lished homes. And it is also consistent with this move to wider dispersal of industrial facilities.

The CHAIRMAN. What kind of encouragement would you expect from the Federal Government and the State governments in accomplishing that, any monetary help?

Mr. BENHAM. Monetary to the extent of educational work, surveys of areas, and possibilities. I do not think there should be any great big monetary inducement offered to industry, but there can be. The CHAIRMAN. Merely to point up the problem?

Mr. BENHAM. Yes, to point up the problem and to work to encourage industries as they expand or as new ones come along. We recognize we will have to have a great expansion as the population increases.

The CHAIRMAN. It is really to give part-time work to farmers in order to make both ends meet?

Mr. BENHAM. I hope it would provide opportunity for full time so he would give up farming.

The CHAIRMAN. I would rather for us to work out a scheme whereby you could let the farmers hold their own on the farm and not get this part-time work. I think that is the goal we ought to strive for. Mr. BENHAM. We would also suggest that consideration be given to establishing trade schools in such areas, so that the sons and daughters of these farmers may be encouraged to learn a trade and qualify for good paying, nonfarm jobs.

The CHAIRMAN. That is the fact now; is it not?

Senator AIKEN. I think that is share and share.

Mr. BENHAM. It could be share and share. Certainly the Federal Government can encourage such programs.

The CHAIRMAN. In our own State we have a lot of trade schools that have been established for many, many years and they are very effective. They are owned and operated by the State with Federal aid and under vocational education appropriations.

Mr. BENHAM. As point No. 2, in regard to this problem of marginal land, we would approve the adoption of a soil bank plan for those areas. We believe that they should be offered only on a long term and full farm basis.

Senator AIKEN. Pardon the interruption. You would be careful how you would apply that soil bank plan? You would not approve any across-the-board cut for all farms?

Mr. BENHAM. I am saying for marginal land areas.

I am confining my remarks to marginal land areas.

At the moment

Senator AIKEN. You would not apply it to the land which has been taken out of production by reason of support programs, primarily? Mr. BENHAM. I am referring to lands that are being farmed. Senator AIKEN. All right.

The CHAIRMAN. What about the areas of the country where you have good lands, they are productive, but many crops are missed because of the lack of moisture-you get rain now and then but those lands are likely to blow away; what would you do with that land?

Mr. BENHAM. That has to be thought of as marginal land, too, because you cannot depend on the weather.

The CHAIRMAN. You would get rid of a lot of the Middle West, thousands of acres.

Mr. BENHAM. I am assuming that there would not be anything compulsory about such a program. It is an offer to the landowner who wants to take advantage of it.

The CHAIRMAN. What inducement would you give-have you any plans for that?

Mr. BENHAM. In thinking of these areas, one inducement was where I would provide an alternative opportunity for him to earn a livelihood by having some industries available.

The CHAIRMAN. Supposing in a community you cannot afford that— take in the Middle West, the farms are so far apart.

Mr. BENHAM. I am sure that there are some areas where that would be true.

The CHAIRMAN. The average farm in Wyoming is 3,200 acres, the distances are great; how would you handle your proposition in respect to Wyoming, let us say?

Mr. BENHAM. I assume that you are perhaps better informed with regard to Wyoming than I am. I have been in that country.

The CHAIRMAN. The proposal you are making is to be nationwide? Mr. BENHAM. It might be that under those conditions there would have to be some relenting on this. Say, you retain some of your limited number of the best acres and you the rest.

Let me point out that further that we would recommend that wherever the climate is such where it makes it practical to do so, that the Forestry Service reforest this land that is taken out of production on long-term contracts and reforest the land, care for the plantings until the trees are of a marketable age, and then give the owner the privilege, if he wishes, of repaying the Government, together with interest, to take back the land, or the Government would harvest and market it.

The CHAIRMAN. You mean wherever practicable?

Mr. BENHAM. So that the Government could get its investment returned. In that way we would not only be encouraging the taking of some of this land while it does not produce very heavily, probably produces more than our surpluses are in total, getting some of that out of production. We would be building up a future essential commodity, lumber, that our population 40 or 50 years from now may be seriously in need of. And in the long run the taxpayer could expect to get money back as this timber grew up and came to marketable

size.

