Then there is the question of the relative value of the farmer's dollar as compared to the dollar of the manufacturer. That involves the stabilization of the currency. That question has been presented to Congress under another bill upon which hearings have been held by a subcommittee of the House of Representatives. I shall, therefore, at this time not go into that question. I have merely enumerated these things in order to show what an intricate economic situation we have drifted into and that in my opinion all of these conditions and factors have contributed to the present chaotic condition of the farmer's problem. In this bill I have sought to solve this question of farm prices by, what I admit frankly to be, a price-fixing bill. There is nothing new in this bill from the standpoint of public policy except that it is being applied to the products of the farm. A part of this bill is composed of the old McNary-Haugen bill which I am informed was written by one of the expert economists of the Department of Agriculture. It was presented to Congress two years ago and voted down in the House of Representatives. Last year it was offered in the Senate as a rider to an appropriation bill and received only 14 votes. Its critics at that time said it was economically unsound, that it was a radical idea and we were told that the country was opposed to a Government price-fixing policy and that the solution for the farmer's problems was up to the farmer and that the farmer must help himself. I desire to point out to you at this time if I may how inconsistent is that attitude of Congress. The idea of the policy of fixing the price by a Government commission is an old established public policy in this country.

Whether we like it or not, whether it is economically sound or not, that policy has been established here for a good many years. We have under that policy established a commission under the Federal Government fixing the price on transportation. We have a Tariff Commission with authority to fix tariff schedules on the basis of the difference of the cost of production at home and abroad, so that the manufacturers can fix their price to meet the competition of the foreign manufacturers, In almost every State in the Union we have State commissions fixing the price on the production of public service corporations like telephones, telegraphs, electric lights, street railways. Only the other day we had the radio industry represnted by its lawyers appearing before the Patents Committee of the Senate asking to fix a price on music that is used by the radio broadcasting stations. This public policy of many years standing of fixing a price by Government commissions on the various necessities of life that people must pay for has placed such a great advantage on the industries enjoying this price-fixing privilege at the expense of the public that they have enjoyed a steady income. The risk and hazard of their business has to a large extent been eliminated. They have as a result a fair return and a steady income. Whatever advantage they have received out of this special privilege legislation has created a handicap upon every industry not enjoying this special privilege legislation with the result that the great industry of agriculture, the basic industry of producing the Nation's food, and not enjoying a price fixed by the Government muBRARY OF CONGRESSherefore, carry the other industries on its back by having to contribute to this national overhead expense necessary to provide a fair price and a steady inincome for industry, transportation, and bagging.

DOCUMENTS DIV SION

Under the Federal reserve banking act the Federal reserve banks have the authority to raise and lower the rediscount rate, and thereby to a large extent control the interest rate on credit, so necessary to transaction of business. Therefore, when I say that this principle of establishing a Government commission for the purpose of fixing thẹ price on farm products is not a new idea in the light of our national history of the past 30 years I think the committee will have to agree with me. I am not going to go into the technicalities of that part of this bill. Extensive hearings were held by this committee and the committee of the House in the last two sessions of Congress upon this feature of the bill which was covered in the old McNary-Haugen bill which I understand has not been reintroduced in this session of Congress. In addition to the old features I have added a provision that provides that when this price is fixed it shall be fixed high enough to yield a fair return upon what is found to be the aggregate value of the property used for the production of agricultural products. This is a principle that has already been established by Congress when it enacted the Esch-Cummins railroad law.

I desire to call your special attention to paragraph F, page 4; subsection 4; subsection 4, page 5; and subsection 5 on page 6, of S. 973, which read as follows:

(f) In the event that the ratio price that may be fixed as hereinbefore set forth for said commodities shall not yield to the producers thereof a fair return upon the aggregate value of the property of such producers held for and used in the service of production of such commodities, the said corporation shall have the power to fix the said ratio price so that the said ratio price will yield such fair return, and in the exercise of its power to prescribe just and reasonable prices the corporation shall initiate, modify, establish, or adjust such prices so that producers as a whole (or as a whole in each of said price groups or territories as the corporation may from time to time designate) will, under honest, efficient, and economical management and reasonable expenditures for maintenance of structures and equipment, earn an aggregate annual net operating income equal, as early as may be, to a fair return upon the aggregate value of the property of such producers held for and used in the service of production: Provided, That the corporation shall have reasonable latitude to modify or adjust any particular price which it may find to be unjust or unreasonable, and to prescribe different prices for different sections of the country.

