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We agree that an imperative need exists for a clear definition of the role and policies of the Federal Government in the framework of a consistent national water policy which will progressively promote conservation and development of this vital natural resource for the Nation as a whole, as well as for the States and local communities.

We have not had sufficient time to properly analyze the task force and Commission reports on water resources and power since receiving notice of this hearing. Consequently, our comments will be of a general nature and limited.

The North Carolina State Grange believes that the need for action calls for positive leadership by the Federal Government. The reports now before you seem to place major emphasis on the role of private interests and local government in the development of these great resources. While we recognize the need for cooperation between the Federal Government, the States, localities, and private citizens in arriving at solutions to our water problems, we hope that the implications of the committee reports will be carefully analyzed before any action is taken to restrict Federal participation in these programs.

We do not feel that the agricultural aspects of the problem were given adequate recognition in the committee reports. Moreover, the Commission made a basic mistake in considering the water resources as an independent entity, since we know that water is part of an inseparable complex which also includes land, timber, crops, grass, and other values.

The largest water reservoir in the world, outside of the oceans, is land. In the consideration of any policy affecting water and land resources, this fact cannot be overlooked or ignored. It also appears to us that the Commission failed to give adequate attention to underground water supplies, underground water recharge, or drainage, in their report.

We would like to see the Small Watershed Act strengthened. Farmers find it difficult to understand why they are required to pay such a large percentage of the cost of a small-watershed project which benefits an entire area, while flood-control projects on a major stream are financed by the Federal Government. To the extent that water problems are solved back on the land where the rain falls, the need for large expensive structures can be minimized and the entire area benefited.

Congress should be sure that the agricultural aspects, including the maximum use of the Small Watershed Act, have been considered for each project area before any steps are taken to build large dams solely for flood-control purposes.

There is also an urgent need for speeding up the land-capability inventory if we expect to develop either a water or natural resource policy for the Nation.

While we recognize that recommendation No. 1 has some merit, we do not agree with paragraphs (h) and (i) as found on page 37 of the Commission report.

We came to the conclusion, as we read the reports, that the majority at least were not sympathetic with the development and distribution of power through such agencies as TVA and REA. The statement made in paragraph (h) does not seem to be compatible with suggestions found elsewhere in the report that Federal agencies administering revenue producing water resources and power projects conduct themselves as business corporations.

The State grange has given its endorsement to valley-development program on many occasions. Our members recommend that steps be taken to coordinate the work of all Federal, State, and local agencies on each major watershed project. They also suggest that no project be approved for the expenditure of public funds unless a sound appraisal shows benefits in excess of cost. The same consideration should be given agricultural values as are given industrial values in appraising costs and benefits.

Our organization believes that every watershed project should provide for the maximum use of water resources. This will include water for people and animals, agricultural and industrial use, the generation of power, recreation, and the prevention of floods. It also means that the tributaries along the entire river system must be taken into consideration before any program is finalized. This again suggests that the Federal Government must provide leadership if our natural resources are to be properly developed.

The Tennessee Valley area offers a fine example of what can be accomplished. The entire region has made remarkable progress. New products and new industries have been promoted, agricultural practices improved, flood damage minimized, and electric-power rates reduced. Consequently, we hope that the Federal Government will provide the kind of leadership which will conserve and develop every resource for the welfare of all.

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We do not agree with recommendation No. 6. To divorce the construction of headwater dams from land treatment would destroy the interrelationships that must be recognized if sound natural-resource policies are to be carried out.

Our organization feels that public power projects perform essential services as a part of the total electric-power program of the National. We do not want to see the values of these projects restricted by unnecessary or unreasonable regulations. This we believe would be the result if the recommendations Nos. 9, 10, 11, and 15 were adopted.

Grange members are supporters of the REA. We know that this program has been a major factor in the extension of electric service to rural areas.

These systems are owned by the people who use the service. They borrow money from the Federal Government as needed in extending and improving their services,

We hope that no action will be taken by Congress which, will retard this development in any manner. Grange members have called upon Congress to provide adequate loan funds to increase the capacity of existing systems and to provide extension of lines to those who do not now have electric service. They also recommend that loan funds be made available to electric membership corporations for use in constructing generating plants and transmission lines where reasonably necessary.

Our organization endorses the preference given municipalities and cooperatives for the purchase of electric power from public-power projects under the Flood Control Act of 1944. The electric membership corporations insist upon their right to purchase power directly from the Government. We feel that the Federal Government has an obligation to make this power available to them at their load centers when satisfactory wheeling agreements cannot be negotiated with private power companies. We believe that the right of people to provide services for themselves on a cost basis is sound and should be preserved. The growth of the private power companies indicates that they have benefited and that the general economy has benefited from this policy. We hope that Congress will continue to support these basic principles.

