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We have competition from outside businesses that other known occupation does, sir. Everybody invests money in a farm or piddles with tourists in my county, locally have bought up all the best. farms, Du Pont and people with millions. They can farm at a loss and me out of business. . This fellow Williams, in the oil business, ħas eight or ten thousands acres. The CHAIRMAN. How would you stop that?
Mr. Hough. No way, unless you gave maximum support to a family-type economy,
The Chairman. That was suggested. We have had some suggestion made that any person who is not a bona fide farmer and who doesn't make his living out of it should get no support whatever.
Mr. Hough. I agree.
Mr. Hough. More equal allocation of basic crops on all farms and if that farmer does not plant the allocated crop that year it should not be taken away from him as long as there is an overproduction of those basic crops.
The CHAIRMAN. We have had that suggestion.
Mr. Hough. That farm conservation payments be increased sufficiently to pay the cost of the seed, fertilizer, but not labor which the farmer is capable of putting into it to establish this conservation practice. At present I have to put about 50 percent increase from my funds which I have had to borrow the last 4 years to get the soil conservation payment on the farm. That all farmers are required to place a large percentage of their land into practices that would take them out of cultivation. I think that will cover it.
The CHAIRMAN. Thank you.
The CHAIRMAN. Mr. Warr, please. Give your name in full, please, and your occupation.
STATEMENT OF 0. L. WARR, TIMMONSVILLE, S. C.
Mr. WARR. I grow cotton and tobacco. I wanted to talk about cotton only. You have put a fair question to us, it seems to me. What will you do about cotton? I have enjoyed these years of 90 percent price supports, but I see that that program has developed stresses and strains and defects that look like are going to be fatal to it. What would I say in place of it? Its worst defect is it is pricing American cotton out of the export market. Its second defect, our own mills have to pay more for cotton than mills anywhere else in the world, and the Secretary is considering selling our cotton to other mills in other countries even cheaper than our own can buy. Those defects I think would be counteracted by the program I am going to be brash enough to suggest since you put it that way.
I would favor the Secretary of Agriculture allotting to each farmer cotton farm in this country what he deems to be its fair share of the domestic consumption for the next year and guaranteeing to that farm parity on that amount.
The CHAIRMAN. A hundred percent?
Mr. WARR. A hundred percent of parity. I am not interested in growing cotton for export, but a lot of farmers particularly in the West are. They should be allowed to do it if they can meet the competition.
The CHAIRMAN. That is something that has been suggested.
Mr. WARR. If they see fit to grow it I think they should grow it without penalty.
The CHAIRMAN. Would you sell that cotton for the export trade and then not have any system whereby you could prevent it from coming back in the finished product to compete with your mills here in South Carolina?
Mr. WARR. This way-
Mr. WARR. We would say where would you get the money to pay the farmer parity? I would draw on the old processing tax idea in the original agricultural adjustment act. I know the Supreme Court held that unconstitutional but that was when the bench was not composed of sociologists. I think they would pass it now.
The CHAIRMAN. You are optimistic.
Mr. WARR. Under that same arrangement at that time when the mills paid the processing tax on all cotton but when they exported cotton that money was refunded to them and when other mills exported cotton to this country that tax was added to the regular duties.
The CHAIRMAN. You have to increase it.
Mr. WARR. By that amount. That left our mills in a fair way of competing with other mills insofar as the price of raw product was concerned. Our mills would then be able to buy cotton at world price, American cotton would sell at world price. I would favor that.
Now, the program is a long-range program. As an immediate program it seems cotton is in worse trouble than that. If we are going to have on hand first of next August about 14 million bales of cotton that is more cotton than will be used in the following 12 months in this country.
The CHAIRMAN. That is right.
Mr. WARR. I would favor a cotton holiday. I know that sounds like a crackpot idea, but from your day in Louisiana you remember it is not a new idea. It was advanced and started in the South years ago. I would favor a cotton holiday for 1 year,
The CHAIRMAN. What would you let the farmers do with the land? We wouldn't want to turn it out to desert pasture.
