the friendship of Baruch, Morgenthau, Straus, Ginsburg, and the Guggenheim interests, all of whom belong to one racial group? Mr. LINDER. I had nothing to do with what race they belong to. I just attempted to pick out the men with whom he had been associated. Mr. KEAN. All I can say is that when you come in with such an un-American statement, as far as I am concerned, your whole testimony has no weight. The CHAIRMAN. I am wondering if you understood the witness correctly. Mr. KEAN. These were his remarks: The only reason so far advanced for Mr. Henderson to have this job is that he enjoys the friendship of Baruch, Morgenthau, Straus, Ginsburg, and the Guggenheim interests. The CHAIRMAN. Yes; but that is not the question that you put to the witness. You did not quote his language quite verbatim. I did not understand the gentleman to have said anything about any race. Mr. KEAN. He did not mention it, but he mentioned a list of men, all of whom are members of the same race. The CHAIRMAN. I did not understand that he meant to make any reference to any race, but he referred to his association with certain financial interests, things of that kind. I did not understand the gentleman to refer to any racial group. Mr. LINDER. I can answer the gentleman's question in this way. There are some men in Georgia who are farmers, who live out on a farm and farm-I know at least two, and there are some more— who belong to the same race, and I include them in my statement that they are 100 percent American. The CHAIRMAN. The committee will meet tomorrow at 11 o'clock for a short session. The House is now in session and we will have to adjourn at this time. (Whereupon, the committee adjourned to meet on Saturday, October 11, 1941, at 11 a. m.) PRICE-CONTROL BILL SATURDAY, OCTOBER 11, 1941 HOUSE OF REPRESENTATIVES, COMMITTEE ON BANKING AND CURRENCY, Washington, D. C. The committee met at 11 a. m., Hon. Henry B. Steagall (chairman) presiding. The members present were: Messrs. Steagall, Williams, Spence, Ford, Brown, Patman, Mills, Monroney, Hull, Crawford, Miss Sumner, Messrs. Smith and Rolph. The CHAIRMAN. The committee will be in order. The committee will be glad to have you resume your testimony, Mr. Linder. STATEMENT OF TOM LINDER-Resumed Mr. LINDER. Mr. Chairman, I would like to call at this time the attention of the committee to an agricultural meeting that has been proceeding in Washington for the last 2 days. This meeting was called at the request of Senator Thomas of Oklahoma, who is chairman of a subcommittee of the Agriculture Committee in the Senate. It was responded to by delegates and representatives of 37 States, including the commissioners of agriculture, representatives of farm organizations, Governors and representatives of Governors, and was a very representative gathering of agriculture, as I see it. This meeting adopted a report, and I will read you the clerk's report of the meeting. (Mr. Linder then read the following:) [For immediate release] FARM GROUPS ISSUE STATEMENT ON PRICE-PARITY LEGISLATION WASHINGTON, D. C., October 10.-Culminating action of a 2-day conference including representatives of Governors of States, farm organizations, and the State commissioners of agriculture was the creation of a special committee to study and propose Federal legislation embodying a new conception of price parity. This committee consists of Charles W. Holman, Washington, D. C., secretary, National Cooperative Milk Producers Federation; Fred Brenckman, Washington, D. C., Washington representative of National Grange; E. W. Sheets, Washington, D. C., secretary, United States Live Stock Association; E. E. Kennedy, Washington, D. C., secretary, National Farmers Guild; Tom Linder, Atlanta, Ga., Commissioner of Agriculture; and E. H. Everson, Pierre, S. Dak., Commissioner of Agriculture. The conference, which was called to Washington by the parity-price subcommittee of the United States Senate Committee on Agriculture, issued the following statement of policy and program: "We have considered the position and problems of the farm people of the United States in the present war crisis. We have weighed proposals to preserve 1811 64300-41-pt. 2——53 economic balance among the various groups amid national-defense preparations. We have attempted to appraise various and sundry theories as to what leads to or constitutes inflation. We are greatly disturbed by the ungrounded claims of both public and private propagandists that agricultural commodity prices are unduly high and are paving the way for uncontrolled inflation. "Such claims are specious. Such claims bear little relation to the facts. "The facts are these: For over two decades the position of urban labor and industrial capital has steadily forged ahead of the position of agriculture. Today's status of both capital and labor is superior to that of 1929. Agriculture's status, by and large, has not reached that which it held in 1929. Year by year since the last World War the margins of advantage have