REPORT OF COMMITTEE NO. 4, FOREIGN COMPETITION AND

DEMAND.

Resolved, That the conference favor immediate legislation necessary to provide credits for financing the export of surplus agricultural products during the present emergency in so far as it can be done with due regard to general interests.

Whereas grain now receives a preferential freight rate when intended for export: Therefore be it

Resolved, That the conference recommend to the Interstate Commerce Commission that it investigate the advisability of extending such preferential rates to other agricultural products for the purpose of promoting foreign trade. Whereas many foreign countries have consolidated their purchases of many basic agricultural products and manufactured products thereof into few and often single agencies, thereby limiting and in many cases eliminating all competition in purchasing our products; and

Whereas agencies handling farm products and manufacturers processing same in this country are in active competition with each other in the sale of our products in such countries; and

Whereas the Webb-Pomerene Act to promote foreign trade is so restrictive in its present terms as to make it difficult to successfully organize export associations to meet the concentrated buying in foreign countries; and Whereas the law as now written requires any association organized under it to be solely and actually engaged in export trade, requiring the financing of such associations and the setting up of elaborate and expensive machinery for carrying on such export trade; and

Whereas many farm associations and manufacturers with established trademarks and brands can not enter such export trade associations without virtually abandoning their trade-marks and brands, and their distributive machinery for handling their export business: Therefore be it

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Resolved, That this conference recommend that Congress amend the WebbPomerene Act so as to broaden the definition of what shall be deemed to be engaging in export trade," so as to make it possible to facilitate such organizations in this country to meet the one-sided situation existing in foreign trade; that this conference further recommend that the following amendment, recently introduced by Senator Fletcher, of Florida, and now pending before the Senate Committee on Interstate Commerce, be adopted:

"An association shall be deemed to be engaged in export trade for the purposes of this act if it shall promote agreement among its members as to the prices and terms which shall govern the sale of their products to foreign customers, engage in trade promotion abroad, transmit to its members inquiries of orders received from foreign customers for the purchase of their products, agree as to terms of credit and as to the allowance or refusal of credit or of sales to foreign customers, and generally promote such agreements and understandings among its members as are necessary to protect them from hurtful combination and practices of foreign competitors or customers." Whereas a supply of potash at a reasonable price is necessary and essential to profitable farming in many sections of the United States: Therefore be it Resolved, That this conference considers that the imposition of a tariff on potash would be detrimental to the agricultural interests of the Nation and therefore opposes the placing of any duty or tariff thereon; that this conference recommend that in all tariff legislation full recognition should be given to the fact that every consideration justifying the imposition of duties on other importations applies with special force to all agricultural products which are produced in other countries on a cost basis greatly below costs prevail ng in this country, and that the permanent tariff and all adjustments thereof should give us as full protection to American agriculture as is given in other industries. Resolved, That it is the sense of the National Agricultural Conference that the time has been reached in the development and history of this Nation when the question of the tariff should be removed from the domain of partisan politics and the vicissitudes incident to changing political control of the Government; that the welfare of the agricultural, industrial, and commercial. interests of this country demand the fixing of a permanent policy in relation to this vital question.

It is therefore recommended that Congress as soon as practicable shall create by appropriate legislation a permanent tariff adjustment board, to be appointed by the President and confirmed by the Senate, with such emolument and tenure of office as will remove them from political influence and personal interest; that such board shall be separate and distinct from the present Tariff Commission, the duties of which should be so modified as to require reports of its investigations to be made to the tariff adjustment board in addition to the reports it is now required to make under the law.

It is further recommended that Congress likewise proceed to enact permanent tariff legislataion which should be so framed as to permit adjustment of individual rates or particular schedules of rates within prescribed limitations, and authorize changes therein from time to time by said tariff adjustment board, and thus provide a reasonable latitude in the application of tariff rates to any commodity in the adjustment of said rates to the varying fluctuations of agricultural and industrial trade conditions, and emergencies caused by fluctuations in exchange or other causes, without the necessity of a general revision of the tariff, as now required under the present system.

