modity that any set law for all the commodities will not work because the distribution is different and the manner of sales and so forth is different.

The CHAIRMAN. That is what the committee thought back in 1937 and that is why we dealt almost exclusively with basics at the beginning.

Mr. WILLIAMS. It has been almost 12 months since we had our annual convention. Our North Carolina Farm Bureau meets next week, at which time we are hoping that resolutions will come from the various counties of the State to help us solve and recommend to you some of these problems. I know it is a problem to you. It is quite a problem to us farmers, because we don't know where to go, and it is going to take the best brains in Congress with the advice of all the farmers in this Nation to try to work out something satisfactorily. We appreciate very much the efforts that your committee has gone to to try to work out this, and also Congressman Cooley's committee, because I know that Senator Scott and you and Congressman Cooley have the farmer's interests at heart, and you want to work out some program that wlll be of benefit to the farmers.

Our resolutions in the North Carolina Farm Bureau we believe in 90 percent of parity on the basic commodities when production is controlled. There has been a law on the books where we were guaranteed 90 percent without controlled production.

The CHAIRMAN. During the war?

Mr. WILLIAMS. Wasn't it continued until about 1949 or 1950?
The CHAIRMAN. Two years after.

Mr. WILLIAMS. That created a lot of this surplus condition. I don't think the farmers should be blamed for that, because they were encouraged to do that and they produced way beyond expectations of the Department. We are faced with the problem today where the retail prices remain constant and the prices are gradually falling. As you mentioned in the beginning, it has fallen to 40 cents out of the dollar. That causes us concern. What has happened to the difference in spread? Who gets it? That needs investigation.

As far as the cotton problem, you have witnesses coming after me that are more familiar with the cotton problems than I. Mr. Caldwell spoke briefly on resolutions from the counties to our State convention next week and everyone is opposed to a poundage control. We tried that in 1938 and 1939 and the Government even got into the business of selling poundage. That would not be satisfactory.

Even if there was a possibility of working, it won't be acceptable to the farmers, and that should be a consideration. We want something acceptable to farmers as well as something that will benefit them.

The CHAIRMAN. We have quite a bit of evidence asking for bushelage control instead of acreage on wheat and grains. Now, it is my hope that something can be done in that regard, and again I ask for the best heads in these organizations to try to get together and submit a plan.

Mr. WILLIAMS. Senator Scott mentioned to Mr. Caldwell about the watershed proposition. The Farm Bureau is very interested in irrigation and other methods of conserving the water on the soil because we have had 3 years previous to this year. There has been sections of our State that suffered terrible from drought, and in our last Farm

Bureau meeting we recognized that fact and here is the resolution on that:

Because of the ever-increasing importance of protecting our water and pond resources, we recommend present State legislation be examined to determine if it adequately provides local and State units of Government with authority and financial support to undertake watershed programs under terms of recently enacted Federal watersheds and water control acts. If adequate provisions are not now in State statutes we recommend enactment of legislation to provide for full local and State participation.

Now, on the crop insurance the Farm Bureau believes in the present farm crop insurance but we believe that the premium rates should be a little higher and a little bit higher guaranty be made on tobacco.

The CHAIRMAN. Would you suggest compulsory, if it is possible, insurance?

Mr. WILLIAMS. No, sir.

The CHAIRMAN. You will never get it to work if you just get a farmer here and there to join it because that has been our trouble I think in respect to the program that we are trying out now in various parts of the country county by county.

Mr. WILLIAMs. It was tried in my county for 7 or 8 years and the majority of our farmers participate in the program and like it but they do object to no guaranties.

The CHAIRMAN. That is because of the premium rates being low? Mr. WILLIAMS. Premiums are low and we are guaranteed on about 50 percent.

The CHAIRMAN. We are waiting for sufficient information to go along with a permanent program that will be nationwide.

Mr. WILLIAMS. You will have more participation if you raise your rates a little and give a little higher guaranty or insurance on it. We appreciate the efforts Congress made on trying to expand our foreign trade in farm commodities and we realize it is quite a problem. We don't want to upset economic conditions of other countries but every effort we feel should be made to expand those commodities that will not affect the economy of any foreign country. I believe that it about all I have.

The CHAIRMAN. Are there any questions?

Mr. WILLIAMS. I have some questions here I would like to ask the committee.

The CHAIRMAN. We are not here to answer questions, sir.

