72 



What else is a handout? You have scams and all kinds of things. 

 Federal loan guarantees for Farmers Home Administration loans 

 or the PC A is like in Iowa where there was a big scandal. Federal 

 loan guarantees now have been routinely brought up by many of 

 these kind of banks and then there are cases of farmers being fore- 

 closed on when they shouldn't be. Or perhaps they were put in a 

 loan situation that their cash flow didn't justify just so the Federal 

 loan guarantee payout, our taxpayer money, could go to these 

 banks. 



That has been documented in Iowa. There is a foreclosure Febru- 

 ary 8, next Monday, that I would like to bring to the attention of 

 the committee named the Zanker family in North Dakota. I will 

 inform Mr. Pomeroy about it because the paperwork shows that 

 this was a scam. The farmer was put in indebtedness and there is a 

 sheriffs sale scheduled. This should be stopped. 



But this is a characteristic of the era of this kind of Federal Re- 

 serve indebtedness. Internationally, Alan Greenspan is already 

 worried. He has said, "We have derivatives markets. I am worried 

 about it." 



This is the thing I think characterizes the economy that is put- 

 ting us in the crisis. That is what I put before your committee. 



So what should we do? Well, my third point is that that has to be 

 stopped, that Federal Reserve mechanism that is creating this use- 

 less debt that is looting the economy. You could say that we should 

 nationalize the Federal Reserve. Whatever you want, it should be 

 stopped. 



What should be done is that we should resume, as we have done 

 in past times in history, extending the credit through the Treasury 

 Department notes — say, at 2 or 3 percent — to the entities that will 

 do what we need: Capitalize developments in the South. Maybe we 

 should do it through the Rural Electrification Administration. I am 

 not an expert on that. We used to have Bonneville Power Author- 

 ity. We have precedents of many in the past. 



But this money could be lent out directly to those kinds of enti- 

 ties then a ripple effect of purchasing would go through the auto- 

 motive sector, aerospace, basic industry. And at the same time, 

 parity prices, or a decent price, were decreed as we did up through 

 the 1950's for farm commodities. And there was the ability to pay 

 by farmers. If all these existed, you would get in a situation where 

 you could bring down the unemployment rate from 17 percent 

 down lower than 5 percent where it ought to be in a healthy econo- 

 my. 



This is the program I think we ought to have. The projects are 

 clear. Not small, free enterprise zones that are going to lead like 

 Mahke Landora in Iowa to cholera and disease, but what we need 

 is traditional family farming and we need large scale projects such 

 as water management projects, irrigation, the North American 

 Water and Power Alliance in the West — I could go through many 

 others. 



In Florida, the energy problem can be solved by various kinds of 

 electron beam recycling. They are doing it in Miami. That kind of 

 thing needs to be examined. 



What we need in the meantime is a moratorium on any family 

 farm foreclosure, at least pending investigation. Otherwise we need 



