Do you think that Senators and Congressmen from States that are predominantly livestock States would be happy about this program that you suggest?

Mr. SMITH. Probably not. There is dairying in almost every State in the Union. I am just simply saying that this would accomplish the result we are trying to accomplish, if it could be done.

Senator HOLLAND. How many cows do you milk at your dairy?
Mr. SMITH. Eighty.

Senator HOLLAND. And the number that was fixed has been fixed before us from time to time as a family unit, which is about 30, it is not?

Mr. SMITH. I think about that. It varies.

Senator HOLLAND. You would be more generous than Mr. Brannan. Instead of limiting it, the 100 percent or the 90 percent of the price support to the 30 cows, you would want it to go up to 100 or 80 cows? Mr. SMITH. Sure.

Senator HOLLAND. You see, it makes a difference what kind of shoe each man is wearing. He works out his program to fit his own situation.

Mr. SMITH. I know that.

The CHAIRMAN. All right. Thank you.

Mr. SMITH. Thank you.

The CHAIRMAN. Is Congressman Anfuso here?

(No response.)

The CHAIRMAN. We will next hear from Mr. Keane. You are a rural banker and a farmer.

STATEMENT OF EDMUND J. KEANE, VICE PRESIDENT AND DIRECTOR, AGRICULTURAL PROGRAM, MERCHANTS NATIONAL BANK & TRUST CO., SYRACUSE, N. Y.

Mr. KEANE. My name is Edmund J. Keane, I am vice president and director of the agricultural program of the Merchants National Bank & Trust Co. of Syracuse.

In the interest of time, Senators, I see no point in reading this statement. I am perfectly willing to make it a matter of record. The CHAIRMAN. That will be so ordered.

(The prepared statement of Mr. Keane is as follows:)

I would like to say that the Merchants National Bank & Trust Co., of Syracuse is one of the few larger institutions in this State that maintains a complete department for the handling of agricultural credit. Due to our many years of experience, we have the privilege of doing business with a great many farmers. The large majority of our loans are with dairymen because of the area we serve. After our years of experience, we feel that we understand the many problems that dairy farmers face. During the past 2 years we have had to spend a great deal more time than formerly to supervise loans to dairymen so that they do not become delinquent. Whenever extra expense items arise, most dairymen find it necessary to adjust their payment schedules because they do not have the income to pay for these expenses. Extra expenses that have come to our attention include: replacement or repairs to machinery, equipment or buildings; extra help for planting or harvesting; in the event of an accident or illness. The close margin that they are operating on doesn't permit them the opportunity to face these situations without refinancing their loan and attempting to spread their indebtedness out over a longer period of time.

During the past months, I talked to a dairy farmer in this area who had just voluntarily petitioned himself into bankruptcy. In going over his situation with him, it didn't appear to me that his position was that bad and that he

shouldn't have resorted to this action. However, he explained that his wife had recently died and previous to her death, he had incurred sizable medical expenses. In looking over his situation and considering the possibility of realizing enough income from his dairy herd to pay these obligations and continue his normal operational expenses, his situation appeared to him to be hopeless. His only recourse was voluntary bankruptcy.

To us, as an institution extending farm credit, this is a serious situation as this man maintained a dairy average of about 25 milkers and was attempting for the most part to do his own work, with extra help during planting and harvesting periods. This feeling of hopelessness represents a new problem that must be given serious consideration whenever extending farm credit. We very much fear that there are many others whose thinking is of the same kind. Nothing can upset a credit arrangement more than to have the borrower loose his desire to continue his operation for any reason. Our economy is based on credit and the dairy farmer needs credit.

For nearly 20 years the Merchants Bank has offered a farm auction service to assist farmers who wish to dispose of their property. While this service was originated to provide a service for individuals who wished to retire, the demand has changed a great deal in the past 2 years. This year we are running far above average in the number of dairy dispersal sales that we will handle. They are mainly from farmers who are finding that they cannot operate at a profit even though they have a large capital investment, therefore are going out of business. The CHAIRMAN. You may proceed.

Mr. KEANE. I would like to make one comment about a problem we find, with the possible suggestion that this committee might take under consideration a study to see if the same exists in other parts of the country and, that is, namely, setting up some kind of a program by existing credit agencies to enable young people to establish themselves in farming.

We here in this area at least find it a very serious problem in banking as part of the agricultural program, existing regulations and rightly so on banks and credit institutions. They are such that no matter how capable, worthy, or responsible a young man may be, there is no existing means of helping him substantially in establishing himself in an agricultural operation.

