March, 1927 



The Illinois Agricultural Association RECORD 



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Pmf i 



How Congressmen Voted On The McNary-Haugen Bill In Last Congress 



This provision. Inserted ms a Senate 

 amendment, provised that State conven- 

 tions shall be held for the purpose of ex- 

 pressins producers* sentiment in States 

 where less than 50 per cent of the pro- 

 ducers belonfc to a farm or cooperative or- 

 eanization. The bill elsewhere provides 

 that the board, before operating with mny 

 commodity, must satisfy itself that the 

 majority of the producers favor such ac- 

 -tion. The point is made in the veto mes- 

 sage that "the bilt^oes not say 'delegates,' 

 it says 'producers,* the farmers them- 

 selves," therefore, it is concluded, "it is 

 entirely unworkable." 



Such an objection is almost trival. The 

 bill provides that the heads of the State 

 department of agriculture shall prescribe 

 rules and regulations for such conventions. 

 The President reaches the surpassing con- 

 clusion that the physical presence of a 

 majority of all the producers of a State 

 is required in one convention by this 

 provision — certainly an unreasonable in- 

 terpretation, in the light of the power 

 conferred on the State commissioner of 

 agriculture to prescribe the rules and regu- 

 lations for the convention in his State. 



The original bill did not contain thia 

 section. It might be regarded as unneces- 

 sary, but it is not unworkable of itself. 



Not Purpose of Bill 



"That 'we are already overproducing,' 

 and that the measujre would result in dis- 

 astrous dumping of -farm products abroad, 

 giving an advantage to our foreign farm 

 competitors, but at the same time leading 

 to reprisals on the part of foreign na- 

 tions." 



For example, the message says : "we 

 shall send cheap cotton abroad and sell 

 high cotton at home." Nothing could be 

 further from the intent of the bill. Cotton 

 is a commodity of which our exports con- 

 stitute nearly two-thirds of the total in- 

 ternational trade. There was proposed in 

 this bill a way in which surplus cotton 

 could be withheld so that the world cot- 

 ton buyers, abroad as well as at home, 

 would be required to buy in a market free 

 from the pressure of more cotton than 

 currently needed. The message is clearly 

 uninformed and prejudiced in this point. 



Much is said of the consequence of 

 "dumping" American feeds abroad, thus 

 subsidizing livestock competition for our- 

 selves. Corn is the only feed crop in 

 the bill- The authors clearly recognized 

 that with corn the problem is rather to 

 overcome the effect of excessive produc- 

 tion one year and scant supplies the next 



than to dispose of a large exportable Bor> 

 plus abroad. There is no reason to be- 

 lieve it impossible or unwise to secure 

 the price benefit of the small com tariff, 

 both through an intelligent carry-over 

 program and export sales. Hill feed is 

 classed with corn, notfawithstanding that 

 a policy of exporting wheat as flour would 

 retain mill feed in this country and thus 

 cheapen its home price. 



Our exports of agricultural products go 

 to countries that are themselves deficient 

 in farm production. They might fear a 

 move to restrict our farm surpluses: they 

 will not protest against a measure that, 

 tends to keep up their supply. 



It is not consistent to argue, as the mes- 

 sage does, in one paragraph that we are 

 conferring unfair advantages on foreign 

 agriculture, and then argue in the next 

 paragraph that foreign nations will be 

 moved to reprisals. One or the other of 

 the objections might be valid, but surely 

 not both. 



It is objected that "we are already over- 

 producing." Our agricnlture was devel- 

 oped on an export basis by conscious effort 

 of National and State governments, of rail- 

 roads, banks, and civic agencies. The war 

 forced further expansion of agriculture, 

 industry, transportation, and labor. Our 

 national imstwar effort has been directed 

 successfully to save industry, transporta- 

 tion, and labor from the effects of transi- 

 tion to a peace-time basis, leaving agri- 

 culture exposed to the full shock of post- 

 war deflation. It was our national policy 

 that expanded agriculture. Therefore it 

 has become a national responsibility to 

 aid agriculture as other groups were aidedr 

 Instead of meeting that responsibility, and 

 developing u national program to promote 

 agriculture side by side with industry, 

 we are pursuing a national policy aimed to 

 expand industrial experts at the exiMnse 

 of our agricultural market in other coun- 

 tries. 



Taking the long view of the relation be- 

 tween our farm production and population, 

 the National Industrial Conference Board 

 makes a clear statement of the falling 

 behind both of acres and farm production: 

 "Since the beginning of the century our 

 mining production increased about 2S1 per 

 cent: oar manufacturing production about 

 190 per cent; whereas agricultural produc- 

 tion only increased 88 per cent. The num- 

 ber in farms per capita increased up to 

 1860. but then started to decline since it 

 was then limited by the limits of our 

 territory. The per capita of improved 

 farm land increased up to 1880, but since 

 then has shown a downward trend. The 

 acreage in harvested crops per capital In- 



creased up to 1900. Since then it has 

 shown a downward trend. In the period 

 1920-1925 this decrease was very sharp, 

 between 9 per cent and 10 per cent. 



Instead of this process resulting in an 

 increase in yield per acre to make up for 

 the declining per capita acreage in crops, 

 there has been a slackening in the up- 

 ward tendency in the yield per acre, which 

 was in evidence before the beginning of the 

 century. Neither has there been any in- 

 crease in the total per capita agricultural 

 production. In fact, the period 1920- 

 1925 shows about 6 per cent below the 

 pre-war years 1910-1914. 



Would Help Co-ops 



"That the insurance provision is 'de- 

 structive of all orderly processes of trade.* 

 and is unfair to non-members of the co- 

 operatives." 



This provision takes previous utterances 

 of the President at literal value. It has 

 been repeatedly said from the White 

 House that cooperative organizations are 

 the agencies through which the agricul- 

 tural surplus should be controlled. With 

 an insurance agreement such as proposed 

 cooperative associations could afford to 

 withhold a surplus from the market when 

 supply and demand conditions jeopardize 

 producer's interests. The cooperative 

 would be able to advance nearly the full 

 snrrent market value at time of delivery 

 by its members. This would overcome the 

 great handicap that now prevents coopera- 

 tive associations from increasing member- 

 ship. With it removed, it is believed that 

 cooperatives would rapidly bring a major- 

 ity of producers of certain commodities 

 within their organizations. 



The insurance proposal does not insure 

 a cooperative associa'ion against loss if 

 it sells unwisely. It merely insures 

 against changes in the level of the quoted 

 market. Nor is there any "straight 

 Government agreement" to insure cooper- 

 atives, as the message represents. The 

 agreements were to be made with the 

 backing of the stabilization fund for a 

 commodity, raised by the fees paid by the 

 commodity itself. 



This Isn't Right 



"That it would disrupt existing chan- 

 nels of trade." 



The report of the Senate committee an- 

 ticipated this criticism. It said: 



"Under the committee bill existing 

 agencies are employed to do all of the 



buying, storing,' or aelUng that t))c board 

 deems necessary in controlling and hand- 

 ling the surplus. Instead of upsetting 

 existing trade channels, the committee 

 bill uses them exclusively. It is true that 

 under contracts with the board corpora- 

 tions created and controlled by cooperative 

 aesociations would probably handle, store, 

 and sell, both in domestic and export 

 markets, a larger volume of the surplus 

 commodity than at present. To that ex- 

 tent they would probably render unneces- 

 sary some non-cooperative private grain 

 exporters and buyers of. farm commodities 

 for speculative profits. The committee 

 understands that this * result would like- 

 wise follow from any equivalent growth 

 in the functions of cooperative associa- 

 tions. Congress must abandon its policy 

 of promoting cooperative marketing if it 

 is to preserve from interference every 

 speculative dealer or exporter trading in 

 farm commodities." 



A Weak Exciise 



"That many farmers have not asked for 

 it." 



During four years in which this legis- 

 lation has been considered not a single 

 representative of a membership farm or- 

 ganization has opposed it before commit- 

 tees of Congress. On the contrary, the 

 committee reports list literally hundreds 

 of organizations that have appeared peti- 

 tioning for it. Unanimity among bankers 

 was not required as a condition to enact- 

 ment of the Federal reserve act or of 

 the branch banking act, which the Presi- 

 dent signed on the day of his veto of 

 the farm bill. There is probably no prec- 

 edent for a veto based on such a reason. 

 After all that has been said by the pres- 

 ent administration about cooperative mar- 

 keting, the recommendations of the asso- 

 ciations handling the commodities affected 

 are pushed aside, while the message em- 

 phasizes a suggestion that "imirartant min- 

 orities" have advised the President against 

 the legislation. 



Senator Norris, former chairman of the 

 Senate Committee on Agriculture, on 

 March 29, 1026. inserted in the Record 

 correspondence referring to an agreement 

 by the President and two of his Cabinet 

 officers with the former chairman and the 

 legal advisor of a national council of co- 

 operative marketing associations. In this 

 correspondence these gentlemen then rep> 

 resenting the cooperatives admitted that 

 they had agreed «-ith the President and 

 the Secretaries of Commerce and Agri- 

 culture that their organisations would op- 



Dark Screen — For, 

 Light Screen — 

 Against. White — 

 Not Voting. New 

 Mexico didn't vote 

 but was Favorable. 

 Light Screen dis' 

 trictin Northwest* 

 ern Georgia didn't 

 vote but was 



pose legislation aimed at anrplus eoatrdi — 



to which the veto message now refers as 

 "the heart of the whole problem." This 

 understanding was reached without the 

 knowledge of the cooperatives that com- 

 posed the council. Practically all of them 

 were, in fact, favorable to surplus control 

 legislation and supported the McNary- 

 Haugen bill. This incident indicates at least 

 one quarter from which came the Presi- 

 dent's advice on what the farmers want. 

 The message says "several of the larg- 

 est farm organizations have refused to 

 support' the farm bill. The foeegoing par- 

 agraph throws light on what happened 

 to one of them. Of the three national 

 farm organizations, one of them on this 

 very issue repudiated its president, who 

 had stood with the administration. An- 

 other at its annual meeting in October 

 indorsed the Com Belt program for agri- 

 cultural equality, which includes the Mc- 

 Nary-Haugen bill. The third at its annual 

 convention in November made an emphatic 

 declaration on the surplus problem and 

 indorsed far more radical legiiilation in- 

 volving Government subsidy through 

 bounties on exports. 



Bill for Surplus Control 



As a summary of what the bill does 

 contemplate, it may be said that it is ad- 

 dressed primarily to surplus control. It 

 provides especially for certain "basic agri- 

 culturml commodities." because they arc 

 the principal cash crops of which we expart 

 a surplus. Collectively they are the foun- 

 dation of farming in the great agricultural 

 areas of the United States. In addition 

 the bill treats with all farm oommodities as 

 fully as any loan measure can soundly 

 provide for them. 



The bill provides a method by which a 

 majority of the producers of a "basic" 

 commodity may regulate the flow to mar- 

 ket of the surplus portion of a crop in 

 order that supply and demand may be 

 balanced over a longer period than ii pos- 

 sible under existing conditions. Through 

 the principle of an equalization fee it 

 would enable American farmers to in- 

 fluence the marketing of their surplus 

 products in ways that would permit main- 

 tenance of domestic price levels in line 

 with domestic costs and standards of liv- 

 ing. It does not attempt to annul the law 

 of supply and demand, but to administer 

 it in the interest of producers. The equal- 

 isation fee spreads the cost as well as the 

 benefits over the whole crop and avoids 

 Government subsidy. If supply and de- 

 (Continued on page 6, colaasn t.) 



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