policy. This policy must necessarily be a part of a definite policy relating to land utilization and conservation.

It is apparent that the existing banking machinery of the country does not adequately serve the farmer's credit requirements. These requirements are for credit corresponding to his turnover. The. maturity of paper representing loans for agricultural purposes should be such as to make possible the payment of the debt, when it becomes due, out of products of the farm. Considering the wide variations in the production seasons and the great variety of farm crops and products, it seems that such credit should have a maturity of from six months to three years.

The Joint Commission of Agricultural Inquiry, following an investigation of the subject, has made a recommendation with respect to meeting these requirements which I commend to the consideration of the conference.

There is a great need for the formulation of a definite constructive and conscious program of agricultural development. It is not my purpose to enumerate the recommendations which may properly be a part of such a program, but such a program must apparently contemplate recommendations in addition to those I have already suggested for an adequate warehousing system, more fully adapted to the utilization of warehouse receipts for credit purposes; more adequate wholesale terminal facilities, particularly for handling perishables at primary markets, and a more thorough organization of the agencies and facilities of distribution of the large consuming centers of the country; the development of better roads to local markets, better facilities at terminals connecting rail, water, and motor transport systems, and more adequate facilities at shipping points with a view to reducing the cost of marketing and distribution; the promotion of better book and record keeping of the cost production of farm products as a basis for the development of more efficient methods of farm management, and an extended and coordinated program of practical and scientific investigation through State and National departments of agriculture, and agricultural colleges and universities, directed toward reducing the hazards of climate and weather conditions, and of plant and animal diseases and insect pests.

The work which this conference is called to perform is both important and urgent. Its recommendations will be awaited with ardent hope by all those who appreciate the urgency of measures to restore the purchasing power of the farmer and the necessity of a well-paid and contented agricultural population to a well-balanced and prosperous national life.

AGRICULTURAL CONDITIONS IN THE NORTHEASTERN STATES.

By E. B. CORNWALL, of Vermont.

I want to say right here to those of you who are not actually farming that the farmer is often misjudged. People often wonder why the farmer does not do certain things.

When I have been away from the farm for a few days I have often thought of things that I ought to do which seemed easy, but when I

got back into the daily grind, from 5 in the morning till late at night, I usually haven't done those things.

The farmer must work long hours to make a living. His income is too small to enable him to have a stenographer or bookkeeper. When he comes in at night, after long, physical work outdoors, he is too sleepy to think or figure. Just keep this in mind in working out farm problems. It is one factor which has usually enabled the business man to outgeneral the farmer in public affairs.

The northeastern farmer did not feel the present economic crisis as quickly as the westerner. In some sections the situation is already very serious; in other sections it is just becoming serious. Agriculture in the Northeast will soon be in as critical condition as in the West if we do not get immediate relief.

Poultry men have made a fair income during the past year. They suffered heavily during the period of high grain prices, but recently with cheaper grain and good prices for fresh eggs and fair prices for poultry, the market has enabled the intelligent poultry men to succeed. Prices are now breaking badly. I am a poultry man myself, and I confess I agree with our poultry expert that the outlook is bad.

In 1920 the fruit men in New Hampshire made a good profit, while the last half of the fruit crop in 1920 in Delaware was sold at ruinous prices. During 1921 the fruit men of the whole Northeast had a short crop and lost money. They are not very optimistic over the outlook for this year.

In Maine the transportation problem is acute as to apples, and also as to potatoes. The Maine Central and Bangor & Aroostook Railroads have declined to grant the 10 per cent reduction in freight rates, which all other roads of the country have allowed on agricultural products. The 1920 potato crop in Maine was sold at ruinous prices. The 1921 crop is being sold at a price which hardly covers the cost of production and hence leaves nothing with which to take up the obligations of 1920, and were the banks' correspondents to call for settlements on the rediscounted paper it would spell ruin to the farmers whose notes they hold.

Along the western edge of our Northeast States are some grain growers and beef-cattle men. They are in a serious condition.

This gives you some idea of the diversity of our farming, and the impossibility of making a short, quick summary.

