them to show agriculture is not the only hand which is extended asking to be allowed to exist.

The CHAIRMAN. If I may suggest, sir, you have overlooked a very important one. You know, when industry was converted from war back to peace, it cost us, I think, about $50 billion.

Mr. WALDO. I know. There are many others that I could have cited.

The CHAIRMAN. I thought that I would like to add that to those which you had mentioned.

Senator AIKEN. Rather than eliminate the reconversion cost, would it not be better to eliminate war itself, and save the 200 billion? Mr. WALDO. That would be all right with me, being a former war veteran myself, if you can do it.

Senator AIKEN. If we could, we would like to.

Mr. WALDO. We all admit that agriculture is ailing and that the patient is failing, if not fast, at the least it fails to holds its own. Now, as anyone who has been ill knows, before we can prescribe a treatment, we must have a diagnosis of the patient. We seem to have two different stages of the problem to solve.

First, that most of our problems are due to overproduction and that because of surplus overhanging the market, prices are down, so the doctors say, "Let us cut down production;" but if we are to do this, rigid high price supports will aggravate the malady, or to avoid this each farm would have to be minutely supervised.

And if we abandon rigid price support and take up flexible supports, then production would not be stimulated and within a short period of time the situation would work back to a supply and demand, in which the farmer would take his chances on survival on the efficiency of production of his farm.

The second view is that the farmer is the low man on the totem pole of our industrial economy. There is great disparity with labor and industry. So here we are with costs fixed by the wages and charges arbitrarily set by labor and industry. Yet we have a decreasing income and we are not yet integrated in this new economy on a basis of equality.

And with this as the basis of this diagnosis, overproduction is not our trouble, but that most of it is due to laws, subsidies, and special benefits which labor and industry have obtained from our Government. As industry is not selling its production in a free market, nor is labor, but in a market supported by many special concessions, so we cannot sell our agricultural products on the supply and demand, and stay on an equality with these other groups.

Thus, we, using this view, must have some support for agriculture. We may not like the remedy, but our society, to again paraphrase Lincoln, cannot exist half free and half slave.

Most surplus are only surplus at a price, because they exist in quantities easily within the ability of the country to consume, except possibly wheat and cotton. The disparity between the income of the farmer and wages and industry is not explained by overproduction, as our income is only low in comparison with the artificially high wages and charges which constitute agriculture's cost of production. As for example, there is no shortage of labor, yet wages keep advancing, our products are in the same position as the supply of labor, yet on the other hand they keep going down.

The CHAIRMAN. What is the solution? As I have said a dozen times here today, what is the solution? Let us have your solution to it, please.

Mr. WALDO. The solution of the thing is to discard the present concept of parity as outmoded and outworn, and to substitute a standard support basis on income and not on price-pay the farmer in cash the difference between the support standard and the average selling price, the same as they are doing today in wool. Let us establish a fair base for the prices to which we are to go. Let us limit the amount of payments under this plan to the average production of the family-sized farm, and keep that high enough so as to benefit most farmers, but not the industrialized farms.

Let us determine the purchasing power by dividing the cash receipts by the index of prices paid by farmers for supplies, machinery and services. Let us adopt a unit of measurement which is applicable to all agricultural commodities upon which support can be reasonably anticipated. Let us determine eligibility by observance of soil and conservation practices, and by compliance with programs to provide against wasteful production or disorderly marketing.

Under this plan which has been presented many times with many variations by many in both high and low position, we would have production payments which would keep the supplies ample for high consumption and the farmer happy with assurance that he would be on a parity with other segments of our economy. Our objective must always be parity between prices and income.

In conclusion, the theory that farm price must be allowed to drop to a low level to bring about a decrease in volume cannot be subscribed to by many. It means that price support would not be available when it is needed most. The program to be set up must effectively serve the farmer and his family on his farm. It must not discriminate against consumers. The program outlined herein will meet the need of protection of both farmer and consumer with plentiful supplies at a fair price.

The CHAIRMAN. Thank you, Mr. Waldo.

Your entire statement will be made a part of the record at this point.

(The prepared statement submitted by Mr. Waldo is as follows:) The writer of this proposal was born in Camden, N. Y., in 1893, of immigrant parents from Italy. Moved to Canastota, N. Y., in 1902 and has lived there since. Was educated in the Canastota Public Schools, Valparaiso University in Indiana, and graduated from Albany Law School of Union University in 1914. Volunteered for service in the First World War and was awarded the Distinguished Service Cross by Gen. John J. Pershing for his services in battle on November 1 and 2, 1918, at the Bois de Loges during the Argonne offensive. Has been engaged in the practice of law in Canastota since his graduation, having been elected police justice for 16 years and mayor of his community for 14 years. As my father before me, I have operated a commercial vegetable farm on the muck lands of the Lenox Sullivan Drainage District for the past 25 years with my principal crop onions and potatoes and minor crops of lettuce and carrots.

