tioned people in a very bad fix. I think that sort of thing is disastrous wherever it occurs.

The CHAIRMAN. Do you think that it makes-taking a period of 6 months and assuming the same long interest at the end of 6 months as at the beginning-do you think it makes for a permanent effect on the price, or is it just these ups and downs that you refer to that are so tragic?

Secretary ANDERSON. I think it is chiefly the ups and downs, but we do find that these interests get into the market sometimes and establish a new level, and then mills having bought at that level, that becomes known that the farmer can expect about so much for his grain, and the elevators have a tendency to pay those prices again, and it could easily contribute more to the upside than to the down, it seems

to me.

The CHAIRMAN. Thank you. If there are no other questions, you may proceed with the next item.

Senator BALDWIN. May I ask if the Department is prepared with specific legislative recommendations to deal with this particular problem, that is, the amendment of this law?

Secretary ANDERSON. Senator Baldwin, if the committee desires us to submit concrete legislative proposals, we will be glad to do so. We had rather thought that might come from legislative committees, but we are prepared to do whatever the committee desires.

If the chairman asks me, at any time, to submit a legislative proposal, I will file it with you, or the representatives of the Department will be glad to work with the legislative drafting committees, if you desire, to prepare your own recommendations, or be glad to pass upon them after you have prepared them.

Senator BALDWIN. You mean to date, you mean to say no specific form has been prepared?

Secretary ANDERSON. I could present one if you wished. I preferred to feel that the request should come from the Chair.

The CHAIRMAN. I think it would be wise to ask you to submit it, it seems to me, to point out the exact request for authority that is being made. Does the committee not think so? Now, if you would put that in the record, it would be helpful to the committee. We may not recommend any specific legislation, but I think it helps the record.

Secretary ANDERSON. If the chairman desires to do so, I will submit for the record a proposed bill to amend the Commodity Exchange Act, to grant the Secretary of Agriculture authority to regulate marginal requirements with respect to speculative transactions in further contracts on commodity exchanges.

The CHAIRMAN. That will be placed in the record. (The proposed bill is as follows:)

A BILL To amend the Commodity Exchange Act, as amended, to grant the Secretary of Agriculture authority to regulate margin requirements with respect to speculative transactions in futures contracts on commodity exchanges

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Commodity Exchange Act, as amended (7 U. S. C. 1-17a), is amended by inserting at the end of section 4a the following: "(5) Whenever the Secretary of Agriculture determines that the nature or extent of speculative trading on boards of trade causes or threatens to cause undue enhancement or fluctuation in the price of any commodity as herein defined, or any other agricultural commodity or product or byproduct thereof, he may

prescribe rules and regulations governing the margin to be required with respect to the purchase or sale of any such commodity for future delivery on or subject to the rules of any board of trade whether or not designated as a contract market under section 5 of this Act.

It shall be unlawful for any person to buy or sell, or accept orders for the purchase or sale of any such commodity for future delivery subject to the rules of any board of trade unless they are deposited margin funds or secutities in compliance with the rules and regulations promulgated under this section. No floor broker shall be deemed to have violated this section with respect to any transaction in connection with which he has acted solely in the capacity of floor broker.

"All money, securities, or property deposited as margin in compliance with rules and regulations promulgated under this section shall be handled by the person receiving such margin in compliance with the requirements of section 4d (2), regardless of whether such person is a futures commission merchant as defined in this Act and, for the purpose of this provision, the term 'contract market', as used in section 4d (2), shall be deemed to mean board of trade. It shall be unlawful for any person to engage in soliciting or accepting orders for the purchase or sale of any agricultural commodity for future delivery on any board of trade, whether or not such board of trade is designated as a contract market, unless such person shall keep a record in writing showing the date, the parties to such contracts and their addresses, the property covered and its price, the amount and kind of margin deposited and the terms of delivery. Such record shall be kept for a period of three years from the date thereof and shall at all times be open to the inspection of any representative of the United States Department of Agriculture or the United States Department of Justice.

In order to effectuate the purposes of this section, the powers, functions and authorities vested in the President under paragraphs (3), (4), and (6) of subsection (a) of section 2 of the Act of June 28, 1940 (54 Stat. 766), as amended, shall be vested in the Secretary of Agriculture. The Secretary of Agriculture may exercise any of such powers, functions, or authorities through any employee of the Department of Agriculture."

Representative RICH. Will you point out where the point is that any speculation on the grain market has only tended to increase the price of the grain and not for the general benefit of the trading in the market for the good of the people who are milling the grain for the best interests of keeping the prices at the very minimum?

In your conversation a while ago, I thought that there was legitimate trading, and then the speculative trading. Try to determine where that point is so that we understand it.

Secretary ANDERSON. I think that would be a very difficult thing to do. We do know that when a mill makes a contract, for example, with us for the delivery of flour which is going into relief areas, it makes a contract at a specified price, and it bases that contract upon its ability to go out and buy futures at a specified price.

Now, knowing that it can get delivery in March of a given quantity of wheat which it can grind at that time and put into flour, it makes this forward contract. We think that that is legitimate in itself, and that the person who at the same time meets it on the other side of the contract.

Representative RICH. I quite agree with you, but now when people buy with the expectation that they are only buying for speculative purposes, then they have the tendency to increase the price, but they intend to gain the advantage of a profit by selling it to somebody else. There is where we want to stop them.

Secretary ANDERSON. We shall try and do that by the regulation. The CHAIRMAN. You may proceed with the next item.

Secretary ANDERSON. May I move to item No. 6? It was to enable the Department of Agriculture to expand its program of conservation practices in this country, and to authorize measures to increase production in foreign countries.

If I may, I would like to divide that into two separate statements, one as to grain conservation.

It was recognized early last summer that this country would be called upon to make a substantial contribution to Europe's food needs. Subsequently, drought in Europe increased the need for this aid while drought in this country seriously affecting the corn crop made aid to Europe more difficult.

On September 22, the Cabinet Food Committee reported to the President that 470,000,000 bushels of grain could be expected to be available for export under the conditions then prevailing-400,000,000 bushels of which would be wheat. That estimate was about 100,000,000 bushels less than the estimated minimum requirements for grain from this country. The committee therefore recommended that a voluntary campaign to economize on domestic use be started at once. Early in October, the President appointed the Citizens Food Committee and delegated to it the vital task of urging the American people to conserve foods made from grain or produced with grain. I am sure you are familiar in a general way with the work of that

committee.

The Department of Agriculture took on, for itself, the responsibility for organizing the informational and educational program necessary to carry the conservation program out to the farms and feed lots. This, I can assure you is an important part of any effort to conserve grain. About three-fourths of the total output of grain in the United States normally is fed to livestock. That gave us a pretty big conservation target on the Nation's farms.

On October 3, I announced that the Department of Agriculture was going to do its share in making the over-all conservation program a success. In separate memoranda to the heads of Department agencies, I asked them to throw the full force of their energies behind the drive to save grain-to give it priority over all other business.

Out in the States we have what we call State USDA councils, which include representatives of State extension services and Department of Agriculture agencies working within the States-agencies such as the Production and Marketing Administration, the Forest Service, the Rural Electrification Administration, the Farmers Home Administration, and the Soil Conservation Service. I asked the chairman of each State USDA council to take the initiative in coordinating programs of the various member agencies and in organizing additional specific activities that would save grain. Through this type of organization it has been possible to work with farmers at the county level, through county agents, county agriculture conservation program committeemen, and other Federal and State people who work in the counties.

It would take up too much of your time to recite all the practices we and the State extension services are suggesting that farmers adopt to save grain; but I should like to mention some of the major ones. We are suggesting that farmers market their hogs at lighter weights; that they put less finish on beef cattle; that they feed more roughage and less grain to dairy cattle; that they cull the unprofitable hens from from their poultry flocks; that they declare war on rats and insects; that they store grain properly; and that they prevent farm fires.

As the Department's program moved along, it was given support by vigorous allies. We began to receive samples of posters, leaflets, and

other types of informational material issued by farm organizations, feed dealers, feed manufacturers, the livestock industry, the meat industry, the poultry industry, and similar groups.

On October 27, Mr. Charles Luckman and I addressed a joint letter to the president of each land-grant college, suggesting that he appoint a special State livestock feed committee to serve during the emergency. It was suggested that such a committee might well include members of the research and extension staffs of the land-grant colleges, as well as representatives of State farm organizations, feed dealers and manufacturers, and others in a position to contribute to the program. The idea here was to bring under the program-at the State level—the many agencies and associations working with farmers who were willing and anxious to cooperate in saving grain. A number of land-grant colleges have already appointed these committees and the committee are now at work.

A further step in this direction was taken on November 13, when, at my invitation, representatives of the leading farm organizations, livestock producers, meat packers, poultrymen, dairymen, feed manufacturers, grain cooperatives, banks, insecticide manufacturers, and others met with Mr. Luckman and me at the Department of Agriculture. These representatives offered full cooperation with the program and outlined in detail what they were doing or would do in the way of assistance. An executive committee of five was organized and will meet with Department people Monday, November 24, to map out further plans.

I can tell you, without any reservations, that there is wholehearted cooperation with this program throughout the rural areas of the United States. How can there be anything else but wholehearted cooperation with a program that emphasizes efficient feeding practices, the elimination of rats, the prevention of fires? As Mr. Edward A. O'Neal, president of the American Farm Bureau Federation, reported after a swing around the country;

Everybody is in favor of the grain-conservation program. They all say to me: "It's just good business."

It is good business. It is a program that the Department of Agriculture has been urging for years. Only this year, the Department is giving that program an extra push.

Farmers are conserving grain. During the past several weeks, reports from the Corn Belt have made it clear that farmers are marketing their hogs at much lighter weights than last year or the year before. The weights of barrow and gilt butcher hogs received at major Corn Belt markets during October and November have averaged 10 to 20 pounds lighter than in the same months of 1946, and 30 to 50 pounds lighter than in the same months of 1945. These figures are extremely significant in terms of grain. For every reduction of 1 pound in the average weight of all hogs marketed in the United States over the period of a year, we can expect savings of about 7,000,000 bushels of grain.

There is another indication that the program is succeeding. That indication lies in the fact that the Government's grain procurement operations have been moving forward without any serious difficulties. We have procured enough bulk grain to meet our shipping schedules through March, and enough flour to see us through January.

Much more should have been done to provide information to stimulate grain conservation on the farm. More could have been done with adequate facilities to handle this special undertaking. And yet we are encouraged at the progress that has been made. But let me interject one note of caution. The tightest pinch on our feed supplies will come-not in December or January or February-but in the months that immediately precede the next harvest. So there can be no let-up on farm grain conservation-no resting on the oars. This is a program that must go on at least until the next harvest if we are to stretch our grain supplies as they must be stretched. And speaking of the next harvest, who among us here is willing to venture a guess as to how large-or how small-that harvest will be?

Up to now, the grain-conservation program has been carried on with the regular facilities of the Department. The same is true of the special food-information services we are now providing for housewives in support of the whole conservation effort. In every section of the country, through the five Production and Marketing Adminis-. tration area offices we are supplying information on the foods that are most plentiful. This information is supplied to press and radio outlets, to hotels and restaurants, and to the grocery trade as a service to stores that want to feature foods that are the most plentiful and in order that they may be prepared for greater demand for these foods. The objectives of this effort are to assist the housewife and to ease the price and demand pressure on the foods that are not so plentiful. At the same time, the home economics workers of the Department of Agriculture are supplying information on the use of the foods that are most plentiful in order to make the food-supply information more effective. The same information has been supplied to the Citizens Food Committee for use in its consumer-services operations. The Department of Agriculture is the only source in the Federal Government of this information.

The burden of these special services to the public and to the Government has been superimposed upon the duties that the Department already is required, by legislation, to perform. I am proud, frankly, of what the Department has accomplished thus far with limited facilities. But these facilities must be strengthened.

The President recommended to the Congress November 17 that legislative action be taken to enable the Department to expand its program of encouraging conservation practices. As I see it, that legislation would do two things: (1) It would give congressional sanction to a program that, as many people have put it, is "just good business"-good business at any time, but especially good business this year; and (2) it would provide the relatively modest funds that will be needed to keep this program functioning vigorously next spring and next summer. I hope, sincerely, that the Congress can see its way clear to act upon this recommendation of the President in the very near future.

If I may do so, I would like to leave with you, perhaps for filing purposes-I doubt if they should be reproduced in the hearings, some papers which would be of interest in that connection. One is the announcement of a grain-conservation program featuring a letter of October 8, which outlined a full program for grain conservation. The second would be a letter of October 27 to the State USDA councils suggesting to them measures by which they could operate within that program, and third would be a letter of November 7, in which I