STABILIZATION IS FARM BILL AIM
McNary, George W.
Stabilization is Farm Bill Aim Surplus-Control is Vital Principle in MeNary-Haugen Measure for Agricultural Relief Before Last Congress By GEORGE W. McNARY (U. S. Senator from Oregon) T HE...
...American cotton exports arc nearly two-thirds of the world's international trade in cotton...
...Farm Board Would Govern '"p'lIUS, in addition to its provisions for cotA ton, wheat, corn, hogs, tobacco and rice, the measure provides for service to cooperative organizations in every branch of agi-i-Liilture and in every State in the Union...
...When there is a surplus ami th« Board does operate, its powers are limited to assisting the producers in "removing or withholding or disposing of the surplus," leaving the remainder, or the regular Bupply, to be sold and distributed in a regular way through regular agencies...
...in 1921, 9.9 per com...
...In the first place, the bill treats only with the surplus...
...That sounds mysterious, but it isn't...
...In the presence of a surplus, it is impossible to preserve an advantageous domestic market if conditions outside the United States depress world prices and take the American farmer into depression with them...
...Or, sometimes, when we grow more of a crop than the home market requires, conditions wholly outside the United States rather than our domestic costs of production establish the price even of that part we sell at home...
...states it is lut 78.98 per cent of 1919 exchange value...
...Gotten, wheat, and rice- have adequate cooperative organizations, or can perfect them at ence...
...Agriculture's share of the total national wealth was 25 per cent in 1900, 2t>.7 per cent in 1919 and 20 per cent in 1923...
...If the farmers could get together and grow just what could be sold at a fair price, and no more, there would be no need for this legislation...
...In order to insure close cooperation with the producers, the board's first duty is to create a non-salaried commodity advisory council to speak for the producers of each of the basic commodities, cotton, wheat, corn, hogs, tobacco, and rice...
...If there are no such cooperative corporations other agencies may be used, or such contracts can run to processors when necessary and desirable...
...facilities "to be used in the storage or processing" of any agricultural commodity...
...Debts Treble in Decade TOTAL farm indebtedness in the United States, which was estimated by the Bureau of the Census at $4,320,000,000 in 1910, has grown to $12,250,000,000 in 1920, and stands at approximately that figure today...
...Notwithstanding the tremendous up-and-down movement in com prices, we produce on the average little if any more corn than we need here...
...Our farm plant is contracting in comparison with our population and with other industries...
...This is the primary purpose of the bill...
...Even if the farmers could exactly...
...In the first place, our great crops are grown by millions of farmers thousands of miles apart...
...This producers' organization might buy and store for later resale at home or abroad in any amounts necessary to carry out the program of stabilization, or it might continuously..divert surplus to export...
...Due to a temporary oversupply, the current cotton crop is being sold for more than $ti(H).-000,000 less than it cost to produce, bringing widespread loss and ruin to farmers and business interests...
...Actual purchasing power of farm lands in the United States is 20 per cent less than it was in 1910...
...The same plan of surplus control that is provided for growers of so-called "basic" oommoditiea might readily be applied to other crops...
...These operations would be made possible through use of the "stabilization fund" raised for each of the five commodities from the commodities themselves...
...The ones who benefit primarily from this program of farm stabiliz.ation are the men who produce the crops...
...Unstable Conditions Ruinous IN CONSEQUENCE, there is no real stability in the staple crops of agriculture...
...Real conditions are much worse than these figures indicate because the larger number of farm failures do not take the form U formal bankruptcy proceedings...
...the total nu-ber of acres to be planted, the yield would vary hundreds of millions of bushels of grain, or millions of bales of cotton, one year from another...
...Prices may be smashed to ruinously low levels by the production of one season's excess supply which the next season's market might absorb at a fair price...
...The board's operations with any commodity depend on its findings— (1) That there is, actually or in prospect, • a surplus of any of the basic commodities...
...Fee Keeps Wheels Going THE "equalization fee' is simply the contri bution each'unit (bushel, bale, or pound makes to a common fund for the eomniodit> This (stabilization) fund for wheat, for ex ample, makes it possible for an agency' set ul and controlled by wheat growers to say hov much of the surplus of wheat shall be for sal« in the market at any time...
...The bill limits the aggregate amount of such property loans to ?25,OOO,O0O...
...Second...
...It provides for loans to help cooperative associations construct or pureha.se...
...Total value of all farm property in the United States, in terms of the 1913 dollar, was hut 84.4 per cent as much in 1924-25 as in...
...Within limits die tated by business sense, it enables wheat farm ers to adjust the supply of wheat to the need...
...It might mak« it worth while for farmers to hold stocks back on the farm...
...There arc differences in operation, but ih« same principle applies to each of the five commodities...
...This assistance may take the form of 4 per cent loans to such cooperatives to assist in managing the surplus...
...Such a fund for cotton would make it possible for cotton growers to feed cotton into th« markets of the world as fast as the world wanted it at a reasonable price...
