In 1933, in the first Agricultural Adjustment Act, through their representatives in Congress, farmers set up a goal. They called it parity, which meant simply equality for farmers compared with other groups. They decided that farm prices were balanced with other prices during the period from 1909 to 1914, and that period was taken as a yardstick. It was the goal to be reached by one means or another. They set out to see that a pound of cotton, for example, would buy as much as it did from 1909 to 1914. This year, for the first time since we set out on the long road, cotton farmers and quite a few other farmers will get parity returns on their crops. The 85 percent of parity loan, plus the parity payments and conservation payments under the agricultural-adjustment program, insures parity returns to cotton farmers on their 1941 crop. Now I know that parity prices don't tell the whole story. Because of the weather and boll weevil, the cotton crop this year is going to be smaller than in recent years. It is estimated at 10,800,000 bales, the smallest crop in 6 years. Many cotton farmers won't have as much money as they would have if they had better crops along with parity returns. Next year, crop insurance for cotton should be in effect and cotton growers will have some protection against shortcrop years, but that doesn't help much this year. Nevertheless, I know that cotton farmers are proud of the fact that they have reached parity. For cotton farmers built their farm programs and made them work. They led the way in the kind of cooperation necessary for farm programs to be successful. It took courage to plow up 10,000,000 acres of the 1933 crop; it took courage to enforce the restrictions on cotton under the Bankhead 'Act. Southern farmers have earned parity. I don't think we realize fully what a really big job it has been to build national farm programs and what farmers have accomplished through the programs. During the first World War I helped organize the first county farm bureau in Indiana. The biggest job we had, and about the only one in those first days, was the job of raising more food and feed. Farm prices were high and most of us took it for granted that they always would be high and conducted our business accordingly. Everybody praised us and took a great interest in agriculture until the war ended. Then everybody seemed to forget about us. Farmers struggled with their economic problems all through the 1920's and more and more of them came to the conclusion that since the problems were national in scope, the solutions for them had to be along national lines. But very few farmers were organized and we had so many different ideas that sometimes it seemed pretty hopeless. Then in 1932 the country decided that it didn't want to die of dry rot and we began, among other new things, national programs for agriculture. I remember very clearly those first days and how little we knew about national farm programs-for there had never been any such thing before. Things got mixed up sometimes and a lot of confusion seemed normal, but somehow we got through. One of my clearest memories of the first corn-hog program is of the figures about the production of corn and hogs; row after row of figures, all full of significance if one could tell what they meant. I also remember very clearly the patience of the farmers with whom we dealt and how they took hold of the programs and began to run them themselves. They forgave us almost anything, for they figured, I suppose, that our hearts were in the right place and that we would improve. Luckily for the farmers, there were improvements. While we have reached parity, we are about as far from some other objectives as we were when we started these programs. After all, parity is a means to an end: It is a means of obtaining a prosperous and secure life on the farm for the majority of farmers. Most of the South's farmers are neither secure nor prosperous. Just now, the defense effort has relieved to an extent the pressure of surplus population on southern farms. Once the war ends, however, these workers who are now in industry and in the Army, will come drifting back to the land unless we find some way to keep our city factories going as they are going now. Almost every farm problem we had in 1933 still is with us and some of them seem to grow bigger as time goes on. Nevertheless, this must not cause us to lose sight of the very real gains we have made. Most significant of all these gains is the fact that farmers have learned to cooperate and to work together on a national scale. Southern farmers and farmers the country over have learned to think in national terms and to plan in national terms. In the long run this will be their salvation. Only a few years ago, a lot of good citizens had the idea that poverty and ignorance in certain rural sections were the fault of the people themselves. They thought that, because the people were ignorant and shiftless, they were poor. Now we've come to realize that poverty comes first and ignorance and shiftlessness follow. Do something about the poverty and you do something about the ignorance and shiftlessness. Our farm programs are remarkable and the most remarkable thing about them is the changed point of view they represent. The American people have accepted the principle that agricultural inequality, farm poverty, soil erosion, and other national problems of agriculture are a Federal responsibility—the responsibility of the Nation as a whole. The country as a whole has come to accept the fact that farmers should have parity. Farmers deserve most of the credit for converting a lot of people who used to think that Government aid to agriculture was a sin. Farmers must share the credit of that achievement with Members of Congress and others, including Henry Wallace and Franklin D. Roosevelt. And right here I'll repeat to you something I have said many, many times-President Roosevelt is the best friend that farmers have ever had in the White House. I want to go back to talk about parity returns for cotton for a few moments. The cotton program is directly responsible for parity. Take the program away and cotton would be selling for 5 cents. The outside world isn't buying American cotton. We exported only a little over a million bales during the last marketing year, and the whole system of cotton production in this country is based upon an export market. We have over 12,000,000 bales in warehouses--more than a year's supply at the present rate of consumption and exports. Yet, we have parity for cotton and every cotton grower knows that parity is being supported by the floor formed by the cotton program. The total income of American farmers this year will be around $10,700,000,000, the highest in 11 years. City workers, the farmers' best customers, have more money and they are buying more farm products. We are shipping food to England. But our principal export crops, wheat, cotton, and tobacco, are backed up in the United States. England wants only limited quantities of these commodities, and other foreign markets are cut off. Without the protection of the farm programs, the wheat, cotton, and tobacco farmers would be just as deep in the economic mire as they were during the worst of the depression. Since these programs are protecting farmers, farmers must protect the programs. A farm program is like an automobile; it can be wrecked in a hurry. At regular intervals, people come along with proposals that would put the programs in the ditch. It is our duty to examine every proposal for changes with a good deal of care. It won't help us to see the danger after the damage is done. I want to discuss some proposals that are pending now. They are almost through Congress and may be sent to the White House very soon. One of these proposals would allow wheat farmers who exceeded their acreage allotment this year to use their excess wheat for feed and seed. As the law now stands, they must pay a tax of 49 cents a bushel if they sell the wheat grown on those excess acres. The feed-and-seed proposal sounds reasonable enough until we look at it pretty closely. Then we see that it won't do. It is letting the end gate down, and out of that end gate will go the whole wheat program. As a practical matter, it would be impossible to determine just how much wheat is needed for feed and seed. As a result, more wheat will be planted each year instead of less and we might as well stop trying to adjust wheat production to wheat needs. Or to put it another way, we might as well stop trying to have a wheat program and, instead. let wheat farmers grow all the wheat they want to grow and let them get what they can for it in the open market. But wheat farmers don't want to wreck their program and they should not be forced to wreck it. In the same bill that contains the feed-and-seed proposal, there is another provision that will hurt farmers if it goes into effect. This provision would freeze about 6,000,000 bales of cotton and 200,000,000 bushels of wheat held by Commodity Credit Corporation. For all practical purposes, Commodity Credit would not be able to dispose of this cotton and wheat until Congress changed the law. Now, let me say that Commodity Credit should handle the stocks it has acquired in a way that will not beat down farm prices and income. I feel that Commodity Credit should never release its stocks of any commodity in a way that would endanger the parity objective for that commodity. But to tie up stocks in an effort to create an artificial scarcity and unreasonable prices is not in the interests of the farmer, the consumer, or the general welfare. For example, cotton farmers and wheat farmers will get parity returns on their 1941 production. This is assured them through the 85 percent of parity loan and payments. Yet, some persons insist that this is not enough and that the Government should assure returns higher than parity by simply locking up cotton and wheat. I don't believe that cotton farmers who are assured of parity through Federal programs want those programs to be endangered because of the efforts of a few people to obtain a temporarily higher price through artificial scarcity. The proposed freezing of stocks violates the principle of the ever-normal granary. The theory behind the granary is that commodities will be stored up in times of surplus and released when they are needed. Generally speaking, the Commodity Credit Corporation loans are made at rates that are higher than market prices would be without a loan. The Corporation makes the loans to protect the farmers until supplies can be adjusted and prices go up again. Once upon a time, the speculator got all the benefit from such increases in prices. Now the farmer gets this benefit, so long as he holds title to the stored collateral; and it is the policy of the Corporation to extend loans whenever it is practicable. Commodity Credit Corporation losses have been very small when we take into account the scope of its operations and the fact that it has added hundreds of millions of dollars to farm income by its loans and effect ou market prices. I don't think Commodity Credit Corporation can continue to function very long if we direct it to make loans at 85 percent of parity and then make it impossible to get rid of the stocks it already has on hand. I know that some sincere persons are afraid that Commodity Credit Corporation will release stocks in a way that will beat down farm prices and farm income. To them let me say again that Commodity Credit Corporation should not-and I am sure will not-release stocks on the market in a way that will endanger the parity objective. To the persons who think they see a way to force cotton and wheat prices up during this emergency, let me remind them of two of Aesop's fables. One is the fable about the dog with a bone in his mouth. You know the tale. The dog crossed the bridge and, looking down into the stream, thought he saw another dog with a much bigger bone. He dropped his bone and jumped into the water to get the bigger bone. There was an awful splash and he wound up with no bone at all. And let me also remind them of the fable about the killing of the goose that laid the golden eggs. I hope the provisions which would freeze wheat and cotton stocks do not become law. As a general rule, I would say that we should be very careful about action which puts prices for any commodity or group of commodities out of line with other prices. Nowadays some prices are going up pretty rapidly and people are wondering whether we can avoid inflation. Farmers went through inflation during the first World War and deflation afterward. The pain lasted a lot longer than the pleasure. Thirty-five-cent cotton and twenty-two-dollar hogs were pleasant while they lasted but they didn't last long. The aftermath-debts, taxes, and increased costs-lasted a long time. Some of its effects still are with us. Farmers don't want inflation. It's a bubble and, like all bubbles, it bursts. Yet farmers wouldn't be human if they didn't get excited when farm prices begin to move up. Prices for most of their products have been low for a long time, and the upward movement is like a good rain at the end of a prolonged drought. There are some who think agriculture should charge all the traffic will bear; to get while the getting is good, with the hope that somehow the aftermath can be avoided. But I know that farmers as a group oppose inflated prices. They want fair prices now. They want fair prices after the war. So long as the parity principle is operating effectively, farmers are protected, since parity prices are flex ible and rise as other prices rise. The danger is that other prices will go up so fast that farmers will not get parity, or that prices in general will go too high. Therefore farmers will support any sound program that promises to curb speculation and runaway prices. If this means putting a ceiling on prices or pricefixing in some cases, why they are for that, too. The time to stop uncontrolled inflation is before it gets very far along. Farmers are attempting to prevent inflated farm prices by producing abundantly. If there is abundance, there will be little need for price ceilings or rationing. Today farmers are using the farm programs to produce more, just as they used the programs in past years to adjust burdensome surpluses. Without the restoration of soil fertility during the past 8 years and without the organization resulting from the programs, farmers today would be doing just what they did during the first World War-plowing up all the land in sight without regard to eventual consequences. Farmers are producing more dairy products, more poultry products, and more of almost every vital food than they did last year. Yet the demand is great. England needs almost every kind of food we can send to her, wheat being one of the few exceptions. As the war spreads, the threat of famine spreads. Once the war ends, millions will be looking to America for food. We've got to be in a position to give it to them. This time democracy must not only win the war, it must win the peace, too. But the peace cannot be won until nazi-ism is defeated. So long as Hitler controls Germany, talk of an enduring and constructive peace is futile. This war is a struggle between systems. It is a struggle between a system which believes in freedom-individual freedom, political freedom, and economic and religious freedom-on the one hand, and on the other, a system of completely controlled and regimented trade, and completely controlled and regimented people. The defeat of nazi-ism is first on our list of first things. But the downfall of Hitler does not mean the end of our troubles. It only means that we have an opportunity to save our system. We have an opportunity