· STATEMENT OF MR. C. S. BARRETT, CHAIRMAN OF THE NATIONAL BOARD OF FARM ORGANIZATIONS AND PRESIDENT OF THE FARMERS' UNION; RESIDENCE, WASHINGTON, D. C.

Mr. BARRETT. Mr. Chairman and gentlemen of the Joint Congressional Commission of Agricultural Inquiry, speaking for a very large body of organized farmers, I want to begin by thanking the Congress of the United States for giving us this opportunity to place before you the facts concerning the business of the farmers of this Nation. In presenting our case we approach the subject in no narrow or sectional spirit.

The National Board of Farm Organizations, the National Farmers' Union, and affiliated organizations, which speak for farmers in every State where food or raw materials are produced, impressed by the necessity for the official announcement of the truth concerning our industry, decided a few months ago to ask Congress to create the body I am now addressing.

We were very glad to find that agriculture everywhere agreed that the plan originally suggested by the National Farmers' Union was deserving of support. Now, the farmers in every section of the United States have registered their approval of the proposed method of reaching the truth.

With the earnest, sincere, and energetic cooperation of agriculture there are good grounds for the hope that you will be able, before your labors end, to give the country the truth regarding the condition of our industry and the causes for it. And may we also hope that will be able to propose to Congress remedies for the evils which, through your diligent research, you will undoubtedly uncover.

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I am well aware that Congress is not omnipotent. I know that your powers are limited. There are certain constitutional limitations, but none of these will operate to bar you from discovering the truth. If the Nation knows the truth, it is not impossible that, with the cooperation of the States, the municipalities, and organized honesty everywhere, that effective remedies will be found.

When the National Farmers' Union, in concert with other bodies, decided to ask Congress to adopt this method of arriving at the truth, we believed that a system of permanent readjustment could be evolved. Of course, the impelling cause for the demand that Congress create your commission and arm it with the powers recited in the resolution, was the present condition of agriculture.

We saw ruin and misery everywhere, and this ruin that had overtaken the farmers spread to the cities. It closed factories and stopped the wheels of industry everywhere, depriving 5,000,000 of our robust citizens of employment. Of course, we understood that it was necessary to arrest this progress toward national disaster.

But after all, we realized that these evils were symptoms rather than diseases and that the real trouble lay deeper. It was not open to superficial vision. It was necessary to probe deeply, to go many fathoms beneath the surface. Having found the real trouble which, in the first clause of the resolution creating the commission, you are instructed to discover, it will be possible also to find the remedy.

The farmers who earnestly besought Congress to adopt this resolution to create the commission had in view a possible permanent

remedy for the malady from which agriculture is suffering. We believe that the evils from which our industry is suffering are permanent. They are not spasmodic. The troubles of the past two years are simply aggravations of a continuing malady. The causes are the same, but the disease has become more malignant.

Farmers would cooperate in any effort to give temporary relief. If legislation now pending or to be proposed gives promise of alleviation, agriculture will not fail to give such legislation its hearty support.

I would like, however, to impress on you the fact that agriculture never has been in a large sense a free and untrammeled institution. It has been forced to yield a very large percentage of its legitimate earnings to interests which "toil not neither do they spin." It has paid excessive prices for services which often are not performed, and it has been penalized in a thousand ways from a thousand directions to satisfy unjust exactions.

In penalizing agriculture men and systems have handed additional penalties down to the customers. The results have been unhappy in the extreme. Excessive prices to the consumer for agricultural products and ruinous returns to agriculture for its services to society have been the rule for years passed.

Systems of distribution, systems of finance, systems of transportation, and practically all systems which serve or pretend to serve the public have exacted enormous tolls from the farmers and have further increased these tolls to their customers.

Millions of men and women have left the farms, tenancy is rapidly increasing, and the country which should be devoted mainly to agriculture has now about two-thirds of its available capital invested in other fields. Why are all these things so? This is something which we are hoping the commission will discover and establish.

Gentlemen, you are asked to find the causes for the present condition of agriculture. If you find these causes it will be necessary for you to cover practically the entire economic field of the United States. No avenue which leads to or from agriculture will be able to escape. your probe. It will be necessary for you to explore finance, transportation, distribution, foreign markets, and foreign credits, foreign shipping, and all fields through which or by whose agency farm products reach the consumer.

