right over to the funds that were made available for the BankheadJones tenant purchase program and began to do the same thing there, because you did not specifically mention the Bankhead-Jones tenant funds.

Mr. COOLEY. In this bill we specifically provide that no funds shall be loaned to a corporation or to a cooperative, and we provide only for individual loans to individual farmers to enable them to finance the purchase of individual family-sized farms.

Mr. SHORT. Did you include in that charitable institutions?

Mr. COOLEY. Any cooperative or corporation, and any other loan except an individual loan to an individual person.

Mr. SHORT. Just so that you have made it strong enough, Congressman Cooley.

Mr. COOLEY. I am asking you if you do not think this is strong enough.

Mr. SHORT. I Could suggest language something like this: (To be inserted by Mr. Short.)

Dr. L. C. GRAY,

United States Department of Agriculture,

Washington, D. C.

FEBRUARY 12, 1937.

MY DEAR SIR: I desire to restate the objections I so frequently made during the discussion of the proposed findings and recommendations to be made by the President's Farm Tenancy Committee. The American Farm Bureau Federation, which I represent, through its executive committee has outlined the position it desires to take in respect to the general subject of alleviating tenancy conditions prevailing in various parts of the United States. I am bound by the statement heretofore issued and I cannot, therefore, approve any recommendations or mode or procedure for administration contained in the proposed report which go beyond the limits of the announced policy of the American Farm Bureau Federation.

If my signature is to be attached to the report, I desire that it be noted in such manner as to call the attention of the reader to the limitations our organization policies and this letter require. In the event this is not deemed advisable, then I prefer not to be a signer of the report.

In addition to the limitation above described, I cannot approve the principle of withholding the transfer of title to any purchaser who is able to pay the principal indebtedness for which he obligated himself at any time that he is able to make such payment. I regard the proposed restriction on alienation of lands as contrary to sound American jurisprudence and deem it in conflict with the desired policy regarding land ownership. By and large, I am of the conviction that a man who owns a proper equity in a farm or has accumulated the amount available to own such an equity is capable of the responsibilities of such ownership. Other policies relating to the use of agricultural lands should be approached from the standpoint of education and demonstration, rather than through limitations on the right of ownership.

Tha: part of the report which indicates the use of credit as a basis for carrying on the program, I deem of great importance. I have grave doubts that credit can carry the burden of such a program.

Without attempting further to define my attitude toward the report, I desire to state that I prefer not to be a signer of the report except on the condition stated in a foregoing paragraph.

Very truly yours,

AMERICAN FARM BUREAU FEDERATION,
EDW. A. O'NEAL, President.

AMERICAN FARM Bureau FEDERATION OFFICIAL NEWS LETTER, February 2, 1937
O'NEAL APPEARS BEFORE HOUSE COMMITTEE TO URGE SOUND PRINCIPLES AS BASIS
FOR TENANCY MEASURE

In a prepared statement which was read to the House Committee on Agriculture last week, President E. A. O'Neal, of the American Farm Bureau Federation, strongly urged the committee to base any farm-tenancy legislation on principles which are economically sound and administratively workable. Complete text of the statement is as follows:

"To the Honorable MARVIN JONES,

Chairman, House Committee on Agriculture:

"In striving to overcome the admitted evils of the present system of farm tenancy in this country, we should remember that a fair price system and parity of income for the farmers will do more to prevent the loss of farm homes through foreclosure than any other one factor.

"Tenancy improvements.

"Nevertheless, there is a pressing need for improvement in our system of farm tenancy, and I urge upon your committee the immediate necessity of passing a law with such improvement as its objective. It is to the interest of the entire Nation, and to all of our farmers, that improvement be brought about. It is particularly important that better means be provided for tenants to become owner-operators of farms.

"Attainment of these objectives can come only through a sound law and its effective administration. The problem is a national one, but in our country we have such a wide diversity of people, of land, and of conditions generally, that administration in the States must be in the hands of people who are intimately familiar with the land and the people, properly guided by the Secretary of Agriculture.

"The tenancy problem involves broad social, economic, and education factors. In trying to solve this problem, I believe we will find that education of the tenant along practical lines is of equal importance with the extension of credit.

"Administration of law.

"Therefore, I believe that any law enacted to deal with this question should be based on the following considerations:

"1. The law should be administered by the Secretary of Agriculture through the directors of extension in the various States, who will carry out the provisions of the act under rules and regulations prescribed by the Secretary.