We are fearful that some of the recommendatoins are intended to restrict the economic values which now flow from these power projects.

Our statement does not attempt to analyze the reports now before you. We have attempted to point out a few basic principles advocated by the Grange which we hope will be helpful as you chart the course for future action.

Mr. CHARLES RUTLEDGE. I understand you came here to get the diversified views of the dirt farmer from over the section such meeting covers.

The CHAIRMAN. Yes.

Mr. RUTLEDGE. We have been here an hour and 15 minutes and we have heard 2 witnesses.

The CHAIRMAN. We will stay here until midnight, sir, to hear everybody. I have done it before.

Mr. RUTLEDGE. We can't stay until midnight.
The CHAIRMAN. We will call you in time if you be patient.
Mr. RUTLEDGE. I suggest a limit on

The CHAIRMAN. I am not going to put a limit on anybody, but I will say this to you, that the first few witnesses that we hear we ask quite a lot of questions to point up the problems and it is our hope that the witnesses who follow will listen to what these witnesses say and save us duplication.

In other words, for the first 4 or 5 witnesses in the past we have examino quite a bit in the hope that the witnesses and audience would listen well and when they are called they can expand on the testimony stated.

Mr. RUTLEDGE. And take issue?

The CHAIRMAN. Yes, exactly. That is what I want. That is why we are here and if you have anything to add to what has been said,

64440_56-pt. 6- -18

Mr. RUTLEDGE. We might get done in a decent hour.
The CHAIRMAN. I will see to it that everybody is heard if you

will be patient, sir.

Mr. RUTLEDGE. Thank you.

The CHAIRMAN. At this point in the record I wish to put 2 telegrams, 1 from the senior Senator from the State of North Carolina, Mr. Sam J. Ervin, who cannot be here because he is in Washington acting as a member of the Committee on Government Operations, and 1 from Milton Young, who promised to come here but said he could not make it, and he gives his reasons.

(The telegrams of Hon. Milton R. Young, United States Senator from the State of North Dakota, and Hon. Sam J. Ervin, Jr., United States Senator from the State of North Carolina, are as follows:)

WASHINGTON, D. C., November 14, 1955. Hon. HAROLD D. COOLEY, Care Senate Agriculture Committee,

Hotel Carolina, Raleigh, N. C.: Terribly sorry I won't be able to be with you tomorrow.' Would certainly do so if at all possible. Best wishes for a good meeting. Regards,

MILT YOUNG, United States Senator.

WASHINGTON, D. C., November 14, 1955. Senator ALLEN J. ELLENDER, Chairman, Senate Committee on Agriculture and Forestry,

Care Senator W. Kerr Scott, Raleigh, N. C.: I have been called to Washington as a member of the Senate Committee on Government Operations. As a consequence, I will not be able to attend the hearing in Raleigh tomorrow. I had intended to appear before you and testify that I favor the restoration of rigid price supports at 90 percent of parity for basic crops.

SAM J. ERVIN, Jr. The CHAIRMAN. The next witness is Mr. Arthur D. Williams. Mr. Williams, you have heard the previous witness. What we are looking for here is not a statement as to what the problem is. I think the record is replete with statements from various parts of the country as to what the problem is. What we want specifically from you, if you can give it, is methods of solving that problem.

STATEMENT OF ARTHUR D. WILLIAMS, PRESIDENT, NORTH CARO

LINA FARM BUREAU FEDERATION, GREENSBORO, N. C. Mr. WILLIAMS. I think much I would say would be repetition of what Mr. Caldwell said, because according to his statements the Grange position is almost similar to the Farm Bureau pnoition.

The CHAIRMAN. Does it differ in such a manner that you can tell us in a few words where the differences are?

Mr. WILLIAMS. Well, it may differ some in the various commodities. The Farm Bureau believes that any farm program to be a successful program, each farm commodity will have to have a program of its own. There are so many different problems facing each farm com

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The CHAIRMAN. That is what the committee thought back in 1937 and that is why we dealt almost exclusively with basics at the beginning

Mr. WILLIAMS. It has been almost 12 months since we had our annual convention. Our North Carolina Farm Bureau meets next week, at which time we are hoping that resolutions will come from the various counties of the State to help us solve and recommend to you some of these problems. I know it is a problem to you. It is quite a problem to us farmers, because we don't know where to go, and it is going to take the best brains in Congress with the advice of all the farmers in this Nation to try to work out something satisfactorily. We appreciate very much the efforts that your committee has gone to to try to work out this, and also Congressman Cooley's committee, because I know that Senator Scott and you and Congressman Cooley have the farmer's interests at heart, and you want to work out some program that wlll be of benefit to the farmers.

Our resolutions in the North Carolina Farm Bureau we believe in 90 percent of parity on the basic commodities when production is controlled. There has been a law on the books where we were guaranteed 90 percent without controlled production.

The CHAIRMAN. During the war?
Mr. WILLIAMS. Wasn't it continued until about 1949 or 1950 ?
The CHAIRMAN. Two years after.

Mr. WILLIAMS. That created a lot of this surplus condition. I don't think the farmers should be blamed for that, because they were encouraged to do that and they produced way beyond expectations of the Department. We are faced with the problem today where the retail prices remain constant and the prices are gradually falling. As you mentioned in the beginning, it has fallen to 40 cents out of the dollar. That causes us concern. What has happened to the difference in spread? Who gets it? That needs investigation.

As far as the cotton problem, you have witnesses coming after me that are more familiar with the cotton problems than I. Mr. Caldwell spoke briefly on resolutions from the counties to our State convention next week and everyone is opposed to a poundage control. We tried that in 1938 and 1939 and the Government even got into the business of selling poundage. That would not be satisfactory.

Even if there was a possibility of working, it won't be acceptable to the farmers, and that should be a consideration. We want something acceptable to farmers as well as something that will benefit them.

The CHAIRMAN. We have quite a bit of evidence asking for bushelage control instead of acreage on wheat and grains. Now, it is my hope that something can be done in that regard, and again I ask for the best heads in these organizations to try to get together and submit a plan.

Mr. WILLIAMS. Senator Scott mentioned to Mr. Caldwell about the watershed proposition. The Farm Bureau is very interested in irrigation and other methods of conserving the water on the soil because we have had 3 years previous to this year. There has been sections of our State that suffered terrible from drought, and in our last Farm

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Gentlemen, it is hard to realize the seriousness of any situation unless you are directly affected by it. When your heart and soul and 30 years work plus what earnings you might have had are needlessly going down the river then you can realize it.

I say we do not have an oversupply of beef but a market controlled by the few. There gentlemen, this is where you come in as our duly elected representatives of the people.

STATEMENT OF A. C. LAWRENCE, CHAIRMAN, AGRICULTURAL

POLICY COMMITTEE, NORTH CAROLINA STATE GRANGE, APEX, N. C.

Mr. LAWRENCE. I am A. C. Lawrence, a farmer living in western Wood County. I raise tobacco, corn, some wheat and a few livestock and hogs and a few other small general practice crops.

The CHAIRMAN. Proceed.

Mr. LAWRENCE. I also serve in the official capacity as chairman of the agricultural policy committee for the North Carolina State Grange. I am not any speechmaker such as the Grange representative who preceded me.

The CHAIRMAN. We don't want speechmakers. We want you to talk to us as a dirt farmer.

Mr. LAWRENCE. That is what I will do.
The CHAIRMAN. You may proceed in that light.

Mr. LAWRENCE. In reference to some questions that were given to Mr. Caldwell as our representative as to whether or not he was representing the feeling, the sentiments, and recommendations of the North Carolina State Grange or his own, I, speaking for the agricultural policy committee who had a part in developing the policy under which the Grange now operates and who have just recently come out of the policymaking meeting of the grange, I will say that the things which he gave us here this morning do constitute a part of the agricultural policy committee of the State grange at this time.

Those solutions and recommendations for your consideration which we offered, all of them were in our recent policy and in his statements to our organization which was approved unanimously by the group.

Now I have a statement here of the policies of the grange, I am not going to give them because he has already covered them. He did have one thing which he did not cover.

Recognizing the importance of the continuation of the family-sized farm in our American way of life, we recommend the promotion of all necessary measures to insure its continuance.

The CHAIRMAN. What are those measures? What would you suggest? You know a statement like that doesn't do too much good unless you expand it by telling us what those measures are. Would credit be one of them?

Mr. LAWRENCE. Yes, sir.
The CHAIRMAN. Better credit.

Mr. LAWRENCE. We think that credit should be made available at as reasonable rate as possible. That should certainly be true in the case of young people trying to get started in the farming business.

The CHAIRMAN. Would you make that credit available only in the event that the local banks or local lending agencies can't help?

Mr. LAWRENCE. Yes, sir; I think the local lending agencies should be given the first chance.

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