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The CHAIRMAN. When was that?
Now I will admit that the costs have gone up, but if that man didn't raise that corn for a maximum of 69 cents I will masticate my fedora. That meant the taxpayers of the United States were paying that man $100,000 profit.
Now I think there is another approach to this thing. I will open it up because you gentlemen have appeared to be sympathetic to new ideas. This is not new, I would say originally, with me. It has been discussed. But I have a background on this that goes back for a good many years. I had the very great privilege one evening of spending the entire evening with President Franklin Roosevelt. I spent 412 hours with him that evening. Jim Farley said later that was more than he had spent in 2 years.
He told me when he initated the beginnings of a farm program what his intentions were. This is my recollection of what the man said.
We have had farm depressions before. We had them in this was about 1940—we had them in the twenties, in 1932, 1934, and 1935. If the law of averages holds good we will have farm depressions again. Now what kind of a formula can we work out for this? As he put it, how can we work out a formula that will lighten the burden on those who are least able to bear it? How can we adjust the load to those who are best able to carry it through, because our present problem is not just to reduce production; our problem is to do it in such a way that it will hurt the least possible number of people.
He said at that time: "I would like to see some formula put into effect that would embody the fundamental moral principles of the graduated income tax. I would like to see some formula that would embody the ethical principles of some of our labor legislation which would give special attention to the needs of the little fellow.”
So from that I say if we accept the moral principle of a graduated income tax, why not look into the question of a graduated farm price support, higher prices for the output of smaller farms, with subsidy rates that go down as farm size and output go up? And a graduated acreage reduction to give special emphasis to the minimum practical requirements of a family-sized farm?
Now, by that I mean in spelling it out we will say: Today we have all heard the story about the Pennsylvania farmer with his 9 acres of wheat. Down in my county we have things that will make that look silly. Some of our farmers have been cut to 3 and 5 acres of cotton; 1 farmer cut to 1.8 acres of cotton.
It isn't just reduction in acreage. It is new methods of agriculture. How can a man with that acreage possibly even produce his 1.8 on the basis of the big man? He can't turn his machinery around. How can our fellows that have been reduced to 6 and 7 acres of peanuts possibly compete on a cost basis with the fellow that has 50- or 60- or 100-acre allotment? I think it would be possible, according to the plan that I have in mind, to set a minimum practical operating acreage for the cotton farmer, for the peanut farmer, for the wheat farmer, corn farmer. I wouldn't say as to rice and tobacco, I don't know enough about them, but set a practical minimum acreage below which he cannot be cut.
We will say this. We will say that in Iowa on a 160-acre family farm it is good practice to grow 40 acres of corn a year. All right.
The average production of Iowa is, say, in the neighborhood of 50 bushels per acre, 2,000 bushels of corn. We set up a parity of production as well as parity supports and we say we give him top support on the first 2,000 bushels, then if he has a larger corn acreage he gets a reduced support on the next thousand, and a reduced support on the next thousand, and the next, until finally the Government support price is down below the world price; and then the man who has that excess production can sell it at the world price.
The CHAIRMAN. Do you think he can produce it and compete with peon labor in Mexico, let us say, and Brazil and other countries of the world?
Mr. BLACKETT. Yes; I think we can produce to compete with anybody.
The CHAIRMAN. You had better look into that. I do not think he can.
Mr. BLACKETT. If we don't, Mr. Chairman, what right has a man got to get at the taxpayers' expense a full parity on 800 acres or a thousand acres? Are the taxpayers required to maintain for that man a Cadillac standard of living, the man who doesn't need it, who will never be hurt if they don't have it? If we paid more attention, in my opinion, to the smaller man, we would have the money to handle some of these things.
The CHAIRMAN. I have been for that ever since I have been in the Senate; to try to work out a plan to help the small farmer, and so far we have not been able to get to it.
You talk about Franklin D. Roosevelt. Let me tell you a bit of history. When I first came to the Senate in 1937, the law that was enacted by the previous Congress had been declared unconstitutional, I think, in the spring of 1937. Well, it was Franklin D. Roosevelt who sent for the members of the Committee on Agriculture, and I was privileged to be a member at that time. This was in the fall of 1937. It was because of the conversation between the committee and the President that a subcommittee of seven, of which I was a member, proceeded all over the country to try to get an answer to the problem. The President suggested we go around and see what we could do, and as a result of his suggestion we held hearings all over the country.