to make it work. After the war, we must participate actively in world affairs. We'll have to unless we want to go through this thing all over again. Our participation in world affairs must be on a permanent, and, to put it frankly, on a profitable basis. If keeping the peace doesn't pay, we'll get tired of keeping the peace. One way to be paid for helping keep the peace would be to sell our cotton, our tobacco, our wheat, and other goods to other nations. But we can't sell goods unless we buy a corresponding amount of goods in return. This whole question of trade will be on our list of first things after the war. Upon our decision may depend the continuance of democracy. As a vital part of this whole question of trade, our policy on cotton, and perhaps tobacco and other export commodities, may have to be restudied after the war. I have advocated continuance of the 85-percent loan during the existing emergency. So long as the war continues, our export market will amount to comparatively little. If Great Britain needs more cotton, she will be supplied through lease-lend funds and the price may not be a significant factor. For the time being, the 85-percent loan seems to be the best way to give the South a reasonable income from cotton and tobacco. However, once the war ends, we may not be able to export cotton at 85 percent of parity. Eighty-five percent of parity amounts, just now. to 14 cents a pound. So long as other countries will sell cheap cotton the world won't buy our cotton at 14 cents or better. The United States cannot afford to retire from the world cotton market. The problem is, how to stay in that market. If cotton prices within the United States are to be kept at a high level, it will take a substantial subsidy to sell on the world market. The Government would have to buy cotton at a high price, and sell at a low price. It will be difficult, if not impossible, to keen public support for a high loan rate under those conditions. And we do need the support of the people of the United States if the farm program is to be successful. Another way to deal with the problem might be to negotiate an agreement among the cotton-producing nations of the world, with each one taking a fair share of the world market. This is a plan that should be carefully explored. I see no reason why nations should fight each other for the privilege of giving away the products of their labor and soil. That is what has happened in the past with mutual injury to all concerned. Perhaps a world agreement among the cotton-exporting and cotton-importing nations will be the way to get a fair return for cotton. That is what all cotton producers, tobacco producers, and other producers of agricultural commodities want-a fair return. A fair return means parity. Let's conduct our affairs now and after the war so that we'll be assured of this fair return. Now that we've got parity, let's keep parity. Today, we are dedicating here on the campus of the University of Georgia the building which is to house the State office of the Agricultural Adjustment Administration. To me, this building is a symbol of the permanence of the farm programs. The programs are a means by which the farmers can put agricultural affairs on a sound, businesslike basis. These programs are economic democracy in action. They represent the American way of life. No one man cracks the whip over the farmers of America. Our way may be a little slower, but it is surer. This war has put democracy to the test and it has shown and is showing every day that its strength is the strength of the people. The war between Germany and Russia is a godsend to England and ourselves. The stubborn resistance of the Russians gives us more time to prepare. We have more time to get ready. And let us use this time to the greatest advantage. All our problems everything that we are doing and hope to do-is related to the war and its outcome. Our first task is to help frustrate nazi-ism. Nothing must interfere with the swift and complete fulfillment of that task. Part of that fulfillment falls to agriculture. We have promised food to the nations resisting Hitlerism. We'll provide food. Our farmers will see to that. They are eager to do the job. The overwhelming majority of American farmers are squarely behind the President in his foreign policy. Farmers make up their minds slowly, but once made up, they stay made up. American farmers have made up their minds that all domestic problems are transcended by the international problem. They want peace, a lasting peace, and they know how to get that peace. Along with the majority of other Americans, they have made up their minds that Hitlerism must go. Mr. HENDERSON. Mr. Chairman, the other day Mr. Crawford, I believe, asked me about sugar prices during the first World War.1 I have had two tables and a chart constructed which I should like to submit for the record.2 TABLE 20.-Sugar prices during first World War Raw, 96° centrifugal 1914 1915. 1916 1917 Year 1 See p. 431, supra. Tables 20 and 21, chart 112. $0.038 .058 .063 Granulated Year Source: U. S. Department of Labor, Bureau of Labor Statistics. 1 Granulated sugar not quoted for April, May, June, July. Raw, 96° centrifugal $0.064 .075 .130 .047 Granulated $0.078 .089 1.127 .062 |