bank plan? That would keep a certain percentage of the land in grass to protect the future wealth and productivity of that farm for the farmer himself and for the Nation in the future.

This plan for a few years in order to work off our surpluses and restore farm prices to parity will require retiring a lot of acres fom production. In retiring acres from grain and converting to grass, we must protect the livestock production. We already have too many hogs and all the cattle we can consume. A certain percentage of this land will have to be absolutely retired, not even pastured nor cut for hay. A new program should contain a Government rental fee to pay the farmer the cost of the taxes, the cost of seeding this land and a fair return for these acres. This fee should be big enough to make these acres pay as well as the average acres in the farm.

The cost of this new soil-bank plan will not be any more than our past programs. If the rental fee for retired acres is high enough to make these acres pay as well as the average acres in the farm, compliance will become a general practice, production control is sure to be accomplished. This program will stand the test of time and history will record it as a far-reaching Government policy on agriculture, preserving the liberty and freedom of agriculture and insuring soil fertility and future productivity of this Nation's agricultre.

STATEMENT FILED BY JOHN C. KAYSER, POCAHONTAS, ILL.

Permit me to begin by stating my own position. I am a southern Illinois farmer operating a 480-acre grain and livestock farm on a rental basis, raising feed grains, chiefly corn, wheat, and hogs. I have worked at farming all my life except for 2 years of military service during World War II. Since 1949 I have been farming the home place on my own. It has been quite difficult to acquire sufficient operating capital from the profits to be made in farming. With constantly rising costs, $11 hogs, and $1 corn, it is practically impossible, even with good management, to even show a profit. Naturally I am very much concerned about the economic and political situation which is causing farmers to be the most underpaid segment of the American economy. If our agriculture is to avoid serious crippling something must be done very quickly.

Certainly if we are to solve this problem we must turn away from the mistakes of the past. We must recognize that the Commodity Credit Corporation is not a consumer. We must abandon the principle of high rigid price supports which build up huge surpluses in Government warehouses to depress future markets, encourage foreign competition in the production of agricultural commodities, and increase the use of substitutes, while our own products are priced out of the market. It is my definite conviction that present surpluses are at the very root of our present problem and that no kind of a farm program will have a chance to succeed until they are disposed of. If our surpluses were no longer a threat over our markets and our price supports and production controls were geared to consumer demand both at home and abroad, certainly farmers would not be in such serious circumstances as they are today.

It would seem to me that any solution to this problem should be directed along two main lines. First we should endeavor to produce for consumption what the consumer wants at a price the consumer can afford to pay. Much more remains to be done along the line of research for uses of agricultural products. Certainly far greater effort needs to be put forth to regain and expand foreign markets. Public Law 480 is a very worthwhile step in the right direction. Surely greater effort could be made to trade agricultural products for strategic materials which could be stored at far less cost than butter, wheat, and corn. Some of the roadblocks to foreign trade could be removed, such as the requirement that 50 percent of commodities exported be shipped in United States vessels, as now required by the United States cargo-preference law. Our tariff system should be simplified and made more favorable to agriculture.

Secondly, if we are to prevent surpluses from piling up and reduce those we have, it is imperative that production be effectively limited. Past experience has shown that acres diverted from cotton, corn, and wheat have been used to increase production of soybeans, oats, barley, rye, and grain sorghums, which compete with corn as feed and thereby intensify the problem. Most of the farmers I have talked with seem to agree that some form of the soil fertility bank plan offers the best chance to effectively control diverted acres. Certainly some way must be found to limit supply and at the same time permit reasonable freedom of management. If the control of diverted acres is to be effective at all

it must be rigid and in my opinion the controls should be written into the law by Congress rather than left to the discretion of the Secretary of Agriculture. I hope you will give serious consideration to the opinions stated above.

STATEMENT FILED BY THOMAS HART KENNEDY, MINONK, ILL.

The No. 1 economic and political domestic problem facing the American people is sick agriculture.

Lessons bitterly learned in the 1929 et seq. depression are not forgotten by farmers, albeit some city dwellers opiated by the Eisenhower big-businessboom and/or the guaranteed annual wage are inclined to consign them to limbo. I am an Illinois farmowner. The basis of our economy is corn. In dealing with the United States Department of Agriculture we find that huge organism not only husbanding corn, but also concerned with cotton, tobacco, wheat, livestock, sugar, etc., etc., and etc.