widened aud now agriculture finds itself in the valley while capital and labor are on the superior profit-taking tablelands. "Such disparity as exists probably flows out of the inherent differences in organizational possibilities. Organized capital and organized labor represent activities easily capable of concentration and control from within. To the extent that agriculture is diverse and scattered, it cannot utilize mechanisms of self-protection readily available to capital and labor. "Recent price rises of agricultural commodities have been both normal and needed, if farmers are not to break under the heavy loads of national defense. They still lack much in restoring the economic balances among groups or giving farmers a fair share of the national income. "Our goal then is parity-a true parity, one that means legalizing out existing inequalities now so glaring and evil in their effect upon our society. "Our deliberations have revealed a common objective as to parity. While present parity operations have aided agriculture's status, we still desire to improve its legislative and administrative application so that farmers may obtain their rightful share of the national income. But we have also discovered that the same legislative parity formula may not always operate equitably for all commodity groups. We have therefore agreed that the present method of computing parity, as prescribed by law and administrative action, should be modernized for those commodities that cannot be priced adequately by the old method, and that the exponents of new parity methods should, at this juncture, present their proposals immediately to the congressional committees concerned with this problem. "With regard to the great underlying principles of price policy, we take this stand: "1. We oppose any price-fixing or price-ceiling legislation with respect to agricultural commodities that does not simultaneously control prices of industrial products and urban wages in an equitable relation to farm commodity prices. "2. We favor minimum guaranties of prices for agricultural products as a part of the defense program. "3. We favor parity, or its equivalent, as the standard of minimum prices for all agricultural commodities. "4. We ask that it be made mandatory for the Government agencies to use all available funds for loans or purchase in such manner as to sustain both minimum prices and such above-minimum prices as may be determined to be necessary during the present emergency. "In this crisis our Government is calling upon many industries and certain branches of agriculture enormously to increase production. Either by price, contract, or otherwise, industrial plants are being indemnified against loss on operation or expansions. We hold that the same principle should apply to the individually owned farm. "We ask that agriculture be given equal representation with industry and labor, satisfactory to agriculture, on all Federal agencies having to do with the national defense. "In this emergency all groups should freely, unselfishly, and willingly give their loyal service to the common good. There should be no halt nor hindrance to full production and efficient distribution. "We, the assembled farmers and farm representatives of 37 States, meeting together in the city of Washington, District of Columbia, for the purpose of of aiding and protecting agriculture, hereby declare our avowed determination to secure for the farmer of this Nation his proper relationship with other branches of organized society by demanding for raw materials, which he has to sell, prices that will insure the above-mentioned relationship. "Further, we do declare our intention to resist any attempt by any official, or group of officials, in our Government who by act or statement or otherwise affect the interest of agriculture adversely, until such a relationship as we deem essential to our own welfare has been established. Our resistance will be in the form of request to our Senators and Congressmen that they represent our views in appropriate legislation. "It is the purpose of this statement to serve notice that agriculture realizes the importance of unified effort to protect and to insure its proper relationship in the distribution of our Nation's income. "We thank the subcommittee of the Senate Committee on Agriculture for its public-spirited and forward-looking action in calling together this national conference representing practically all phases of agricultural life in the separate States." The CHAIRMAN. The statement you have just read, was that issued by the Senators, or by whom? Mr. LINDER. By this committee of farm representatives. Mr. LINDER. Mr. Chairman and members of the committee, I want to call to your attention a statement of Mr. Henderson, in connection with the matter that the result of the passage of this bill would be the creation of a new deparment of the Government. In the hearings on the second deficiency appropriation bill for 1941 Mr. Leon Henderson was on the