That would be my suggestion if the suggestion is in order.

The CHAIRMAN. Very well, sir. We have some laws on the statute books now. Those suggestions have been made by quite a few wit

nesses.

Mr. KEANE. Thank you, sir.

The CHAIRMAN. Yes. We have received testimony asking that we liberalize credit, as you suggest. Thank you, sir.

Mr. Berghold, will you come forward, please, and give us your name in full for the record.

STATEMENT OF WILLIAM F. BERGHOLD, NEW YORK, N. Y.

Mr. BERGHOLD. My name is William F. Berghold. I am editor of the Rural New Yorker. I do not, however, appear here today as editor of the Rural New Yorker. I appear at the request and on behalf of 660 dairy farmers who have signed their names to a petition authorizing me to appear, which petition has been given to the stenographer. (The petition signed by 660 dairy farmers is as follows:)

We, the undersigned farmers, authorize William F. Berghold, editor of the Rural New Yorker, to appear and testify on our behalf at the hearing before the United States Senate Committee on Agriculture and Forestry, to be held in Utica. N. Y., November 19, 1955.

Mr. BERGHOLD. Because of the crowded condition of the calendar you have, I am deliberately confining my remarks to the milk situa

tion here in the Northeast and specifically to the milk marketing orders.

The CHAIRMAN. Have you anything to add to what has already been said?

Mr. BERGHOLD. What I am going to cover, Senator, I promise you has not been covered today.

The CHAIRMAN. All right, proceed. That is what we want.

Mr. BERGHOLD. May I, however, first state for the record that the great majority of dairy farmers here in the Northeast are, as a matter of principle, opposed to price supports of any kind, but at the same time they feel that, if it is adjudged there must be a temporary support program, then there should be no discrimination in favor of the grain farmer as against the dairy farmer, as there has been-you cannot get blood out of a stone.

And, second, that dairymen do not look with much, if any enthusiasm on the so-called helf-help programs that have again been resurrected, first, because they are predicated on assessments against milk checks and you cannot get blood out of a stone; and, second, because they feel primarily that these self-help plans are designed to guarantee dairy products manufacturers against loss in their manufacturing operations-an operation, incidentally, on which their highest profits are made.

May I also express to this committee the appreciation for this opportunity to place the views of 646 individual dairy farmers on this record. No doubt this committee has already ascertained that in many cases the policy of the so-called farm leaders and farm organizations does not truly represent the sentiment at the grass roots. That situation is also true here in New York State; otherwise I would not be here before you today with signatures of 646 dairymen, regardless of their affiliations.

We in the East understand that midwestern dairymen resent their exclusion from all milk markets, principally by reason of the milk marketing orders. Let me assure this committee, and midwestern lairymen likewise, that, while New York dairymen may be married to the Federal order, they are not necessarily in love with it. It was put into effect back in 1938 as an emergency measure under the provisions, and pursuant to the declared policy, of the Agricultural Marketing Agreement Act of 1937, to bring order out of chaos-which it did. It is also true that, to a large extent, it has continued to prevent chaotic conditions. But dairy farmers feel they are entitled to more than just prevention of chaos. Time and time again they have been told they are entitled to 100 percent of parity in the market place and, while this may be a political rather than an economic goal, they believe that at the very least they are entitled to a voice in the market place. They have not had that voice for 40 years, and the Federal milk order is removing the producer further and further away from the chance of ever entering much less being heard in-the market place. With both Federal and State statutes sanctioning unit voting by cooperatives, with the dealer-conceived and dealer-manipulated classified price plan still the dominating factor in the Federal milk order, and with complications constantly heaped on complications, the dairy farmer finds himself completely deprived of any voice in, or control over, the pricing of his own product.

Dairymen of substance-in the majority, the younger men-realize that they know little or nothing about the intricacies of milk pricing and milk marketing, and they realize further that such lack of knowledge is detrimental to their future. They resent being told that theirs is solely a job of production and that their participation must stop when they unload their milk cans on the creamery platform. They feel that, for the most part, their socalled leaders, no longer have the ability, or desire, or both, to represent their producer memberships adequately. They suspect that Government is in the dairy business with the intention of staying-contrary to what they were first led to believe, and they don't like it.