...Purposes of Fees WITH THIS machinery the Board would agree with the producers' trading organization for a commodity on steps to take whenever necessary to preserve- market stability in the face of a surplus...
...In the second place,-weather'and pests, not acreage alone, determine the total yield...
...of the domestic market at an American price It would mean the same with rice...
...and within the last few months has dropped bark to HO per cent...
...Members are appointed by the Pres-dent for six-year terms, one from each Federal ami )>ii!\\i district, -from nominations made bv nominating committees selected by farm and cooperative marketing organizations in each district...
...Since 1900 our mining production increased about 231 per cent, manufacturing production about 190 per cent, whereas agricultural production only increased 38 per cent...
...The surplus control act offers a sensible, practical method for the stabilization and valorization of cotton, and not by the Government, but by the cotton growers themselves...
...This is needed as operating capital, when the board satrts to op-crate...
...The purchasing power of farm products has ranged from a yearly average of 69 per cent of pre-war in 1922, to 89 per cent in 1925...
...per capita have increased 30 per cent since 1900...
...Decline of Farm Income FpARM population comprising 29.9 per cent of the total received in 1919 (the most favorable year of record), 17,7 per cent, of rh*» total current income in the United States...
...For the 12 North Centra...
...year, will, under other conditions, grow more than the market can absorb at prices that will yield a profit above cost of production...
...Third...
...S. Senator from Oregon) T HE SURPLUS-CONTROL bill, gen-erally referred to as the McNary Haugen bill, cannot be explained satisfactorily, unless it is considered in connection with the condition in agriculture it is aimed tc _ correct...
...The surplus-control bill proposes a way to meet this situation,—not by Government subsidy, not by Government price-fixing, and not toy Government buying and selling of farm commodities,—but by making it possible for buying, storing, and selling organisations created and managed by farmers themselves, to do the job...
...It provides for assistance to cooperative associations in handling surpluses of any agricultural commodity, whether one of the five basic commodities or not...
...Our agricultural exports per capita have declined 28 per cent...
...and (2) That the organizations representing the growers of the commodity, and th# commodity advisory council, want help iu managing the surplus...
...The surplus-control bill would- establish a federal famis board of 12 men in addition to :hc Secretary of Agriculture, an ex-officio nember...
...and in 1926, 7.5 per cent, showing a progressive and continuing decline in the actual mid relative position of agriculture...
...in 1920, 13.4 per cent...
...They can not come together in a combination like the United States Steel Corporation...
...Variation in corn yields keeps the farmer in the Corn Belt in an endless seesaw between com and hogs...
...our agricultural import...
...The board can neither buy nor sell...
...A "revolving fund" of $250,000,000 is authorized out of the Treasury...
...The bill calk this contribution the "equalisation fee," because by means of it the expense of an operation which benefits alike all producers of a crop is carried by them in exact proportion to the benefits they receive...
...The number of acres which under normal conditions will grow just about what is needed during the...
...For $100 that went to each person engaged in ail other branches of our productive life, each person engaged in agriculture received $46 in 1900, $40 in 1910, and $39 in 1920, the last year for which calculations in this form are available...
...Before discussing the mechanism of the bill, it is well to describe its three main relations to agriculture: First...
...It can contract with other agencies set up by the farmers themselves, to do the buying, storing, and selling that is necessary to stabilize markets...
...These loans may be paid off by installments over a period of 20 years...
...Corn and hogs could be quick!-/ organized, with such a service to perform...
...In every sense this measure is a regulation of commerce in basic farm commodities...
...For example, there will be no mooev in the cotton stabilization fund to begin with because the equalization fees are yet to be col lected...
...The board simply loans from the re volving fund to the stabilization fund, such amounts as are called for, and then whe the equalization fees are collected, the evolv ing fund is replenished by repayment of th loan...
...Formal farm bankruptcies were ten times as high in 1925 as they were in 1910-11...
...To help check this is one of the purposes of the surplus control measure...
...But this is impossible for two main reasons...
...It provides definitely for dealing with the surpluses of wheat, cotton, corn, rice, tobacco and hogs (called "basic" agricultural commodities to distinguish them from others...
...Price-Fix ing is Canard THE "equalization fee" is simply the eotitri-provides for any price-fixing by the Board or by anybody else...
...The proposed bill should be studied with some consideration of the facts that show the existence of a real national agricultural problem wbich is becoming progres*-hely serious, and the effects of which are being definitely felt by other business classes...
...The real debt is larger than the figures show because prices of commodities which must pay the debt are lower than they were when the debt was incurred...
...So, as each bushel of grain or bate of' cotton moves in commerce, a contribution is collected from the most convenient point,—from the miller on milling, or the railroad on transporting, or the purchaser on buying...
...If there is no surplus the Board cannot operate with that commodity...
Vol. 19 • March 1927 • No. 3