Mr. WARR. The Government will spend 60 or more million dollars more a year for storage of cotton, it will have in the loan for several years—$60 million a year. It is going to take a beating on the price of not less than a quarter of a billion dollars and it will be lucky if it gets out with that no matter what gradual system we use of decreasing production.
I would favor taking the half billion dollars the Government will Jose holding this cotton for 5 years and selling at a loss and taking the cotton holiday next year and distributing the half billion dollars out among us. It won't cost the Government anything in the long run, it will be as well off at the end of the following crop year, the cotton would have moved out of storage, there would be no further
storage payment to pay, the surplus would be moved away, there would be no loss taken on the cotton, the Government could sell every bale at a profit, it seems to me. I would be willing to take my share of that half billion dollars that the Government is going to lose anyway.
The CHAIRMAN. That might be all right for the fellow who doesn't owe anything. But you have most of the farmers in South Carolina who owe money on implements. What about the implement man? Would he give the farmer a holiday? Would the banks give the farmer a holiday?
Mr. Warr. If we drop to 75 percent of parity support then we are not going to make a half billion dollars clear money on our next
The CHAIRMAN. Somebody has suggested we insulate that cotton and lock it up and not use it. That might be a little—we are considering that, too, but this holiday business I don't know about. You are probably the first man who has suggested it. But I would hesitate to venture what would happen to the many people depending on labor there. You certainly couldn't take care of them with a half billion dollars.
Senator JOHNSTON. Another thing, if you get them out of growing cotton, it is not as easy as a lot of people think to get them back. They will be going off into something else.
Mr. WARR. We would also have a chance, maybe, of permanently eradicating the boll weevil by doing that. We might. Certainly we can make cotton cheaper in the future if we did that.
The CHAIRMAN. Thank you.
STATEMENT OF ALFRED SCARBOROUGH, SUMTER, S. C.
Mr. SCARBOROUGH. I as a citizen want to express my appreciation of your being here today and using the real democratic way that you have. It is really democracy in action. We are privileged to have our two good Senators here and have our good friend, Senator Scott, and our good Congressman from the Spartanburg section with us. I want to refer first to the matter of tobacco.
I grow some tobacco and I certainly think the program is an excellent one and I am delighted to know the sentiment is so generally in that direction. However, I would like to mention this: Somebody referred to 400 hours being required to handle tobacco over a season. The United States Department says it takes 500 hours. And actually a man like Mr. Frank Williams and those that have been planting tobacco for 30 year or more, and a great many of them say it takes considerably more than 600 hours; in fact up to 700, but I think 600 hours would be conservative.
Mr. Chairman, personally my interest is very much the immediate action. This situation is a very, very serious one and if we will go back to the history and the First War and recognize that then agricultural products fell about 40 percent and the income to the farmer did actually, and other nonagricultural groups, it rose about 21 percent by the end of the sixth year. When we consider that after the Second World War during the first 6 years thereafter your agricultural commodities went down about 40 percent and those things that
the farmer had to buy went up about 21 percent, the one period being about 57 percent and the other period 61 percent.
If you get your figures now about 6 years again after our last war, you will find the same thing, history is repeating itself. It is not only analogous in this line.
The CHAIRMAN. I think it will get worse.
Mr. SCARBOROUGH. Yes; because in that period they had the situation so pronounced before us and we had been through the Hoover administration back there and you had a situation where during that period they came along then-it is analogous in another way. They said leave it alone, this higher prosperity of the nonagricultural people will pull up the other. We have a repetition again analogous to that of a propaganda of a similar kind now very insidious and deceiving and carries the urban mind and the consumers right along with them. We know that that won't happen for a good many reasons. If you get percent figures and the tables and the amount of increase in national business, we just haven't got it in the picture. What distresses me, and why I say I am interested more on the immediacy of something being done is that with the utmost complacency, as though they didn't know history, there is conduct on the administrative part that would indicate the utmost complacency or indifference, making you think it is analogous again to the period before the thirties, the administration then, where they said the farmers never made anything, we don't know how to get him to make anything.