It is further recommended that it shall be made the duty of said tariff adjustment board to apply the tariff acts of Congress and fix just and reasonable rates with prescribed limitations to meet changing conditions and in accordance with definite principles set forth in the act. That among the principles that should control in framing such legislation and in the adjustment of rates and schedules the following should be included:

(a) Reasonable protection of American agriculture and other industries that are subject to destructive competition from abroad and that are or promise to be of benefit to the country as a whole or to any considerable section thereof. (b) Meeting discriminatory or unreasonable tariffs or regulations, direct or indirect, against the products of this country.

(c) The prevention of dumping of foreign goods into this country to the injury of our markets.

(d) Maintenance and encouragement of export trade.

(e) Promotion of the interest of the American public as a whole, as well as due consideration of relative standards of living, earnings, and efficiency of labor in this and other countries.

Whereas prompt information and facts concerning production, supply, and demand in foreign countries, as well as knowledge of costs and other factors affecting production, are of vital necessity if American farmers are to properly adjust their programs of production and marketing to meet the changing conditions of supply and demand and develop a sound future agricultural export policy: Therefore be it

Resolved, that this conference recommends: (a) That adequate support be given to the International Institute of Agriculture at Rome in order to facilitate the prompt collection of more and better agricultural statistics in foreign countries and develop uniform methods of crop reporting; and that provision be made for the sending of five delegates to the next general assembly of the institute to be held at Rome in May, 1922.

(b) That authority be granted by Congress in the immediate future for the appointment of agricultural attachés to our embassies in the principal foreign countries producing and consuming agricultural products, for the purpose of gathering and forwarding promptly by cable, wireless, or otherwise data concerning the area and production of crops, live-stock production, surpluses and deficits, exports and imports, as well as information concerning the factors affecting present and future production, supply and demand, prices, and general agricultural development; such attachés to be men thoroughly trained and experienced along agricultural and economic lines and skilled in the interpretation of farm facts.

REPORT OF COMMITTEE NO. 5, COSTS, PRICES, AND ADJUSTMENTS.

Space is not available for this committee to attempt to present detailed figures as to the present situation of the farmer. Intimate acquaintance by the various members with the actual conditions in the chief agricultural regions-such as the wheat area, the corn belt,

the range country, the cotton belt, the dairy sections, and others— demonstrates the very serious plight of the farmer as a result of the collapse of the prices of the farm products, while the costs of items which enter into their production have fallen relatively little or, in some cases, not at all. This first-hand information is amply borne out by cost of production figures gathered by the Department of Agriculture, various State agencies, accounts kept by farmers on their own business operations, and by the investigations made by the Congressional Joint Commission on Agricultural Inquiry.

The result of this has been that the farmer is receiving on his invested capital a very scant return or no return at all, and for his labor and that of his family a return which is not only far below current industrial wages, but in many cases even falls below a decent level of subsistence.

There can be no restoration of national prosperity until both wages and capital which enter into the production of the commodities which the farmer buys bear their mutual and just share in the general process of readjustment.

Conditions have now become so serious that productive capital is impaired, and unless prompt relief is secured the farmers' ability to continue production on an efficient basis will be seriously curtailed. Such a breakdown in farm production would be a national disaster from which every other business interest and every private individual would suffer as well as the farmer.

Action to bring about a more favorable agricultural situation must be looked for from two directions: First, from the farmer himself; and, second, from other interests directly related.

WHAT THE FARMER MUST DO FOR HIMSELF.

The farmer should continue the movement already so well begun toward reducing his overhead expenses so far as possible by developing for his family a more completely self-sufficing farm organization. With the present high level of freight rates, this policy of greater self-sufficiency could wisely be extended to regions as well as to the individual farm. This would include an increase in crop production in crop deficiency areas and a reduction of crop acreage and an increase in live stock in regions now producing crop surpluses. This will develop a proper balance of crop acreages and should be accompanied by increased efficiency in crop production. This increased efficiency and reduction in cost may be obtained in part by greatly increasing the proportion of legumes to other crops and thus maintaining, and even building up, present soil fertility, and with the use of better cropping systems, better soil treatment, and better care of crops, produce increased yields in future years at minimum cost. The farmer can help himself by proper diversification of crop and live stock enterprises, by adjusting farm operations to market demands, by the use of improved varieties of crops and of pure-bred live stock, by producing a larger part of the family living on the farm, by effecting reductions in the cost of farm operations, by the elimination of unnecessary expenses, and by cooperating with his fellow farmers in the marketing, grading, and standardizing of his crops. If he will do these things, and will keep a record of his business with a view to the elimination of unprofitable enterprises

and to the direction of his efforts along more profitable lines, he will be making his full contribution toward the restoration of the agriculture of the country to a permanently profitable basis.

