Mr. BLACKETT. You could make a logical argument as to why the State Department should govern the policymaking of all the different departments of the Cabinet-and they have done a pretty good job of it but why shouldn't the Department of Agriculture and the farmer be given the same liberty and freedom that other businesses have to market goods anywhere in the world?

The CHAIRMAN. I am in thorough agreement with that. The only difficulty-I think I know something about it-is simply this: We in Congress have tried on many occasions to work out a proposal whereby our surplus commodities could be sold for the currency of the country that agreed to buy it, but when we came to use the currency of that country to buy commodities from that country that we needed they said "just a minute. You need rubber, you need tin, you need this and that. We won't accept our own currency; we want your dollars." What would you do in that case?

Mr. BLACKETT. I would barter on any basis you can to sell your goods.

The CHAIRMAN. Would you be surprised how we are stymied in our effort to use the currencies of the countries where we buy commodities to buy the things they have so we can stockpile?

Mr. BLACKETT. Who is stymying you?

The CHAIRMAN. I would hate to say, but the United Kingdom has a lot to do with it.

Mr. BLACKETT. I think you are getting to the root of it. They have run our foreign department a good many years.

The CHAIRMAN. I agree somewhat but not entirely. The United Kingdom has had a lot to do with it because they control this soft currency pool as you know.

Mr. BLACKETT. That is right.

The CHAIRMAN. And when we go to a country like the Malay States and we have a lot of surplus commodities they would like to buy, or we have a lot that Australia would like to buy, we buy wool from Australia and then the United Kingdom says "you have to pay us dollars for that. We will not accept the pound."

Mr. BLACKETT. I would like to inject this thought: That until we figure out some minimum acreage for the smaller fellow we are going to-I think this, a lot of this acreage control appears to be a kind of frustration because of the tremendous increase in production per acre. Now I know the Department of Agriculture talked about I think reducing acreage from 18 million to 17 million acres. I think the farmers here have demonstrated that it won't be very many years until we can produce the present requirements on 10 million acres. So each year how do you whittle it down if you have a straight acrossthe-board reduction? I am not against the big operator who has been making a bonanza out of this in past years. I only say it should'nt be done at the expense of the little fellow who gets reduced to such a point that he can't operate.

That is why I would suggest that we look into the possibility of a graduated farm-price support and a graduated acreage.

The CHAIRMAN. That is on our agenda. That suggestion was made many places.

Mr. BLACKETT. I believe if we do I think we can combine something that is economically sound with a principle that is morally right.

Thank you.

The CHAIRMAN. Thank you. Are there any questions?
Mr. McClanahan, please.

STATEMENT OF A. E. McCLANAHAN, NASHVILLE, TENN.

Mr. McCLANAHAN. I am A. E. McClanahan and I am a dairy farmer at Nashville, Tenn. I might say, Senator, that I was told to come down here to make this statement but when I got_down I understand that I should have gone to Raleigh, for which I deeply apologize, sir.

The CHAIRMAN. That is all right. We can just as well hear you here.

Mr. McCLANAHAN. I thank you.

The CHAIRMAN. Proceed.

Mr. McCLANAHAN. I am A. E. McClanahan, a dairy farmer of 712 McGavock Lane, Nashville, Tenn. I have made my living for the past 43 years from dairying. For part of this time my father and Î operated a retail dairy. For the past 14 years I have sold milk wholesale to the Nashville grade A market. I own a registered Jersey herd of 45 cows. I have no other business or professional in

come.

I am president of the Davidson County, Tenn., Farm Bureau. I am a member of the dairy committee of the American Farm Bureau Federation. I helped organize and was vice president for 9 years of Nashville Milk Producers, Inc., a milk-marketing cooperative.

I know from experience what it is for a farmer to lose everything that he has because of a depression. I am greatly disturbed about the present plight of farmers. The familiar farm danger signals are appearing too frequently at the present time. Farm prices continue to decline while everything the farmer has to buy continues to advance. Farm mortgages are increasing. The Farm Credit Administration just announced this month that farm mortgages for the first 6 months of this year are up $300 million as compared with the first 6 months of 1954. Also, this report shows that the average farm mortgage has increased from $5,990 last year to $7,050 this year.

