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nomic balance of the country and the security of the Nation depends upon its realization.

You have heard an eloquent and very convincing statement on parity today. We have wrestled with the question since early this spring, trying conscientiously and laboriously, all of the farm groups working together. The National Grange, the National Cooperative Milk Producers Federation, the livestock group, the commissioners, secretaries, and directors of agriculture, and they are in substantial agreement that true parity remains a goal-not only a goal, but our goal is, in addition, parity of price to obtain parity of income, and parity of income has declined steadily since 1919.

Senator BROWN. Do you advocate the Holman figures?

Dr. SHEETS. The groups that I have mentioned are in substantial agreement on that method of arriving at fair prices during the emergency. We do not contend that this is the last word on the subject of parity. More study should be given to the question, as there are fundamental differences at this time as to methods of procedure. The groups working together on the problem agree that the wage parity formula or plan is the best method of dealing with the placing of ceilings over farm commodities that would not be fair to agriculture. In that connection, Mr. Chairman, I would like to submit a brief résumé on that parity question. It covers only a few paragraphs. (The document referred to and submitted by the witness will be found at the conclusion of his statement.)

Dr. SHEETS. Referring specifically to the legislation that is before the committee and the proposal which Mr. Charles W. Holman presented (Table 1. A comparison of farm prices) as representing the general views of this group, I would like to say that there are two fundamental principles involved. The first is that we believe that the Secretary of Agriculture should have the responsibility for determining when and if ceilings are to be established over agricultural commodities.

While I have spent nearly 16 years in the Department of Agriculture as chief of one of its largest research divisions, I have no brief for the acts of the Department of Agriculture relating to certain phases of agriculture, especially when it comes to the question of parity, because we believe that mistakes have been made and existing methods out of date. We are convinced, however, that the farmers and stockmen of this country must depend upon, look to, and make the United States Department of Agriculture responsible for determining when and if fair parity prices are to be established and just how high the ceiling is to be.

In that connection we are supporting the proposal in the recommendations submitted by Mr. Holman for placing that responsibility in the Department of Agriculture. We feel that we have a precedent for so doing in that the Administrator and others testifying for this legislation have contended that the Department of Labor and the National Labor Relations Board and other related agencies are sufficiently endowed with power and other requisites to determine the relations of labor to the legislation under consideration, and perhaps for these and other reasons labor is very largely if not entirely excluded from the act.

We have no quarrel with labor in any way. We all work with our hands as well as with our heads, and we try to be fair in that respect. But we feel that the Department of Agriculture should have the responsibility for determining where, how, and when or if ceilings are to be placed over farm commodities, and not the Administrator of the Office of Price Administration.

We feel that that is so fundamental that we would like to emphasize that our recommendation be examined most carefully, because we believe that the future welfare of agriculture in this country depends largely upon and around whatever decision is made relating to the

matter.

Furthermore, we are committed strongly to the belief that in case of a great emergency, as at the present time, in the administration of this bill, a board is a safer recommendation than one individual, regardless of who it may be.

It has been my experience in handling emergency matters and in observing the handling of emergency matters by others during my experience in the Government service, a single administrator makes quicker decisions, and if it is a matter that is not too involved and does not cover too many things or people, it will result in perhaps speedier action and many times equally satisfactory service.

Senator BROWN. Perhaps you feel like a good many others, that if it were given to you to administer it should be a one-man job, but for somebody else it should be a five-man job?

Dr. SHEETS. No; I do not. I was going on to say that a task that is as huge as the administration of this act I believe is safer in the hands of a board, where the interests of all groups would be given equal consideration.

Then there is one other safeguard that we would like to see. Let Congress retain some sort of control over whoever administers this act, whether it be one man or five men.

Senator BROWN. There is practically a 2-year limitation now. Dr. SHEETS. I think 2 years is a little too long. It is suggested that the Congress, to whom the people of this country are looking more earnestly today than ever before, to retain essential control, and possibly changing the plan if necessary, before it is too lote. It may be too late after 2 years. It is our view that 1 year would be a more desirable limit, unless you retain control of this important matter.

Stockmen and farmers of this country are slow to express their opinion, but they are beginning to speak their mind and they are speaking it loudly. They hope that you will take sufficient time in redrafting this bill to make it safe for American agriculture, because they believe that in its present form it is not safe.

Senator HUGHES. We can always stop it if we want to. Even though we fix it at 2 or 21/2 years, or whatever time it runs, we can stop it.

Dr. SHEETS. In that connection it may be stated we have had experience in the delegation of authority to negotiate trade treaties, and from the standpoint of the livestock industry of this country we feel that that delegation of authority has been unfortunate. We know that it can be recalled, but it has not been.