That was partly true. These folks have the utmost confidence that they know how but they go back again to the situation there that makes it so that they act on the basis of the utmost futility but like in the Iloover days they let nature take its course. We are not ignoring the law of supply and demand, we are conforming to it like the law of graft. You have to conform to it. When we do these things we are conforming. What did they do? They took the position that let nature take its course, don't try in the midst of artificialities to do anything but let them bleed themselves out and finally the economy will reach the bottom when all the poor devils are frozen out and lost their homes and finally she will bound back. They have the same idea now.
The CHAIRMAN. Don't you think when that happens you will have a lot of your merchants here that will follow the same way, and the manufacturers? It will reach them.
Mr. SCARBOROUGH. You will be issuing certificates to pay schoolteachers and you will have the banks going unpaid and taxes unpaid and your debacle, not a recession but an unholy depression. They use that in the general economy. They are practicing that same philosophy on agriculture. Why? The evidence is there. It is a perfect case. Why? Because they are using the sliding flexible scale. ile know from history that whatever the percent level where the support price is the agricultural price always comes down to that level. That is just a known fact. It is repeated. It is happening every day. What is the result? They are saying let prosperity of the nonagricultural go along with uttermont futility and it will pull the others. They put flexible supports down and lowering price level to jeopardize the general economy because we are a manufacturing and a volume producing economy. What is the result? We have a situation today from an international standpoint.
They say as long as we keep our home in good shape, keep ourselves sound financially, spiritually and otherwise, and well prepared, we are doing the best we can, are least apt to have trouble. They are taking agriculture, your bottom of the very thing itself, and the very source of new blood to our cities and people, and jeopardizing the whole economy. It is not only of local, Mr. Chairman, and national significance, but of international significance.
The CHAIRMAN. What is your remedy?
Mr. SCARBOROUGH. I would think, sir, I would ask you to let me do this because I have been impressed with the fact, it will take me about 10 minutes to read this because I give you some instances and illustrations.
The CHAIRMAN. Do you have anything new?
The CHAIRMAN. Your whole statement will be put in the record. Can you highlight it?
Mr. SCARBOROUGH. It is difficult. I would like to say I want to mention a few things here.
For several years the farmers of America have been pictured by some groups as living off of Government handouts, and always asking for more aid, assistance, and relief. Newspaper and magazine articles portray the farm program as costing the taxpayer billions of dollars.
Many have been led to the false impression that the farmer is sitting back, drawing a large Government check each month and living high. Nothing could be further removed from the truth.
In the face of the recent announced increase of the cost of living figure the farmer's income for the past year dropped 6 percent. The farmer's gross share of the consumer's agricultuer dollar has dropped to the alarming figure of 41 cents.
The farmers asked for 90 percent parity and that was 10 percent less than the justified 100 percent. It worked to produce a step nearer equity. Prices have always followed support levels. Now with the flexible formula all prices have fallen to the new low levels. The farmers did not want a subsidy but loans on a 90 percent parity basis to enable orderly handling and marketing of its products in the hands of both the individuals and the Government. It is presupposed as necessary to the program, putting controls on in such time and manner as to try to prevent surpluses. It also contemplated strenuous effort toward increasing of export sales, and orderly selling of accumulated Government holdings. An essential of the many-sided picture was utilization of any apparent surpluses by sales or gifts on the Marshall plan program and on the lunch programs. It was important to have an extensive research program in finding new uses and increasing consumption at home and abroad.
Agricutlure has never wanted a direct subsidy, even though with the high protection afforded others it would be thoroughly justified. The losses on the agricultural program have been much less than the expenditure on other lines of endeavor by subsidy. I would like to have in your record what has recently been quoted from one of your fellow Senators, Senator Scott of North Carolina. He says:
1. The Tariff Act of 1789 has been in effect more than 50 years, when in 1945 the Congress authorized special subsidies to steamship lines carrying overseas mail.