Mr. WILLIAMS. I thought maybe you would take this up for future consideration, sir.

The CHAIRMAN. You can put it in the record.

Mr. WILLIAMS. I will put it in the record.

The CHAIRMAN. All right.

(Paper submitted by Mr. Williams follows:)

QUESTIONS

1. Is it not true that the flexible price-support program has never been put into effect on any basic commodity?

2. Do you think the continuation of the 90 percent price-support program would stop the decline now occurring in farm income? Or would get the income back up?

3. Will cotton hold its place in the world market at present prices, considering the inroads already being made by synthetics?

4. At the present price level of wheat, can we expect to get back into the world market and compete with Canada and Australia?

Please review these questions and if at all possible the committee make a study of the causes why farm income has declined. We want the committee to know that we here in North Carolina believe in the price-support principle provided supply is kept in line with demand.

The CHAIRMAN. Mr. Gillespie.

STATEMENT OF JOHN C. GILLESPIE, TAZEWELL, VA.

Mr. GILLESPIE. John C. Gillespie, farmer, cattleman.

The CHAIRMAN. As I understand it, you are testifying in the place of Mr. Bishop.

Mr. GILLESPIE. That is right.

The CHAIRMAN. You may proceed.

Mr. GILLESPIE. I am from southwestern Virginia in the fat-cattle business, which you know is recognized as a sick industry. I don't know that we have a cure-all for it. We do think we possibly have a right start in the direction to find some of the things which are wrong today. We are told and I think correctly, that 65 percent of our beef is being purchased by 3 chain stores today. That meat is being purchased at the beginning of each week at a certain price.

So much for beef grading Choice or Prime, so many carcasses for eastern division, North, South, West, so many grading Prime, so many Choice, so many Good, four divisions.

"Here is my price, you take it." I am talking about Swift & Co. "I am going on over to Cudahy and going from there to Wilson, back to Armour." All have the same price today. They are told, "We won't take your price today. We will change this and make the Prime so many Choice, make the Choice so many Goods. Carry it over in the cooler if you want to." That isn't being done. They know they have purchasing power to buy at their own price. That same man sets his retail price every week. We are being squeezed to death by three buyers in the beef industry. We know we have somewhat of an oversupply of beef, not the oversupply that you gentlemen and everybody else here is led to believe. You have seen nowhere this year where anybody's coolers, any of the packing industry, has a carryover of beef. Sold out from week to week at an enormously low price while the retailer has an enormously high price.

I believe I heard you state your beef cost you the same thing.
The CHAIRMAN. That is right.

Mr. GILLESPIE. There were 21,000 cattle in Chicago yesterday at 1212 cents. You will buy your steak at the same thing again. There is where we are being squeezed to death.

The CHAIRMAN. What is the remedy?

Mr. GILLESPIE. I am asking you gentlemen to investigate that purchasing.

The CHAIRMAN. You many enter into the field of antitrust laws; I don't know.

Mr. GILLESPIE. That is correct.

The CHAIRMAN. You may suggest it. That is outside of the jurisdiction of this committee. As you know, we are agriculture, and that would come before the judiciary.

Mr. GILLESPIE. Wherever it is necessary to take it we would like to take it. We have no carryover of meats; we think it is purely a

squeeze play on cattlemen. The fact is we are pretty well convinced of it. We are asking for that investigation. You tell me you are not empowered with that authority. We must take it where it is necessary.

The CHAIRMAN. We could investigate but the committee that could bring action in order to remedy the situation, which to me sounds like violation of the antitrust laws

Mr. GILLESPIE. We think it is, sir.

The CHAIRMAN. This would be the Judiciary and this committee will be glad to bring it to the attention of the Judiciary.

Mr. GILLESPIE. We have had a lot of newcomers in the cattle business since the war. People got rich; people went into the cattle business to make money. I am no newcomer in the business. I am the fourth generation on the same farm making three-quarters of a million pounds of finished beef a year. I have seen the depression; I have gone through it; we are not asking for Government handouts or dole today.

But we certainly are not agreeing to take money out of our pockets and pay subsidy and get nothing in return. Nothing we have is subsidized. I am not quarreling with the other man getting what he can get. We are getting nothing in return for what we are paying. We don't have anything carrying a subsidy in our area, which is the grass section of southwestern Virginia. At one time we exported those cattle to England. Later we had a big passenger-ship trade. Later we had hotel and restaurant trade. We pride ourselves and our hills, what they have done, and are doing and will do, but we are fast being pushed out.