It would seem to me rather than spend all of our millions in stockpiling surplus products, with not resultant apparent effect in reducing the supply, we might better spend some of this money in programs that would tend to reduce the supply.

The CHAIRMAN. In connection with that, we have had several proposals made by many organizations for the creation of a fertility bank and that the Government would compensate the farmer. Some have said on the fair market value; 6 percent on the fair market value. And then some to plant certain grassy areas that may keep it intact, others have suggested that the Government compensate for whatever income they might derive from this land that is set aside. Others have said that since a farmer buys machinery to operate, let us say, 1,000 acres, and you set aside, say, 10 percent of that, he ought to be compensated for the wear and tear on his machinery.

We have had all kinds of proposals made. Have you given thought to it to tell us what you would do in the event that Congress should decide to reduce our plant so as to in effect reduce our surplus?

Mr. BENHAM. I have a thought on this subject. It is my opinion that it would be far more effective and practical to try to develop a program that would take our least efficient plants entirely out of production than a program that would take a part of our good plants out of production. That is, I question taking 10 or 20 percent of a farm that is on good land out of production. The first, would not that be to decrease the efficiency of the operations on that farm as you decrease the acreage and the volume of product. Certainly, it would seem to me that we would have to have quite a sizable administrative and policing force. Certainly, it would not be of any value unless that land, this percentage of farms that was taken out, was put into grasses and no harvest or pasture from it. Otherwise, you would defeat your purpose. And I could foresee that when there came a rather dry season in any area, there would immediately arise a demand to allow the crops to be harvested from this acreage and the cattle to pasture on it. And I have some question whether you gentlemen could stand up under such pressures.

The CHAIRMAN. In respect to the policing that you have just mentioned of these areas, it was suggested by some that this land be put under the jurisdiction of those who handle the conservation program and make it so that a farmer who sets aside these acres and does not comply with the requirement would lose payments on the supported crop. What do you think of that plan?

Mr. BENHAM. It might have some effect. I am not at this point saying that I would be 100 percent against that. I would have some reservations as to its value.

The CHAIRMAN. I understand. It is my judgment, and I am speaking for myself only, that from the mass of information we have obtained that there seems to be quite an urge to set aside acreage until our surpluses are reduced. We are in search of a formula to carry out that thought.

Mr. BENHAM. I would point out that, as a dairyman, if I set out on a program to reduce the production of milk on my farm, I would not sell the best cows to the butcher-I would send the poorest ones. I think that idea is practical when you come to look at our land resources, too.

The CHAIRMAN. What the proponents of such a plan had in mind is by setting aside the land. It might cause seed and feed to go up and thereby you would probably dispose of some of your cows that would not be economical to keep.

Mr. BENHAM. It has the advantage if you require that the land be kept in grass, so that the fertility is retained-it is there when we need it. It has some advantages. I still question its practicability. Senator AIKEN. You would not object to squeezing out the 4,000pound cow?

Mr. BENHAM. Perhaps we would say that is what I am proposing to do with agriculture as a whole.

Senator AIKEN. I notice that you are opposed to squeezing off people; you would not oppose squeezing out the uneconomic producing cows?

Mr. BENHAM. I am opposed to trying to starve people off land, but I recognize the necessity of encouraging them to get off. I do not think we can push them off, but I think it has to be done through programs that will make them have alternative opportunities, so that of their own volition they will decide there are better opportunities for them otherwise than on the farm.

We would approve the adoption of a two-price plan for agricultural products, to be administered either by Government or by farmers themselves under a program somewhat similar to what the dairymen are suggesting.

The CHAIRMAN. What commodities would you suggest that on? Mr. BENHAM. I would say that that would be particularly true with our cereals and probably dairy products, as long as they are in surplus. We feel that it is fair probably to assess part of the losses resulting from sales at these lower export prices back on the farmers, possibly with adjusted percentages according to the supply of surplus. The CHAIRMAN. Does your plan envision a fixed price for the domestic consumer?

