Paxc Eixht 



THE I. A. A. RECORD 



"Chamber of Commerce 



Action a Big Mistake" 



C. C. Teague, Member of Farm 



Board, Discusses Marketing Act 



in Recent N. B. C. Radio Talk 



from Washington 



' (By C. C. Teague) 



THERE has been a great deal of dis- 

 cussion lately about the need of a 

 closer understanding and relationship 

 between business and agriculture which 

 has been welcomed by agriculture gen- 

 erally. This has taken the form of 

 invitation and solicitation by the United 

 States Chamber of Commerce to agri- 

 cultural organizations to join the 

 Chamber, which has been generally ac- 

 cepted where these organizations had 

 any money to join with, but which I 

 will have to admit was not in a large 

 number of cases. 



There was witnessed hers in Wash- 

 ington recently a spectacle which 

 seemed to demonstrate how far com- 

 mercial business interests will go in the 

 support of agriculture whenever the 

 aid extended in any way interferes with 

 established business. It has been the 

 purjxjse of the Federal Farm Board in 

 making effective the Agricultural Mar- 

 keting Act to interfere just as little as 

 possible with established business, but 

 it has been impossible to carry out the 

 primary, purpose of the act, which is 

 to establish a system of grower-owncd- 

 and-controlled co-operative marketing 

 for the agriculture of the country, 

 without in some cases disturbing com- 

 mercial operators particularly at the 

 point of production. 



Cotton and Wheat 



The operations of the Board that 

 have brought about the most criticism 

 from certain quarters are those in 

 wheat and cotton. During October 

 and November there was a stock panic 

 when probably 50 per cent of the sup- 

 posed values of industrial stocks was 

 squeezed out. The country h.is been 

 suffering from the effect of this ever 

 since; wheat and cotton were headed 

 in the ^ame downward direction. 



In an effort to prevent any further 

 serious decline in these commodity 

 prices the Farm Board offered to loan 

 to co-operatives $1.25 a bushel en 

 wheat and 16 cents a pound on cotton 

 with the customary grade, variety and 

 freight differentials to the various ter- 

 minal markets. This proved effective 

 for several months, but later when 

 there was a sharp decline in the price of 

 wheat the Board, under the terms of 

 the Agricultural Marketing Act, au- 

 thorized an emergency stabilization op- 

 eration in wheat. The purpose of this 



stabilization operation was to take off 

 the market whatever quantity of wheat 

 was necessary to prevent any consider- 

 able decline in the price. 



In accordance with its announce- 

 ment last October the Board continued 

 making these loans to the wheat and 

 cotton co-operatives over a period of 

 more than six months, regardless of the 

 fact that the market part of this time 

 was below the loan values. The policy 

 of fixed loan values on cotton and 

 wheat, together with the subsequent 

 stabilization operation in wheat, un- 

 doubtedly saved a panic in these com- 

 modities which would have cost the 

 farmers of the country many millions 

 of dollars and if this depression had 

 been added to the business depression 

 caused by industrial stock losses it per- 

 haps might have cost the country bil- 

 lions of dollars. This action was taken 

 in a national emergency and in the 

 opinion of the Board was entirely justi- 

 fied and in the interest of all of the 

 people even if later this action cost the 

 taxpayers some money. 



Helped Prevent Panic 



If these efforts to prevent a serious 

 decline in wheat and cotton prices have 

 made any important contribution to- 

 ward the prevention of a general crisis 

 or panic in this country, it may be that 

 this alone justifies the Agricultural 

 Marketing Act. 



Stabilization operations as contem- 

 plated by the act probably are only 

 warranted in cases of emergency when 

 the laws of supply and demand do not 

 normally operate and should be ap- 

 proached with great care. These oper- 

 ations in wheat and cotton have 

 brought on a most vociferous howl, 

 which has reverberated throughout the 

 country until it reached the halls of the 

 United States Chamber of Commerce 

 in annual session Wednesday, April 30. 

 This was the day set by the Chamber 

 when the Farm Board was placed on 

 trial and was called upon to defend 

 itself. Chairman Legge made a splen- 

 did statement of the purposes and ac- 

 tivities of the Board and the reasons for 

 its actions, as did also Secretary Hyde. 

 Congressman Fort, who was a member 

 o^ the Agricultural Committee, which 

 after extended hearings drafted and 

 sponsored the act, made a strong state- 

 ment in support of it as wise legisla- 

 tion in the interest of the general pub- 

 lic and to assist the agriculture of the 

 country, which generally was recog- 

 nized to be in great distress and which 

 formed an important part of the social 

 and economic structure of the country. 

 Millett's Philosophy 



Mr. Dan A. Millett, investment 

 banker and stockman of Denver, Colo- 

 rado, was selected by the Chamber to 



lead the attack, the essence of which 

 was that it would be better to go back 

 to first principles, with no artificial in- 

 terference with economic laws; to abol- 

 ish tariffs and all artificial aids to busi- 

 ness, labor and industry. Mr. Millett's 

 philosophy seems to be expressed in the 

 following quotation' from his address: 

 "Let no man think that living stand- 

 ards of America can be permanently 

 maintained at a measurably higher level 

 than these of other civilized countries." 



We have been measurably successful 

 for over a hundred years in keeping the 

 living standards of American labor and 

 American farmers above the peasantry 

 of Europe and the earning power of 

 American capital above that of Europe 

 and I do not believe that our people 

 are yet ready to abandon that policy. 



Speculators Howl Most 



Following the statements of the 

 prosecution and defense, discussion was 

 limited to five minutes per person. It 

 was interesting to note that all of the 

 speakers who demanded the repeal of 

 the Agricultural Marketing Act repre- 

 sented national organizations of com- 

 mercial and speculative operators, 

 bonded together for mutual protection, 

 who were attacking the attempt of the 

 Government to assist the farmers in 

 organizing so as to be in position to in 

 some measure protect themselves. The 

 Resolutions Committee reported a reso- 

 lution, which was passed by the Cham- 

 ber, pledging it to work for the amend- 

 ment of the act so as to make it in- 

 effective. In my opinion the United 

 States Chamber of Commerce has made 

 the greatest mistake in its history. 



It is quite probable that the same in- 

 terests responsible for this resolution are 

 also responsible for publicity directed 

 toward discrediting the Agricultural 

 Marketing Act and the activities of the 

 Farm Board, in suggesting that this 

 legislation will raise price levels to 

 consumers cf agricultural products. 



The main purpose of the act is not 

 to raise prices to the consumers but to 

 give the producer a larger share of the 

 consumer's dollar. In fact, the act di- 

 rectly charges the Board not to support 

 co-operative organization or stabiliza- 

 tion operations to a point that brings 

 on any distress to the consumers. An- 

 other reason that consumers need have 

 no fear is that it is not possible to get 

 a monopoly in food products because 

 of the ease and quickness with which 

 producers can get into agricultural pro- 

 duction, the small amount of capital re- 

 quired and because of the always avail- 

 able land inviting the producer when- 

 ever there is an opportunity for profit. 

 Therefore, any attempt to arbitrarily 

 raise prices to a level where unreason- 

 able profits are given the producer is 



9 :/ 



■■■:-j^M 