Dairying is a great industry which is uniform through these States. The dairyman is beginning to feel the crisis. It is coming on swiftly and we will soon be in severe straits. Cost account figures, whenever obtainable show that milk was produced during 1921 at a loss.

Let me give you an illustration from New Hampshire. It costs more to produce milk in New Hampshire than in Vermont, but less than in Maine, Connecticut, and Massachusetts. Cost accounts for April, 1920, to April, 1921, show a loss per hundredweight of milk of 62 cents, when everything is figured that should be in any complete cost account. It is interesting to note that labor was figured at only 16 cents per hour. These cost accounts were kept in dairies which are better than the average.

During the year 1921 the milk which was shipped into Boston was sold at a price below the cost of producing it and the cost of getting

it there. As far as I can check this up it is true of the other large eastern cities.

On January 1, 1922, the weighted average cost of producing 1 quart of the fluid milk which was shipped to Boston was $0.0752. To this cost is added the can and freight cost of delivering 1 quart of milk to Boston-$0.0118 which gives the final cost of 1 quart of milk to Boston, $0.087. The sale price f. o. b. Boston was $0.07. On January 1 milk was being sold f. o. b. Boston for about 14 cents per quart less than it cost to produce it and transport it.

The cost of grain is now going up, and the cost of milk and milk products dropping. The railroads have not included fluid milk in their 10 per cent reduction. Filled milk and milk substitutes are being sold in large quantities. Money is already very tight on the farms. Where are we headed?

Our section as a whole, like all others, is suffering from the high cost of transportation. This matter is getting earnest consideration from all the interested groups and will be taken up in this conference.

I wish to indorse the recent highway legislation, the retaining of administration in the Agricultural Department development along the line of farm-to-market roads. The problem of adequate highways in a rural State like Vermont is very acute, owing to the heavy truck and through touring-car traffic, and to the fact that there is no large concentration of wealth to provide funds.

The Federal farm loan system is beneficial to the farmer in every section. I could quote instances in which it is aiding deserving and thrifty farmers to get a start through its loans, and also through making certain banks see the light.

The question of rural credits and commodity financing is not so acute in the Northeast as in other sections, so it will be the duty of their representatives to dwell on it more than I do. However, there is great need for a system which shall not be too paternalistic, but which will insure an adequate supply of long-time credits suitable to agricultural purposes.

There is a great need, of course, for a broad-visioned forestry policy.

It is a matter worth thinking about and working on-this equalizing of production and consumption. One thing is certain, there is no reason, moral or economic, why the farmer should produce more than the market demands. No other manufacturer does, nor is it expected of him.

Cooperative buying is a very important matter in our region. Developing of cooperative marketing is one of the most pressing measures of relief for producers and consumers in our northeast States.

There is no danger of abusive farmers' monopolies. You can not control farmer production; as soon as you succeed in raising the price to the farmer, you will have a much larger production which will make a surplus and keep the prices down. This is happening to-day in our northeast dairy States. There have been striking instances in California and other sections. We can not abrogate the law of supply and demand; neither do we want to. It will operate better under a cooperative marketing system.

Vitally connected with the cooperative marketing is the tariff. The farmers do not attempt to decide whether we as a Nation shall adopt a high tariff or a low tariff policy; we simply ask for a protective tariff proportionate to that of other industries.

We have people who urge us to follow the methods and examples of our Puritan ancestors. Those people would picture the Puritans as conservatives. A few nights ago I heard the president of one of our eastern colleges. He pointed out that the Puritans, during a short period, beheaded a King of England, led a troubled life in Holland, whither some of them had migrated, sailed in ́small boats across an uncharted sea, fought the Indians, and set up a government of their own. These men were anything but conservatives; they were progressives. In their day they were called radicals. They thought clearly and they followed their ideals.

We must realize that leadership is not "sitting on the lid." A leader will always be a little ahead of his time. I went to a boarding school in the Berkshires where we often canoed on a small rapid stream. The only way we could steer through the rapids was to paddle, keeping just ahead of the current. If we drifted with the current or failed to pick our way through the best channel, we capsized. Where the water was roughest we had to think most quickly and clearly, and paddle hard. There was no turning back; no place for the timid or the sluggard.