In my State milk cow prices have dropped from their peak of $199, State average in 1952, to $98 in August this year. This represents a decrease in inventory of $70,070,000. This is farm capital that has crumbled away. In addition, using average annual milk production per cow, Tennessee dairymen are taking an annual loss in milk prices totaling $50,591,950. Frankly I do not see how dairymen can take such a licking and still keep their chins up.

I would like to point out that the Nashville milk market and four other of the larger markets in Tennessee are under Federal milk orders. We, in Tennessee, are strong for the Federal milk-order program, but we do wish that the Department of Agriculture would realize that the Southeast did not contribute to the surplus dairy product situation and be more lenient in their pricing. In my State

we consume just about all the milk produced, while some States export as much as 80 percent of their product. The Nashville price at the present time is $4.92 per hundredweight, 4 percent milk. The CHAIRMAN. Did you say 4-percent milk?

Mr. McCLANAHAN. Yes, sir.

The CHAIRMAN. Is that not the way above the average?

Mr. McCLANAHAN. Yes, sir, but most of the places in the country, especially in the northern part, it is 3.5.

The CHAIRMAN. Some is 3.7. Do you have to charge more for the milk at 4 percent?

Mr. MCCLANAHAN. No, that is what we have to sell it, that is what we get paid on.

The CHAIRMAN. Is it fixed in your order that the milk must grade 4 percent?

Mr. MCCLANAHAN. It is not fixed in the order, but that is the general practice.

The CHAIRMAN. A suggestion has been made that all milk sold. should have at least 4 percent fat in order to prevent the surplus of butter we have. In other words, would you agree that it would be a good way to sell the milk and the butterfat whole instead of selling it to the Government; that if the farmer tried to do that he might help himself?

Mr. McCLANAHAN. Owning a Jersey herd, Senator, I would say I would like for it to be sold with 4 percent fat, but the boys that sell it want to sell a 3.5 milk.

The CHAIRMAN. By "the boys" you mean those who retail it?

Mr. MCCLANAHAN. That is correct; not the farmers. We have no farmers retailing milk on our market.

The CHAIRMAN. It strikes me something should be done to make the boys sell it at 4 percent.

Mr. MCCLANAHAN. I heartily agree.

In Tennessee, and these are official figures, there are 15,236 less farm owners than there were 5 years ago. This is an 11.4-percent decrease. I may be wrong, but it is my opinion that farm ownership represents the greatest training school for the American way of life in this Nation today. Few, if any, of the evil isms too prevalent in this country today are found among farm owners.

There is another phase of agricultural ownership that has wide application to the stability of this country and that is that argiculture and agriculture alone can take care of its own workers in a serious depression.

I hate to see the farm problem becoming a political football. I wish that we could arrive at some fair plan, but after all the farm problems as we know it today is relatively new. So it is likely that many attempts and changes will be made before a final and reasonable solution is reached.

The trouble with farmers today is largely the result of wars and the unfair treatment accorded farmers by Government. Farmers were asked to produce more and more of the essential foods during the war years. This they did in the face of tremendous difficulties. Incidentally, there were no strikes among farmers during those years, either.

Now, you can't step up farm production over 10 years and then shut it down like an industrial plant. Industry was helped by the ad

ministration to work out of war surpluses. In fact, $30 billion of such surpluses were dumped and about $25 billion were lost in the dumping. But what happens to agricultural surpluses? They were not dumped, except in the case of some small amounts of dairy products in the past year. They were held and are still being held, with the net result of holding down farm prices.

As long as labor and industry are supported by minimum-wage rates, 40-hour week, et cetera, and industry is protected by tariffs, renegotiations, fair-trade laws, et cetera, farmers must have supports. Farm price supports must be realistic and fair. Parity computations must not be subject to regulations by the Department of Agriculture. After all, it is the actual price and not parity that farmers can spend. After all, what is so wrong with farm prices supported at 90 or even 100 percent of parity? Certainly there have been inequities under the 90-percent program, such as the wheat farmer being able to realize about $4 per hour of labor and the dairy farmer only about 60 cents per hour. But those inequities should be eliminated without having to discard the whole plan.

