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programs to any real advantage for agriculture. The land capability survey is only partially finished in the Nation and Congress has not appropriated enough money to permit it to go forword. If we are going to rely upon soil conservation as a means of taking land out of the production then we certainly ought to have that soil survey completed so that we can devise the most practical program that will be in the long-term interests not only of farmers but of the Nation as well. We would urge you to give some consideration to completing the land capability survey as quickly as it can be done within reasonable limits.

The nation has a vital stake in abundant supplies and reserves. The question is, How large should these reserves be and how should they be handled ?

The need for sound national policy is evident. A small surplus brings bankruptcy to farmers and a short supply means high prices for consumers. Some way should be found to assure the Nation of abundant supplies without destroying the price structure of producers. We hope that Congress will explore this problem. How large should the reserve be in corn or wheat or cotton in terms of national interest, what should it be and how can that reserve be managed so as to prevent the reserve itself from depressing income of farmers who produce these products ?

I don't believe anyone has ever defined the size of the reserve that is needed in the long-term interest of the Nation. There are a number of other things we could talk about. We mentioned the need for research and education. Certainly they are important tools in solving the problem.

Then we need to develop stronger cooperatives that will help farmers gain bargaining power in the market place and so will enable them to provide services for themselves which would not otherwise be readily available.

We talk about the problems of the small farmer. The small farmer is often at a disadvantage because he doesn't have mass purchasing power. The corporation farm you mentioned a moment ago may own its fertilizer mixing plant and warehouse for storing cotton or other surplus commodities. It has buying power that will enable it to get volume discounts. The rank and file of little farmers lack that and the only way they can get it is by working together through their purchasing association.

We know the members of this committee realize the need for cooperatives, but we must never forget that there are powerful forces seeking to weaken or destroy them. We solicit the continued interest and support of the members of the Agriculture Committee on this phase of the farm program because we believe it, too, can make a contribution in helping to find a way out.

Crop insurance is also important. We have been talking about the costs of programs. All of these programs are going to cost money but we need to realize that there are some price tags on the other side of the ledger, too. If farmers depend upon free markets then we are going to face some general economic problems and unbalance our general farm program to such an extent that the Nation will suffer. This means that crop failures or existence of some emergency demand may create serious food shortages and it is our opinion that the net cost to the Nation will be much less if we provide farmers with the

tools that will assure them reasonable prices so that abundant supplies can be available at all times. We believe the long-time interests of the Nation will be served better in that way than any other way.

I have taken more time than I planned. If you have any questions I will try to answer them.

The CHAIRMAN. Are there any questions, Senator Scott?

Senator SCOTT. Some time ago at another meeting you mentioned something about water resources. I wonder if you would put your statement in the record on that because it has a bearing on this thing, too.

Mr. CALDWELL. It has a very definite bearing and I will be glad to insert it in the record for the benefit of the record.

The CHAIRMAN. Is that in line with the law we enacted here recently?

Mr. CALDWELL. This is in connection with the Hoover Commission report on water resources. We had a hearing conducted by the subcommittee headed by Congressman Jones of Alabama here in this same room a few weeks ago, and I presented a statement on that subject and we will present it for the record. On the Small Watershed Act, we would like to see the Small Watershed Act strengthened. I might say farmers around here find it difficult to understand why they are required to pay such a large percentage of the cost of a smallwatershed project which benefits an entire area while flood-control projects on a major stream are financed entirely by the Federal Government. A few industries can go to Washington and say, "Our businesses are being destroyed by floods and we need a flood-control program," and the Army engineers make a survey and recommend building of a big dam that will cost millions of dollars and if Congress is convinced that the benefits will exceed cost they appropriate money to cover the full cost of it.

The CHAIRMAN. In most instances they are multiple-purpose dams and electricity pays for most of the cost, and in areas in the West you have irrigation which is repayable by the farmer, however, without interest.

Mr. CALDWELL. Right now we don't see any particular reason for using public funds to reclaim nonarable lands or bring lands in production in competition with crops in surplus.

The CHAIRMAN. Your whole statement will go in the record on that. (Statement to be furnished by Mr. Caldwell follows:)

I am Harry B. Caldwell, master of the North Carolia State Grange, from Greensboro,

We appreciate your visit to the State.

The grange is a general farm organization with members in all areas of the State. Our members have a keen interest in water-its conservation, control, and use--and in the development and use of electric power. We want to see the resources of the State developed for the benefit of all.

