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Mr. STEVENS. We would get something in turn for reciprocal trade agreements. At the same time in the case of Japan that is a hot question today and they are flooding this country with manufactured goods from Japan out of this cotton produced some in this country and some in other countries.

We have to set up quotas and not let them flood this country.

Senator SCHOEPPEL. I can see where your textile industry will be up against a serious problem and if that competition is tough they will say "I cannot take thousands of bales of your good cotton because I cannot make it up and compete."

Mr. STEVENS. We know that and they are our best customers and we want them protected as far as possible. And that is the reason we think in cases like Japan we will have to set up quotas on those boys and not let them flood it.

A few years ago, I am told, they had a voluntary agreement of the amount of import this country could take from Japan and it was recognized as an agreement, a gentleman's agreement. They don't think now a gentleman's agreement would work with the Japanese mills and therefore you have to do it by act of Congress.

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Senator SCHOEPPEL. Today, of course, it is Japanese, but tomorrow may be be our British friends or South American friends or India or someplace else. It is a problem we have to recognize. It is a touch and go picture.

Mr. STEVENS. I agree, but in reciprocal trade agreements, don't you have your committee set up and they don't go into this thing unless they feel that this country would gain something by letting an import of a product come in?

Senator SCHOEPPEL. The problem is how will you get rid of your cotton if this thing goes on? You would not be able to sell too much of it domestically, more than you are now selling, and you will ship it over and cut the price and let those fellows come in. We are in trouble on wheat but you may be in more trouble on cotton. Mr. STEVENS. I doubt it. They are both bad enough.

Senator SCHOEPPEL. All right.

Mr. STEVENS. It is unfortunate that there has developed two factions regarding prices. One the high rigid and the other the flexibleeach claiming to be the salvation of the farmer.

These have been talked about so much that many people have lost sight that there can be any other solution.

The philosophy of the American farmer is to produce and produce abundantly, but with tremendous surpluses we realize we must curtail production to permit absorption of the surpluses.

We approve in principle the idea of the soil-fertility bank. It is more feasible to spend a reasonable amount of money to build fertility in the soil for an emergency than to pay fixed warehouse charges and have the products go out of condition.

We quote our 1956 resolution regarding same:

We recognize that many problems would arise, and inequities result in the application of diverted acreage controls. However, the nonbasics, with 0-90 percent support prices based on supply, must have some protection from the production of diverted acres of the 75-90 percent supported basics when controls are applied. Therefore we prefer and endorse the soils bank except for absorbing a large portion of diverted acres to reduce overall production to meet real market demand.

The application of the soils-bank concept must not be rigid enough to legislate scarcities to the extent that we price our market high enough to lose present export markets or encourage importation to meet domestic needs. Rentals must be commensurate with those prevailing in the several basic commodity areas and on a voluntary basis. Concessions as to percentage of acreage, price, and penalties should be provided for the smaller farms.

Historical plantings of nonbasics and the relative supply of basics should be considered in historical commodity areas in determining the duration and cancellation of rental contracts.

Present legislation for production controls and price supports should be continued after the adoption and application of the soils-bank concept except as provided for in other sections of these resolutions.

Few farmers can afford to take diverted acres out of production with no income from these acres, yet, if not restricted we could find ourselves faced with enormous surpluses in other fields that the same isn't true at the present time.

Our dairy industry is in better position than we found ourselves in a year ago. We have no direct resolution regarding this position, but I being a dairyman also have checked with many dairymen and all agree that we are in a better position.

The CHAIRMAN. That is in Mississippi?

Mr. STEVENS. Yes, sir.

Most dairymen in our State are worrying for fear that too many will now go back into or go into the dairy business.

I have just attended the executive committee meeting of the American Dairy Association. Representatives from 44 of the 48 States were in attendance officially at this meeting. Representatives of many other dairy organizations were in attendance. It was the sentiment of all that the dairy industry was in a healthier position than had been the case for several years and all hoped no change would take place legislatively.

Senator YOUNG. Is it not true that with respect to the dairy-support program, the Federal Government has done more for dairying than for any others in the last 2 years?

Mr. STEVENS. Yes.

