represent larger areas, and Mr. Valgren, who is in charge of this work, has through a series of years been making a very careful study of the success of the different types of cooperative insurance companies, and he has also studied their methods of keeping records and the type of organization, so he is in position at the present moment to give valuable advice to the companies.

Mr. MCLAUGHLIN of Michigan. Advice to the companies?

Dr. TAYLOR. Yes; the cooperative companies, these farmers' companies. Sometimes they are county organizations, sometimes they are just township organizations, and sometimes two or three townships in a mutual fire insurance company, for instance, and he is able to give them advice that is very helpful in getting them organized on the proper basis. Only a small amount of the fund has been put into that, but the letters we have received from the different parts of the country with regard to the value of the service that has been rendered in connection with improving these cooperative insurance companies are very reassuring.

On the question of farm labor

Mr. HUTCHISON. Before you leave the banks, I understood you to say you wanted to investigate the matter of loan credits to the farmers?

Dr. TAYLOR. Yes.

Mr. HUTCHISON. Do you think the department here in Washington can tell better than the local bankers or local people around whether a man is entitled to credit or not?

Dr. TAYLOR. NO. I wish to state that we believe the local people are the ones who can answer that question, but let us take a specific example. Let us take a little town down in Texas at Red Springs. Each one of the individual farmers around there, as an individual, perhaps was not worthy of credit, and the bankers up at the county seat would have found it entirely too expensive to have looked up each one of those farmers and to have arranged to give him credit, but when the farmers at Red Springs organized into a group in a credit association, with all the resources behind any particular loan they made, all the bank had to do was to look up the credit of this whole group and then loan the money in a large amount at a time to this association, which in turn did the loaning of this money to the individuals. In other words, a local cooperative credit association was what was needed as the go-between between these little individual farmers, some of whom wanted to borrow $50, let us say, and the bank at the county seat which had the money to lend.

Prior to this time it had been done in this way: The banker had made the loan to the storekeeper who, in turn, had made advances or sold on time to these farmers at prices which corresponded to time prices, of course. Instead of lending him the money under the new organization, the money goes to the association, and the association members are able then to buy for cash and buy to so much better advantage. The bank has the same work in either case, lending the same amount of money, let us say, and the farmers are very much better off as a result of the cooperative credit association.

In North Carolina credit associations of this kind have been developed. There is a great need of improving this aspect of farm credit. It is not a matter of taking business away from the banks.

It is a matter of better organizing the farmers for getting what they need from the banks.

Mr. ANDERSON. What did you have to do, or what did your organization have to do, with the creation of these credit associations?

Dr. TAYLOR. In this particular Red Springs case it happened that I was personally acquainted with the man who was partly on pay of the Department of Agriculture, and partly from the State of Texas, in connection with the extension work. He was the man who helped these people organize and showed them how to do it. Organizations of this kind are not new. They exist in many countries.

Our first work is to study the different ways in which the farmers may organize to get this credit, to see how these different forms are adapted to different regions with different kinds of farming, the amount of credit that is needed in the different districts, and the form of credit needed is very different in the dairy district from that needed in the cotton district, for instance, and we propose to study the needs from the standpoint of better farming, that is what are the needs and just how the farmers can organize to get in touch with the bank and the credit system that exists.

It is not expected that an entirely new credit system for the United States shall be organized to take care of the farmers. It is a question of how the farmers can articulate with the credit system that exists in such a way as to get funds when they need them, in order to increase the effectiveness of agriculture.

Referring again to the brief I have put into your hands I wish to call your attention to the studies in history and geography, the purpose of which is to bring together the evidence from the long time point of view. and from the broader territorial point of view, that gives a better balance to our judgments in regard to the proper types of farming. Here you will find some maps that illustrate what I have in mind. For instance, the shift in the wheat production, and if you will look at the charts you will find where wheat was produced in 1840, and just below you will find where wheat was produced in 1870. You find that by 1870 the wheat production in the Middle West had developed to very considerably proportions. On the other hand, by 1910, the area in Wisconsin, northern Illinois, and Iowa that was important in 1870 had ceased to be a producing area.

