their fathers' farms and continue to make it possible to provide our present enjoyable agricultural abundance and it is to those problems that we wish to address ourselves.

Now, charges have been made that the farmers are expecting and demanding excessive incomes that might be in the nature of excess profits.

We are not. We are told, as a matter of fact, that the price supports, rigid in nature, of recent years, were only a continuation of wartime price levels, and that this, at the current time, is not realistic; therefore, we must console ourselves with going to a peacetime economy, so far as prices on the farm are concerned, and not expect this. However, to me, it seems that we are missing the problem a little. Why not be realistic and look at the facts as they are?

I cannot see the wartime price level argument that has been so often proposed because of the fact that the things that I have to buy have increased in cost since the war.

My farm machinery costs more, my automobile, my pickup, my costs of living, all the way down to our haircuts and a shoeshine, all have increased in price, while the things that I have had to sell have decreased in price, in spite of the bolstering supports of our Gov

ernment.

So let us be realistic and discuss this thing on a comparative basis, rather than on a wartime price level basis.

Let us understand the fact that the spread between the producer and the consumer is caused by a certain amount of factors that have not been given the proper publictaion by these able gentlemen of the

press.

They have not told all the story, in my humble opinion, so that the consumer who buys practically everything that he buys on a monthly-payment basis, except groceries, howls to high heaven when she gets to the grocery store and finds she has to pay the full price, and that is the only thing that is considered, the full price, as it were, by and large, because she had to pay it all that day and not on an installment basis.

We have overlooked a lot of the factors. The fact that her husband's salary, for example, will buy more groceries for her than it ever has in the past; and the whole thing is a matter of relativity, in my opinion, and the farmer is entitled to his place in the relative position of other segments of our society, as I see it.

For my farm program to possess those qualities that I believe to be necessary for the security of our economy and Nation, it must include ample provision that will assure the continued solvency of the American farmer and, at the same time, afford him ample opportunity to earn a livelihood and a standard of living that is comparable to that enjoyed by other members of society.

Now, to that end, let us discuss the farm program for a moment, if you please.

It is my feeling that since we are in a regulated economy and there is no end to the regulation in a regulated economy, we have learned we cannot be isolationists, and we have learned we cannot compete with the remainder of the world, nor can we give it away and raise the world standard without automatically lowering our standard of living.

So we have to hope for some way to remain solvent, and at the same time go about our business as a normal member of the family of nations.

I believe that the nearest approach to that has been the rigid parity of not less than 90 percent, with rigid controls, and marketing quotas being applied when necessary.

However, if there has been some failure of price supports to create the result that we hoped for them to do, rather than charge it to the price supports themselves, I prefer and suggest that it be charged to the fact that there has not been sufficient controls or quotas to go along with the program to attain the purpose for which it was intended.

Now, there is another contention: Under the present support program, we do know what acres in farming can be operated at a reasonable profit; whereas under a sliding-scale program, or some other untried program, it is an indefinite factor as to whether or not we will operate as a profit; and it is a feeling of the farmer, and I know it is true with me, that I would rather operate half my acres at a profit than the whole shooting match at a loss. [Applause.]

Now, may I say a word about the sliding scale. As the gentleman so aptly put it, the slide goes downward instead of upward, even without controls, and reaching the level that we hoped that commodities would reach, no great deal of relief will be given to the consumer because the cost of the basic product is relatively small in the finished item; witness the loaf of bread, or a cotton shirt, without going into the details.

You could lower the price of cotton sufficient to break cottongrowers without effecting much saving in the price of a shirt, and likewise in the price of a loaf of bread. You could lower the price by 1 cent and put wheat farmers out of business.

So, consequently, we have to look at a comparative level there. Therefore, I think that the necessary controls must be imposed to hold the production in line with our normal domestic demand and our normal portion under the restrictions, of course, it now has from the State Department, the Department of Agriculture, of the foreign trade situation, that we might enjoy, and even if we do put production controls on a sliding scale, we would slide the scale downward to where, I think, the thing would happen which would be this: That the price would become so low and the effort so great to produce more bushels that the point of diminishing returns would be reached to the extent that it would be entirely a dead weight at the hands of the Government to attempt to keep it going, even though the price were low.