I have been the executive secretary of the Lenox Sullivan Drainage Improvement District Association since 1932. I was president of the New York State Vegetable Growers Association for 5 years and for a like period I have been president of the New York State Council of Farmer Cooperatives and president of the Syracuse Production Credit Association for 5 years. Was chairman of the New York-New Jersey Milk Shed committee for 1 year and have served on committees for revision of New York State Cooperative Law; and many other statewide committees for agricultural progress, and last, but not least, executive secretary of the Canastota Growers Cooperative Association, Inc., for 22 years.

I have been a member of the Grange, Farm Bureau, and 4-H Club; also adviser and member of the education committee to provide a handbook for guidance in the study of cooperations for vocational agriculture.

My presence here is not to attempt to ask the Congress of the United States for a law to present to each individual farmer a handout from the United States Treasury. Nor am I here to present a plan for one segment of agriculture over the remainder. I know, as well as you honorable gentlemen, that agriculture cannot continue to function properly where it is half slave and half free. If we support grain and not livestock, then the latter segment of agriculture is denied an equality of opportunity which is assured to it under the Constitution. So will it be with all commodities; either all should be administered on the same basis or agriculture will always be unbalanced.

The basic premise upon which I am to speak is that this committee and the Congress are desirous and that their aim and purposes are the preservation of the family-type farm and not to present legislation which in the final analysis will tend to place such agricultural enterprises at a disadvantage with large corporate farming. There will be many proposals presented to you, but I dare say that not many of them are basically for the preservation of the family-type farmers with its limited drain of the Treasury of the United States. The large majority of them contain no restriction as to the amount any individual or corporation may obtain under the program.

May I deflect for a moment to give an illustration of what this means. In one county, with which I am familiar, during one of the years of the late and unlamented potato program, there were 18 farms in the program, and the total outlay was $396,000, or an average of $22,000 per farm, but 5 of these 18 received $305,900, or an average of $50,966, and the 13 received an average of $6,900 under this program. If the average per family farm had been taken as a guide the Government could have saved $270,000 and the program could have been saved. Any program which may be adopted will cost the taxpayers money but let us have a program that will preserve the family-type farm which is the foundation of agriculture and yet not bankrupt the Treasury.

I know many nonagricultural people are opposed to subsidies supports or similar plans which envision the payment of funds from the Treasury of the United States; but let us for a moment digress and take a look at what under present legislation are we supporting or subsidizing in nonagricultural pursuits: (1) The tariff is but another form of support for industry.

(2) The steamship lines are subsidized to the extent of 50 percent on the cost of constructing new ships which cost the taxpayer $48 million last year. (3) A further subsidy is paid steamship lines to compensate for high-labor costs to that protection the Treasury wrote checks on our dear Uncle Sam to the extent of $100 millions.

(4) The airlines were given a direct subsidy last year of $73 million plus $57 million for mail and free use of facilities that cost the taxpayers $75 million.

(5) Publishers are subsidized to the extent $230 million annually on their second-class mail.

(6) Industry is permitted to hold back from the Treasury billions in rapid writeoff for depreciation, oil depletion, and so forth.

(7) Labor is supported by legislation for minimum wages, unemployment benefits, pensions, Wagner Act, legalized strikes.

(8) Foreign aid has been checked out of the Treasury to the extent of about $75 billion.

There were many others, such as the bailing out of the banks on dead mortgages. we are not here to quarrel with these, but cite them to show agriculture is not the only hand which is extended asking to be allowed to exist.

We all will admit that agriculture is ailing and that the patient is failing, if not fast, at the least it fails to hold its own. Now as anyone who has been ill knows, before we can prescribe a treatment, we must have a diagnosis of the patient. We seem to have two different stages of the problem to solve.

First A. That most of our problems are due to overproduction and that because of surplus overhanging the market, prices are down; so the doctors say let us cut down production; but if we are to do this, rigid high price supports will aggravate the malady, or to avoid this each farm would have to be minutely supervised.

B. If we abandon rigid price support and take up flexible supports then production would not be stimulated and within a short period of time the

situation would work back to supply and demand in which the farmer would take his chances on survival on the efficiency of production of his farm.

The second view is: A. That the farmer is the low man on the totem pole of our industrial economy. There is great disparity with labor and industry. So here we are with costs fixed by the wages and charges arbitrarily set by labor and industry. Yet we have a decreasing income and we are not yet integrated in this new economy on a basis of equality.

B. With this as the basis of this diagnosis overproduction is not our trouble but that most of it is due to laws, subsidies, and special benefits which labor and industry have obtained from our Government. As industry is not selling its production in a free market, nor is labor, but in a market supported by many special concessions, so we cannot sell our agricultural products on the supply and demand and stay on an equality with those other groups.

Thus, we, using this view must have some support for agriculture. We may not like the remedy but our society to again paraphrase Lincoln cannot exist half free and half slave.

Most surpluses are only surplus at a price, because they exist in quantities easily within the ability of the country to consume, except possibly wheat and cotton. The disparity between the income of the farmer and wages and industry is not explained by overproduction as our income is only low in comparison with the artificial high wages and charges which constitutes agricultures cost of production. As for example, there is no shortage of labor, yet wages keep advancing, our products are in the same position as the supply of labor, yet on the other hand they keep going down.