(4) The corporation shall from time to time determine and make public what percentage of such aggregate property value constitutes a fair return thereon, and such percentage shall be uniform for all price groups or territories which may be designated by the corporation: Provided, That during the two years beginning March 1, 1926, the corporation shall take as such fair return a sum equal to 52 per centum of such aggregate value, but may, in its discretion, add thereto a sum not exceeding one-half of 1 per centum of such aggregate value to make provision in whole or in part for improvements, betterments, or equipment, which, according to the accounting system prescribed by the corporation, are chargeable to capital account.

(5) For the purposes of this section, such aggregate value of property of the producers shall be determined by the corporation from time to time and as often as may be necessary. The corporation shall give due consideration to all the elements of value recognized by the law of the land for price making purposes, and shall give to the property investment account of the producers only that consideration which under such law it is entitled to in establishing values for price making purposes.

You will notice that the language of the paragraphs that I have quoted is almost exactly the same as the language in section 15A of the transportation act, otherwise known as the Esch-Cummins law. The only difference is that a change of wording is necessary to make this bill apply to agriculture instead of railroad transportation.

That is the only difference. In other words the paragraphs I have quoted will give to agriculture the same result that the Esch-Cummins law gives to railroads. Therefore, there is nothing new about this part of the bill. The only thing that may be considered new is that it applies to agriculture.

We, who represent the Northwest have sometimes been charged with proposing new and untried remedies for the troubles of agriculture. Therefore, I have taken particular pains in this bill to follow lines laid down by Congress in the past in order to meet the charges that we are proposing something that is new and untried.

I and a few other Senators from the Northwest who represent agricultural communities have been accused of trying to make a nursing bottle out of the Capitol and out of the Government of the United States. As a matter of fact, we who represent the agricultural communities take the Capitol as we find it. We did not make it a nursing bottle; it was a nursing bottle when we came here.

Its base is founded in the almost inexhaustible resources of the United States, and to this nursing bottle have come for years the manufacturers of the United States. They have come here, getting their pay by getting a high protective tariff, so that they could fix higher prices on their products sold to the American people.

The railroads, through the transportation act, got access to this tremendous nursing bottle that is being constantly refilled by the taxpayers of the country, by having the Government fix a price on rail transportation so that they should have a fair return upon what is found to be the value of their property. This is pap for the railroads. But when we ask something of the same character to fix a better price for the farmer we are met with the argument or charge of being radical and being economically crazy and desiring to make a nursing bottle of the Government.

We only ask for the same treatment that has been accorded industry, transportation, and banking. We have not got it.

This morning there came to my desk an editorial from the St. Paul Pioneer Press, which I ask to have inserted in the record at this stage of my remarks. This editorial is as follows:

THE PRICE-FIXING BOGEY

"There is," says our Washington correspondent in the course of a discussion of the administration's attitude toward agricultural legislation, "outspoken objection to Government buying and selling. With equal emphasis price fixing has been frowned upon."

Now why, we should like to know, is the leadership of the Republican Party pretending to be so fearful of the phrase "price fixing"? Why whenever the West asks it to do something to equalize agriculture, does it put this particular bogey man on parade? Sometimes we think it must be because the Republican Party thinks its western section is composed exclusively of children who may be frightened by scarecrows dressed in bed sheets.

Price fixing has been the settled policy of the Republican Party for more than a generation. That is what the Republican tariff is a price-fixing system. Before a foreign commodity can be sold in this country it must pay a tariff or duty which, when added to the price at which it is sold abroad, equalizes its cost in this country with the cost of similar articles manufactured here. In some cases this tariff more than equalizes the cost, giving the American manufacturer what is known as protection against commodities of foreign manufacture.

Now, call it what euphonious name you like, this is price fixing in every sense of that phrase. It fixes the price not merely of the commodity itself, but it fixes the price of American labor employed in the manufacture of that commodity.

It sets up the American standard of living, and protects it both by high tariffs, and by such measures as the Adamson Act and by the severe restriction of immigration. No more thoroughgoing system of price fixing has ever been employed by any government than that now in force as the result of Republican policy. The West does not, we believe, dissent from this system. It believes in an American standard of living; it believes in the protection of American industry from cheap foreign competition. It pays the higher cost of all things without complaint. All that it asks is that its own particular industry-agriculture-be included in the system. And it is beginning to lose its patience when it hears that the party of the price fixers "frown upon" price fixing as applied to agriculture.

I might say that I have for years been opposed to this kind of special privilege legislation that has been given to industry, to transportation, to banking, and to public-service corporations of various kinds. I have always thought that this kind of legislation should not have been passed, and after it has been passed I have always been in favor of its repeal. We have not been able to repeal these laws. The forces that favor them have been too powerful. So we are now faced with certain conditions that we must meet. We must deal with facts and conditions as they concern us now, and that is the reason I am asking for this legislation because it will put farming on the same level as other industry.