Now, that brings us to the two-price system. I would like to say a word or two about that. If we go into a two-price system, and support domestic parity at a hundred percent, well and good.

However, we have to determine a reasonable manner in which to arrive at what our domestic allotment quota would be and in many areas of the country that has been fraught with drought and uncertainty of production-the thinking seems to be that a 10-year period, or some such average, would possibly be a more normal expression of the normal productivity upon which you could base a figure to arrive at the domestic allotment quota.

Now, if we allow production to go without control under a domestic allotment quota, it is my opinion that the result will be that we will be subsidizing foreign nations by throwing our productive power into the world market at a loss to the farmer and bringing the world market down to where it will become cheaper for certain nations that are our customers to buy the grain from the United States at the expense of the farmers than to produce it themselves.

Therefore, under a two-price system, we must be mindful of the fact that we ought to include ample provision to keep that condition from occurring with regard to the foreign markets.

There are, of course, several theories about the price control. The certificate plan that the boys from the Pacific Northwest have so ably presented, with which you are familiar, works also as an insurance clause for the farmer, to issue the certificate each year, whether or not he does raise a crop.

Now, I propose not such a direct subsidy as that, but I propose that a carryover privilege be allowed in the event of a two-price plan being considered; and it seems to me a lot of the argument here today has definitely pointed to the coming of a two-price plan.

But if I have produced-say on my farm I have a 5-bushel allowance on whatever acres I am allowed to put into grain for the purpose of my domestic allotment, and I raise a bumper crop of 25 bushels, it would be far better for me to hold over for future marketing under my domestic allotment an amount equal to it, and sell it the ensuing year, regardless of which year it was grown, rather than dump it on the world market and, at the same time, I would be induced then not to plant more grain, but to hold my grain in storage cheaper for domestic-allotment purposes, cheaper than I could dump it and grow another crop.

The CHAIRMAN. If that plan were followed, sir, would you expect Government loans on it, or would the farmer hold it himself?

Mr. HOGGE. If that plan were developed on the holdover, I would expect no Government loans whatever, because theoretically that would be taken care of in your ability to market your domestic quota, and so much of your own quota as you cared to, or as your banker might force you to market.

But it would give you the option of carrying over, which would have the effect and the result of an ever-normal granary and at the same time would give a tendency to offer opportunity for land to rest and not force farmers to plant to maintain acreage quotas on the basis of what would appear to be a normal crop failure year.

The CHAIRMAN. Let us go to the question of the restoration of the 90 percent of parity formula. You said that you had rather plant half of your acres into a protected crop than to plant the whole acreage and maybe lose on it?

Mr. HOGGE. That is right, sir.

The CHAIRMAN. Now, what would be your plan for diverted acres? Mr. HOGGE. The diverted acres should not be used in competition with any regulated crop, is my opinion.

The CHAIRMAN. Yes.

But would you compensate the farmer for any of that?

Mr. HOGGE. Not necessarily. He is getting a hundred percent for his domestic allotment or 90 percent or whatever the pegged price

would be for his crop; so I do not think that you could pay him for that unless he were requested to do some soil conserving act which he could not reasonably be expected to finance, and pay out in the immediate future.

I do think that long-term programs in the way of conservation should, since they are to the interest of future generations, receive some reward because they are of benefit to society.

But just because I happen to farm on the contour or across the level to conserve more moisture does not mean that I am entitled to a subsidy or a payment, because I want to make more money doing that.

And, therefore, it is good business practice for the time; but if I am going to lay out my land for a period of years and establish a crop or return it to grass, natural state, then I cannot hope to reap the reward that I ought to get from it, probably, during my lifetime. If we are going to go at it in an expensive way, some terracing is so expensive that the farmer, without some aid, cannot be expected to cover the cost; so on those things only would I suggest that there be Government compensation.

The CHAIRMAN. Well, now, suppose in the process we pass a law that would reinstate the old program, and assuming that we put no price supports, except at the discretion of the Secretary of Agriculture on other programs, would you, in that case, take out of production the diverted acres and not permit the farmer, who is protected, from reaping any benefits whatever from those diverted acres?

Mr. HOGGE. Well, I think since you are going to leave to the judgment of the Secretary of Agriculture matters concerning the acreage that he takes out of production and the quotas under which he must operate, if there is another crop that could be profitably grown for the Nation, it could be so publicly announced without endangering the economy of agriculture.

The CHAIRMAN. You mean provided there is a shortage?

Mr. HOGGE. That is what I mean. I do not believe in

The CHAIRMAN. Provided it would not be in conflict with production in other areas.

Mr. HOGGE. That is the point exactly. Because I think it is a foolhardy method of thinking to think that we can set up in the face of the uncertainty of production and the uncertainty of forecasts of nature, any particular rule of thumb we can go by as far as diverted acres go, Senator. That is my opinion about it.

So somebody has to exercise discretion to preserve our national food supply and to keep our economy.

It is fortunate we are wrestling with a surplus instead of shortages. We know that; so we do not want to get ourselves into a position to have to wrestle with a shortage problem.

The CHAIRMAN. You agree that regardless of whatever program we propose here, whether it be an amended 90 percent price support, an amended flexible price support, the first problem we are confronted with is to get rid of the surpluses we now have on hand?

Mr. HOGGE. That has to be done.

The CHAIRMAN. All right. Proceed.

Mr. HOGGE. Regardless of what we call them or that we set them aside or any concept we may use on surplus results only in one thing: in reality they remain surpluses.

The CHAIRMAN. Yes.

Mr. HOGGE. And if they are real, we have to contend with them as such, regardless of whether we set them on a ledger or off in a bin or take them to Admiral Byrd's Little America and store them, as he has suggested; but nevertheless they are surpluses.

The CHAIRMAN. That is the next question I am going to ask you. Do you have any plan or can you tell us of any plan to dispose of these surpluses.

Mr. HOGGE. Of the present surpluses, you mean?

The CHAIRMAN. That is right; of course.

Mr. HOGGE. You suggest that we ought to get our house in order to introduce in the future what we believe to be a workable plan? The CHAIRMAN. That is right; that is what we are talking about. Mr. HOGGE. We have to go into a competitive world market to dispose of these. We have to decide the economic question of whether or not it is cheaper for us to go ahead and subsidize the sale of these surpluses in open trade or continue to pay storage and take the losses that may come from deterioration-that come out of it.

So if it were possible for us, at or near the same projected figure, to dispose of the surpluses, even though it did cost the Government a subsidy to do it, either in direct subsidy, transportation, or however we have to raise it to compete in the market, it might be cheaper in the long run and healthier for the whole agricultural problem we are now undertaking to resolve, to go ahead and do what I say-to do that at Government expense rather than to continue to pay the bill that the public continually harangues us about of storing and keeping off the market commodities that ought to be in circulation. The CHAIRMAN. Of course, you realize the problems that confront us in that respect.

In the beginning of the year I had the privilege of selecting my good friend to my left here, Senator Eastland from Mississippi, as chairman of a subcommittee to look into the charge made by someone that the State Department was interfering with the sale and disposition of the surpluses abroad. The State Department took the position that we should not in any manner do things that might knock their economy out of balance in other countries and, therefore, any time any surplus commodity was offered in any particular country, the State Department took a peek at it, and if it in any manner disturbed the economy of that country, usually they said "No."

Mr. HOGGE. I realize that. There is no chance of our putting on a fire sale without disturbing the playhouse that the State Department fit up with our neighbors; isn't that right?

We cannot throw a fire sale, and we cannot give it away. But there we come again, Senator, into the conflicting attitudes of two separate departments of government, and since our Government is established upon the concepet that it is the legislative and the executive branches of the Government

The CHAIRMAN. Don't forget the judiciary.

Mr. HOGGE (Continuing). They have-and the judiciary-have to get along each with the other to act as checks and balances to see that no one section takes off with the rights of the others. Therefore I think that question, being as academic as it is, is beyond my possibility to explain, Senator, and I rather hesitate to go into a discussion here today of the concept.