Mr. FULMER. They could function, but have absolutely refused to do so, and there are farmers to-day in my section that are absolutely suffering because they will not administer the law as it is written.

Mr. PURNELL. What excuse did they give for their failure to function?

Mr. CAREY. I do not know as to the board, but there were a couple of instances where the local bankers were absolutely opposed to doing anything; that was just their attitude about it.

Mr. FULMER. The excuse given by one member of the board was that the board was created to deal with loans on land, and they did not take any special interest in connection with loans by the intermediate credit banks to the farmers along other lines.

Mr. KETCHAM. Do you know whether they had been advised by their counsel as to their powers? Ordinarily all these questions are put up to the solicitors for the various departments who define very accurately the limits within which they can operate. Do I understand the opinion of the solicitor was they had a right to do these things and the members of the board refused to do it because they did not agree with that?

Mr. FULMER. I do not know that they have ever asked for an opinion along these special lines, but as a matter of fact, from what I have noticed they haven't paid any attention to it.

Mr. KETCHAM. I would like to know about a bureau chief who has not done all that his solicitor has told him he can do. He is a rare bird. I agree with Governor Carey that we should absolutely have a board created and composed of members of actual farming interests, to look after the farmers' interests and make the Department of Agriculture and the Department of Commerce and other departments as well as the intermediate credit board function and see to it that they do function.

The CHAIRMAN. Were the heads of the bureaus and divisions invited to appear before your conference?

Mr. CAREY. A great many were invited in. Mr. Chairman, there hasn't been a department in Washington that has not furnished us any information that we have asked for. I do not want that impression to get out, that they did not cooperate with us, because they have cooperated with us splendidly. I would not want the impression to get out that they had not.

Mr. VOIGT. If I recollect correctly, the agricultural appropriation bill carries $1,500,000 every year for encouraging cooperative effort in this country. Now, if we appropriate another $500,000 in this bill and put that in the hands of a separate board, aren't we going to create conflict between the activities of this board and the Agriculture Department?

Mr. CAREY. I think the Agriculture Department could very well use that money to make investigations and report to this board and cooperate with this board. I think there should be a provision in here whereby they would have to cooperate with them.

Mr. VOIGT. Did your conference try to find out what the Agriculture Department was doing with the $1,500,000 that Congress appropriates every year?

Mr. CAREY. We have had them in and asked them if certain things could be done under the law, and they advised us that practically everything could be done under the present law. We did find out

that they were not doing a great deal to develop cooperative marketing at the present time. It may be lack of funds or some other reason. I do not know, but the fact remains that they have not done it.

Mr. VOIGT. I think it would be very wise in this committee to invite one or two gentlemen from the Department of Agriculture to come up here and tell us what they are doing with the million and a half that we are now appropriating for cooperative work.

Mr. KETCHAM. Mr. Chairman, if Mr. Voigt will permit, I think we are putting a stricture upon the cooperative division down there that is undeserved.

Mr. VOIGT. I have not cast any reflection on them. I said I thought it would be advisable to have them up here to tell us what they are doing with the million and a half a year that they are now getting for cooperative work.

Mr. KETCHAM. Well, the plain implication back of that, coupled with what preceded it, is that they are not doing what they should do under the law.

Mr. VOIGT. I am not intimating any such thing. In fact, I think, considering what has been said here, those gentlemen ought to be given the opportunity to come here and clear themselves of any suspicion that has been cast on them.

Now, Governor, most of the work done in Congress on agricultural relief has been toward the creation of an export corporation. Did your conference take up that proposition?

Mr. CAREY. We went into it to a certain extent, but we did not finish our investigation on the subject. The bill that was presented there I did not think was workable, and we realized that there was not enough time to complete a study of it in this Congress, so we intend to take that up later on.

Mr. RUBEY. It is your intention to continue to take up other matters?

Mr. CAREY. Yes, sir. We realized that this was the short session of Congress and we tried to get something into shape, mostly in the way of things that were pending in this Congress, and we took up cooperative marketing because there were a number of bills in Congress on that subject.

Mr. WILLAIMS. In your report on page 2 you say that there should be established a balance of American agriculture by which production is kept in step with the demand of the domestic markets and with such foreign markets as may be profitable. Now, to establish that balance of American agriculture, is it your thought that the enactment of this cooperative bill that is being drafted is all that would be necessary at this time to work out this recommendation, or do you contemplate that perhaps some supplementary legislation might be needed in time?

