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Representative HORAN. I think the general opinion is that speculators are always buyers. Is that right?

Mr. SKYBERG. I don't think so.

Representative HORAN. And sellers are always hedgers or some thing

Mr. SKYBERG. I don't think so.
Representative HORAN. A speculator could be a seller could he not?
Mr. SKYBERG. Yes.

Representative HORAN. He could operate, and I think he is in charge of the operation of depressing the market, particularly by the farmer, is that not right?

Mr. SKYBERG. That is what I have understood. One group of speculators could guess or believe that the market was going to go down, and another group could think or believe it was going to go up. Thereby we have a market.

Representative HORAN. As a farmer, your complaint about speculators, basically, is that they are not there in sufficient quantities when the farmer needs them during hard times. Is that right?

Mr. SKYBERG. I presume that that is the whole difficulty when times are hard. No one has any faith in what any market is going to be.

Representative HORAN. You are a producer of wheat. reading in one of the morning papers that the program before the Congress is one of confusion and control. As a farmer I think you appreciate that.

Senator FLANDERS. Excuse me a moment. Which came first?

Representative HORAN. I do not know. If we want bread we have to produce the wheat first, and if we want out of this tense situation, we are going to have to encourage and increase production. Do you feel, living as close as you do to a neighboring country that has a very, very strict control of the wheat production and has had since 1943, and has had further legislation on it this year, that we will get increased production out of controls in the clossing of grain exchanges, or any of the final and ultimate results that might come from an adventure in controls?

Do you think you will increase production as the world stands now?

Mr. SKYBERG. No. I think the production has been at the best possible peak that it could be. I don't think controls or, if please, lack of controls, is going to change that.

I would like to add that I think that we should consider ourselves extremely fortunate that we have had the production that we have had. An all-time record of wheat for 1947, which has come at the end of many years of consecutive high production away beyond any past record. Representative HORAN. Around 300 million bushels more.

In spite of that record production, we face a tense situation and empty pipe lines in our commercial system before the next crop year comes.

Mr. SKYBERG. That is right.

Representative Horan. Largely due, of course, to a short crop of corn and a short crop of

rye. Do you feel that the 1948 production of wheat, even with miraculous weather from here on out could be increased over this year's production?

if you

Mr. SKYBERG. No. . With the prospects in the winter wheat belt, cannot see where it can come up anywhere near the 1947 production. 'hat is an individual farmer's opinion.

Representative HORAN. And domestic oats and ryes also were igh this year, were they not? Vr. SKYBERG. That is right.

Representative HORAN. Barley was average, and rye was down long with corn. We can increase corn and rye, possibly.

Do you not think that the Government could wisely advocate and ponsor an increase in complement rye crops and that would give ope to the Nation if we were to analyze the situation and to figure ut the complement rye crops so we could increase production at a ime when we find ourselves almost in the shape of Old Mother Iubbard? Mr. SKYBERG. In view of the domestic and the world food situation believe that we must do everything possible to maintain a high roduction of all foodstuffs.

Representative HORAN. Have you talked to any of your Canadian neighbors who raise wheat?

Mr. SKYBERG. No, I have not.
Representative HORAN. That is all, Mr. Chairman.
Senator WATKINS. What about the spring wheat crop? Could
hat not be increased substantially over last year in your section?

Mr. SKYBERG. Acreage can be. It all depends on favorable veather. We have had, as I indicated before, the longest span of avorable grain weather that we have ever had in this country, 'that have known of. Senator WATKINS. How long is that? Mr. SKYBERG. Six to seven consecutive years. That is, speaking of our area there

Senator WATKINS. As far as the witner wheat crop is concerned, nothing can be done about that now. It is fixed for next year pretty nuch, as far as man's part of the deal is concerned.

Mr. SKYBERG. I have no personal knowledge about that, but rom statements I have heard on many occasions by many people who are supposed to be well informed, they say that we would have o have exceptionally fine weather to get a normal production out of the winter wheat area.