Senator BROWN. I misspoke myself a moment ago, and Senator Taft calls my attention to it. This bill will expire on July 1, 1943, which is a little more than a year and a half.

Senator TAFT. Then that will give the new Congress, which comes in 1943, an opportunity to consider the question for 6 months, which it certainly ought to have.

Dr. SHEETS. That is a reasonably short time.

Speaking now in the interests of the cattle feeders of the West who are hesitating now in the purchase of feeder cattle because of many uncertainties involved, it is disturbing to the cattle producers. I have a statement from an Illinois feeder that I would like to submit for the record. It is a brief statement showing some of the reasons for knowing "how high the ceiling" is going to be.

I would also like to put into the record a statement from the Commissioners, Secretaries and Directors of Agriculture, signed by Mr. H. K. Thatcher, chairman of the Committee of Five. A statement is also submitted with reference to the action of the Administrator in establishing a ceiling over fats and oils, with special reference to efforts on producers of lard, soy beans, cottonseed.

Senator Brown. What action?

Dr. SHEETS. The action of the Administrator on last Saturday. With reference to southern farmers, it represents a loss of $5,000,000 to the cotton producer, to say nothing of the losses to the mills that have seed on hand bought at prices prevailing throughout the Cotton Belt. Our point is that that action should have been deferred until the policy of the Government was established in regard to this matter. Senator SPENCER. Does that show what percentage of cottonseed is still in the farmers' hands on that basis?

Dr. SHEETS. Yes, sir. On November 30, 3,088,436 tons of cottonseed had been received at the mills, up to November 30. It is estimated that 11,000,000 bales of cotton will yield something like 3,850,000 tons of seed this year; and assuming the amount which has gone to market already, 3,088,000 bales, there remains in the hands of the producers approximately 800,000 tons. This ceiling forces the reduction, theoretically, at least, in the price of cottonseed of at least between $6 and $7 per ton.

Senator SPENCER. Mr. Henderson's statement was that there was not over 5 percent of the cottonseed left in the farmers' hands. That could not possibly be true, could it?

Dr. SHEETS. The statement is based upon reports of the Department of Commerce, Bureau of the Census, on that point. That would mean $5,000,000; and that does not take into account the losses to the mills that have, in good faith, paid cotton growers current prices up to $60 per ton for cottonseed.

The same problem affects the hog producer, the soybean grower, the peanut grower, because fats and oils are interchangeable to such an extent that what affects one affects the others.

So we feel that in fairness to the farmers of this country, the action should have been deferred and not taken when prices were declining and in advance of the establishing of a policy by the Congress. The farmers of this country have their eyes turned most earnestly to this committee.

Mr. Chairman, there is just one other suggestion that I have to make. If we are to have parity for all, we must have parity dollars. I appeared before the Senate Agricultural Subcommittee, of which Senator Thomas of Oklahoma was chairman, and at which we pleaded earnestly for a parity dollar. The parity dollar is the first essential in establishing parity prices for all commodities. Parity dollars are convertible into gold upon demand if and when the gold reserve is equal to or in excess of total currency.

The procedure in order to arrive at a parity dollar is the use of gold coin in the monetary system. Resumption may be approached in stages when gold stocks are inadequate. The primary need in this country is to establish firmly the credit of the United States, so that the ever-growing appropriations may be successfully financed by the Treasury Department.

The Congress should pass a resumption act which primarily restores the gold clause to Government gold bonds. This clause should provide that interest and principal are paid in gold. There is no need to restore the gold clause to any class of bonds other than Government's. Such clause never should have been permitted in non-Government bonds.

Senator BROWN. The court has held that they never were there, that there never was a gold clause that could be enforced.

Senator TAFT. It certainly did.

Dr. SHEETS. But the gold clause should be made immediately applicable to all existing and future Government bonds. All countries to whom the United States is making lease-lend advances or credits of any other character should be required to remove all barriers which stop the free world market for silver.

Senator HUGHES. You mean, make them pay in gold?
Dr. SHEETS. Or silver.

Senator BROWN. I might say that Senator Thomas of Oklahoma, who is the ablest man I know of on this particular subject, fully presented that to us this afternoon, and it seems to me that you are repeating what he has already told us.

Dr. SHEETS. I am sorry. I did not get to hear his statement.

Senator Brown. He gave a very full explanation of that subject. If you have anything more that you want to put into the record

you may do so.

Dr. SHEETS. Thank you. I appreciate the courtesy of the committee, and apologize for appearing at such a late hour.