The CHAIRMAN. I presume you know the history of cattle population?

Mr. GILLESPIE. I do, sir.

The CHAIRMAN. It is my judgment from evidence gathered on this trip, too many doctors, too many lawyers, and too many other people that had no business in the cattle business got into it.

Mr. GILLESPIE. Yes.

The CHAIRMAN. The cattle population in the last 5 years instead of increasing at the rate of 134 to 2 million head per year, averaged 41⁄2 million. That is the cause of the trouble, I think.

Mr. GILLESPIE. Your meat-eating public has increased almost the same amount.

In other words, your purchasing power. That is the reason your coolers have had no carryover. It is the reason these meats will all sell; they are selling at a tremendously high price but they should be purchased the same way.

The CHAIRMAN. Is your recommendation only to look into the antitrust?

Mr. GILLESPIE. Yes, sir.

The CHAIRMAN. Have you any other recommendations to make? Mr. GILLESPIE. Only one. I think taking lands out of production plus subsidies or any other thing of the kind is certainly a turn in the wrong direction. In our country if we take anything out of production we don't make enough now to fatten these cattle. We have to buy grain and we take lands out of production it will be the same as you not mowing your front or back lawn.

The CHAIRMAN. When you say land out of production, you mean grazing land?

Mr. GILLESPIE. Yes. I just don't know where that would fit in our picture.

The CHAIRMAN. Have you any views to express as to taking cultivated acres out of production?

Mr. GILLESPIE. We can't cultivate that much. We can't make enough grain for our cattle. We are in the hills.

The CHAIRMAN. Would you favor this order to reduce the huge amount of surpluses we have on hand, a curtailment of the cultivated acres?

Mr. GILLESPIE. No, sir.

The CHAIRMAN. That is because you are in the cattle business.
Mr. GILLESPIE. That is right, I am fighting my own case. I realize

that.

The CHAIRMAN. I realize that is the situation, but if you were a wheat or rice or cotton farmer, you might think differently.

Mr. GILLESPIE. I am not quarreling with them. I am here for myself. Thank you.

The CHAIRMAN. Thank you.

(Mr. Gillespie's prepared statement is as follows:)

Gentlemen, I didn't come down here as a critic, either to criticize what has been done or what is being done but simply to state my own views as an average farmer of today.

Gentlemen, today is late, but not too late to try to work out some formula by which the farmer and cattleman can live. I am primarily interested in cattle, in beef grading good and choice, made on grass.

We are told and I think correctly that 65 percent of our beef is being purchased by three chainstores. Bids are placed with all major packers every week at a low figure-take it or leave it proposition. They also retail that meat at a fantastic price.

My own experience-Example: We were forced to sell a steer recently because of an injury to a leg. In no way affecting quality of beef. In trying to dispose of said beef we were told by three chainstores that their meat purchases had been made for following week. Finally settling and selling to Piggly Wiggly in desperation for 20 cents per pound for front quarters and 30 cents for hind quarters. Steer would have graded choice.

One of my associates wanting some of this particular beef, especially after being told by me what I had sold it for, and knowing quality of meat, goes to store for price of cuts. He was asked 98 cents per pound for round steaks and $1.05 per pound for sirloins. Being told that is our price this week. I ask you who sets this price for chainstores?

No notice of coolers being full of carryover meats-squeeze play on the cattleman.

Investigate, I am not a newcomer to the cattle business but the fourth generation. Have lived through the depression and not asking for a Government handout or dole but certainly not agreeing to take money out of my pocket to pay the other fellow subsidies and get nothing. So if we pay one subsidies let's pay all subsidies or cut it all off. I don't believe subsidies is the answer.

The $1 an hour minimum wage recently passed by you gentlemen I believe was done a little too hastily without enough thought. It helps no one, not even the man it was intended to help only caused everything to rise in price. It really hurt the farmer and cattleman. We can't compete. Farm machinery and everything he has to buy increased while the price of his products decreased. I ask you please, if that was the intent?

We do not expect a miracle but we know that given enough thought by the committee in cooperation with the farmer and cattleman of sound judgment and advice, this can be worked out whereby the two of them can expect and receive a fair return on their investment.

Taking land out of production and or plus subsidies is certainly a turn in the wrong direction. Lets find out what is wrong with our markets, purchasers, and retailers. We want a free economy.