I have devoted 7 years of my life working inside bureaucracy (senior attorney, NRA and FTC and staff trial examiner, NLRB). In addition for 21⁄2 years I served as an officer, United States Army Air Force, in this country and in England, World War II-more bureaucracy. A considerable part of my professional life off the Federal payroll has also been given to dealing with administrative law, bureaucracy, and bureaucrats. Lately the United States Department of Agriculture has figured largely in such contacts.

From this experience I am inclined to agree with the sentiment expressed by the late Senator Taft, when, before convention in 1952, he answered to the question. "How would he get rid of all that Federal bureaucracy?", thus: "With a meat ax."

All economic regulation is disagreeable, often grossly inefficient, costly, slow, and in many instances, unfair to those regulated.

We have had economic regulation of American manufactories for many decades. Without the economic restraint of tariff protection few manufacturing concerns could operate as they now do in this country. Millions of American union members would either be unemployed or would work for a fraction of the high wages now received.

If we are to retain tariff protection for United States manufactories we must provide compensating protection to American farmers.

Corn is our problem in this region.

I propose we consider the corn industry as we would the oil industry, should that industry be economically sick.

There was a time when oil was overproduced. Production controls were established under interstate compact. This is the pattern I suggest we follow as to

corn.

I suggest Congress repeal all legislation with respect to the growing or marketing of corn, such repeal to be effective 2 years from enactment. This repeal legislation should contain a declaration by Congress that any economic regulation of the corn industry is a matter of State concern and provide for assistance by the Department of Agriculture to any or all States desiring to enter into an interstate compact with respect to corn.

Such a plan will give force to the 10th amendment, United States Constitution, will relieve the taxpayers, eliminate a vast army of Federal bureaucrats, invite the States to stand on their own feet, and point a way to streamline economic regulation of all agricultural production.

I cannot understand why Illinois taxpayers must foot the bill for cotton supports, nor why Louisiana taxpayers must pay to support corn growing in Illinois. Admitted, if the corn industry is to be healthy economically, production must be limited. However, I fail to see why the regulation limiting production must be accomplished by remote control from Washington, D. C.

The best that can be said for economic regulation is that under certain circumstances it is a necessary evil. If so, let us reduce such evil to its minimum, by keeping regulation at home.

The more bureaucracy we remove from the National Government, the better chance constitutional functions have to be efficiently performed by that central government. Are not the constitutional functions of national defense, foreign affairs, postal service, money regulation, and bona fide regulation of bona fide interstate commerce sufficient to keep that one central government busy? By stripping the Federal Government down to constitutional size we will take some of the load off the Chief Executive. He, then, also might have a chance.

I revert to the oil comparison. We know alcohol is made from corn. We know internal combustion engines can be operated on alcohol as fuel. We know the United States Government owns many million bushels of corn and the United States Government operates thousands of aircraft and thousands of motor vehicles. What progress has the United States Department of Agriculture made in using this Government-owned corn as motor fuel in Government-owned aircraft and other vehicles? If alcohol can power aircraft, trucks, and other automobiles, why should the Federal Government spend millions of taxpayers' dollars buying gasoline so prodigously? The Federal Government already owns the corn; it has to buy the gasoline.

Presently such questions directed to the United States Department of Agriculture may evoke the shrug, said Department is merely one branch of the vast Federal Government, the Federal Government must look out for the welfare of, not only the corn industry, but all industry, including the gasoline industry.

By contrast an interstate corn authority, set up by the corn States, would have no other function than promoting the corn industry. We could expect such single-minded administration to secure results for the single industry-corn. Corn cannot secure the sole attention of the many sided United States Department of Agriculture.

The Federal Government, constitutionally, is the sole guardian of our international well-being. As such it must provide effective national defense and conduct our relations with foreign governments.