Mr. BENHAM. I will touch on that a little later. You will have to have the prices established somewhere.

The CHAIRMAN. I understand the two-price system would mean as to all products that are sold domestically you would have a fixed price?

Mr. BENHAM. You would have a higher price than the export price.

The CHAIRMAN. It would have to be a fixed price?

Mr. BENHAM. It would have to be fixed, but whether it could be flexible or adjustable or not, that is, a different price adjustable from time to time, from year to year.

The CHAIRMAN. The surplus would be sold abroad at whatever the market would bring, the world market?

Mr. BENHAM. Yes. We say that because farmers have been in no way responsible for the high price levels we find ourselves operating under in this country, and we question whether it is fair to assess all losses on such export sales back against the farmers, something he was not responsible for and cannot help.

Fourth, we would propose that agriculture cooperatives and other domestic corporations should be encouraged to develop facilities for manufacturing and merchandising agricultural products in foreign countries, and our Government should make available technical skill and low-cost financing for such purposes. Of course, the surplus products should be made available to them at prices which will be competitive in those markets.

Fifth, we believe that Government should do more than it has been doing in the field of research in hopes of developing more practical industrial uses for agricultural products.

The CHAIRMAN. You know that during the last 2 years we have appropriated much more than in the past.

Mr. BENHAM. We appreciate that.

The CHAIRMAN. I believe that is going to continuously increase-I hope so, anyhow.

Mr. BENHAM. So do I. There is a big field there that I think we have not anywhere near cultivated to the extent that we could profitably.

The CHAIRMAN. Senator Aiken and I happen to sit on the subcommittee of the Appropriations Committee that handles these appropriations. Senator Hollad also is on that, and I can testify to the fact that we have had a considerable increase in funds for all kinds of research.

Mr. BENHAM. Our sixth point is on a subject which I have rarely heard mentioned as being associated with our agricultural problems or with any of our industrial problems. I think it has importance greater than we ordinarily think of it having. We would suggest that qualified men should study the effects of foreign-curreny devaluations upon both our agricultural and industrial export problems, and recommend actions to counteract those effects.

The CHAIRMAN. You mean by our Government?

Mr. BENHAM. Yes, if there is anything.

The CHAIRMAN. To meet the challenge that they pose?

Mr. BENHAM. To meet the problems that these currency devaluations of nations have presented, those nations that we would export to, or who are offering similar products in the world markets-the advantage that has given them over us in world trade.

The CHAIRMAN. What they do is to subsidize commodities so that they will be sold just under what we have to sell. Would you want us to follow the same policy?

Mr. BENHAM. I am not saying what we should do.

The CHAIRMAN. You could not tell them what to do, certainly.
Mr. BENHAM. I am asking.

The CHAIRMAN. And a study would not do any good unless our country was willing to meet the challenge they pose. I do know that in Brazil, for instance, they got rid of their crop by subsidizing it. That is, the Government itself came into the picture and subsidized to the point where it was sold abroad just under what we could get.

Would you want our Government to do the same thing?

Mr. BENHAM. I was not talking about direct subsidizing of agricultural products.

The CHAIRMAN. That is what they do.

Mr. BENHAM. I was talking about the advantage that the exporters of agricultural products have gained over us in countries where the country is deliberately devaluating its currency. I do not know that we can do anything about it, but it is a rather serious matter. Certainly, it deserves to be studied in the hope that some solution might be found. I am not proposing what the solution is.

The CHAIRMAN. They have a method of devaluating their own. currency. Ours is devalued as our debt increases, as you know. Mr. BENHAM. So far as our domestic use of it is concerned. The CHAIRMAN. That is correct. I hope that we put a stop to that

soon.

Senator AIKEN. I think, Mr. Benham, we could do something about foreign currency manipulations, if such were directed at the United States. We have plenty of ways of doing something about it to make them think twice before they engage in those pastimes.

Mr. BENHAM. I am frank to admit that I am not familiar enough with the subject to suggest correction, but I can see the results, and I hope that some method of correcting it can be found.