In other words, these changes in production are going on. In any one year we do not know about it, but all those who are studying these aspects from the standpoint of the economic changes that bring them to pass, can give very important additional advice that can not be gotten by the cost-study method. We are making the study not only from the standpoint of what is going on now, but what has been going on through a series of years, for instance, what changes have taken place in the State of Wisconsin, which used to be a wheat country. Now it is a dairy country. What are the forces that have brought that about? We contemplate in that particular case a studv in detail. There was a special bulletin published in Wisconsin on that particular point.

On the other page of these charts is given the price of wheat through a long series of years, from 1825 up to the present time. Notice the shifting from year to year in the wheat price. Notice the very high price after the Civil War, and then note the gradual

fall in the wheat price during the series of years after the war, until you get to the low level of 1895. Then, in connection with that, note the great expansion in wheat production, and notice that Kansas, Nebraska, and the Dakotas, and all of western Minnesota came in and threw their great quantity of wheat into the market, and how that tended to sag the price.

The point I wish to make is simply that by studies of this kind we can better understand what the trends are, and understanding the trend, we are in a better position to give advice with regard to readjustment in farming to fit new conditions.

In regard to the subject of land economics, that is a question of land tenure.

The CHAIRMAN. In regard to this shifting, that was due last year to the Government advising people in our section, and other sections, to grow wheat, much to our regret. It cost the farmers millions of dollars, and it decreased the food supply, instead of increasing it.

Dr. TAYLOR. You could have produced more of the crops which your experience, through a series of years, had shown you paid best on your farm?

The CHAIRMAN. Yes; we would have produced more oats, barley, and corn, more than enough to make up the supply of wheat; but that has nothing to do with your work.

Dr. TAYLOR. The next subject that we wish to give special attention to is that of land tenure, that is the question of land ownership and tenancy. What is the trend? Are more and more farms going into the hands of tenants? What are the methods that can be used to make it easier for tenants to become owners, and then, to the extent that they do remain tenants, that is for a series of years, at least, while they are getting enough money with which to make the first payment on a farm, how can the relations between the landlord and tenant be adjusted in such a way as to guarantee better farming and fairness between the landlord and tenant? Those are questions that are receiving some attention at the present time.

Then there is also the question of land settlement. In a number of States where new land is being settled there are various methods of settlement, some of which are very much more satisfactory than others, and those are being studied with a view to improving the methods of getting farms. This goes right along with the problem of showing the young man how he can hope through the years to become an independent farmer, owning the farm which he operates, which we believe is very essential if he is to be contented as a farmer.

Mr. ANDERSON. Before you leave this land economics business, I notice in the estimate here that you have five subdivisions, the first of which is land resources. What are you going to do about that?

Dr. TAYLOR. Land resources is the question of studying the resources of the country from the standpoint of economic utilization. All of the land in the United States is not in farms, and it should not all be in farms. Of the land that is not in farms, which should be brought in and which should not is a very important question from the economic point of view.

Mr. ANDERSON. That is going to regulate itself under ordinary economic processes. You can not regulate that by governmental regulation.

Dr. TAYLOR. What we want to do is to study the matter and clarify thought on that subject in such a way that action may be more intelligent.

Mr. ANDERSON. How are you going to get this information in the first instance, beginning at the beginning?

Dr. TAYLOR. Information in regard to land?

Mr. ANDERSON. Yes.

Dr. TAYLOR. A very great deal of information is available at different points in the various services at the present time.

Mr. ANDERSON. There may be a whole lot of it made available after this next census is taken.

Dr. TAYLOR. Yes.

Mr. ANDERSON. Why not postpone this proposition until we get that information?