The Federal Government now owns mountains of corn. It might approach Russia, saying, "You need corn. We need peace. If you will adopt and enforce the Bill of Rights behind the Iron Curtain, we will have peace. In such event we will supply you with our surplus corn, a certain quota free the first year, a quota at 15 percent market price the second year, at 50 percent market price the third year, at 80 percent market price the fourth year, and at 100 percent market price the fifth year." (Russia has a penchant for 5-year plans let us give her one.) The provision is Russia must enforce the Bill of Rights behind the Iron Curtain. The United States must, with such an offer, reserve the right to inspect behind the Iron Curtain to determine whether or not Russia is enforcing the Bill of Rights. Should such enforcement lapse, the corn supply will lapse also.

If such a proposal is accepted by Russia, consider the reduction in armament expense to us-which in turn will dictate a reduction in Federal taxation. If there is anything which will help small business-and most American farmers are engaged in small business-it is a reduction in Federal taxes. The farmer now in distress merits a $1,000 personal exemption on his income tax, rather than the current $600 exemption.

Should Russia spurn the suggested proposal, she thereby informs the world she has no real desire for peace. The Russian people, who need our corn, would appreciate this constructive offer by America. They might not like its rejection by the Kremlin. Is there any doubt the Russian people would not embrace the Bill of Rights if they could?

I have used corn to illustrate the points:

1. States rights;

2. The inefficiency of centralized bureaucracy;

3. A way to promote agricultural products, through single-purpose, 10th amendment administration;

4. Use of corn as leverage for peace.

If this streamlining-stand on your own feet-idea is good for corn, I believe it is equally good for other agricultural products.

I suspect Texas cotton planters would rather deal with an interstate cotton authority, headquartered at Memphis or New Orleans, than with a corn-worried United States Department of Agriculture bureaucrat, 2,500 miles distant in Washington, D. C.

We all defend the Constitution of the United States. Many of us have taken an oath to support it.

"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people" (Constitution of the United States, 10th amendment).

SENATE AGRICULTURAL COMMITTEE,

ELKVILLE, ILL., November 20, 1955.

Senate Office Building, Washington, D. C. GENTLEMEN: I had made plans to appear before your committee at the Chicago hearing and was surprised and disappointed to learn that it had been canceled. I do appreciate, however, the opportunity of making a written statement to your committee concerning my opinions as possible solutions to the enormous problems facing agriculture today. Since grain and livestock farming are my livelihood, these problems are of utmost importance to me. In due consideration of the amount of time that you can allot to me, I will not prepare a long dissertation.

The major problem with which we are plagued today is a lack of balance between supply and demand at prices high enough to enable farm people to enjoy a level of living equivalent to nonfarm people. During the past 5 years in which agricultural prices and incomes have suffered a gradual decline, consumer incomes have exceeded all previous records and the general economy is bubbling with prosperity. At this same time, the Government has been very active in directing farm affairs.

I feel that there is definitely a need for some Government regulation in agriculture but I also feel at the present time the Government has gone beyond its proper place in agriculture. I would much rather see the Government provide a framework in which our markets can operate rather than let regulation serve as a substitute for markets as it has in the past few years.

I am approaching this problem by considering what has been the major factor in reducing farm net income. This factor has been an emphasis on production to the point that it has resulted in a steadily growing surplus of farm products which surmounts any known record for our country. Two factors have primarily been responsible for this overproduction. One has been the fixed level support program with controlled acreage and the other has been the counterpoint of the price-support program in not controlling the diverted acres.

The fixed-level program fulfilled an excellent incentive to produce during wartime and the readjustment period that was to follow. But both of these periods are past and we still continue to produce at exceedingly high rates much of which has been sold to the Government. At the same time we are still receiving aid on fertilizers which also increases production per acre.

History has proven that allotments merely shift acreage from one crop to another which creates our diverted acreage problem between agricultural regions. As cotton and wheat acreages are reduced, feed grain crops are substituted. These feed grains are then marketed through livestock which in turn increases the production of meat-it works on and on to no end.

In my suggestions as to possible approaches to these problems, I want to use angles of working so as to help reduce the present surplus on hand and then consider the prevention of increasing surpluses in the future.

