We had a situation down there that we had up with the Farm Board here. Gentlemen came from all sections of the dark tobacco districts in Kentucky and Tennessee, and it was very apparent that the farmers were not going to receive anything, practically, for their crop, and chaos was confronting the farmers in my district and in the adjoining districts of Kentucky, in every district where dark tobacco. was produced.

Some of the men down there determined, or came to the conclusion that the only possible relief was the organization of an association, if you care to call it that, of the producers, for the purpose of having a cooperative association, in order to secure at least a fair price for their tobacco.

They could not do it without money, because it was necessary to advance a certain amount to the producer when he brought his tobacco in. He had to live and pay his debts. There was no place where he could get the money.

They came here and talked with Mr. Stone and the members of his board, and I want to say this for Mr. Stone, that I never in my life and I have appeared before a great many boards-I have never attended meetings where more sympathetic consideration was given to the farmers. If it had not been for the Farm Board—and I say this without the slightest hesitation-it would have been absolutely impossible for that association to have been organized and to have functioned.

As the result of the creation of that cooperative organization down there the price of tobacco has been from 2 to 3 cents more in the pound than it otherwise would have been. It was just gradually going down, and they had no market.

When that association was formed it created a market, and while they have not been getting anything like what they ought to get, and it was impossible for them to expect it, the organization of that association has enabled those farmers to get a little something as the result of their labor, and I do not know what would have happened if it had not been for the Farm Board.

Mr. TAYLOR. To what extent is that being done in other places? Kindly amplify this matter as fully as you desire.

Mr. STONE. Similar service has been rendered in every State, with the exception of two, Delaware and Maine, and we have done some work in those. .

The board and its staff are assisting cooperative marketing associations directly in almost every State. This now includes assistance in teaching farmers how to form and run cooperative marketing associations in 37 States; advice and assistance to existing cooperatives in solving problems pertaining to organization, operating policies, and accounting systems, production and marketing programs, and legal programs, in 109 cases; and assistance in determining whether a cooperative is needed in particular cases, whether one if formed would have a good chance of succeeding, and if so, help in organizing one, in 48 cases. There are thus 194 individual projects now under way. The nation-wide character of the work of the board is indicated by the attached map, which shows the States in which we have helped cooperatives and the commodities we have worked with in each State.

FIELD WORK WITH COOPERATIVES AND GROUPS OF PRODUCERS BY FEDERAL FARM BOARD

TO APRIL 1, 1932

N

As a practical illustration of what we are doing, take, for instance, the Eastern Shore Potato Association. There is an association that has been in operation for 31 years and has a good financial statement. They handle about 15,000 carloads of potatoes annually. Until these hard times developed in 1929, the association was able to get its financing from commercial banks. Last year about $500,000 was needed. The money was to be used in paying growers, on delivery, for potatoes that had been sold but which had to be graded at the receiving station before shipment to the buyer with a draft attached to the bill of lading. About 10 days elapsed between the time the grower delivered his potatoes and collection from the buyer by the association. The loan thus was needed by the association to finance its operations for this 10-day period.

The association came to the board last year and said, "We can get but $200,000 from the banks, and we have to have $300,000 more or we can not operate our business." The board let them have it, and they paid us back.

This year they were unable to borrow any money from commercial banks and said that if they could not borrow what they needed from the board they could not operate and would be compelled to discontinue their operations.

We loaned them $400,000, and they are handling the potatoes and are paying the money back.

Take the situation in Senator Byrnes's own State of South Carolina. There are two asparagus associations there; one has been operating for 17 years and the other for about half that period.

With nearly every bank in South Carolina closed they could not get any money with which to handle the asparagus crop of their members.

Upon investigation we found that they had some defects in their organization set-up. We sent one of our men down there and helped them straighten out these defects. We then loaned the two cooperatives $55,000 which they needed and they paid us back in less than 60 days.

There is another interesting thing that is encouraging to me in this work. In the past three years we have had thousands of failures in all lines of business, but among some 12,000 farmers cooperative marketing associations we have had fewer than 80 failures since 1929. If it had not been for our help, however, I think many of them would have failed.

The Cotton Shippers Association have a lobby in Washington and they have appeared at every meeting where anything relating to the Farm Board or its work has been taken up by any congressional committee. It makes my blood boil when I think that those men are here fighting everything that is being done to help agriculture.

What have they done, and what are they doing for the benefit of agriculture? In the last 50 years the wheat men and the cotton men have gotten rich off of the sweat of the brow of the man who raises cotton and wheat. We of the Farm Board are trying to help work out a better system for the men who own and till the land.

And yet these wheat and cotton men come here and sit continuously. There has never been a committee hearing where they have not come in and spilled their talk about what a harmful thing this effort is, and I think it is a crime.

