I think we should be fair. I have been pushing this board and crowding them to relieve the agricultural position, and I will say that I think they are entitled to have it stated that they have fed the market as fast as they were advised and believed the market would absorb their bonds; and having issued $292,000,000 in less than a year, it seenis to me that they have taken advantage of the situation, at least to the extent they were advised could be accomplished, and I am advised they are going on and issuing these bonds as fast as the farm-land banks can use the money.

But since the last issue three or four months ago the banks have had all the money they could handle, not enough perhaps to take up all the applications, but all that could be examined and approved.

I just want to make that statement in justice to the Federal Farm Loan Board, because I, as much as any other person, have been urging them to sell bonds and make loans.

Mr. King. Would the gentleman care to answer a question?
Mr. STRONG. I would be delighted, brother King?

Mr. King. Does the gentleman think that if the tax free provision were removed from these bonds it would interfere with the sale of them?

Mr. STRONG. Absolutely; it would interfer.

Mr. King. Would it have a tendency to increase the interest charge to the farmers?

Mr. STRONG. I think it would; but in discussing that proposition with a member of the board, Captain Smith, I was told only Monday of this week that within another six months, if conditions continued to improve as they are now, he believed that the farm-loan system could sell its bonds at 5 per cent if the tax-free provision were removed. The last issue was oversold at 41 per cent, and reduced the interest to the farmer one-half of 1 per cent.

Mr. MARSH. I thoroughly appreciate they are catching up, but my point is this, that I gave the farm land bank loans to the nearest date on which the farm mortgages were reported.

Mr. STRONG. In less than a year after the litigation ended they are loaning over $1,000,000 a day to the farmers of the Nation.

Mr. MARSH. How long is it going to take them to catch up?

Mr. STRONG. I do not know. But when you take into consideration that for two years the system lay dormant awaiting the decision of the Supreme Court and could not function, and that the bond market until a year ago was demoralized, and in less than a year now they have issued $290,000,000 of bonds and are now furnishing the farmers loans of over $1,000,000 a day, I think that they ought not to be condemned but rather commended.

Mr. Marsh. I am glad you made the point. I am not condemning them; I am approving what they have done. I am pointing out that in our judgment it is not wise to put upon that board the additional task now of going out and organizing and financing intermediate credit for farmers. I think that they ought to be permitted to go right ahead to catch up with the mortgage needs of farmers. And there is an imminent danger-it may be only a danger, but it is so imminent as to be worthy of your careful considerationthat if they go into this other they will impair the job which they have been doing splendidly in my judgment.

Mr. STRONG. In talking this matter over with members of the board I learned that the board had no organization through which they could place these bonds to the extent of hundreds of millions in the country. Consequently, they have had to go to a bonding organization that could handle them. The last issue of bonds being oversold $42,000,000 caused one of the members of the board to say to me, “We have built up such a demand in this country—such a sentiment in the country for these bonds—that we believe that within a short time we can dispense with the organization that has been selling our bonds, which would make a saving to the farm land banks of from one-fourth to one-half per cent." That is, they think that they have so advertised and established these bonds as being a safe and splendid investment that in a short time they will be able to just announce, “We have $100,000,000 of bonds that we will sell on a certain date," and without paying a commission to anybody the public will come in and take them; and that is the reason they want to have their own organization for the purpose of saving that commission that has been going to the bond organizations to sell the bonds. I realize that there is a faction here in Washington who are opposing the management of the Farm Loan

Board. I also realize that there is a bank mortgage organization that is fighting it. Between these two forces, if we do not give credit where credit is due, they may break down this farm loan system that is now furnishing the farmers $1,000,000 a day; and I am defending it when I think it is entitled to defense, and giving it credit where I think credit is due, to try to protect the system. And if these men can now or later be able to sell their bonds without a commission I want them to be given an opportunity to do so, because it will save that much to the farm loan banks.

(Mr. Strong at this point took the chair.)

Mr. MARSH. Mr. Chairman, I entirely agree with you that this would be a splendid thing. I think that the Government should sell its own bonds all down the line. I am glad this Federal Farm Loan Board is doing that. But I do think their hands are full with the long-time mortgage credit business, certainly for some years ahead, and I will say this right here: I think that the speculative increase in the selling price of farm lands is a most dangerous thing for the farmers of the Nation. I wish that the aggregate selling price of farm lands in this Nation was $20,000,000,000 less than it is to-day, and the farmers would be better off.

Mr. KING. I think many a farmer has mortgaged his farm to purchase land at advanced prices, who is going to be seriously embarrassed and perhaps lose his farm because of the deflation that perhaps will come in the price of the land, reducing it below what he paid for it.

Mr. MARSH. I want to say that I think that the practice of the Federal Farm Loan Board in making their careful appraisals of farm property before they make loans has saved the farmers a whole lot of trouble, and that their policy should be continued. The farm land selling at $300 to $400 an acre I am speaking of land for general farming-is uneconomic farm land, and it puts farmers in a dangerous position. We can not maintain such prices to justify such values of farm lands.

The Farm Loan Board's hands are going to be full, I should judge, for the next 5 or 10 years in meeting the mortgage needs of the farmers; and I hope to see the private banking concerns which loan the farmers on mortgages get out of that business, because it is a Government function.

Mr. STRONG. I do, for this reason: I do not know as it is a Government function-I would not go that far—but the great thing to my mind in favor of the present farm-loan system is its amortized loans, because my experience has shown me that the farmer very often puts the mortgage on his farm and renews it time after time and seldom pays it off, while under this plan he will pay a small part of the principal each year, and at the end of 34 years he has paid no more commission and he has canceled his loan; and I think it is greatly to the advantage of the farmers to patronize the farm-loan system.

Mr. MARSH. I also think it is.

Mr. STRONG. I do not want to interfere with your statement any more, and I apologize for doing so.

Mr. Marsh. Not at all; I am very glad to have your comments.

I believe that before we can get any real intermediate short-time credit for the farmers that we have got to carry out the provision of Senator Ladd's bill to establish an honest money system, which reads as follows:

“ SEC. 9. No banking or other corporation, or association of men or individuals, shall be allowed to issue any kind of money or currency or loan any credit substitute for money.”

This pyramiding of credit is the undoing of the legitimate farmer and the legitimate business men in their business transactions, and issung credt is constitutionally exclusively a Government function which has been turned over by act of Congress—or “farmed out ” would be a more correct expression-to the banking interests, and it is a very, very serious burden and menace to the American people.

Mr. Anderston, in his testimony the other day before this committee, stated that the American Farm Bureau Federation had indorsed his bill. My atten. tion has been called to and I have here a copy of a letter sent by the Colorado Bankers' Association with reference to what they are pleased to call the radical tendencies in politics, and I would like to read this into the record.

Mr. STRONG. Without objection, it may be read into the record.
Mr. MARSH (reading):

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Denver, Colo., April 20, 1922. To the bank addressed:

Your attention is called to the fact that an attempt will be made this fall to capture the primaries of one of the old parties by certain organizations of

radical character which have been active in the State for the past year or more.

The scheme will be similar to the one employed last year by the Non Partisan League, and while what is left of that organization is a part of the new move, that name will not openly appear. The organization work to this end is being done in the cities through alleged organized labor, although a careful investigation shows that legitimate organized labor is not a part of the scheme. In the country, and among the farmers, the work is being done through radicals who have gained_some hold and position in old-time legitimate farmers' organizations. The Farm Bureau is said to be exceptionally free of any radical activities and to be working along legitimate and proper methods for the actual benefit of the farmers.

Because of the general feeling of unrest, due to lower prices for products and lower wages, there is an exceptionally fertile field for the professional agitator. The plan is to secure men on one of the old-line party tickets to pledge themselves in advance to stand for the platform proposed by these radicals, which platform has for its purpose the weakening of government and the final elimination of the private ownership of business, and then all who have been united into these different radical movements to go into the primaries of that party and nominate those men.

Many men will be found seeking legislative honors. It might be well for you and the business men and reliable farmers of your section, to see that only men of character, standing, and reputation who are KNOWN to be conservative are selected by both parties for the legislature.

This warning is given you early that you may have time to make a careful and full survey of the situation. This office will be pleased to know of the situation in your section as you find it.


Enclosed find membership card for 1922. These should be inserted in the metal holder sent you some time ago and hung in the lobby of your bank. Yours respectfully,

PAUL HARDEY, Secretary. Convention Glenwood Springs, June 22nd and 23rd.

" The above illustration is a facsimile of a letter that is being sent to bankers of Colorado by the Colorado Bankers' Association.

“ It proves two things :

“1. That the bankers are out to nominate reactionary candidates for the two leading parties. •

“ 2. That they rely upon the American Farm Bureau Federation, of which J. H. Howard is president, to assist them in their political work.

“ Howard is the man who went into a conference of railroad presidents and came out a strong advocate of high freight charges for the carriers and starvation · wages for the workers. He also went to the White House and talked shipping matters over with the President and came out a strong advocate of a subsidy of millions for the shipping interests. He is the same Howard who appeared before a congressional committee and opposed a Federal appropriation urged by the farmers as the only method of stabilizing the price of grain.

“ It is likely that bankers' associations in all other States are proceeding along similar lines. There is always perfect teamwork when big business sets out to reach a certain point.”

I quote this letter because it indicates that the Farm Bureau Federation has tied up with or at least strongly been indorsed by this bankers' association ; and I would like to remind the members of the committee that about a year ago when several of us were trying to get credit for the live-stock interests—a Government loan to them—that this was opposed at a conference which I

attended in Doctor Atkeson's office by a representative of the National Grange. Mr. W. C. Jamieson, at that time president of the Colorado Farm Bureau. representing Mr. Silver, the Washington representative of the American Farni Bureau Federation, and Mr. Buchanan said that the bankers in his State of Colorado were treating the farmers, and particularly the live-stock interests. all right. I was out in his State a few weeks later and they denied that also lutely. But I will admit that a farm organization which has the 0. K. of the bankers' association may indorse the Anderson bill, but I do not think you will find any other farm organization will do it.

In conclusion, I want to emphasize the fact that the farmers are in such serious condition to-day as to their marketing and productive credit that I do not believe that any bill before Congress which you can pass at this session is going to meet the situation. I am as convinced as I was last year that you have got to create practically what Senator Norris provides for in his bill to create the Farmer's Export Financing Corporation-S. 1915. You have got to create a Government corporation, with Government funds, to act as a purchasing and sales agency for farm credits for export, and this same corporation should have power to go into the market and buy staple farm products and any farm products when the price is being hammered down and assure the farmers somewhere near the cost of production.

I do not know whether this is going to be permanently feasible; certainly it is absolutely necessary that such legislation be enacted at this time.

Mr. STRONG. Is that provided for in the Norbeck-King bill?

Mr. MARSH. In a way; yes. I am not sure whether that is entirely covered or not. Mr. Sinclair has a similar provision in the bill which he introduced last spring but which was reintroduced on May 24H. R. 11726. The functions of this corporation seem to apply to the export of a few products the price of which is stabilized. Personally I believe that Congress should stabilize the prices for a few years of a few of the staple farm products, but the very least you could do is to create immediately-I mean before you adjourn and go back to your constituents—that you ought to create a Government agency to purchase and sell farm products. Moreover, I have no pride of authorship of the Ladd bill or the Sinclair or King bill; I think it would be a composite. The principle is incorporated in your bill, Mr. Chairman, and in the Norbeck bill, which is identical, I understand.

But farmers can not get credit, and they ought not to go through such a period of suffering as they have been through the past three years; it is not human to ask it.

Congress can pass such legislation, and I think it is one of the vital things to do before they adjourn, because the nations of the world are buying over here England, France, and Italy-in vast quantity and through pools, and we have got to meet that pooled buying from abroad with the pooled sale of farm products on the part of our Government in this country.

The Secretary of Agriculture, under date of May 16, was good enough to send me some data on the production costs of staple farm products corrected tentatively up to 1921, and it is not a very long table. I would like to have it placed in the record.

Mr. King (presiding). Without objection, it will be printed.

(The table referred to and submitted by Mr. Marsh is here printed in full, as follows:)

Production costs of staple farm products.

Production cost investigations from which basic factors of cost were determined.

Trend of production costs com

piled from basic factors ex-
pressed in index numbers--
1913= 100.


No. of





acre cost


1913 1




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i The 1913 unit cost was computed by using the average yield for the year of the inventory except in the case of wheat, where a 10-year average was used. 2 Detailed cost accounting and route records. 8 Dark tobacco. 4 Burley tobacco. 5 Number of head. 6 Cost per hundredweight.

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