active; but it certainly is a step in the right direction, in an effort t provide for the use of these funds in self-liquidating projects.

Of course it does inaugurate debt and it does involve debt; bu there has never been a period of so-called prosperity in this countr when we did not witness what might be regarded as an abnorma increase in debt of one kind or another. From 1920 to 1930 th average increase in the debts of the people of the United States wa about $6,000,000,000. Now, it may be that is all wrong, but it doe accompany a move up the hill toward the employment of men an the utilization of money. It involves the increasing of debt. Tha is a financial and metaphysical as well as an economic question tha we could debate all day and probably never come to the same fina conclusion.

However, this is an effort not only to put money to work but to put men to work, and to do it in a way that would bring back to the Government, as nearly as possible, every dollar that is given out.

Senator DOWNEY. I should just like to disclose by comment or this: that if this proposal is meant to be a remedy for the situation developed by the data that I have mentioned, it will take care of about 5 percent of the excess savings that were revealed in that hearing, and testified to by the representatives of practically every governmental branch that we have.

Senator BARKLEY. Of course the percentage that this would take care of would depend altogether upon the extent to which this authority was exercised.

Senator DowNEY. I am assuming $400,000,000 a year, Senator, when I make that statement.

Senator BARKLEY. I think it will be reasonable to assume that much of it will be used. While it was originally set out as program one part of which would extend over 2 or 3 years, most of it was a 1-year program. As I recall, most of it was with reference to foreign loans, and that has been eliminated from this bill. So it may be possible for the entire $2,600,000,000 to be utilized in a year or perhaps 2 years.

Senator DowNEY. Even then, it would be totally insufficient. Senator BARKLEY. So, if it all got into operation in a year, it would be nearly 30 percent of your $8,000,000,000 of excess funds.

Senator CLARK of Idaho. Senator Barkley, may I ask whether those of you had charge of the formation of this bill gave any consideration to the funds for reclamation and irrigation self-liquidating projects? It occurs to me that of all the proved self-liquidating projects that we have, sound irrigation and reclamation projects would probably head the list that we have today. I am sure some of us will be very much interested in knowing-perhaps it is unfair to ask the question at this time-whether those who have charge of the bill would look favorably upon a diversion of part of these funds, or perhaps not very much, to such sound irrigation projects as the Bureau of Reclamation might be willing to undertake.

Senator BARKLEY. Well, I will say to the Senator that that was discussed, in looking around for workable and available projects that could be utilized in this situation. That matter was discussed. It was not specifically included in the bill because there are two theories about that, just now: whether, in view of the surplus crops that are being produced and which cannot be sold, it is wise at this particular

time to bring into cultivation additional lands to superimpose upon the acreage already available. The effort here, insofar as it affects agriculture, has been to concentrate very largely on making it possible for tenants to become landowners.

You know that mention was made awhile ago of the Lee bill. That does not provide for the expenditure of any money, but it simply guarantees mortgages up to $350,000,000, not only for the purchase of lands but in order to keep farmers from lising their lands and becoming tenants. That is a guaranty of individual mortgages, somewhat after the fashion of the F. H. A.

Senator TOWNSEND. It may mean the spending of some money eventually.

Senator BARKELY. Yes, if the bonds are defaulted, there is always that possibility.

However, I will say that I shall be glad to give consideration to that matter.

Senator CLARK of Idaho. I had in mind irrigation projects which probably would not bring any new lands into cultivation but would provide for adequate water supply to lands already under cultivation but without adequate water. It looks to me that the intermountain country ought to have something like that, because we are not going to get any toll roads. The toll roads are going to be constructed between New York and Chicago and Philadelphia and in other portions of the industrial East. We shall not get any of those.

Senator BARKLEY. That is inevitable.

Senator CLARK of Idaho. Yes. We will get our share of the P. W. A., of course.

Senator ADAMS. And we will get our share of the taxes.

Senator DoWNEY. Of course. The main contribution will be to the roads of the East.

Our railroads are in pretty good shape; and as the president of the Union Pacific said, he did not need any of the money and he did not want it.

Senator BARKLEY. He is to be congratulated. I know that the roads over which I have been riding recently have been badly in need of equipment.