Dr. TAYLOR. The idea is this: The census does not show much about what is going on on land not in farms. Let us take the example of what has happened on lands that are now in farms and some people believe should not be in farms. Take the so-called wheat lands of eastern Montana. Just a few years ago, as you will remember, the real estate agents made a big move toward selling lands, which were good grazing lands, to people who knew nothing about those lands, as wheat lands. Their method was to advise them they could buy the land and sell it at a higher price, and they unloaded it on a great number of people. As you know, people started out in that country and tried to grow wheat on that land. It was grazing land, but they plowed it up and put it in wheat, and, as you know, for three years the crops have been a failure.

A very great deal of damage has been done to the people of the United States, not only to individuals who went out and lost all they had, but also to the people of the country, from the standpoint of the price of beef, because a large part of the land which would be good grazing land is not producing anything because production was misdirected. The idea is that the different forces in the Government service are gathering various materials which should be correlated and appraised from an economic standpoint in order that this movement toward new land may be more intelligently carried on. That, however, is only one of the aspects of the land economic studies.

Mr. ANDERSON. If you are going to chase up all these land speculators and tell the people that what we are trying to sell them as wheat land is not good land for wheat, you have got a considerable job on your hands.

Dr. TAYLOR. We will perhaps not chase the speculators, but look up the land and publish information and try to get it in the hands of the people who otherwise would be mislead by the speculator.

Mr. ANDERSON. Now, tell us what you are going to do about land values. Preliminary to this question I want to say this: A good deal of this work is new. The ultimate cost of this thing is going to depend very largely upon its scope at the beginning. We are up against what I conceive to be a period of economy in Government expenditures, and consequently we must exercise such care as we are able to with a view to see that we do not enter upon activities that are going to cost a great deal of money and which are not going to result in economic advantages corresponding to the cost. Consequently it is very important that the committee should understand

as nearly as possible the scope of these various activities which you are proposing. That is the reason that I am making these inquiries. Dr. TAYLOR. So far as the land economic studies are concerned, the major attention will be given to the problems of the relations between landlord and tenant, and the problems relating to the acquisition of land on the part of young men who perhaps start in as hired men, and become tenant farmers with the hope of becoming owners. If they can look ahead to being owners, they may be happy to go through these preliminary stages while they are earning money to make a part payment on a farm.

If the outlook is not promising, they will probably look to some other line of activity; so I say that is the thing that is especially important in maintaining upon the land the right class of people.

Turning back to the question of variation in cost, the cost of producing farm products in the future is going to depend more largely upon the quality of the men upon the farms than any other one thing, and I should say that the hope of owning a farm is the thing that is outstanding in connection with the young man who is figuring on remaining on a farm. It is one, at least, of the outstanding things.

With regard to the question of land values, this last summer, when the land boom came on in the heart of Corn Belt, we at once proceeded to gather information in regard to what had actually happened there. That information will be ready for publication in^a few weeks now.

If you are interested, the information that we got covering that matter was of two forms. First, we visited a large number of counties and got over 1,000 cases of land transfers, that is each farm is a case, whether transferred once, twice, or eight times, and then we wanted to know how much these farms increased in price between spring and fall, and we found it running up into very large sums, up to $125 and more an acre, and then we wanted to know who got the money as between the price that these farms there sold for at first, and the price later, and found that about half of it went to outside speculators, men who were stimulating land transfers, and we found that in most cases these transfers were made on a very narrow margin. When a speculator comes in and buys a farm he pays only $1,000 down, in the first place, and then before March 1 transfers it to another and another, each one taking a margin out of it, and some farmer holds it at the end at a price appreciably above the price of land last spring, and if it is held with the idea of farming and paying interest on the new high valuation, he has a burden much larger than he would have had the year before.

What we tried to do then at the same time was to get the facts. It happened that the Iowa College of Agriculture had surveyed a large number of farms in 1914, so that they knew just what was happening on these farms in 1914. We arranged in cooperation with the college to go back to these same farms and find what had happened in 1918, in comparison with 1914; that is, how much more. was the earning power of these farms in 1918, as a basis of increased land values, and the increase will show how much interest these farmers could pay on the new price and still get wages for themselves, and I can assure you in advance that the rate of interest they