There is an apparently well financed propaganda going through the country, particularly among farmers, telling the people that the solution for the farmer's trouble lies with the farmer himself. They say that the farmer must help himself, and that he can best help himself by keeping away from politics and Congress, and that the farmers can pull themselves out of this financial ditch that they are in by cooperating among themselves. I have heard these speakers address farmer meetings and tell them this bunk.

We are perfectly willing to help ourselves, provided you make every other industry do the same.

Some years ago when the farmers in North Dakota came to the legislature at Bismarck and asked for legislation for the farmers they were told to go home and slop the hogs. That is what many are saying here in Congress now--that the farmers should go home and help themselves and slop the hogs and raise more hogs. I beg you to remember that when the railroads came to Congress and asked for help that they were not asked to go home and cooperate among themselves and solve their problems themselves. Congress gave them what they asked for and they received a price-fixing law from Congress that we call the Esch-Cummins law. I beg you also to remember that when the manufacturers came to Congress and asked for a high protective tariff so that they could fix prices on their products higher than they had been able to fix them before, Congress did not tell the manufacturers to go home and help themselves by cooperating. They gave them what they asked for, a high protective tariff, and as a result the price of necessities of living that the American people must buy is higher and the farmer must carry his share of the burden. As I have said before I am only asking the same treatment that you have given to the manufacturer, the railroads and other service corporations, a fair price for our products.

At present we Americans are at the mercy of the speculator, and as a part of this statement and in order to save time I ask to have printed in the record a letter that I wrote to Julius H. Barnes about a year ago.

DEAR MR. BARNES: In your extended article in the February number of Nation's Business you give me undue credit, perhaps not intentionally, for advising the grain growers of the United States to market their grain on the rising bull market, instead of waiting for the inevitable collapse of the speculative "bull corner,' built up artificiallly by "doctored" statistics and by loans of hundreds of millions of 2 per cent and 3 per cent "call money."

In fact, as doubtless you know, I gave no advice. So I am not entitled to the credit. But I did point out that the price of the farmer's crop was fixed-or, perhaps you would say, "stabilized"-by future trading exchanges controlled by a small group of traders or "ring," and I warned producers not to be fooled by money powers pushing up quotations for political and financial purposes known only to that "ring."

However, you credit me with the nation-wide action of the grain growers in marketing their crop more promptly than usual, and this appears to have been the result: By March 1, as reported by the Department of Agriculture, the wheat growers of the United States held on their farms only 113,928,000 bushels of wheat against 137,717,000 in 1924 and 156,087,000 on the corresponding date in 1923.

See what they escaped. From the January high point to April 3 wheat dropped 69 cents and corn 46 cents per bushel. Nearly 730,000,000 bushels of the total 872,000,000 crop of good American wheat-actual wheat raised by toil for the people's bread, not paper "futures" and gambling wind-narrowly escaped that awful crash. I am not egotistical enough to claim the credit. Nevertheless, I hereby extend to you my appreciation of your generosity in conferring upon me the credit.

In addition to crediting me with the farm grain movement by which 6,000,000 farmers escaped the calamity of a 69 cent drop on 730,000,000 bushels of wheat you outline 10 steps by which you and the national administration are going to aid the farmer. One of those "steps" is the following, "Encouragement of future trading on exchanges."

It is apparent by what happened to the "May future" in the Chicago wheat pit by the time your article went to mail, that it is scarcely necessary now to mention the other nine "steps.' That one "step" is plenty-more than enough. In that connection may I be permitted to ask you 12 practical questionsa "daily dozen"-which I trust will receive your frank and full answer for the enlightenment of the country.

Question 1. In view of the facts, attested by the Secretary of Agriculture (a) that during the 28 days of February, the month in which you wrote your article, the Chicago Board of Trade alone sold wheat "futures" amounting to 1,581,584,000 bushels, or over five times the official "world's visible supply"; (b) that on Black Friday, March 13, Chicago sold wheat futures amounting to 149,398,000 bushels, or nearly one-half the "world visible"; (c) that during the week ending March 14 the Chicago Grain Exchange sold in wheat futures more than double the "world visible," and during the entire month of March many times all the wheat-"visible" and invisible-then existent on the face of the globe-do you candidly think as a practical business man that "Encouragement of future trading exchanges" is necessary and can you guarantee that the national administration still has that panacea in stock as an aid to the American farmer?

Question 2. In view of the fact, that since the collapse of the "bull" movement, the market price of actual wheat in the leading primary markets of the world now ranges from $1.50 to $1.30 per bushel, according to location, is it not apparent to you that wheat was never worth the $2 and over in January and February, to which it was pushed by Chicago bull interests, and that such price was artificial, unwarranted by world conditions, a ballooning gamble created by price-fixing speculators for their own enrichment after the bulk of the crop was out of farmers' hands?