It will be necessary for you to examine the Federal Reserve Board and other agencies and bureaus of the Government. If you would arrive at the whole truth you must make big business yield what it knows. The Chamber of Commerce of the United States, the great trusts such as the Steel Trust, the Coal Trust, the Credit Trusts, and the Money Trusts should be compelled to give you the facts concerning their operations. Unless this is done it will be impossible for you to answer the questions addressed to you in the resolution.

All these great aggregations of capital are engaged in some way in operations which affect agricultural interests. Let these men and systems lay their cards on the table just as my colleagues in the agricultural field are willing to do. If they do this, it will be entirely possible for you to reach the truth and propose constructive remedies.

The Bureau of Census of the Department of Commerce says the farms of the United States, not counting machinery, live stock, grain, and other provisions, are worth $67,000,000,000. In this vast capitalization there is not a drop of water. There are no artificial securities, no bogus bonds.

It is ground wealth, fundamental resources and naturally indispensable property.

From the products of this vast capital must be deducted great sums to pay for the "services" of gamblers on the various exchanges, to make contributions of bonuses and commissions to men who are unwilling to recognize agriculture paper as liquid and to pay for millions of gallons of water that saturates financial, railway, and other securities.

I am making these assertions. You have the power and necessary legal authority to determine whether or not I am giving accurate information. You have access to all channels from which it may be possible to obtain enlightening facts.

I am well aware that efforts will be made by those who profit through the deflation of farm products, who prosper through the adversity of millions of their fellow citizens, to make your labors vain and profitless. If you go into the fields that I suggest, and which the resolution requires, you will be met by every kind of obstacle. These will be as subtle as the methods employed by the big profiteers of the country.

Evidence of this is found in the hearings before the committees which have been looking into various phases of profiteering. There is little hope that big plundering systems will voluntarily submit themselves to such a searchlight as the commission with the great powers delegated to it by Congress, can play upon them. Therefore, gentlemen, it is inevitable that you will be required to make use of your compulsory process. We desire this statement to be followed by Mr. Lyman, if satisfactory to the commission.

The CHAIRMAN. The commission will be glad to hear Mr. Lyman. State your name, residence, and official connection for the benefit of the record.

STATEMENT OF MR. CHARLES A. LYMAN, SECRETARY NATIONAL BOARD OF FARM ORGANIZATIONS; RESIDENCE .1731 I STREET NW., WASHINGTON, D. C.

Mr. LYMAN. Mr. Chairman and members of the Joint Agricultural Commission of Inquiry, the statement I am about to make is simply in the nature of a brief outline of what we hope and expect to present to you to-day, tentatively. It does not attempt to cover all the testimony that we are prepared to offer at this time or subsequently. Agriculture, the one outstanding basic industry of this Nation, is to-day facing bankruptcy and ruin. The representatives of the farm organizations do not wish it thought that the farmer's viewpoint is the only viewpoint which they entertain in appearing before you. While keenly realizing the responsibility they hold to present in the most convincing manner possible the case for agriculture, they also are conscious that in calling attention to the lamentable condition of agriculture and in asking for remedies they are doing a patriotic service to their fellow men of the towns and cities who must languish in the end if agriculture fails to function.

It is the desire of our representatives that an outline be presented to indicate the nature of the evidence which can or will be offered in showing at this or subsequent hearings the agricultural situation, its causes, and how we believe material improvement can be brought about. It is not our thought that many phases of the situation can be fully and adequately covered at this time; but rather that the

evidence adduced will be of such a nature as to suggest and stimulate lines of inquiry by the committee which otherwise might not receive the attention which their importance demands.

In the minds of the commission we are confident the thought has already occurred of what steps can be taken at once to meet the immediate needs of agriculture, and that the commission, while fully aware that the scope of its investigations will lead it into a careful consideration of what should be done to build a permanently prosperous agriculture, will prefer first to consider testimony bearing on the present agricultural crisis and to evaluate the remedies that are offered. Briefly stated, the agricultural situation to-day is that for the principal farm commodities the farmer is receiving prewar prices, or less than prewar prices, and with the difference from the condition. he was in before the war that now his ability to sell, to find suitable markets, to secure credit, to borrow at reasonable rates of interest, to buy his farm requirements at fairly reasonable prices, and to pay his increased taxes, is most seriously impaired. On top of this is the fact that suddenly, without warning, a policy of deflation of the currency, a restriction of credit, was instituted by agencies created by the Government, and for which the Congress of the United States is responsible in the last analysis. This policy drastically carried out has resulted in a loss to farmers during the past year of $7,000,000,000.

