Page Four 



THE I. A. A. RECORD 



August, 1932 



power. He told the congressmen 

 that 50 per cent of the buying 

 power of America is directly de- 

 pendent upon farm income, that 

 only through such restoration of 

 buying power could factories re- 

 sume normal operations. 



While the provision requested by 

 the Illinois Agricultural Associa- 

 tion was placed in the bill through 

 the efforts of Congressman Rainey, 

 and reported out of the House 

 Ways and Means Committee, it was 

 seriously amended and its effective- 

 ness restricted during consideration 

 on the floor of the House. 



A similar provision which was in- 

 cluded in the Wagner bill in the 

 Senate was similarly amended on 

 the floor of the Senate. 



But when the relief bill came up 

 for consideration in conference 

 committee representing both House 

 and Senate, the provision directing 

 immediate disposition of farm sur- 

 pluses was restored through the 

 efforts of Congressman Rainey and 

 Senator Norbeck, respective leaders 

 from the House and Senate on this 

 committee. 



The relief bill then went back to 

 each House where it was passed 

 and sent to the White House. 

 Vetoes Bill 



On July 11, President Hoover 

 vetoed the measure on the ground 

 that the bill provided for loans to 

 private corporations and individ- 

 uals. 



Two days later a new relief mea- 

 sure meeting all the requirements 

 of the President was introduced, 

 again including full authorization 

 for loans for the disposal of farm 

 crop surpluses as originally re- 

 quested by the Illinois Agricultural 

 Association and the American 

 Farm Bureau Federation. 



This revised bill was finally 

 passed by Congress on July 16 and 

 was signed by the President. 



The sections of chief interest to 

 agriculture are Section C and Sec- 

 tion D under Title II— Loans by Re- 

 construction Finance Corporation. 

 These sections are as follows: — 



(c) In order that the surpluses 

 of agricultural products may not 

 have a depressing effect upon 

 current prices of such products, 

 the corporation is authorized 

 and directed to make loans, in 

 such amounts as may in its 

 judgment be necessary, for the 

 purpose of financing sales of 

 such surpluses in the markets 

 of foreign countries in which 

 such sales can not he financed in 

 the normal course of commerce; 

 hut no such, sales shall he fi- 

 nanced hy the corporation if, in 

 its judgment, such sales will af- 

 fect adversely the world mar- 

 kets for such products. 



id) The Reconstruction Fi- 

 nance Corporation is authorized 



and empowered to make loans to 

 hona fide financing institutions, 

 organized under the laws of any 

 State or of the United States and 

 having resources adequate for 

 their undertakings, for the pur- 

 pose of enabling them to finance 

 the carrying and orderly market- 

 ing of agricultural compiodities 

 and livestock produced in the 

 United States. 



Rainey And Norbeck 



These provisions were consist- 

 ently protected during all the de- 

 liberations on the measure by Con- 

 gressman Rainey and Senator Nor- 

 beck whose earnest efforts and 

 watchfulness prove them to be real 

 leaders for and friends of the 

 farmers of America. 



President Smith had been as- 

 sured that the surplus disposal pro- 

 vision WOUI4 have the approval of 

 the administration, particularly of 

 Secretary of Agriculture Hyde and 

 Chairman Stone of the Farm Board. 



An interpretation of the far- 

 reaching possibilities of the surplus 

 disposal provision for improving 

 farm prices if aggressively and 

 courageously administered was 

 given by Mr. Smith in a radio ad- 

 dress from Station WLS Chicago on 

 July 21, in which he said: — -:v 



Authorization Given 



"Careful study of this provision 

 undoubtedly reveals that without 

 any restriction, there is full author- 

 ization given — first, for financing 

 sales of agricultural surpluses in 

 the markets of foreign countries in 

 which such sales cannot be financed 

 in the normal course of commerce; 

 second, to provide loans to bona 

 fide institutions for the purpose of 

 enabling them to finance the 

 carrying and orderly marketing of 

 agricultural commodities and live 

 stock. These provisions have re- 

 ceived very little publicity. Had 

 much publicity been given, no 

 doubt, certain of the interests 

 opposed to the improvement of 

 farm prices would have im- 

 mediately and possibly successfully 

 thwarted the efforts that were be- 

 ing made. 



"All who believe that the im- 

 mediate disposal of accumulated 

 surpluses of farm commodities is 

 essential to the improvement of 

 farm prices will be glad to know 

 that the first mentioned provision 

 not only authorizes but directs ac- 

 tion be taken to bring this about. 



Meets Problem 



"It is generally recognized that 

 one of the chief reasons for the 

 failure of farm prices to improve 

 has been the inadequacy of credit 

 facilities to finance processors in 

 being able to carry processed com- 

 modities in storage or otherwise. 

 The second provision meets this 



problem. For instance, one of the 

 reasons given for the extremely low 

 price of hogs during recent months 

 was that the market for lard had 

 been greatly restricted, particularly 

 the export outlet. Second, that 

 packers were not adequately fi- 

 nanced to carry the lard in stor- 

 age. The provision just referred to 

 would meet a situation of this kind 

 in two ways — either to finance the 

 carrying of the lard until a normal 

 demand was restored or to finance 

 the sale to a foreign government of 

 the excess accumulation of lard. 

 "It should also be noted that 

 these provisions are not confined to 

 accumulated surpluses, but also ob- 

 tain as to recurring surpluses. 

 There is a substantial school of 

 thought in both congressional and 

 administration circles, which be- 

 lieves that the amendment I am 

 referring to should result in the 

 immediate and substantial general 

 improvement of farm commodity 

 price levels. While I do not person- 

 ally believe that the same results 

 can be expected or obtained as 

 would have resulted from the en- 

 actment of the Rainey-Norbeck 

 measure; yet, I do not hesitate to 

 say that if aggressively, coura- 

 geously and immediately adminis- 

 tered, farm price levels should re- 

 spond to a substantial degree. 



Predict $1 Wheat 



"It is interesting to note that al- 

 though the bill finally passed Con- 

 gress on July 16, a Washington 

 newspaper of Monday, July 18 

 carried in its headlines a prediction 

 of $1.00 wheat by September^ Sen- 

 ator Norbeck, to whom I have pre- 

 viously referred, is quoted as saying 

 that he believes an increase of 25 

 cents a bushel is a possibility in the 

 early future. 



"I do not believe anyone can ac- 

 curately predict as to the future. 

 Too many elements are at the 

 present time operating to disturb 

 the economic equilibrium of the 

 Nation. I have no hesitancy in say- 

 ing, however, that the complete 

 disposition or removal from our 

 domestic markets of the surpluses 

 that have been accumulating dur- 

 ing the past two and one-half years 

 should be most helpful in bringing 

 about gradual, but substantial in- 

 crease in farm commodity price 

 levels. 



Getting Wise 



"Of one thing we can be sure, it 

 is fast becoming generally rec- 

 ognized and accepted that the res- 

 toration of normal and prosperous 

 conditions in agriculture must be 

 realized before there can be any 

 substantial or permanent improve- 

 ment in any line of industry in the 

 United States. The agricultural 

 problem is receiving far more at- 

 iContinued page 5 col. 3) 



Brief 



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