(The documents referred to and submitted by the witness are here printed in full as follows:)

An Illinois cattle feeder, writing to Grain and Livestock Herald, presents his case as follows: "The bill as passed by the House provides that 110 percent of parity, the June 30, 1919, to July 1, 1929, average, or the price October 1, 1942, whichever is higher, will be the ceiling. Parity on farms is about $7.25 and 110 percent of that would be $8 prices are over a dollar a hundred above that now-and still there is no profit in cattle feeding. The average farm price of cattle during the 10-year post-war period was only $6.72-below the parity figure. (It must be remembered that cattle prices were the very first commodity to break after the war, their decline coming in 1919 while others did not break until 1920, so they did not get that extra year of very high prices to pull up the average.) On October 1, 1942, the peak price of choice steers at Chicago was $12.50-or 50 cents lower than it is right now and well below where the price should be either in relation to present supplies of feeders being fattened for market, or below the cost of feeding based on loan corn prices.

"Let's figure the thing out. Top price on feeders at Kansas City, of 800 to 1,050 pound weights on October 1 was $11. A feeder of 850 pounds would thus cost $93.50. If financed-and most of them are you could figure on 6 percent interest for 5 months by the time all charges were paid. That would be an additional $2.34, bringing the cost to $95.84 for the steer.

"Then assume the purchase of corn at the Government loan of 74.8 cents on the farm-and it must be figured at that if not above even though the market is below that right now. That steer will probably average eating right at a third of a bushel a day, and it will take 5 months or 150 days to finish him out. So he would consume 50 bushels of corn at a cost of $37.40.

"In addition, he will need 2 pounds of supplement a day. On October 1, soybean meal was the cheapest supplement. Suppose it is used instead of the combination of three supplements we use and recommend, or the combination of soybean meal, cottonseed meal, and linseed meal that is recommended so highly by the university authorities. The 300 pounds of soybean meal at October 1 price of $42 would cost $4.20.

"As for hay, you would need to figure on an average of 5 pounds a day, or 750 pounds. Hay prices back in 1919-29 were far above current levels, so you would need to figure at least $10 a ton-and in northern Illinois it is scarce and above that right now if you try to buy it. So the hay bill for the steer would be about $3.75.

We found a cost of about $8.60 for freight and commissions between the Kansas City yards, our feed lot, and on to Chicago. So we add that. This included some for salt and minerals, but nothing for veterinary fees, straw, or losses.

"The whole thing would add up to a cost of about $149.79. You would expect the steer to gain about 214 pounds a day, or weigh around 1,165 pounds delivered Chicago after some shrink in shipping. That would mean you would need to get $12.85 a hundred to break even. If the maximum of $12.50 were put on, you would be simply out of luck. The country would be driven to eating shortfed cattle or grass cattle.

"But if the cattle feeder is given a square break and as much over his costs as he averaged getting from 1930 to 1939, or 116.3 percent of those costs from October 1, he would be entitled to a price of $14.95 for that steer. And that is where the minimum should be instead of $12.50."

THE WORLD IS WAGING WAR FOR FOOD

To impress upon the people of the Nation the importance of greater production of food, feed, and fiber commodities, and administrative officials the urgency of adequately protecting our agricultural economy at this time, we need but mention the fact that the world is waging war for food. In the last analysis it means a fight for fats.

Fats and oils have always been so plentiful in this country that the average American citizen does not stop to realize just what is taking place. On the contrary, every person in the old world is fully aware of the critical situation confronting them. In Germany for example, everyone down to the humblest laborer is conscious of the seriousness of the problem. That is why also in Italy the olive tree still retains its importance. That is why England has built and maintains a great fleet of battleships. That is why it is so urgent that our own agriculture be safeguarded at this critical period in world affairs.

It has often been related how science, invention, and processing skill have eliminated many human problems and greatly changed others. The fundamental factors which create these problems, however, have not been greatly modified. For example, it has long been apparent that the German people have been compelled to go without fats to buy or produce planes, tanks, and cannon, with the knowledge that they would be used in grand array later to obtain fats. Englishmen, on the other hand, do everything possible to maintain the ordinary functioning of finances and trade so that they may buy or otherwise obtain fats. Such measures widen the areas of conflict so that it is impossible to predetermine which will be finally the most successful, although what is taking place today is likely to settle this age-old question.

Many folks today have forgotten the fact that during the last World War that it was a lack of fats which forced the German Army to surrender. People of the German cities, we are told, were faced with imminent starvation in the early winter of 1918. Long before other foods had become so scarce that the health of the people suffered, it was realized that the essential food problem of this northern country, surrounded by an iron ring, was fats and oils.

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