Senator Watkins. I think you missed my question. Is there anything that man can do about the winter-wheat crop now? Mr. SKYBERG. I think not. Senator WATKINS. In other words, after it is planted, it is turned over to Providence from there on. Mr. SKYBERG. That is right. Senator FLANDERS. Just as a matter of production information, you have had down in the Red River Valley for some years past trouble with things other than the weather. The rust came into your territory once. Do you now have means of controlling that? Do you have rust-proof wheat, or something of that sort? Mr. SKYBERG. Yes. Senator FLANDERS. Is that something you have to recognize as Inother possibility?

Mr. SKYBERG. We have several varieties of highly rust-resistant wheats and have had for several years now.

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Senator FLANDERS. You do not look forward to that as a possibl calamity any more. You are just praying for weather.

Mr. SKYBERG. That is right.

The CHAIRMAN. Any other questions? If not, we thank you very much, Mr. Skyberg.

Mr. SLAUGHTER. Mr. Chairman, I would like to call Mr. Uhlman next. He has a rather lengthy statement which we are filing, an his oral statement will be very short.

The CHAIRMAN. All right, Mr. Uhlmann.

STATEMENT OF RICHARD F. UHLMANN, PRESIDENT, UHLMANI

GRAIN CO., AND VICE PRESIDENT, CHICAGO BOARD OF TRADE HIGHLAND PARK, ILL.

Mr. UHLMANN. Mr. Chairman and members of this committee I am president of the Uhlmann Grain Co. of Chicago. My full nam is Richard F. Uhlmann. In addition to being president of the Uhl mann Grain Co. of Chicago, I am also serving as first vice presiden of the Chicago Board of Trade..

For the sake of brevity, I have torn up the copy of the brief that had here and shall try to talk extemporaneously on some matter that I don't think have been fully discussed up to this time.

Senator WATKINS. You are not submitting a written brief at all?
Mr. UHLMANN. Yes sir,; I am, for the record.
Senator WATKINS. I do not see any copies.
Mr. UHLMANN. I am sorry. I am sure they are here.
The CHAIRMAN. They will be distributed, Mr. Uhlmann.

Mr. UHLMANN. First of all, gentlemen, I know from the question that have been asked here that you are greatly interested in ou export situation. I might say that the present program of 504 million bushels, which to some people is only a figure, is such a vas figure that I am trying to give it to you in certain terms.

Five hundred million bushels to be exported is more than the com bined crops raised this year in Australia and the Argentine. Those two are great competitors of ours. Five hundred million bushels to be exported is 160 million bushels more than has been raised thi summer in Canada. Five hundred million bushels is as much whea as is eaten by every man, woman, and child in this country. Five hundred million bushels is five times as much as the average export: in the United States since 1930. Senator WATKINS. How

many

times? Mr. UHLMANN. Five times as much as the average exports.

I give you the official figures here, which I shall be glad to leave from

the Department of Agriculture—I am using official figures onlywhich will show that the average exports for 17 years have been only 100 million bushels, despite some statements to the contrary.

I would also like to say that when we shipped 400 million bushel last year, which was the previous record for all time, that 400 million bushels for the United States was as much as all of the other exporting nations together exported.

In other words, there were about 800 million bushels included in the world shipments, of which the United States furnished half. So we are doing our duty.

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I do want to call your attention to the fact that we have a population n this country now of 143 million people; that it has increased 32 million over the first World War, and that as a result of that we are onsuming 200 million bushels more of wheat in this country than we vere at the end of the first World War, and we are consuming ,300,000 bushels more of all grains that are either fed or directly used.

So, it is quite obvious that with our domestic consumption last rear of nearly 800 million bushels, and with an average crop since 1930 nly 844 million bushels, what we are trying to do now can only be lone in years when we have phenomenal and unusually large roduction.

In the bistory of this country, we have only had five crops that have eached the billion bushel mark or have exceeded it. The first billion ushel crop was in 1915, and we bave bad four successive crops in the est 4 years.

I am not a prophet, but I don't believe in miracles and I don't hink that these billion bushel crops will last forever. According to be law of averages, something may happen this coming summer, particularly since our crop started rather unpropitiously.

The CHAIRMAN. One figure that impressed me somewhat on the mount was the fact that it would require approximately 1,300 ships, 10,000 tons each, to carry it, which means that three 10,000-ton ships have to leave our ports every day of the year, nearly four-every day of the year, just to carry this feed to Europe.