THE AGRICULTURAL SITUATION IN THE COTTON BELT.

By JAMES W. MORTON, of Georgia.

When I received the invitation from Mr. Wallace to come to Washington and tell something of the conditions that we were experiencing in the South and suggest some remedies, I telegraphed back that it was impossible. In the first place, I didn't have the money to buy the ticket up here, and in the second place we had meetings on in our agricultural college I was very much interested in. After second thought of the importance of this meeting and, it being the first time in the history of our country that the powers that be thought enough of the farmer back on the farm to invite him to come to Washington and to give an intimate account of the conditions back home, I felt it was impossible to refuse and so I am here, although scared to death.

The cotton crops of 1918 and 1919 brought into the South more money than any three previous crops, both made at a rather moderate cost, and sold for record prices, and gave to every farmer, big and little, black and white, more ready money than they had ever dreamed of having in their wildest flights of fancy. The natural consequence was a period of reckless spending and speculation. Extravagant habits were formed. A story that was told at the time illustrates the little value placed upon money. A negro walked into the Overland Agency at Americus, Ga., and asked to see a car. After finding one to suit him, he purchased same, paying cash for it. In about two hours the same negro reappeared and asked to see another car like the first, which being shown him, was bought and paid for. About this time the salesman, being a little curious to know about the

other car, asked this question: "Sam, what have you done with the other car?" "Well, boss," the negro replied, "I ain't never run a car before, and when I got about a mile from town she tuck a fool notion and wrap herself around a stump. I done promise my old 'oman a car and I don't want to disappoint her."

Another story is told of a negro boy in my home town who had come in to see the circus parade. He went into a grocery store to purchase a package of goobers and handed the clerk a $10 bill. About that time some one yelled, "Yonder comes the parade." The negro broke for the door; the clerk called for him to wait for his change. The negro's reply was, "Dat's all right, boss; just keep the change; I ain't got time to wait."

These illustrations may be overdrawn, but this was about the frame of mind of the average farmer and laborer of the South at the beginning of 1920. They had acquired very extravagant habits. The 1920 crop of cotton was grown with the prices of fertilizer, labor, and in fact everything that entered into the making of a crop, from two to three hundred per cent above normal. This crop was sold for about one-third the cost of production.

The 1921 crop was grown with cheap labor, but with very highpriced fertilizers. Owing to the boll-weevil damage and a 30 per cent reduction in acreage, the smallest crop (about 8,000,000 bales) in 25 years was the result. The carry over from 1920 (about 9,000,000 bales), together with the abnormal times, has prevented the present crop from bringing the cost of production, even if a full crop has been made.

Most farmers of the progressive type bought high-price lands for a small cash payment, and now find themselves unable to even meet the interest payments.

The merchants are unable to meet their obligations, owing to the inability of the farmer to pay them. The banks are very heavy borrowers from the Federal reserve and War Finance Corporation, and unless the farmers and merchants have some means of liquidating their loans the banks will be unable to finance the crops of this year.

There is a general feeling of unrest and uncertainty, together with one of despondence among most of the Georgia farmers. The better class of negro renters and croppers are leaving the farms as the boll weevil advances and going north and into the cities, leaving the more shiftless and ignorant with the farmers to become a burden upon the landowner.

It doesn't matter whether the negro owes you one or one thousand dollars, he settles his debt by leaving, and the farmer who has stood. for him has absolutely no recourse. There are counties in Georgia which two years ago made 25,000 bales of cotton and last year less than 100 bales.

Now, Mr. Chairman, I have given you just a little of the gloomy side of conditions as they actually are in the Southeast. I want to say right here that we of the South are not without a precedent, for in 1865, when our fathers came back home and found everything swept away, labor, live stock, food, and I might add self-government, they did not sit down and cry, but threw their rusty canteens and

92640-H. Doc. 195, 67-2- 3