Mr. COLLINS. It is the result largely of combinations, is it not? Mr. STONE. Yes; I do not think there is any question about it. I have been on the other side of this game most of my life. But I have given up my business and I will not go back into it, because I do not think the old system is a fair one to the farmers.

Take these commodity exchanges. Is there a single member of their boards of directors or governors representing the man who grows the commodity? Is there a man handling farm commodities. interested in the price the farmer gets? Every one of these men's chief interest is in getting big volume, because the business is all done on a commission basis of so much per unit of the commodity or on a set price basis.

We are trying to work out a system, based on the law of supply and demand, where the farmer can, through intelligent organization, have the same trading power as the man who is buying his products where he can sit down across the table and be able to talk prices based on the law of supply and demand. If farmers can not make money on that basis, they are in the wrong occupation.

Mr. TAYLOR. What is the hope of your board for the future? What are your present objects? All members of both the Senate and House and most of our constituents would like to know and what would you like to have Congress do?

Mr. STONE. The thing I would like to have the Members of Congress do first of all is to know what is in this law. I have found very few Members of Congress who even know what is in it, and they do not know what we are trying to do under it. Many are continually knocking us and our work from daylight to dark. The big trouble is they get their information from the fellow who does not want the farmer to organize his business. I do not think that is a fair way to approach this problem.

Take me, personally. God knows I did not want a Government job. I am here trying to do something helpful for the fellow who is growing farm products, and I know the Farm Board is doing it in an intelligent way.

Mr. COLLINS. Of course, your principal trouble with Members of Congress is that our Government is so large, and our duties are so numerous that it is practically impossible for anyone to know all the workings of the various departments of the Government, and the laws that are presented to us for enactment.

Mr. STONE. That is true.

Mr. TAYLOR. There are 18,000 bills in Congress before us right now. No human being could even get a superficial idea of what they all are. Mr. STONE. I have taken that into consideration, and what I have said has not been in the spirit of criticism.

Mr. TAYLOR. Our Government has become a great big bureaucratic centralized government, the biggest governmental machine the world has ever known. The work of Congress has increased about four times since our chairman, Mr. Byrns, and I came to Congress in March, 1909, in the Sixty-first Congress. The work has increased so enormously that it is utterly impossible for any set of men to do all the work that is heaped upon us.

APPROPRIATIONS MADE FOR EXPENSES OF FEDERAL FARM BOARD

Mr. STONE. Let me discuss briefly the question of the appropriation for our operating expenses.

We have tried to spend the money like it was our own. Of course, we have made mistakes. We have probably some duplications with other government departments in our organization.

However, we have gone to the Bureau of Efficiency and had their experts come to the board, to find out where economies could be made.

In three years Congress has appropriated $5,527,000 for administrative expenses of the board. We did not spend the full amount of our appropriation each year just because we had the money, but instead built our organization conservatively and expanded it only when actually needed in order to render the maximum service to farmers and farm organizations, with the result that we have saved for the Treasury in the three years more than 35 per cent of the $5,527,000 appropriated for us. Yet with this record Congress this year cuts our operating funds almost 50 per cent of our current rate of expenditures. Although we are heartily in favor of economy in government, we did object to agriculture being singled out for reductions far greater than those made for any other government activity.

In this connection, I would like to call your attention to the fact that up to May 31 this year we had made loans from the revolving fund amounting to $985,300,000, with loans outstanding on that date of $469,225,000. This means that the total administrative cost of the board since its creation, $3,527,000, has been only 36/100th of one cent for every dollar loaned. The interest collections on loans during this period have amounted to $9,100,000, or more than two and onehalf times the total administrative expense of the board.

Our economics department seems to have caused much of the trouble in your minds, we may have some men we can get along without, and would have done so, if necessary, without any action on your part.

We have about 126 different commodities we are loaning money on. For instance, there is a cooperative association in Colorado handling beans. It requested a loan. We needed immediate information from our economics staff on beans. It was impossible for us to know what the bean situation was over the world or in the United States, and we had to have intelligent information on beans immediately. Our economics department contacted the economic departments of the Department of Agriculture, the Department of Commerce, and the Treasury Department, in where they have much larger organization than we have, to get information about beans, bring it back, assimilate it and put it on our desks in an intelligent form so we can act intelligently on the loan application.

Mr. TAYLOR. Have you been able to do anything for the pinto bean growing association?

Mr. STONE. The pinto bean association has its troubles. The reason is that there have been tremendous crops of pinto beans, and a bean market that has been declining from year to year for three years. It is a question as to what is the best thing for that association to do. They have been in consultation with us constantly and we are doing what we can to help.