As some of the older gentlemen like Senator George knows, sometimes when you read the intent, and original intent, and see the results of that law, some of the variations are rather astounding. I recall the statement of that old, famous philosopher, Montesquieu, when he reviewed some of the most important laws that were passed in the history of the world. The thing he pointed out was that in many cases when these important laws were passed the most important
consequences were never discussed, probably never even thought of, because they never were discussed.
Who would have thought when you go back to the original intent of the Farm Act that it would induce American citizens to go to another country and put up the capital with cheap labor to undersell our own citizens at home? Who ever thought that the Farm Act, which was supposed to fundamentally help the little farmer, has succeeded in putting the little farmer out of business at a terrific rate?
If anybody doubts it, just take the figures from 1950 to 1954, the Department of Agriculture figures. In those 4 years the number of farms in Tennessee dropped 24,480. During the same year 38,620 farms have disappeared in Texas; 37,000 in Arkansas; 23,000 in Oklahoma ; 11,200 in Kansas; 6,337 in Nebraska; 10,000 in Iowa; 13,800 in Minnesota ; 15,000 in Wisconsin; 5,000 in Oregon, and in the State of Mississippi 35,465. In no case reported so far has there been a single State where the farm population hasn't dropped. Why has it dropped? In my opinion because I will give you an example.
Last spring the newspapers throughout Georgia ran appeals to farmers saying “If you aren't going to use your cotton acreage will you please be good enough to turn it in so someone else can have it because if you don't we will lose our farm allotment for the State.” The reason for it: Too small to be practical.
These flat acreage controls, in my opinion, are obsolete under present farming conditions. We have got to look at this thing from a new viewpoint, a new approach, because what was a good acreage 10 years ago is impossible today.
The other thing we have to realize that wasn't thought of at the time this legislation was passed is that certain items in the farm field have become mass production items. Just as truly mass production as the production of steel or the production of automobiles. And the fellow with the big acreage has an enormous advantage, an actual advantage. I will give one illustration.
One of the simplest operations on the farm is making hay. This year I put up 800 tons of hay. Now the minimum requirement of modern machinery for putting up hay costs about $8,000. That is without standby equipment. If you don't use that machinery your labor costs will eat you out of house and home. My cost on 800 tons was $10 an acre for my farm equipment.
The man near me who only needs 80 tons of hay, if he gets the same equipment his equipment capital outlay is $100 a ton, whereas mine is $10 a ton. That gives you some of the variations that are occurring.
The CHAIRMAN. You are stating the problem. Will you tell us what ought to be done?
Mr. BLACKETT. I want to state the problem because I want to emphasize how important it is. For instance, another friend of mine, a personal friend of mine, the last statistics I saw he got a corn support loan of $169,000. Now he raised corn in Illinois. The last 5 years that I was in Illinois I raised an average of 250 acres of corn a year and my average an average over 5 years--my average was 81 bushels per acre; and my cost with the auditor's help—I want to explain I threw in everything but the kitchen stove—my cost was 31 cents a bushel to raise that corn.