Senator YOUNG. For the fiscal year ending July 1, 1955, the cost of the dairy-support program was over $440 million; the year before, $150 million; before that practically nothing. We have given away a lot of dairy surpluses. We converted dried milk to livestock feed. If the Department of Agriculture was as aggressive to get rid of surpluses of others as we have been with dairy we would be in better shape. I do not want to condemn them for what they did in dairying, but I would hope they do the same thing for other commodities. Mr. STEVENS. Yes; I would, too.

The CHAIRMAN. Proceed.

Mr. STEVENS. Beef-cattle production, though not comparable with the war years when every businessman, lawyer, or doctor went into the business, seems to have stabilized; and the real cattleman seems to be settling down to a normal operation.

We hope the next Congress will provide a method to allow farmers to grow small grains for their own need regardles of quota provisions in the event he uses this production on his own farm, not to be sold or a loan made for the commodity. This plan in the South would not take any market from the producers of these grains, but would allow the farmer to maintain his cattle in a better physical condition.

64440-56-pt. 63

Mr. KIMBRELL. I firmly think that the farmer was called on to produce these items during the war. I think that actually he deserves maybe a bonus for his performance under rather trying circumstances.

The CHAIRMAN. Concede that the farmers of Georgia and the farmers of Louisiana cannot possibly grow cotton as cheaply as they can in Mexico; is that not true?

Mr. KIMBRELL. I accept that.

The CHAIRMAN. The same thing prevails in Brazil?

Mr. KIMBRELL. Yes, sir.

The CHAIRMAN. Other countries in South America that produce the same products as we do.

What device would you use in order to sell cotton produced by our people in competition with cotton that is produced under circumstances such as I have described in Mexico and Brazil where they use peon labor that are paid much less than our people and their standard of living may be 50 percent under ours; how would you meet that situation? You say you do not want to use the word "subsidy." Let us say a little payment by the Government for purchase of the cotton and let the Government pay the difference. Do you have any plan to submit on that?

Mr. KIMBRELL. Yes.

The CHAIRMAN. You are a banker and you look like a man who could give us that information.

Mr. KIMBRELL. I would think that the Government, of course, has every right today-I doubt if we will be able to sell to those countries but as I intimated a moment ago we would be very much in favor of the Government even giving the cotton if it were necessary to certain areas that are not producing cotton today, particularly for low-grade cottons; that is, also offering that total number of bales we declare surplus and get it out of our stocks.

In this operation that the farmer has carried on in recent years to build up our huge supply and also to win two world wars, there has been an awful lot of mining of the soil. It is our feeling still that the No. 1 problem is that of markets, disposing of these in such ways as we think can be accomplished.

On the other hand, for the use of some of the land that is left we feel that there has been a rapid deterioration of the soil and water resources of our country. We feel that a tremendous amount of effort might be made in that direction. It seems to make sense that we give a lot of thought to maintaining the fertility of the major portion of our soil.

The CHAIRMAN. In carrying out your suggestion, would you do it by way of soil-conservation payments as we now do it?

Mr. KIMBRELL. Yes, sir; I think that actually we are just sort of scratching the surface in that regard, though. For instance, along the borders of our own State at the Clark Hill project, at the Hartwell Dam, Buford, Fort Gaines, expenditures of from fifty to a hundred million dollars in each of those locations, it would seem that that is on the dam itself. It also seems that if it is good business to make those investments, which I think it is, that upstream where the water is reaching the farmer's soil it would be very good if we continued to make some upstream investments for improvement.

The CHAIRMAN. I am glad to note Congress has done that and in fact both Senators from Georgia, particularly the junior Senator who

has, I believe, fostered some legislation along that line. The evidence produced before the committee that handled this indicated that to build these dams upstream as you suggest would cost many billions of dollars, but I believe it is a safe investment and a good investment, and I presume you think so, also.

Mr. KIMBRELL. Yes. We think the legislation was intelligently conceived and enacted and that a boost to that for additional work on the watersheds for additional pastures, for additional farm ponds, maintenance of that water at the source, reforestation in many of those areas that are not suitable for other purposes, is indeed one of the fine investments in improvement that can be made.