It is from this gigantic loss that agriculture is now staggering. With it has come an unemployment of labor and a business stagnation generally which may threaten the structure of our economic, political, and social life.

In the course of your hearing no doubt you will be told that other industries are suffering the same general losses along with agriculture. This may or may not be true. Certainly it is not true that the national banks have greatly suffered, or that the professional holders of interest-bearing securities have lost money from this deflation. It is evident from the reports of the earnings of the national banks, the Federal reserve banks, etc., that the contrary is true. Nor can it be successfully denied that restricted credits, contraction of currency, "dear" money benefit those with capital invested to earn interest by loans and investments in fixed income-bearing securities. Railreads, with Government guarantees, while they may be suffering mentally for fear of what a fickle public may do, are yet certain to receive from the public chest subsidies to recoup any financial deficiencies that may occur. Certainly with a valuation placed on the railroads of $5,000,000,000 in excess of the actual market value, and with access to the Treasury of the United States, the railroads can not appear before you and contend that they have suffered from deflation. Nor can we accept without serious reservations any statements that may be made by representatives of oil, steel, leather, wool, textiles, copper, coal, or sugar interests, or by Armour, Swift, Cudahy, Wilson, Morris, and a thousand and one other powerful trusts or companies whose profits during the war and subsequently were enormous. Had agriculture profited as did these trusts and corporations, had it been able to declare enormous dividends in cash and stock-declared income-tax exempt-it would not have the conscience to appear before you now.

Our program to-day, Mr. Chairman, is first to discuss such questions as we believe can develop a course of action which, to some extent at least, can speedily relieve agriculture in the present emergency.

Under such a heading will come the subject of finance, which must include consideration of the powers, policies, and activities of the banks and financial institutions, including the Federal reserve banks, the Federal Reserve Board, etc. The land mortgage credit situation and the Federal farm loan system will be discussed and other phases of credit may be brought to your attention. The deflation policy of the Federal Reserve Board, which has ended in disaster to the Nation as a whole, will be treated in connection wth the question of finance. Transportation is another question which will be discussed because of its immediate bearing on the agricultural situation. Our witnesses will show the evils existing in excessive freight rates, their demoralizing effect on production and distribution, the special privileges granted the railroads, and the remedies which can be applied.

The necessity for reestablishing our foreign markets for our exportable surplus should be added to the trinity of emergency topics-Finance, Deflation, and Transportation." Here is a quartet

worthy of deep but speedy investigation.

To-morrow we expect to outline several subjects in connection, not so much with the present emergency as with the building up and improving a permanent agriculture. Questions will be presented by witnesses, such as cooperative marketing, distribution, spread between the producer and the consumer, unfair discrimination, and boycotting against the cooperative organizations.

The CHAIRMAN. Are there any questions of Mr. Lyman?

Senator ROBINSON. Mr. Lyman, you stated as a fixed figure the loss which has come to agriculture during the present and recent times I believe at seven billion dollars?

Mr. LYMAN. Yes, sir.

Senator ROBINSON. Can you tell the commission how you arrive at that figure? Are you prepared to do that?

Mr. LYMAN. I simply took the figures that have been given by Secretary Meredith and Secretary Wallace. Of course, we know in a general way the depreciation of cotton, wool, and grain, etc., but I personally have never figured that up. I simply assume that the statements of the Department of Agriculture are pretty near in line with the actual facts in the case.

Senator ROBINSON. That, then, is the representation of the head. of the Department of Agriculture?

Mr. LYMAN. Yes, sir.

Senator ROBINSON. That it amounts to approximately seven billion dollars?

Mr. LYMAN. Yes, sir; that it amounts to approximately seven billion dollars.

Senator ROBINSON. Of course, I take it that it would be difficult, if not impractical, to arrive at any exact figures?

Mr. LYMAN. I think so.

Senator ROBINSON. So many circumstances and conditions enter into it as important factors, all intimately related, that it is impossible to define it with exactness.

Mr. LYMAN. Yes, sir.

The CHAIRMAN. Any further questions? If not, we are very much obliged to you, Mr. Lyman. Mr. Barrett?

Mr. BARRETT. Mr. Brookhart.