But, since Government is so inextricably enmeshed in milk marketing and milk pricing, farmers must necesarily look to Government to release some of its own shackled, as well as the shakles imposed by hostile interests who have assumed control by Government sufferance.

What can Government do? The recognition by Government that the ultimate salvation of the dairy farmer is in a farmer-owned and farmer-controlled organization, either nationwide or statewide or milkshedwide, which guides the milk from the cow to the consumer, would be the greatest single contribution that could be made to our dairy industry.

Obviously, this is not a project capable of overnight accomplishment, so, meanwhile on a short-range basis, dairymen believe they are entitled to:

1. A fair, competitive price for the various classes of milk under the Federal milk order, with emphasis on class 1-C, class III, fluid skim and nonfat dry milk, to the end that the excess over and above fluid needs will be channeled into manufacturing, as should be the case, instead of, as is now the case, what is not needed for profitable manufacturing, going into fluid use; and

2. Further investigation by the Senate and House Agriculture Committees of the price spreads on fluid milk and on manufactured milk products. Recommendations to the industry were made in the reports of these two committees, but they have not been followed. The Senate Committee also promised a further report about which we have heard nothing more to date.

It was more than 50 years ago, gentlemen, that the robber barons of certain industries finally met their come-uppance on two frontiersthe antitrust laws and the labor union movement. Robber barons are still with us in the milk business, only now they operate by Government authorization or Government sufferane. The cooperative movement, which was first initiated to give the producer some voice in the sale of his own product, has not proven itself to be the complete answer to the producer's needs or prayers. Our cooperatives have not succeeded in retaining producer confidence which is so essential to cooperative vitality. Dairymen believe that farm cooperation could be made to work if given half a chance, but their patience with costs constantly running ahead of income-is beginning to run out. For the questionable privilege of being an individual entrepreneur, the dairy farmer has been disenfranchised as a laborer and denied the protection and benefits enjoyed by labor as a whole. More and more, therefore, they are thinking of the advisability of labor union affiliation because they see what militant organization has done for the

laboring man. And in some areas this union affiliation is already an accomplished fact.

It is the judgment of the dairy farmers for whom I speak here today that, unless Government listens more to the grassroots and less to the so-called farm leaders, unless it encourages a real farm cooperative program, and busts wide open the milk dealer monopoly that continues to throttle the producing end of the industry with inefficient and uneconomic methods of distribution, and thus insure the dairy farmer his day-and a voice-in the market place, the dairy farmer will either abandon his farm or be driven into unionism-and between the two the choice is clear. If that is the right choice, then many of our dairy farm problems may well be solved. If, however, it is the wrong choice, the only ones to blame will be Government and our farm organizations who thus far have, whether wittingly or unwittingly is not material, failed and refused to recognize and eradicate the real cancer in the body of our dairy economy. We hope, therefore, that the new farm legislation, mentioned here today, will be just as much a "Magna Carta" for the farmer as labor regards its own Wagner Act.

The CHAIRMAN. Thank you.

Senator AIKEN. Mr. Chairman, I would like to correct one generally misunderstood situation. As far as the marketing orders are concerned, the milk producer of Oregon or Minnesota or Illinois could ship into the New York market. They do not prohibit shipments from any part of the country. However, 160 years ago the Bill of Rights gave to each of the States authority to set up their own regulations for their own welfare, including health regulations. And States in turn have delegated this authority to communities within their borders.

I presume in almost every State in the Union some community has set up health regulations with regard to the production and distribution of milk which are in effect trade barriers.

I do not know how the situation could be changed. I repeatedly tell our midwest friends that. How could it be changed without a constitutional amendment?

It is the health regulations, not the marketing orders, that prevent the shipment of milk into different markets.

Mr. BERGHOLD. I made reference to the marketing orders because I understood in the last 2 years Congressman Andresen, I believe, has had some legislation or suggestions regarding milk marketing orders being barriers.

Senator AIKEN. Congressman Andresen's proposal is this, that he would refuse a marketing order to any community that sets up such health regulations as do exclude the milk from other parts of the country.

Mr. BERGHOLD. I see.

Senator AIKEN. He probably could do that constitutionally. cannot get votes to do it, though, not for some time yet.

He

Mr. BERGHOLD. The other point I wanted to emphasize was that the desire with which apparently midwestern dairymen look to the northeast markets is more illusory than it is real, because the benefits are not as great as imagined.

Senator AIKEN. The marketing order, if it precludes milk from other areas, does so indirectly through the health measures.