Mr. CAREY. I stated earlier, when I started in, that this was only a part of it, that I thought it would help the farm problem, but I did not consider it a cure-all for everything. In fact, I do not believe there is any cure-all.

Mr. WILLIAMS. Has your commission as yet taken up any of these pending general measures that have been considered, for example, the Sinclair bill, the McNary-Haugen bill, or my own bill?

Mr. CAREY. Just in a brief way. We did not have time to reach any conclusion on them. In fact, Mr. Peak and the other gentle

men were there with a bill that I did not consider workable in its present form. The principle may be all right, but the bill in its present form was not a bill that we could approve.

Mr. WILLIAMS. Is it the purpose of the commission to go ahead and make a further study of these measures, or do you consider that your work is through for the present?

Mr. CAREY. We are going ahead with any work that we think will be of any help to agriculture, anything that we believe is a remedy, anything that will help agriculture.

Mr. VOIGT. The main cry of the farmers who have been before this committee in the last year or two has been that a remedy should be found for the exportable surplus. Did your conference give specific attention to that point?

Mr. CAREY. I just stated that we went into Mr. Peak's bill to some extent. I realize that is a most important question. We will have to consider it and we will have to come to some decision on it, and we expect to do so, but whether we can devise means to take care of it, remains to be seen.

Mr. VOIGT. Don't you consider that the question of the proper disposition of the exportable surplus of farm products is a much more important question than the question contained in cooperative marketing?

Mr. CAREY. No, sir; I do not. I think that measure largely applies to wheat, and while it is important to the wheat farmer, I do not think it is as important to all lines of agriculture as this bill. Mr. VOIGT. What would you say about pork, corn and cotton? Mr. CAREY. I think you will find that cotton and wheat will have to be handled differently.

Mr. VOIGT. I understand that, but the exportable surplus of those commodities is more important than the exportable surplus of wheat.

Mr. CAREY. Well, your cotton is in a very different situation from wheat, because your wheat must be exported at a loss, which is not the case with cotton. I would rather not discuss that bill at all, because I have not gone into it to the extent I would like to go.

Mr. VOIGT. You think that the passing of a proper cooperative marketing bill is more important than some bill which might take care of the exportable surplus?

Mr. CAREY. Well, I would not say that, but the exportable surplus applies more to wheat, and this bill applies to all lines of agriculture. Mr. VOIGT. I do not see where you get the idea that the exportable surplus applies mainly to wheat. In dollars and cents, we export more in pork products, by a good deal, than we do in wheat. So, as far as the pork farmers of this country are concerned, the question of the exportable surplus is more important to them than the exportable surplus of the wheat farmers.

Mr. CAREY. I do not believe it affects them to the same extent as the wheat farmers. But as I say, I have not gone into that subject sufficiently.

Mr. VOIGT. The American farmer wants some immediate relief. What he wants is a better price for his product, and I can not see that he is going to get it out of this cooperative marketing bill.

Mr. CAREY. Well, I do not think there is any man engaged in agriculture who wants relief more than I do right at this time. I

am largely interested in cattle, and I do not think there is anything that is lower today than cattle. But I do not believe that particular bill would help my cattle business as it is drafted at the present time. Mr. VOIGT. Is it your opinion that if Congress passes this cooperative marketing measure in some form it will mean dollars and cents in the pockets of the farmers in the next two or three years? Mr. CAREY. Not to a great extent; no, sir.

Mr. VOIGT. So that if any good should come from this cooperative marketing measure, if it is passed, it may be properly called "longdistance relief"?

Mr. CAREY. It will be a long-distance policy over a period of years for the future. I do not consider it an emergency measure.

Mr. KINCHELOE. Don't you think that if you cut out some of these plenary powers that you are giving this board and offer a greater Government loan, in a way--I mean for the purpose of organization only; I do not mean to take it out of the Treasury-don't you think those two things would be conducive to more organizations coming into the Federal system?

Mr. CAREY. I think that if the Government goes out and loans money to organize cooperatives a lot of money will be lost. I do not think organizations will stand up so well as if they were organized by farmers.

Mr. KINCHELOE. Why will it be lost-through supervision?

Mr. CAREY. Do you intend to put a man in charge of this organization work?

Mr. KINCHELOE. I would think the board would look after the loans and not throw the money away.

Mr. CAREY. Well, if the board would not guarantee

Mr. KINCHELOE (interposing). The truth of the matter has been that the best loans in the world are on these cooperative propositions. Mr. CAREY. On every product?

Mr. KINCHELOE. Some of these cooperative concerns are in debt. Mr. FULMER. Can not they get the money they want?

Mr. KINCHELOE. Not the little ones that the governor is talking about, that the primary purpose of this bill is to support. Of course, the cotton and tobacco association men can borrow all the money they want, but the purpose of this bill is to help the little fellow. Mr. CAREY. They can borrow under the present law?

Mr. KINCHELOE. Yes; they go to these Government banks, but they do not borrow much.

Mr. CAREY. They can borrow as a cooperative concern, but a good many of them do not know anything about the intermediate credit act, they do not know that it has been given to the country. They do not understand it. The first thing the farmer wants is to be educated to know that there is such a thing as the intermediate credit act and to know how it operates.

Mr. FULMER. In my State the intermediate credit act was not known to the agricultural people until two years after the passage of the bill. If they had known of it a year or two ago these credit associations may have been formed and operating now in the interest of the farmers.

Mr. KINCHELOE. The truth is that there have not been any formed.

Mr. FULMER. Very few. There was to be held a meeting of these credit associations under that act, and the board met and the people did not know anything about it, because nothing had been done to give it publicity.

Mr. CLARKE. I agree with Mr. Fulmer and the governor.

Mr. KINCHELOE. You have got to have a capital of $250,000.
Mr. FULMER. Not necessarily.

Mr. CAREY. Ten thousand dollars capital; you can organize with $10,000.

Mr. FULMER. There is one that organized with $25,000 and with $50,000.

Mr. CAREY. Gentlemen, if you have finished with me, I would like to have Mr. Taber, a member of our board, appear for a few minutes.

The CHAIRMAN. Gentlemen, we have a request from Mr. Holman for permission to appear before the committee. What is your pleasure?

Mr. CLARKE. I move that the Chairman be instructed to invite Mr. Holman to appear at the convenience of the committee. (The question was taken and the motion was agreed to.) The CHAIRMAN. We will be glad to hear from Mr. Taber. (Mr. Taber's testimony will be printed in the proceedings of the following day so as to have his statement in one separate part.)

STATEMENT OF MR. W. B. DOAK, CLIFTON STATION, VA.

Mr. DOAK. Mr. Chairman, I am a farmer. May I say just a word? I suggest that if you repeal Title III of the intermediate credit act you will find that the intermediate credit banks will also function. In other words, the Federal farm loan act provided that after $100,000 had been subscribed and paid into each of these 12 Federal land banks, the stockholders, the farmers, were to elect six of the nine directors, which means that the Sixty-third Congress clearly intended that the former-owners of these Federal land banks should run them. Title III of the intermediate credit act took away that cooperative control, and the result is that all cooperatives will sooner or later fail from a lack of sympathetic financial treatment, unless that provision is repealed.

(Mr. Doak was permitted to submit the following:)

To make a practical illustration of how the handling of our cooperative marketing associations work out let me cite our wool pool. That of 1920, we were allowed to carry about 20 months the 1921 clip, 8 months. Then it was sold out, while within 90 days wool had advanced 100 per cent. In 1924 we sheared in May, shipped the wool in through June; graded, stored, and insured it in July, and sold about August. This time the market again advanced 25 per cent in 30 to 60 days. In carrying these early pools charges up to 7 or even 9 cents a pound were taken out of the grower's returns. One-third or on some of the coarser grades nearly half of their price being taken from the farmer by this initial distribution cost. I have also heard them complain bitterly of light weights. On this score, we must confess, to be frank, altogether too many tags and burrs and trash have been in the past weighed up with the wool. But if the woolgrower (outside the pool) gets by with say 20 per cent more weight we have got to sell the pooled wool better than we have been, or farmers will quit them. This difficulty is largely financial. Our lack of control of these 12 Federal land banks and through them of the 12 intermediate credit banks handicaps us in two ways. The farmer does not get a prompt and sufficient advance on his clip, nor have actual producers the membership on boards of directors in these banks to insure