Senator ADAMS. You have been riding on airplanes.

Senator TAFT. They do not want it because they cannot pay the interest on it. Do you mean the real purpose of this is for the Government to loan it to them at 2 percent, whereas the bankers would charge them 4 percent? They charge them 4 percent because there is a risk about it.

Senator BARKLEY. This is only giving the chance to provide equipment and to provide for its lease. If the railroads do not want it, it will not be provided.

Also, I wanted to mention the additional $100,000,000 for rural electrification. Mr. Carmody can tell you about that. That program has been one of the most successful projects that has been inaugurated by the Government. The cry from all parts of the country has been for more, and this bill carries the same prohibition against the installation of any electrification that would compete with existing facilities of existing companies.

Senator TAFT. Is the R. E. A. supposed to be self-liquidating?

Senator BARKLEY. Yes; and up to the present time it has turned out to be such, completely. Of course it has only begun, in a sense. Senator TAFT. I should like you to read the testimony of the Government regarding the Pioneer Electrical Cooperative, in Ohio, which is the principal one in Ohio.

Senator BARKLEY. I do not know about that one.

Senator TAFT. It is the principal one in Ohio; and the Government itself says that they have earned only about one-third of their expenses so far; far from paying interest and principal back, they cannot earn their expenses.

Senator BARKLEY. Of course these projects in the rural sections probably have a slow beginning in certain parts of the country. It may be that one condition or another causes them to be a little weak at the start; but I think that, on the whole, for the period contemplated, they will pay out.

The other thing I wish to mention is the increase in the stockauthority of the Export-Import Bank by $100,000,000, to make loans for facilitating exports of American products. There was considerable talk about that; and in the President's letter to Senator Byrnes, he included 700 millions, I believe, in loans to foreign countries, for the purpose of enabling them to purchase American goods, and thereby to give employment to American labor. Well, after discussing that thoroughly, it was felt that that should be eliminated, and it has been eliminated from the bill; but we have increased the available capital of the Export-Import Bank by $100,000,000, to enable it to make loans such as it has been making.

Senator ADAMS. Senator Barkley, did we increase that capital here, once this session?

Senator BARKLEY. Yes, we increased it, early in the session, to $100,000,000.

The CHAIRMAN. From 25 to 100 million.

Senator BARKLEY. Now, gentlemen, that is the general outline of the provisions of the bill, and that is all the time I want to take. There are certain details of it, with respect to these various departments; and the men who are in charge of those activities can give the information better than I can. I do not wish to take any further time now. I see that Secretary Wallace is here.

The CHAIRMAN. Yes.

The CHAIRMAN. Mr. Secretary, we are very anxious to get your views in relation to Senate bill 2759, which is now up for consideration by the committee. We will be happy to hear you.

STATEMENT OF HON. HENRY A. WALLACE, SECRETARY OF

AGRICULTURE

Mr. WALLACE. Senators, I have a prepared statement with regard to the farm security angle of this bill and with regard to the rural electrification angle of this bill. I shall read both of those statements, after which time of course you may ask any questions you desire. If you want to get into questions of detail, I shall ask Mr. Baldwin to handle the details on farm security, and Mr. Craig, the Acting Administrator of the R. E. A., to handle the details regarding the R. E. A.

The CHAIRMAN. Senator Clark has just raised the question of irrigation and reclamation projects. Will you be able to tell us about that,

or is there someone here who can give us that information? I saw the benefits of that, in my trip through the West, and I saw many towns previously impoverished that had become active and prosperous as the result of the development of these irrigation and reclamation projects.

Mr. WALLACE. Of course that is handled under the Department of the Interior.

The CHAIRMAN. Oh, yes.

Mr. WALLACE. But we do have a Water Facilities Act; and under the farm provisions it would be possible to utilize the water facilities purpose.

Senator CLARK of Idaho. And perhaps the Secretary could give us some idea, because this is going to come up.

The CHAIRMAN. Yes.

Senator CLARK of Idaho. And perhaps he could give us some idea, particularly with respect to completing existing projects and supplemental projects, and the conflict with his agricultural program. If he is in a position to give us his comments on that, it might be helpful, for the record.