When we returned in November of 1937 with these hearings, the President called a session of Congress, as I remember it, on November 15 of 1937, and from the hearings that were held the present act known as the 1938 act was born. He passed on that; he agreed to it, and
Mr. BLACKETT. You probably know more about it than I do. All I know is what he told me.
The CHAIRMAN. I did not want to disturb you or say anything about your talk with Mr. Roosevelt.
Mr. BLACKETT. I am stating what he told me.
The CHAIRMAN. Mr. Roosevelt sent for the committee and suggested that we go around the country and hold hearings in the hope that from the hearings we would get a bill from the grassroots. So we did come back with a bill. He signed it and that became the law.
It was all intended to do some of the things you mentioned here, but somehow the war came on and simply did not permit the act to work probably as it should. World War II had the effect of dis
turbing the program, not making it work as intended, and during the war we amended it in order to produce more food. Our Government asked us to produce more food and farmers responded to it. That may be the reason why the farmers find themselves today in the plight they are. They were asked by our Government to produce more food. They did produce that food.
I believe that since our Government bountifully aided industry in getting from war to peace that it would be right, probably, to ask the Government to put the farmer back and let him start on an even keel again and get out of this plight he is in.
Mr. BLACKETT. Couldn't we give a start by figuring out what is a livable, practical acreage in these crops and set that
The CHAIRMAN. You know these hearings have demonstrated that eren in States, also counties, you have a difference in the size of the farms; some you have irrigated, others dry lands.
If we had only Georgia to deal with, or maybe we might chip in South Carolina, the problem could be solved overnight. But when you try to draft a bill affecting 48 States, that is where the difficulty comes in.
Mr. BLACKETT. It is not child's play, but other industries have had depressions besides the farm industry; steel industry, automobile industry. Taxpayers were not called upon to support United States Steel or Ford Motor or General Motors.
I am going on the assumption that as a taxpayer I am perfectly willing to be taxed to help the small man that actually needs it.
The CHAIRMAN. This great plan you now speak of that is causing distress to the farmers was a result of the war; will you agree to that?
Mr. BLACKETT. Yes.
The CHAIRMAN. All right. We spent $55 billion to help industry to go back to peace. Why should we not spend a few million dollars to get the farmer back?
Mr. BLACKETT. I am in favor of it. I am in favor of paying higher parity on production of the small, family-sized farm but I am not in favor of supporting people that don't need it. That is one of the unexpected trends that came out of this legislation.
As I say, many times you pass a piece of legislation with the best intentions in the world, but a lot of surprising things happen in time.
The CHAIRMAN. The law we enacted, sir, at first I do not believe had a fair chance because, as I said, of World War II. It put a lot of people in the farming business who should not have gone into it. As these hearings will show, we found that many doctors went into the business, many dentists, many people with money who should not have gone
into it, and that may be the cause of some of our trouble. But how would you stop that?
Mr. BLACKETT. I think one of the first approaches I would suggest is that we give the farmer the same freedom of marketing that we have given some of the other industries of the United States.
The CHAIRMAN. He has it. Nothing to stop him.
Mr. BLACKETT. I meant freedom of marketing throughout the world.
The CHAIRMAN. I understand.
Mr. BLACKETT. You could make a logical argument as to why the State Department should govern the policymaking of all the different departments of the Cabinet—and they have done a pretty good job of it-but why shouldn't the Department of Agriculture and the farmer be given the same liberty and freedom that other businesses have to market goods anywhere in the world?
The CHAIRMAN. I am in thorough agreement with that. The only difficulty—I think I know something about it—is simply this: We in Congress have tried on many occasions to work out a proposal whereby our surplus commodities could be sold for the currency of the country that agreed to buy it, but when we came to use the currency of that country to buy commodities from that country that we needed they said "just a minute. You need rubber, you need tin, you need this and that. We won't accept our own currency; we want your
dollars.' What would you do in that case ?