We believe that the economic growth of the State will depend to a large extent upon the supply of water and power and the use made of these resources. North Carolina is in the high rainfall area. Even so, we are frequently plagued by droughts during certain seasons of the year which destroy our crops and endanger the water supplies for municipalities and industry. We have the potential water resources which, if properly developed and wisely used, will meet the current and foreseeable needs for agriculture and industry in this area.

While there is much that can and should be done by the State and local units of government and by the people themselves, there is a real need for Federal action in flood control, valley development, soil, timber, and water conservation, navigation, drainage, and electric-power program.

We agree that an imperative need exists for a clear definition of the role and policies of the Federal Government in the framework of a consistent national water policy which will progressively promote conservation and development of this vital natural resource for the Nation as a whole, as well as for the States and local communities.

We have not had sufficient time to properly analyze the task force and Commission reports on water resources and power since receiving notice of this hearing. Consequently, our comments will be of a general nature and limited.

The North Carolina State Grange believes that the need for action calls for positive leadership by the Federal Government. The reports now before you seem to place major emphasis on the role of private interests and local government in the development of these great resources. While we recognize the need for cooperation between the Federal Government, the States, localities, and private citizens in arriving at solutions to our water problems, we hope that the implications of the committee reports will be carefully analyzed before any action is taken to restrict Federal participation in these programs.

We do not feel that the agricultural aspects of the problem were given adequate recognition in the committee reports. Moreover, the Commission made a basic mistake in considering the water resources as an independent entity, since we know that water is part of an inseparable complex which also includes land, timber, crops, grass, and other values.

The largest water reservoir in the world, outside of the oceans, is land. In the consideration of any policy affecting water and land resources, this fact cannot be overlooked or ignored. It also appears to us that the Commission failed to give adequate attention to underground water supplies, underground water recharge, or drainage, in their report.

We would like to see the Small Watershed Act strengthened. Farmers find it difficult to understand why they are required to pay such a large percentage of the cost of a small-watershed project which benefits an entire area, while flood-control projects on a major stream are financed by the Federal Government. To the extent that water problems are solved back on the land where the rain falls, the need for large expensive structures can be minimized and the entire area benefited.

Congress should be sure that the agricultural aspects, including the maximum use of the Small Watershed Act, have been considered for each project area before any steps are taken to build large dams solely for flood-control purposes.

There is also an urgent need for speeding up the land-capability inventory if we expect to develop either a water or natural resource policy for the Nation.

While we recognize that recommendation No. 1 has some merit, we do not agree with paragraphs (h) and (i) as found on page 37 of the Commission report.

We came to the conclusion, as we read the reports, that the majority at least were not sympathetic with the development and distribution of power through such agencies as TVA and REA. The statement made in paragraph (h) does not seem to be compatible with suggestions found elsewhere in the report that Federal agencies administering revenue producing water resources and power projects conduct themselves as business corporations.

The State grange has given its endorsement to valley-development program on many occasions. Our members recommend that steps be taken to coordinate the work of all Federal, State, and local agencies on each major watershed project. They also suggest that no project be approved for the expenditure of public funds unless a sound appraisal shows benefits in excess of cost. The same consideration should be given agricultural values as are given industrial values in appraising costs and benefits.

Our organization believes that every watershed project should provide for the maximum use of water resources. This will include water for people and animals, agricultural and industrial use, the generation of power, recreation, and the prevention of floods. It also means that the tributaries along the entire river system must be taken into consideration before any program is finalized. This again suggests that the Federal Government must provide leadership if our natural resources are to be properly developed.

The Tennessee Valley area offers a fine example of what can be accomplished. The entire region has made remarkable progress. New products and new industries have been promoted, agricultural practices improved, flood damage minimized, and electric-power rates reduced. Consequently, we hope that the Federal Government will provide the kind of leadership which will conserve and develop every resource for the welfare of all.

We do not agree with recommendation No. 6. To divorce the construction of headwater dams from land treatment would destroy the interrelationships that must be recognized if sound natural-resource policies are to be carried out.

Our organization feels that public power projects perform essential services as a part of the total electric power program of the National. We do not want to see the values of these projects restricted by unnecessary or unreasonable regulations. This we believe would be the result if the recommendations Nos. 9, 10, 11, and 15 were adopted.

Grange members are supporters of the REA. We know that this program has been a major factor in the extension of electric service to rural areas.

These systems are owned by the people who use the service. They borrow money from the Federal Government as needed in extending and improving their services.

We hope that no action will be taken by Congress which will retard this development in any manner. Grange members have called upon Congress to provide adequate loan funds to increase the capacity of existing systems and to provide extension of lines to those who do not now have electric service. They also recommend that loan funds be made available to electric membership corporations for use in constructing generating plants and transmission lines where reasonably necessary.