Mr. UHLMANN. That is right. The reason that I am trying to give you a few of these figures is that we are speaking of 400 million and 500 million, and I am trying to impress you with the fact that the average world shipments before the war were 700 to 800 million, and I have seen them as low as 400 to 450 million.

We are trying to do almost as much now as the rest of the world did before, and we can do that, but we can do it only when we have these inusually big crops.

The CHAIRMAN. One other figure. The last figures I saw on estinates was 450 million rather than 500 million. | Mr. UHLMANN. You saw that figure, Senator, last Tuesday, and if you read the newspapers Wednesday you would have seen 500 million. It was only down for 1 day. I came to Washington

Senator WATKINS. Who made that statement? | Mr. UHLMANN. I am not certain as to that. I read it in the newspapers and the reason I am so clear on that my mind isn't ordinarily that good—is that I appeared before the Senate Appropriations Committee, and I had to change my remarks because on the train getting off that morning, they had reduced it to 450 and by the time I finished t was raised again.

I do want to say, however, that in order to carry on this business it is necessary to buy tremendous quantities of wheat. In the 2-week period ending about October 15, 40 million bushels of wheat was bought by the Commodity Credit Corporation. To give you an idea how big that is, that is more than the exports in any of the years 1932, 1933, 1934, 1935, 1936, 1940, 1941, and 1942. | In other words, what I am trying to tell you is that we exported ess than 40 million bushels over a 12-month period in any of those 3 years, and the Commodity Credit Corporation bought that quantity n 2 weeks.

in 20 years.

In doing all this, this is the point that I am trying to make out I am a humanitarian, and I recognize that we have to take care o these people in Europe, but in order to export 400 million bushels last year, which we did, we cut our carry-over reserve to 8372 million bushels, which was the smallest in 10 years, and the second smallest

The average carry-over reserve in this country is 235 million bushels, and I insist that in a country of 143 million people that this might have been regarded, and it would have been a very reckless program had it not been for the fact that this last summer we raised the largest wheat crop in the history of the country:

Senator WATKINS. Do you think it was a safe risk to take without knowing what was going to happen?

Mr. UHLMANN. I think it was a bad risk.

The CHAIRMAN. But we did know there would be a large crop by the time the final shipment was made.

Mr. UHLMANN. We didn't know the crop would come in on time. I know from our own experience in the elevators in the Southwest that very oftern the crops are late. I say to you, while we don't want bread lines in Poland, neither do we want them in Dallas or Denver or Philadelphia or in any of our cities here. So, there might have been a very bad situation with a carry-over of only 83% million bushels, had the crop been late or had it not been large.

The question of margins I am going to touch on so briefly, I hope I may be excused. I mention that because the other witnesses, like Mr. Cate, who is in the flour milling business, and others who need that protection, as well as myself, don't feel that we can get along and carry on this business at a time when your margins are punitive and when we can't get someone to take the other side of the transaction.

During this period when 40,000,000 bushels of wheat was bought by Uncle Sam, I dare say that out firm sold 2 million bushels, maybe We sold the Government over a million bushels in 1 day,

and we were able to cover those hedges efficiently, but we could not have covered those hedges with the same degree of efficiency in the present market as in the market we had last October.

I know that because I am in the pit sometimes myself, trying to fill orders. On 1 day when we had sold a million or three-quarters of a million bushels to the Italian Government

Senator WATKINS. Just a moment. Do you mean to say the Italian Government buys independently as well? I thought our Commodity Credit Corporation was doing all the buying:

Mr. UHLMANN. They bought that wheat from us and it was later resold, and I think the transaction finally worked out that the Commodity Credit Corporation sold it. But we did have that transaction with the Italian Government.

Senator KEM. In that connection, Mr. Uhlmann, were there other foreign governments competing with the Commodity Credit Corporation in the grain markets at the time you mentioned, besides the Italian Government?

Mr. UHLMANN. I wouldn't know, sir. I think the French Govern. ment bought, and I think most of those transactions were laten canceled out, and I think our Government sold the grain to them at the higher price.

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