Mr. BLACKETT. I would barter on any basis you can to sell your goods.
The CHAIRMAN. Would you be surprised how we are stymied in our effort to use the currencies of the countries where we buy commodities to buy the things they have so we can stockpile?
Mr. BLACKETT. Who is stymying you? The CHAIRMAN. I would hate to say, but the United Kingdom has a lot to do with it.
Mr. BLACKETT. I think you are getting to the root of it. They have run our foreign department a good many years.
The CHAIRMAN. I agree somewhat but not entirely. The United Kingdom has had a lot to do with it because they control this soft currency pool as you know. .
Mr. BLACKETT. That is right.
The CHAIRMAN. And when we go to a country like the Malay States and we have a lot of surplus commodities they would like to buy, or we have a lot that Australia would like to buy, we buy wool from Australia and then the United Kingdom says "you have to pay us dollars for that. We will not accept the pound.”
Nr: BLACKETT. I would like to inject this thought: That until we figure out some minimum acreage for the smaller fellow we are going to—I think this, a lot of this acreage control appears to be a kind of frustration because of the tremendous increase in production per acre. Now I know the Department of Agriculture talked about I think reducing acreage from 18 million to 17 million acres. I think the farmers here have demonstrated that it won't be very many years until we can produce the present requirements on 10 million acres. So each year how do you whittle it down if you have a straight acrossthe-board reduction? I am not against the big operator who has been making a bonanza out of this in past years. I only say it should'nt be done at the expense of the little fellow who gets reduced to such a point that he can't operate.
That is why I would suggest that we look into the possibility of a graduated farm-price support and a graduated acreage.
The ChairMAX. That is on our agenda. That suggestion was made many places.
Mr. BLACKETT. I believe if we do I think we can combine something that is economically sound with a principle that is morally right. Thank you. The CHAIRMAN. Thank you. Are there any questions? Mr. McClanahan, please.
STATEMENT OF A. E. McCLANAHAN, NASHVILLE, TENN. Mr. McCLANAHAN. I am A. E. McClanahan and I am a dairy farmer at Nashville, Tenn. I might say, Senator, that I was told to come down here to make this statement but when I got down I understand that I should have gone to Raleigh, for which I deeply apologize, sir.
The CHAIRMAN. That is all right. We can just as well hear you here.
Mr. McCLANAHAN. I thank you.
Mr. McCLANAHAN. I am A. E. McClanahan, a dairy farmer of 712 McGavock Lane, Nashville, Tenn. I have made my living for the past 43 years from dairying. For part of this time my father and I operated a retail dairy. For the past 14 years I have sold milk wholesale to the Nashville grade A market. I own
I own a registered Jersey herd of 45 cows. I have no other business or professional income.
I am president of the Davidson County, Tenn., Farm Bureau. I am a member of the dairy committee of the American Farm Bureau Federation. I helped organize and was vice president for 9 years of Nashville Milk Producers, Inc., a milk-marketing cooperative.
I know from experience what it is for a farmer to lose everything that he has because of a depression. I am greatly disturbed about the present plight of farmers. The familiar farm danger signals are appearing too frequently at the present time. Farm prices continue to decline while everything the farmer has to buy continues to advance. Farm mortgages are increasing. The Farm Credit Administration just announced this month that farm mortgages for the first 6 months of this year are up $300 million as compared with the first 6 months of 1954. Also, this report shows that the average farm mortgage has increased from $5,990 last year to $7,050 this year.
In my State milk cow prices have dropped from their peak of $199, State average in 1952, to $98 in August this year. This represents a decrease in inventory of $70,070,000. This is farm capital that has crumbled away. In addition, using average annual milk production per cow, Tennessee dairymen are taking an annual loss in milk prices totaling $50,591,950. Frankly I do not see how dairymen can take such a licking and still keep their chins up.
I would like to point out that the Nashville milk market and four other of the larger markets in Tennessee are under Federal milk orders. We, in Tennessee, are strong for the Federal milk-order program, but we do wish that the Department of Agriculture would realize that the Southeast did not contribute to the surplus dairy product situation and be more lenient in their pricing. In my State