From the standpoint of the welfare of the entire population, has 90-percent supports been bad? I am thoroughly convinced that because of the 90-percent-parity program the American housewife has bought food at an overall cost that would be less than what she would have paid without such a program. Without the support program food prices would skyrocket in times of scarcities and then when big surpluses were produced the middleman would widen his margin.

How much has the Government lost in a support program that has somewhat enabled farmers to maintain a reasonable relationship with industry and labor? Well, acording to Commodity Credit Corporation, for the period October 1933 through August 1955, a period of almost 22 years, the total loss is $2,429,238,492. As a matter of fact, much greater losses have been taken by the Government in a matter of weeks and such losses do not rate big headlines. After all, the farm-support program has, in effect, been a food-insurance program for the American public. It has provided the citizens of this country with the assurance of the best diet in the world with an annual cost of about $3.50 per family of 5. Small insurance indeed to know that there was no chance of a food shortage.

So, let's be fair in our governmental treatment of all groups. If labor and industry are to have strong crutches don't expect agriculture to walk with a broomstick.

May I say and ask your indulgence a moment in asking that appropriations sufficient to help us on the Bang's disease be put into effect next year. In my State we have already used up the money and the $50 and $25 had to be cut to $20 and $10.

It is essential to the dairy farmers of my State to have help on its Bang's disease eradication program since we in the milk markets are being forced to clear our herd of Bang's, which we should do and we want to do, by the United States Public Health Service.

Thank you.

Senator SCHOEPPEL. Maybe I did not understand you. You said something about the wheat farmer getting $4 an hour. I am not going to argue with you on that, but I have 10,000 of them in Kansas that would sure argue with me on it if I made that statement.

I want to say this: I was one who sat in the United States Senate on the Banking and Currency Committee before I moved into the Agriculture Committee. You remember when there was a certain group visiting Washington that wanted to roll back farmers' prices on beef? They even talked about butter and poultry. Do you remember those days?

Mr. MCCLANAHAN. I do.

Senator SCHOEPPEL. When we sat on that committee and fought them, several representing labor leaders were there. I have nothing against them, except I told one of them that he was dead wrong. I told him this farm economy had some hills and valleys and that he did not need to think, with the wage scale he was working for, that he had a right to criticize the cattleman, dairy people, and people on the farms because it so happened that because of a war for a little while they were reaping the benefits of increased prices because, I said to him as did other members on that committee at that time that "there will come a time, and it is down the line, when these prices will be depressed. Then what are you going to do?" He did not have an answer. Pretty good thing to get in the record to remember what happened.

The CHAIRMAN. Thank you.

Mr. GORDON MCGEE. Give your name in full for the record and your occupation.

STATEMENT OF GORDON MCGEE, LINCOLNTON, GA.

Mr. MCGEE. I am Gordon H. McGee and I am county agent of Lincoln County, Ga., a small county in east Georgia. I didn't come over here to make a statement before you all, but some of the people were reluctant to use the word "subsidy." I don't think it is a bad word to use because, of course, I understand every time the farmer gets a subsidy he gets bad press; but I want to read a little excerpt from a magazine I cut out.

In Time magazine on February 28, 1938, I cut out a little slip I want to show you that other segments of the industry get direct subsidies as well as indirect subsidies. This is some work that the Congress did. I want to show that the publicity that business and industry got amounted to just five lines whereas I have noted a lot of timesI remember particularly under the Irish potato program-there was a lot of bad publicity.

So, then, I for one say we ought to give the farmer a subsidy and call it a subsidy and then give publicity to what the other people get. In Time magazine, February 28, 1938:

National affairs, work done, the Congress: House of Representatives passed a bill writing off as unrecoverable $2,500 million representing loans to railroads, banks, insurance companies, and special State funds from the books of the Reconstruction Finance Corporation.

There was a direct subsidy of $2.5 billion to big business, I call it. Yet when we give the farmer a few hundred thousand dollars' subsidy or if we want to subsidize the price on what they get, there is a great hue and cry that we are increasing the cost to the consumer. Yet here was this piece that rated-that is the only time I saw it in the paper; in Time magazine-rated five lines when you all give away $2.5 billion to big business.