But after the farmer has done all that he can to work out his own salvation certain aid and sympathetic cooperation must be given by other agencies and interest.

1. He must look to various governmental agencies to direct and assist in the work of combating serious insect and other pests which interfere with agricultural production; the boll weevil and pink bollworm in the South, wheat rust and the serious menace of the corn borer in the North, Central, and West, tuberculosis and other diseases of cattle, and various others which cut down returns and increase

costs.

2. He must have full information on which to guide his productive and distributive operations. Extension of the statistical divisions of the United States Department of Agriculture and of State agencies so as to furnish the basis for a sound agricultural program, which necessarily must include information on cost of production of farm products, domestic production, and rate of marketing, and such information from foreign countries as will give an accurate index to export demand. There is needed, further, an extension of the activities in the field service of the Department of Agriculture and of the Consular Service in stimulating the demands for agricultural products in foreign countries.

3. The farmer must secure effective aid through numerous farmers' organizations designed to perform commercial services of selling his product or buying farm supplies and through general associations designed to carry on educational or other constructive efforts in the interests of the agricultural industry.

4. Intelligent efforts must also be made to develop consumptive markets for American agricultural products, to prevent adulteration and the use of substitutes, and to develop all possible manufacturing utilization of agricultural by-products.

5. Probably the chief source of relief which the farmer may rightfully expect and demand is in the form of readjustment between prices of products which he buys and those which he sells. This is prevented at the present time by distributors' spreads far in excess of any income which the farmer is able to receive, and by high industrial wages and freight rates. It is imperative that the farmer have reduced transportation costs.

The following reports of subcommittees of committee No. 5 were read for the information of the conference:

REPORT OF SUBCOMMITTEE 5A ON COSTS, PRICES, AND READJUSTMENTS IN THE COTTON BELT.

Owing to varying conditions in different parts of the cotton belt, and especially to factors of boll-weevil infestation, land fertility, and the use of fertilizers, the cost of production of cotton varies so tre mendously that it is impossible to discuss it adequately in a brief committee report. Your committee, however, believes that it would be helpful to discuss some of the conditions found in cotton production at present in order that the Nation and world may understand the extent in which this industry is threatened by present conditions.

The crop of 1920 was made at a higher production cost than any previous crop and the prices received for it were admittedly far below the cost of production. The crop of 1921 was made at a somewhat lower production cost, but turned out only about two-thirds of a recent average production, and prices have again been much below the cost of production. Two years of such conditions have destroyed a large part of the capital invested in cotton production, have faced a large proportion of the landowners, merchants, and fertilizer companies with bankruptcy, and have left a large proportion of the banks in a position where, but for the support of the Federal reserve system, the War Finance Corporation, and other outside capital, they would be unable to function. The boll weevil is now present in every producing State of the cotton belt except Missouri and Virginia, and has covered fully seven-eighths of the acreage devoted to cotton. During the past year its ravages (while not exclusively responsible for the small crop) greatly reduced the production in every large producing State except North Carolina.

The outlook for production the coming year is not good. The South has thus far experienced a winter almost as warm as last, a condition most favorable to the hibernating weevil. A large proportion of the farmers not only lack the funds or credit with which to procure fertilizers and labor, but are discouraged at the outlook for production and prices.

It may be helpful at this point to give a typical illustration of the outlook for landowner and tenant. Let us take a 30-acre farm unit, valued at $1,500 and including 25 acres of cleared land. This is occupied by a tenant farmer who furnishes all the implements and labor, including mule power, and receives half the cotton and all the grain crop for his services. The landlord's account will appear about as follows: