would like for you gentlemen to consider that and we are faced with another additional cut more than 12 percent which we have been notified of; faced with an additional cut because of the Secretary of Agriculture having power under the law to reduce acreage to keep supply in line with demand to a certain percentage and we are faced with that problem.

I want to impress something else upon you gentlemen: That tobacco is the only one of those commodities that is just about today being taxed completely out of existence by the Federal and State Governments. Our Federal tax is 8 cents a package on cigarettes, which is $1.36 a pound on the same tobacco we got 40 cents a pound for this

year.

The CHAIRMAN. I think that was one of the compelling factors in letting you have 90 percent.

Mr. MATTHEWs. We want to assure ourselves that we will continue to have 90 percent and at the same time we want to keep this reduction in acreage as low as possible. We have a lot of farmers in Georgia with only a 2- and 3-acre allotment. Those farmers can barely eke out an existence with that small acreage, and we don't feel they can be cut lower than that.

However, as I said, we want to maintain 90 percent at any cost, whatever that cost is. We must have 90 percent.

The CHAIRMAN. I do not think you need worry that the Congress will do a thing about tobacco, but will let it remain as it is. This year, as I remember, there were 5 or 6 bills passed with the consent, as I understand, of all tobacco growers, and the only part of it that may pose a problem is the planting of undesirable tobacco. That is the thing that ought to be corrected by the growers themselves.

Mr. MATTHEWS. We have a movement under way to try to check that.

One other thing a little off the subject of tobacco, but it deals withwe inaugurated a regulation from the county level to the State Farm Bureau level, unanimously adopted in a general resolution there to set a trade, not a trade necessarily, but change of acreage from one farm to another within the county. It is going to require national legislation to get that into working order, but it would be a tremendous help to our tobacco farmers and small cotton farmers especially tobacco for this man, this farmer here who has a pond and irrigates and this man can move to tobacco over there and save disaster like last year. A lot of farmers made nothing last year, a complete loss on account of drought.

If we could move acreage from one farm to another-you can't do it now under the law; it has to stay on the farm it was allotted toif we had a provision in the law to permit us to move acres from one farm to another, it would be a great help.

The CHAIRMAN. The same owner?

Mr. MATTHEWS. From one farm to another, still stay in the lands of the same owner, but he could rent 2 or 3 acres on the next farm next to a lake and plant his tobacco there and irrigate it under the same irrigation system with the same water as his neighbor did. It would be a tremendous help to be able to do that.

A lot of our farmers don't want to grow peanuts because it is not, production is not feasibly adequate. So he would like to move that across to another farm and trade to farm acreage of cotton he could

produce at a profit, but can't produce peanuts. That would help. Some farmers produce peanuts and some not. By moving from one farm to another, it would make all the difference in the world in the net income of that farmer.

We would like to see that considered and it is in our general resolution to the Farm Bureau, unanimously adopted at the State level, and if other States would adopt it, it would be a big help to us. The CHAIRMAN. Any questions?

Mr. Strickland, do you desire to say anything or endorse what he said?

STATEMENT OF ERNEST STRICKLAND, CLAXTON, GA.

Mr. STRICKLAND. I think Mr. Matthews maybe didn't make it quite plain enough that with the high cost of irrigation equipment maybe my neighbor could put his 1.1 acres of tobacco in the same field with my 3 and with the same irrigation equipment from 1 pond irrigate all of that and save a lot of unnecessary labor and trouble. We have had quite a bit of experience with that. I do quite a bit of irrigation. The CHAIRMAN. The plan that you envision, as I understand it would be this: That even though the transfer were made, the farm from which it was transferred would not lose that acreage.

Mr. STRICKLAND. No, sir. That could be done with the ASC, by the supervision of the ASC committee without combining those farms. I have a similar situation where I have to take care of my father's farm and this coming year I have definitely made up my mind, after 4 years, to combine those farms to get that tobacco where I can handle it and those sharecroppers had rather tend it there than try to take the big job of transferring this portable irrigation equipment to do the job.

While I am here, if I may I would like to say one word about cotton, as I have studied cotton more than I have tobacco, having been on the State committee for 5 years. I heard nobody mention it at all today and I may be out of line but I wanted to hear something about stockpiling a bunch of cotton. It doesn't get out of date like guns and jet planes and tanks and other things, and to me it is one of the best things for the security of our Nation, in my opinion, to stockpile at least 10 million bales, take it off the market, earmark it for war emergency only. It wouldn't rot overnight. You fellows know how we can handle cotton.

That would relieve some of the tension on cotton and maybe make our enemies take a second look at what we were trying to do. And in case of emergency, as flexible as farming is, we could turn to food instead of fibe for a couple of years and be able to fight a war.

That is worrying me. Maybe you don't see it like I do, and I hope you don't, but I am worried about another war.

That would about conclude my remarks for today. I thank you for listening to me.

Another thing I want to say is to compliment you on the soil conservation program because God knows I don't know what we would have done without that. Right now any minute I want a technician he is as close as my telephone. And time we want to build a pond he is there to run it or a terrace, he is right there. I want to commend you fellows on soil conservation.

Mr. MATTHEWS. On the idle acre proposition, we would certainly like in Georgia, and a lot of other States I am sure would like to see idle acres set out in pine timber because we will never have too much good lumber. I lost this hand cutting lumber. I know the situation. We would like to see the Federal Government put us out in timber.

The CHAIRMAN. It is a pity Kansas and North Dakota could not grow pine. This program would work fine in Southern States, and I hope the farmers themselves take that up because it is a good way to create wealth in the near future. I understand you can grow timber here in 7 to 10 years.

Mr. STRICKLAND. I am in favor of the fertility bank. That is one thing we will need in the near future if we don't change our way of doing.

The CHAIRMAN. We are going to hear from the man who has all the answers, Stephen Pace. Give us your name and occupation.

STATEMENT OF HON. STEPHEN PACE, AMERICUS, GA.

Mr. PACE. Mr. Chairman, this is Stephen Pace of Sumter County, Ga., an old, broken-down lawyer.

Mr. Chairman, your introduction is somewhat embarrassing because I do not have the answers and the reason, Mr. Chairman, I do not have the answers is I don't know where you want to go.

The CHAIRMAN. I was just trying to be facetious. I am sorry you took me seriously.

Mr. PACE. I did not. What I mean, Mr. Chairman, is it would be very helpful certainly to me, and I think to every witness who is here today and to every farmer across this Nation, if they could get an understanding of what the Senate Committee on Agriculture, the House Committee on Agriculture, and the Congress, what they want to do about agriculture.

For instance, Mr. Chairman, do you want to give the farm people an equality of treatment? Do you want the farm people to have a fair share in the national income? When you legislate

The CHAIRMAN. That is what we hope to do and want to do. Have you a plan to attain that goal? If so, let us have it because that is what this committee wants. That is what I want to do, I know, and if you have a plan whereby agriculture can be put on the same level as other segments of induustry it ought to be done because without a successful agriculture everything else will die on the vine.

Mr. PACE. I agree with you and if that is the view of the committee, certainly we are prepared to sit down and work out the legisla tion that will do that job.

Mr. Chairman, another inquiry in my mind is when the Congress legislates in favor of one segment of our population, does the Congress intend to provide some comparable protection and benefit for those who till the soil? I have specifically in mind, Mr. Chairman, the recent action of the Congress in increasing minimum wage to $1 an hour. I don't know whether you have had the statisticians attached to your staff to calculate exactly what the effect is going to be on agriculture and its consumers of agricultural commodities.

I have a rough estimate, Mr. Chairman, that the increase in the minimum wage from 75 cents to $1 per hour will increase the cost of producing the agricultural commodities of America between 3

and 5 billion dollars annually. That, Mr. Chairman, is reflected up and down across the board, the increase in farm wage in the highly competitive labor market we have now and the increase in the manufacture and processing of everything the farmer purchases. But in addition to that, Mr. Chairman, it is also estimated that the increase in the minimum wage from 75 cents to $1 per hour will also increase the cost of the food commodities to the consumers by another 3 to 5 billion dollars a year.

At the outset I attempted to bring to the committee some statistics, but I learned early this morning that the chairman and all members of the committee are well versed in statistics. But there is a statistic I have in my previous case here showing that the cost of processing and selling agricultural commodities is between 30 and 40 billion dollars a year.

Now the point has been made here that the price of a loaf of bread was a certain figure 4 or 5 or 10 years ago and that now the wheat grower is getting less the price of bread has gone up. That isn't any thing in the world but wages-the wages of the men in the flour mills who make it into flour, the wages of the men that work on the railroads to transport it to your hometown, the wages of the man that bakes and wraps the bread and delivers it. It is all.

I have here the last marketing situation of the report of the Department of Agriculture showing the enormus and rapid increase of taking a farm commodity and delivering it into the hands of the housewife. Therefore, as I see it, when the Congress increased the minimum wage-I make no complaint about that; I believe in good wages, but I believe in equal treatment-and when the Congress increased the minimum wage from 75 cents to $1 an hour you decreased the return to the man that work in the field that produced the commodity by from 3 to 5 billion dollars, but at the same time you increased the cost that the housewife must pay in the store. Do I make myself clear?

The CHAIRMAN. Why should the processors and all those who handle that food make such enormous profits as time goes on? It strikes me something ought to be done in that direction. All the steel producers and everybody else seem to make more and more profits irrespective of what Congress does about wages. Why could it not work both ways? Mr. PACE. I take no exception to the fact that the processing profits, the handling profits might well be looked into, but, Mr. Chairman, there is one I did look into. I looked into that loaf of bread because I wanted to get the answers and I started out with a view in my mind that the baker and retail store was the one that was mopping up. To my astonishment I found that the profit to the baker was not 1 penny more on a 19-cent loaf of bread than on an 11-cent piece of bread, and I found that the retail store profit was substantially identical as it had been.

Now I know some of these big corporate interests handling food commodities are making big profits-reports show they are-but the point I make now is, Mr. Chairman, I think the Congress of the United States has by one stroke and I am serious about it-decreased the return to those that work out in the fields in the sun to produce the commodity and at the same time has increased the cost to the housewife who is the consumer of that commodity.

What I am asking is, What are we going to do about that? Do we want to establish a policy in the Congress that at the same session the same moment that the Congress enacts legislation that helps one segment of this economy of this population, it is going to see that those who are adversely affected thereby are going to be adequately compensated for that additional burden? Is that the policy? If it is, I want to help you write it.

The CHAIRMAN. What is your suggestion?

Mr. PACE. Let me get a little further along.

Now, in connection with wages, I must mention steel. The steel workers are one group that doesn't have to go to Congress. They can, at the call of their leader, walk out. They did this summer. They stayed out. They got the wage increase. The next day the steel companies increased the price of steel 5.8 percent which not only compensated them for the increase in wages, but also included substantial other items.

You heard Mr. Cox testify a few moments ago that the tractor he bought this week went up 7 percent over what he could have gotten it 2 weeks ago. Do you know why? That was the impact that had finally hit down on the farm of the 5.8 percent increase in the price of steel.

Now that brings up a very interesting question. Is the Congress going to protect those who must buy those commodities, the people on the farm, or is the answer-and I think if we don't get it in Washington maybe we will get it across the farms or is the answer going to be that the farmers of this Nation are going to organize where they, too, are going to have a voice in what they get for their commodity? Must that be the answer?

Now on the same question about wanting to know what you are going to do, Mr. Chairman, does the Senate Committee on Agriculture and the Congress believe in parity prices? Does it understand and believe that a parity price is a fair price both to the consumer and to the producer? If it is, I can rewrite that legislation. But somebody before we can differ about this, that, and the other about cotton, corn, wheat, rice, tobacco, and peanuts or other commodities-to write the program somebody, other than a political promise, we have had those, has got to know what can be expected of the Congress of the United States.

Mr. Chairman, there are two problems that you spoke of last evening in your short talk to the distinguished guests at the dinner, and that have been mentioned here today. I should like to discuss those.

First, I observed the Chair and members of the committee, rightfully so, are disturbed about the surpluses. Well, maybe I am different in some way but you know, Mr. Chairman, in a way they could prove to be the greatest blessing that ever happened to the American people. What are we going to strike at, Mr. Chairman? Have you had an opportunity to sit and meditate on what the situation would be if there were scarcities instead of surpluses? I want to give an example which happened in peanuts last year and was testified to a few moments ago.

We have a terrific drought in the Southeast and Southwest. There was a shortage in peanuts. They made the allocation, the acreage