"2. Administration in county or region should be by an appointee of the Secretary, selected from a list supplied by the director of extension in the State. All appointees should meet qualifications set up for county agents in the State. "3. To pass on the eligibility of applicants for aid under the proposed law in each county or region, a nonsalaried committee of three members should be appointed by the Secretary from a list supplied by the Extension Director. In case the Secretary is unable to select a full committee from the first list submitted, he should be empowered to ask for additional names. All committee members must be men whose chief interest and experience have been in agriculture. This committee should be permanent and should act in advisory capacity to the local administrator and the Director of Extension.

"Benefit limitations.

"4. Assistance under the act should be confined to tenant farmers or worthy young men of farm background, and all should be men of demonstrated ability, farm background, and moral worth. They should be men who are unable to secure financial help from the Farm Credit Administration agencies. Aim of this act should be to help them and train them so that they will become eligible for help from these agencies within a few years.

"5. The Secretary should buy farms and lease them to tenants who meet the requirements, for a probationary period at a reasonable rental, at the conclusion of which period, providing he has proved capable, he will receive from the Secretary a purchase contract. Under the purchase contract, the tenant to be aided should operate under an agreement with the Secretary which will pledge him to good farm management practice, and which will involve his turning over to the Secretary each year a definite percent of the gross income from the farm. All such money, over and above a reasonable rental, should accumulate to the client's credit until it equals 25 percent of the value of the farm. At this point the client should receive title to the farm, with the balance of the purchase price supplied by the Farm Credit Administration, and aid and supervision by the Secretary should be discontinued so that another deserving farmer may take his place in the project.

"6. During the probationary and contract periods, the Secretary may make loans to the client for production purposes, up to two-thirds of the amount needed. "Respectfully submitted.

"EDWARD A. O'NEAL,

"President, American Farm Bureau Federation and Member of President Roosevelt's Special Committee on Farm Tenancy."

Mr. COOLEY. You are reading from the agricultural appropriation bill?

Mr. SHORT. Practically the same language; only I would make it relate to any funds that come into the hands of this Corporation.

Mr. COOLEY. If that language was specifically contained in this bill, would you favor the passage of this bill?

Mr. SHORT. No, not alone. I would certainly want to put that language into any bill that was passed, but I think there are many other things that ought to be given consideration, as far as the bill is concerned.

Mr. COOLEY. On page 17 we set forth that they

shall make no loan

(A) To any corporation or cooperative association.

That language might even be interpreted to mean that they could make loans, if it were necessary to do so, to provide for orderly liquida

tion.

Mr. SHORT. Of course, you gentlemen either are lawyers or have access to legal talent. The only thing I am urging is that you use every precaution. In the light of the testimony before your committee, I think you are justified in using every precaution, to see that some device is not conceived in the mind of somebody that you have not had the foresight to exclude. So I would make it just as strong as possible. I think every member of this committee recognizes what has gone on in the past in an effort to violate the will of the Congress in regard to these projects.

Mr. COOLEY. In creating a corporation, you usually endow the corporation with certain specific powers. We have attempted to do that in this proposed bill. We do not set forth a thousand and one things which the corporation shall not be permitted to do, because that would be an endless number of things that would have to be listed. A corporation is permitted to exercise only the powers conferred upon it. I think that this meets the legal requirements and probably meets the situation which you have in mind. Certainly this committee does not intend to tolerate any more communistic projects or any more resettlement projects.

Mr. SHORT. I think you are to be very highly commended for that. Mr. COOLEY. In the past, unfortunately, the Farm Security Administration has not come back to this committee for legislation but has operated under legislation contained in the appropriation bills. From 1937 until the time this special committee started its investigation, the officials of the Farm Security Administration have not darkened the doors of this committee room. But this bill provides that every year they must make a report to the Congress, and that every year the Comptroller General shall check and audit their accounts. I am trying to find out what we can do to this bill to make it meet your approval and the approval of the Federal Farm Bureau Federation. Mr. SHORT. Well, I want to commend the Congressman for the statement he has just made. We urge that, and we will certainly support making that provision just as strong as it can possibly be

made.

Mr. COCLEY. You do object to the revolving fund?
Mr. SHORT. Yes.

Mr. COOLEY. Suppose we corrected the revolving fund. Suppose we made specific prohibitions against any more resettlement and relocation projects and specific provisions against 99-year leases. In what other way can we improve the bill?

Mr. SHORT. If legislation of this character is contemplated on the part of the Congress, we feel that it should be coordinated with and under the overhead supervision of the Farm Credit Administration. Mr. COOLEY. That is a step that remains to be determined in the future. This committee, as I have said time and again, is not in a position to determine whether or not the agency should be coordinated with and administered by the Farm Credit Administration at this time. But certainly the committee does not intend to preclude that possibility for the future. What we are trying to do is to perfect this bill. Frankly, it appears to me that what the Farm Bureau is trying to do is to delay the enactment of any legislation and to permit the Farm Security Administration to die a natural death on June 30.