Senator TOWNSEND. I think that would be very helpful.

The CHAIRMAN. Are you prepared on that now, or will you discuss that later: The question is as to what conflict there might be with your program?

Mr. WALLACE. I may say that it has been the general attitude of the Department that these expenditures, such as for the central irrigation project in California, designed to make a more continuous supply of water available for use of existing projects, are looked upon with the greatest favor by the Department of Agriculture.

Senator TOWNSEND. I think that probably Senator Clark had in mind the same idea that I had: What effect it would have on your curtailment of crops, by increasing the land upon which you put

water.

Mr. WALLACE. Well, we are not concerned with that, Senator. We are not as concerned with the curtailing of crops as some gentlemen have customarily assumed.

Senator TOWNSEND. How many contracts have you for curtailment of crops of corn, cotton, and wheat?

Mr. WALLACE. We are interested in the adjustment of crops to the market, and are not interested in curtailment.

Senator TOWNSEND. It amounts to the same thing, does it not? Mr. WALLACE. Oh, no; not at all.

Senator BARKLEY. Mr. Secretary, before you begin on that, I might say that already, under this self-liquidating or under the partly selfliquidating program, loans have been made to irrigation districts, and they can continue to be made, as a part of the non-Federal projects program, as they have been heretofore.

So far as Federal projects are concerned, the Irrigation Service has its own revolving fund which it can use and does use for the purpose of extending its activities.

Mr. WALLACE. I should like to call attention to one point which arose very early in this administration, on which the President made a statement on July 27, 1933. There was some conversation of the same type which has been occurring here. The President stated to the newspapers on that occasion that insofar as new land was brought in

by the reclamation projects, land of equal productive power would be retired, under the submarginal land projects.

It has been the view of the President, I think, at all times that there would be more human happiness in this country if farmers were exercising their talents on land where there was a prospect of getting a fair return for their talents, than if they were exercising their efforts on submarginal land, where they got a very small return.

Senator TOWNSEND. What would be the mechanics of bringing that about?

Mr. WALLACE. To bring in good land, where good land could be brought in, and to retire poor land, where poor land could be retired. Senator TOWNSEND. You would bring the farmer from the poor land and put him on the good land?

Mr. WALLACE. Not necessarily directly. In some cases it might be directly, of course. We have been having some talks with the Reclamation Service with regard to legislation which might make it possible to move these farmers from the submarginal land and to get them established on the productive land. We believe the total production would not be greatly affected, but that human happiness would be greatly increased.

Senator DANAHER. Senator Norris recently stated, on the Senate. floor, that $23,000,000 had been spent on land in Nebraska, which was land suitable only for raising beets for beet sugar, and yet the people in Nebraska were not allowed to produce that sugar because a quota was fixed by the Department which made that land unusable. I suppose that is the kind of conflict that many of us would like to know about.

Senator BARKLEY. Mr. Chairman, I suggest that before we get into the question of the merits of the agricultural adjustment program, we ought to let the Secretary make his statement regarding this bill.

Senator DANAHER. That was simply tying in with the question of Senator Clark.

Senator ADAMS. It occurs to me that if the Senator has a question in which he is interested and which is in his mind, he ought to be permitted to ask it and to have it answered.

Senator DANAHER. There may be no answer.

The CHAIRMAN. I have been interested in the blessings brought to many communities by these irrigation programs.

Senator CLARK of Idaho. Yes; Mr. Chairman, you have been very kind to us, too.

The CHAIRMAN. Mr. Secretary, will you proceed with your statement?

Mr. WALLACE. I shall be glad to answer it, if Senator Adams desires.

Senator ADAMS. It was not my question, if you will recall.

Senator TOBEY. However, I think it should be answered now. Otherwise it may be lost in the shuffle, if it is delayed.

Mr. WALLACE. I may say that we in the Department of Agriculture naturally have been concerned in the working out of this sugar program in the most harmonious way possible. We have recognized that there is more than one Department involved, and we have endeavored to get coordination of interdepartmental policy. I have asked that there be a meeting of representatives of States which have a very real