I would like to inject one other point we think deserving. That is additional research. Frankly, with the farm industry today, the amount of money that is being spent for research, much is very, very small in comparison to that being spent by industry. We would like very much to urge and encourage expansion of the amount of funds that can be spent for research of various kinds in the utilization of farm products and actually new techniques and new procedures that the farmer may be able to use on his own operation.

The CHAIRMAN. You spoke of rigid price supports and commodities. Would you limit that to the basics as is now the case or would you add any others to the program?

Mr. KIMBRELL. Quite frankly, Mr. Chairman

The CHAIRMAN. You are a businessman and a banker. I don't suppose you till the soil; you do not have a farm of your own?

Mr. KIMBRELL. Yes; I have some farm interests.

The CHAIRMAN. Have you any suggestions along that line? We have a lot of other farmers throughout the country who grow things other than wheat and corn and cotton and who would also like to get the same relief you are now asking for. What is your view on that? Mr. KIMBRELL. My view on that, Mr. Chairman, would be that we are pressed so at this moment with the basics that I should think that we should try to take one problem at a time and try to work out a better arrangement with the basics and maybe we can take care of the fringes.

One other point I should like to make and that is the actual technical assistance, if you want to call it that, to the farmer today. We have referred several times this morning to that small farmer and he is still a very vital part of our economy. He must either make for himself a living or he must become one of the members of the breadline. We must support him in some other socialistic way. It is our thought that this small farmer might be given more technical assistance on his own farm in a field-by-field basis, given some of the advantages of any research or any new techniques that are developed and he himself would become more proficient in the use of the acres that are available to him.

The CHAIRMAN. Is that not done through your extension service in Georgia?

Mr. KIMBRELL. Yes, and to a fine degree. We think it needs tremendous expansion. There are some pilot counties now in this State and I think the representatives of the extension service, or even those individuals from those counties where the efforts are maybe 5 or 6 times that in the normal county-the results have been tremendous.

Our agriculture is varied and we can grow many crops and produce livestock in abundance, all of which will be needed in a long-range program as our population increases and our farmers become fewer in numbers.

Much has been said about small farmers. Certainly a farmer who has ability should be provided the tools in the form of adequate credit to convert the small unit into a larger unit that could be made economically sound.

We continue to approve an expanded program for research and education. Many farmers through commodity organizations are making contributions to research and education, but limited income is so widely scattered they must rely more or less on Government for more of this program.

We continue to support rural roads and truckline-highway systems, REA, and farmer cooperatives. Farmers must preserve the right to do collectively for themselves what they can't do alone.

The growing and protection of timber should be encouraged. Adequate appropriation for research to control insects and diseases in our forests should be provided.

One of our youngest agricultural enterprises in Mississippi is the production of tung oil. This was encouraged by the Government during the war years to produce sufficient amount of high-grade oil for defense needs. Today importation of these oils is a very serious threat to these producers.

We thank you again for the privilege of appearing. We know you gentlemen have a Herculean task, but have every confidence in your ability to solve the problems.

The CHAIRMAN. Are there any further questions?

Thank you ever so much.

Mr. STEVENS. Thank you.

The CHAIRMAN. The next is Mr. George Bazemore and Mr. M. M. Kimbrell.

STATEMENT OF M. M. KIMBRELL, VICE PRESIDENT, GEORGIA BANKERS ASSOCIATION, THOMPSON, GA.

Mr. KIMBRELL. Mr. Chairman, my name is M. M. Kimbrell. I am the executive vice president of the First National Bank of Thomson. I represent this morning the Georgia Bankers Association, of which organization I am also the vice president and chairman of the executive council.

I have with me Mr. George M. Bazemore. Mr. Bazemore is the president of the First National Bank of Waycross, and his bank is maintaining one of the outstanding farm-service programs in the entire Nation. We express to you our genuine appreciation for being heard this morning and our views on this very important subject.

Georgia, of course, is still predominantly an agricultural State and, as the trustees of its economic resources, the bankers of Georgia are tremendously interested in the welfare of its farm people.

During the last few years we have seen tremendous changes come in Georgia, particularly in the cash cost to the farmer for operating. Farming is no longer the industry here where there is a low cash cost for his labor involved.

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