Mr. SHORT. No; that is not a fair statement. Mr. COOLEY. Why is it not a fair statement? that there be a deferment from the very beginning.

You have asked

Mr. SHORT. No; we have made suggestions and told you that we have in process a tentative suggestion to this committee on legislation of this type, not only in regard to these agencies, but with regard to the Farm Credit Administration as well. Fearing that you might not have the opportunity to go all the way, as you have suggested, the officials of the American Farm Bureau Federation appeared before the Appropriations Committee and asked that a nominal appropriation be made to carry on.

Mr. COOLEY. I am familiar with all of that.

Mr. SHORT. That in itself demonstrates and exemplifies the fact that your statement is a little unfair.

Mr. COOLEY. Let us see if it is unfair. Your organization was invited before the select committee and afforded ample opportunity to present your views and the information which you have collected. Mr. O'Neal testified, and all the other representatives were given an opportunity to testify. The select committee heard you fully and then wrote this bill. The bill as it was drafted is now being considered by the full committee, and you are still asking for further delay.

Mr. SHORT. Mr. Cooley, you asked the Farm Bureau, as I understand it-I was not here when the testimony was given; if this statement is not correct, I should like to have it corrected-you asked agencies such as the American Farm Bureau Federation to come in and testify on the operations of these various agencies.

Mr. COOLEY. And to make recommendations for future legislation. Mr. SHORT. I think you were told that we did have a committee appointed at that time that was making a study at the same time you were making a study, in order to be in a position to make recommendations. We are in a position to make recommendations to you today. They are general recommendations. We have no specific bill. We have one in very rough form. We are not prepared to make definite recommendations on legal terminology, but we are in a position to make recommendations.

Mr. COOLEY. Do you think the Congress of the United States should delay the passage of needed legislation pending a further study of this problem by your organization?

Mr. GATHINGS. He has not said that.

Mr. COOLEY. That is what I am asking.

Mr. SHORT. I think the evidence, Mr. Čooley, that has come before your committee and before other committees of the Congress of the United States certainly justifies the most careful consideration on the part of this committee before you hurriedly pass legislation that might in itself endanger the cooperative credit system that you and other Members of Congress and the farmers have for 27 years been building up in this country. You have in this bill provisions, I am firmly convinced, that will jeopardize not only private credit but cooperative credit in this country.

Mr. COOLEY. Where is one provision that will do that?

Mr. SHORT. This insurance corporation and the activity in which it operates; the setting up of a corporation with tremendous borrowing powers; and the revolving fund and discount privileges.

Mr. COOLEY. Do you understand that after all these privileges and powers have been exercised, a loan can be made by this corporation only to an individual who cannot obtain credit elsewhere?

Mr. SHORT. Well, I should like to suggest that you certainly improve the screening process you now have in this bill. Remember, Congressman Cooley, that the limit in this bill for loans to farmers for short-time purposes far exceed the average that is now made by the P. C. A.'s and is more than twice as large as the average made by the P. C. A.'s in 1941.

Mr. COOLEY. All right. You say the limit of the initial loan, $2,500, is too much?

Mr. SHORT. That is right.

Mr. COOLEY. What would you want to make that?

Mr. SHORT. I think it ought to be a thousand dollars.

Mr. COOLEY. Then, at the same time, you make the statement that in the cattle country $2,500 would not be sufficient.

Mr. SHORT. I do not say that. I say that in the cattle country and in other special areas provisions can be made that after hearings and evidence of the fact that a larger loan is needed to meet the conditions in special areas, the board or the management of this institution might have the privilege to raise the amount.

Mr. COOLEY. Did you know that the R. A. C. C. made loans in excess of a million dollars?

Mr. SHORT. I did not know that they made any in excess of a million dollars. I know they make them in the thousands of dollars. Mr. COOLEY. Since we have reduced the size of the loan from a million dollars to $2,500, do you not think we have accomplished considerable in the direction in which you are talking?

Mr. SHORT. Yes; that is some reduction; I will say that.

Mr. COOLEY. Do you know that in some sections of the country, on some of these projects, individuals are indebted to the Government in excess of $8,000-just dozens and dozens of them?

Mr. SHORT. I know that the accumulation of these debts has been rather alarming, as far as the individual farmers are concerned.

Mr. COOLEY. You say that a $2,500 loan to an individual who cannot possibly get a loan from a private bank or the P. C. A., or any other source, is excessive?

Mr. SHORT. I think you ought to look over your screening process in the bill..