So let us conclude: Overproduction is not the primary cause of our trouble but most of it is due to industry, and labor having the jump or preferred position in comparison with agriculture.

Solution: Shall we knock down supports for labor and industry?

The answer is no.

The proper solution is give all agriculture equivalent support to maintain the family-sized farm.

The program which would, in my opinion, do this very thing and allow the family-sized farm to continue at the least cost to the Treasury is as follows: 1. Let us discard the concept of parity as outmoded and outworn.

2. Let us substitute a standard of support based on income and not on price. 3. Let us pay the farmer in cash the difference between the support standard and the average selling price.

4. Let us establish a fair base. Take the 10 years 1940-50.

5. Let us limit the amount of payments under this plan to the average production of the family-sized farm and keep it high enough to benefit most farmers but not industrialized farms.

6. Let us determine purchasing power by dividing the cash receipts by the index of prices paid by farmers for supplies, machinery, and services.

7. Let us adopt a unit of measurment which is applicable to all agricultural commodities upon which support can be reasonably expected.

8. Let us determine eligibility by :

(a) Observance of soil and conservation practices.

(b) Compliance with programs to provide against wasteful production or disorderly marketing.

Under this plan which has been presented many times with many variations by many in both high and low position, we would have production payments which would keep the supplies ample for high consumption and the farmer happy with assurance that he would be on a parity with other segments of our economy. Our objective must always be parity between prices and income.

In conclusion, the theory that farm price must be allowed to drop to a low level to bring about a decrease in volume cannot be subscribed to by many. It means that price support would not be available when it is needed most. The program to be set up must effectively serve the farmer and his family on his farm. It must not discriminate against consumers. The program outlined herein will meet the need of protection of both farmer and consumer with plentiful supplies at a fair price.

The CHAIRMAN. Our next witness is Mr. Stout.

Give us your full name for the record, and your occupation.

STATEMENT OF STANLEY E. STOUT, PENN YAN, N. Y.

Mr. STOUT. Mr. Chairman and gentlemen of the committee, I came here to speak against the penalties on the growing of wheat for feed. That was well covered this morning by Mr. Smith. I will not repeat any part of my statement on that. I am more concerned over something which I have heard this afternoon.

I was going to make it a part of my statement, that I knew of no poultrymen who were interested in supports on eggs or poultry. I was very much surprised to hear from those groups this afternoon.

I want to say, on behalf of the poultrymen of central and western New York, that we are very much opposed to any supports. We do not want subsidies, because we do not want controls. We want the poultry industry to stand on its feet.

Gentlemen, if I may add this: I think the best advice, some of the best advice which we could get from Washington would be a reminder that this country was built on the initiative and self-reliance of people, and not on Government help.

Thank you.

The CHAIRMAN. Thank you. Your entire statement will be made a part of the record at this point.

(The prepared statement of Mr. Stout follows:)

My wife and I own and operate a general poultry farm located near Penn Yan in Yates County. This part of western New York is well adapted to grain growing. Since starting farming in 1947 we have increased our poultry operation as we have increased our grain production. In some years, the law of supply and demand has ruled that returns from poultry were to be small, but in general such years have been more than offset by years of good prices and we have accepted these hazards in the belief that if a type of farming is adapted to an area and the business is operated efficiently, it will yield a reasonable profit.

During the past 2 years, we have felt the effects of another law besides the law of supply and demand, which law is the Agricultural Adjustment Act of 1938 as it effects production and marketing quotas on wheat. The law says

that if a farmer raises more wheat than his quota provides, even if such wheat is raised as necessary feed for livestock, he must either: (1) Store the wheat; (2) pay a penalty on the excess; or (3) give the wheat to the Secretary of Agriculture.

I believe that this law is arbitrary and unfair for, if a farmer attempts to obey the law and refuses to grow the grain which he needs, he immediately faces some problems. First, he is forced to buy wheat on the open market at about twice his normal cost of producing it. This, of course, will help western grain growers. Secondly, he is not allowed to use to maximum capacity the large amount of equipment which he has purchased at high cost. Thirdly, a poultryman faces a serious problem as to what to do with the land. If he is to grow grass or roughage and harvest it, he is then faced with investing several thousand dollars in equipment which his poultry cannot use. If he does raise roughage and sells it, he rarely makes a profit, for the cost of shipping a bulky product like hay, soon removes any profit. Commercial hay farms in western New York have nearly gone out of existence. If he feeds the hay, he must then launch into another livestock enterprise at great expense and attempt to compete in another field which already has its overproduction problems.

The net effect of this law is to force poultrymen, who raise wheat to feed, to pay three times for the price support program. First, the poultryman along with everyone else pays his share of the taxes needed to administer the program. Secondly, he pays a higher price for every ton of feed that he buys because the Government has withheld grain supplies from the market. Now he is asked to pay a third time by being fined for exceeding his quotas, or by having his excess wheat taken from him. In effect, the law says that it is a crime for a young farmer to attempt to support his family by intelligent management such as raising feed.