witness stand. Mr. Ditter asked the following question of the witness. I am thinking whether you are going to try to be persuasive and influencing so that your agricultural economy will fit itself into this whole problem? Mr. Henderson answered: I might tell you what I told Senator Smith's committee the other day. I was asked whether or not I felt I had the power to put ceilings on agricultural commodities, and I said, "Absolutely; yes." And I said, further, that if an agricultural commodity started to run out of line-and I think I know what a good line is for an agricultural commodity price-that we would not hesitate. Now, in order to do this job you cannot just fix a flat price and let it go at that, because this is a tremendous country. There is a tremendous number of factors always at work. Every time we install a price ceiling we undertake to make ourselves available to anybody who has had a hardship inflicted on him--not as to whether he can make a speculative profit, but as to whether he can really produce. For example, take the small steel producer who says, "I can't go on this schedule; I am in the red already, and some part of my assets are going out with every ton of steel, if I charge the price that you set, which is the price you set for the big ones." We go into his books; we sit down and talk to him, and if we find that is a reasonable statement, we make that kind of adjustment with him. We allow him to charge an additional price. Now, that takes a different kind of personnel and different kind of attitude than you have with a connotation of a price-fixer or a price czar. Mr. Ditter asked: Mr. Henderson, may I interrupt at that point? Does that invite any possible favoritism? Mr. Henderson answered: Yes, sir; it does. Mr. Ditter asked: How do you control that possible temptation to favoritism? Mr. Henderson answered: By the best kind of review of all the facts in the case. Mr. Ditter asked: It is pretty nearly a judicial process, is it not? Mr. Henderson answered: Well, I regard it as an economic process. Mr. Ditter asked: I mean in the determination as to whether or not this individual is to be permitted some additional price as against a competitor, that determination is largely a judicial process is it not; equities, in other words? Mr. Henderson answered: It is. Mr. DITTER. As you relate your controls to industry and take in this matter of men and management, are we to assume you are going to be equally assertive in the matter of agricultural prices and agricultural policies? Mr. HENDERSON. I think you can assume that. We are bound by the policy of Congress on agricultural commodity prices as far as bottoms are concerned. You will note from the above that it is Mr. Henderson's idea to regulate different producers of the same identical products in different ways. If Farmer Jones can show that his cotton costs more to produce than Farmer Smith's cotton, it is Mr. Henderson's idea to fix one price for Mr. Jones and another price for Mr. Smith. Since the price of growing cotton naturally varies from year to year on the same farm; since the cost in Georgia might be different from the cost of each of the other States; since the cost of wheat would not be the same in a given year in Indiana that it was in Kansas, it naturally follows that a new department of the National Government would be required to handle the unheard of number of applications for new prices to be fixed. In January 1941 Mr. Henderson was quoted in the New York Times with regard to a statement by him relative to Government control of industrial prices, and I quote Mr. Henderson as follows: Governmental price controls and other mandates which might be substituted for an intelligent management of an independent industry are being avoided as the plague in Washington, only as a last resort will the Government try to dictate marketing procedure or price levels. We don't believe it is necessary to fight totalitarianism by adopting its terrible regimentation. Basically we feel that freedom of the individual is superior to any totalitarian concept and are convinced that price dictation will not be necessary. I also quote Mr. Henderson from the Consumer and Competition, Annals of the American Academy of Political and Social Science, January 1936, pp. 263–264: The consumer can do little to keep prices from rising; at best he can retard the most active. His interests have been identified; his requirements can be met only by a Federal department of the consumer whose duties will be ade quately outlined by the enabling legislation. Mr. Ditter asked the following question: Mr. Henderson, as a result of your long experience and as a result of the program that you are projecting at the present time, can you envision an effec tive price-control program without complete control of the entire problem of the economy, including wages, profits, and everything else entering into it. Mr. BROWN. Mr. Linder, when did this colloquy, from which you are quoting take place? |