As aids in reducing the present surplus, I would like to see more work done toward developing a better export market. I feel that there are factors included in our trade laws that discourage trade from other countries. The cargo bill which requires a certain amount of our products to be transported by our own ships after being sold to other countries is unjust. I don't purchase cattle unless I can do my own hauling. I also feel that the standards of percentage on allowances of inert matter in grains sold to other countries should be reduced. It is unfair for a purchaser of grain to find it obliterated with foreign materials upon receipt, when the expectation had been clean grain at the time it had been bargained for. This should be corrected since most consumers are quality conscious. We should also try to trade our surplus products for materials that other countries now have which we could use now or in the future. I feel that if these materials were not needed at the present time they would be easier and more economical to stockpile than our farm products which have the tendency of being perishable.

The next two suggestions are offered as emergency measures at the time because of the huge surplus overhanging our markets and the dire necessity of exploring. every possible outlet. They have no part in a sound, long-range program.

I would like to see vigorous steps taken toward expanding the school-lunch program to reach a more favorable percentage of our schoolchildren rather than the 30 percent now reached. At the same time, I would like to see more animal products included in the lunches.

There is also a possibility of a food-stamp plan tried for areas of large unemployment, those on relief, and those on Federal and old-age assistance. The emphasis should be placed on the foods in surplus, especially animal products.

My suggestion for preventing an increase in surplus for the future is to lean toward a soil fertility bank program with price supports at realistic levels. With a soil fertility bank program in effect, I feel that it would let farm products move back to a supply and demand basis and at the same time get production in line with consumption. We would be producing for the markets instead of the Government, and also returning farm management to the farmer. The soil-bank plan proposes to keep all tillable land within the crop rotation and at the same time be using the land for soil building rather than production of grain. It would be using the needed acres to produce an ample supply of food and fiber, as well as use the remaining acres to build and store soil fertility and to provide for soil and water conservation. This allows efficient production and higher prices to farmers; it means an insured food supply at fair prices for a growing population.

As a working plan, I suggest this method. Production could be adjusted by offering farmers incentive payments to build fertility instead of producing crops that add Government surpluses which depress future farm prices. This can decrease production where it begins at the soil level, by growing legumes and grasses instead of soil-depleting crops of corn, cotton, and wheat; but the acreage so diverted must be substantial. Incentive payments for the shift would be by acreage rather than a normal minimum lease and should be attractive enough to discourage a shift from soil building to livestock. In the event that an incentive payment is not atractive enough, the purpose will be defeated.

Another possibility of helping reduce the surplus as well as create a market for future production is to have more research for new uses of agricultural products. There is general recognition in industry that research is productive and profitable. Research on production of agricultural products has been very effective the last 15 years. Why couldn't more money be spent in development of a market for the product achieved? It seems to me that there is a strong possibility of using research on agricultural products to find a new use for them other than a food product, such as corn.

To me, there is little hope of adjusting production and maintaining farm prices as long as the difference between support price and market price is the motivating force to induce farmers to comply with acreage allotments. We must remember that when the economy of our basic industry is allowed to collapse, it soon affects our general economy; therefore, I'm definitely sincere in trying to prevent a lower standard of our general economy by approaching the first problem first. Thanking you for your consideration, I remain, Sincerely yours,

HAROLD KUEHN.

STATEMENT FILED BY LLOYD MASON, MAPLE PARK, ILL.

I was planning to appear as a witness on the Senate Agricultural Committee hearing which was scheduled to be held in Chicago today, November 21. As this hearing was canceled I wish to submit the following statement to be incorporated into the record, as requested by you.

I am fully convinced that it is impossible to have continued prosperity if the farmer is not given an opportunity of receiving his proportionate share of the economic benefits that come from the high level of industrial activity which this country is now enjoying. Today the American farmer is receiving only 40 percent of the consumer dollar where only a very few years ago he received 53 percent. During this same period of time his expenses have increased materially with some reports placing this increase at $5 billion since 1947. When you consider that the farmers' income has dropped from $13 billion in 1952 to an estimated $10 billion this year it is readily understood why something must be done immediately. I am vitally interested in doing anything I can to see that we farmers get out fair share of the $325 billion national income expected this year.

It is certainly no secret that the one big reason the farmer is in the straits he is in was caused by a surplus of commodities in nearly every segment of our