Our organization endorses the preference given municipalities and cooperatives for the purchase of electric power from public-power projects under the Flood Control Act of 1944. The electric membership corporations insist upon their right to purchase power directly from the Government. We feel that the Federal Government has an obligation to make this power available to them at their load centers when satisfactory wheeling agreements cannot be negotiated with private power companies. We believe that the right of people to provide services for themselves on a cost basis is sound and should be preserved. The growth of the private power companies indicates that they have benefited and that the general economy has benefited from this policy. We hope that Congress will continue to support these basic principles.

We are fearful that some of the recommendatoins are intended to restrict the economic values which now flow from these power projects.

Our statement does not attempt to analyze the reports now before you. We have attempted to point out a few basic principles advocated by the Grange which we hope will be helpful as you chart the course for future action.

Mr. CHARLES RUTLEDGE. I understand you came here to get the diversified views of the dirt farmer from over the section such meeting covers.

The CHAIRMAN. Yes.

Mr. RUTLEDGE. We have been here an hour and 15 minutes and we have heard 2 witnesses.

The CHAIRMAN. We will stay here until midnight, sir, to hear everybody. I have done it before.

Mr. RUTLEDGE. We can't stay until midnight.
The CHAIRMAN. We will call you in time if you be patient.
Mr. RUTLEDGE. I suggest a limit on-

The CHAIRMAN. I am not going to put a limit on anybody, but I will say this to you, that the first few witnesses that we hear we ask quite a lot of questions to point up the problems and it is our hope that the witnesses who follow will listen to what these witnesses say and save us duplication.

In other words, for the first 4 or 5 witnesses in the past we have examined cote a bit in the hope that the witnesses and audience would listen well and when they are called they can expand on the testimony stated.

Mr. RUTLEDGE. And take issue?

The CHAIRMAN. Yes, exactly. That is what I want. That is why we are here and if you have anything to add to what has been said,

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we will appreciate that, but what I am going to ask the witnesses to do is not duplicate their statements. That is the only request I am asking.

Mr. RUTLEDGE. We might get done in a decent hour.

The CHAIRMAN. I will see to it that everybody is heard if you will be patient, sir.

Mr. RUTLEDGE. Thank you.

The CHAIRMAN. At this point in the record I wish to put 2 telegrams, 1 from the senior Senator from the State of North Carolina, Mr. Sam J. Ervin, who cannot be here because he is in Washington acting as a member of the Committee on Government Operations, and 1 from Milton Young, who promised to come here but said he could not make it, and he gives

his reasons. (The telegrams of Hon. Milton R. Young, United States Senator from the State of North Dakota, and Hon. Sam J. Ervin, Jr., United States Senator from the State of North Carolina, are as follows:)

WASHINGTON, D. C., November 14, 1955. Hon. HAROLD D. COOLEY, Care Senate Agriculture Committee,

Hotel Carolina, Raleigh, N. C.: Terribly sorry I won't be able to be with you tomorrow. Would certainly do so if at all possible. Best wishes for a good meeting. Regards,

MILT YOUNG, United States Senator.

WASHINGTON, D. C., November 14, 1955. Senator ALLEN J. ELLENDER, Chairman, Senate Committee on Agriculture and Forestry,

Care Senator W. Kerr Scott, Raleigh, N. C.: I have been called to Washington as a member of the Senate Committee on Government Operations. As a consequence, I will not be able to attend the hearing in Raleigh tomorrow. I had intended to appear before you and testify that I favor the restoration of rigid price supports at 90 percent of parity for basic crops.

SAM J. ERVIN, Jr. The CHAIRMAN. The next witness is Mr. Arthur D. Williams. Mr. Williams, you have heard the previous witness. What we are looking for here is not a statement as to what the problem is. I think the record is replete with statements from various parts of the country as to what the problem is. What we want specifically from you, if you can give it, is methods of solving that problem.

STATEMENT OF ARTHUR D. WILLIAMS, PRESIDENT, NORTH CARO

LINA FARM BUREAU FEDERATION, GREENSBORO, N. C. Mr. WILLIAMS. I think much I would say would be repetition of what Mr. Caldwell said, because according to his statements the Grange position is almost similar to the Farm Bureau position.

The CHAIRMAN. Does it differ in such a manner that you can tell us in a few words where the differences are?

Mr. WILLIAMS. Well, it may differ some in the various commodities. The Farm Bureau believes that any farm program to be a successful program, each farm commodity will have to have a program of its own. There are so many different problems facing each farm com

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