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Mr. Pace. And the competent men in this Seed and Feed Loan agency will be retained?

Mr. FLANNAGAN. Absolutely.

Mr. Poage. Do you know one single Government agency where every body is competent and qualified?

Mr. FLANNAGAN. Mr. Murray wants to ask a question.

Mr. MURRAY. I want to follow up the statement as to your personnel and give you this assurance from my own personal observation that you had high-class personnel all the time I was in Wisconsin. When I came in contact with them they were men interested apparently only in the job set forth for them. I think your personnel had as little criticism coming to them as the personnel of any Government department in the United States Department of Agriculture. I say that from observation of many years.

Mr. FLANNAGAN. I think we can go further and say that is the opinion of the membership of this committee.

Mr. MURRAY. I was favorably impressed with the attitude your personnel had. They seemed to be willing to spend all their time and effort to get the job done that had been assigned to them.

There is one question that has bothered me for some time, and Mr. Flannagan has brought it up, coming from Virginia.

I have written Marvin Jones about it. Here is what I want to know. I cannot see how you are going out in the State of Virginia to the men that have borrowed feed and seed loans in the past, in the face of what has happened during the last year, and expect to collect a very high percentage of those old loans.

I say that without any personal feeling toward anyone, because ever since the 1st of October I have been trying to find out about this proposition. It seems that the trouble arose in the State of Virginia largely from the fact that they increased their cow numbers rather than weather conditions. I will be pleased to put in the figures showing the amount of hay that was given out, not on the basis of loans, not on the basis of need, but just given out. I would like also to incorporate in the record the statement as to the yields of different seed crops during the last 10 years. The surprising thing to me is that we have got a few approaches to this problem during this particular time when $1,100,000 has been spread out on hay and they do not even know to whom they have given it, or how much each individual got. The reason I say that is that I have watched these people go through 10 years of drought in my own country, and I take it from the looks of the record that they had pretty dry conditions in 1934 and 1936 in Virginia and Maryland, and so forth. I have seen those people and know that these loans have done a lot to keep them on their feet, because they would not have had any crops if they had not had the loans and would have been discouraged that much more.

Mr. FLANNAGAN. What are you driving at?

Mr. MURRAY. We start these affairs as emergency affairs and make them permanent, and calves are awfully hard to wean, it seems, and then we branch off into another line, which we have done, and I do not remember of any law that was passed that said that Marvin Jones: or anyone else should be in the drought relief business. I would like to know how you expect an agency such as Mr. Lindsey represents to collect the old drought relief loans.

Mr. FLANNAGAN. Who is asking him to do it?
Mr. MURRAY. He has to do it.
Mr. FLANNAGAN. "We are going to adjust the old loans.

Mr. MURRAY. I just brought that in at this point. From now on the old loans are not going to be worth the time that would be spent to collect them, and the sooner we can bring in some legislation to the effect that we will not have to spend the time and the effort pounding those people on the back for those loans that were made on the basis of need, the better.

Mr. Cooley. Will you yield right there? I would like to ask you and Mr. Lindsey if either of you have any language that you might suggest that would be an improvement over the language contained in this bill on page 18, and 19, where we provide for just what you are talking about. We may compromise claims, they may adjust claims, and they may be written off. We do not have a definite statute of limitations, but we do clothe the corporation with certain definite authority to adjust and to reduce all claims of less than $10,000. We also make provision for adjustment of claims amounting to more than $10,000.

Mr. MURRAY. I will answer the gentleman by saying that I would cancel them. I would cancel them for the people that have obtained them on the basis of need. At the present time, or during this past year, we have had them strung out to people not on the basis of need but just promiscuously and not knowing who got it or how much. They do not have a record as to how much each one of these big farmers happened to get.

Mr. GRANGER. Do you mean to say that some section of the country was given these loans without a record of them?

Mr. MURRAY. I mean to say that you cannot get a record of the hay that was distributed in Virginia; yet Oklahoma shows a worse drought condition than Virginia ever showed.

Mr. FLANNAGAN. Why has all this hay been distributed in Virginia?

Mr. MURRAY. I do not know. Oklahoma really did have trouble with drought.

Mr. FLANNAGAN. Who distributed it?

Mr. MURRAY. Through some of the bucket-shop operations of the Commodity Credit Corporation.

Mr. FLANNAGAN. Where did you get that information?
Mr. MURRAY. I got it from Marvin Jones.
Mr. FLANNAGAN. I would like to get hold of that information.

Mr. MURRAY. I ask unanimous consent to put all the correspondence and all the records I have at this point into the record.

Mr. FLANNAGAN. I do not think it is pertinent to this inquiry. We are not dealing with the free distribution of hay, but I would like to get the information, because if it happened in Virginia they overlooked my section.

Mr. MURRAY. Those old loans have been hanging to the necks of these people. Let us get rid of them.

Mr. FLANNAGAN. That is a subject for us to take up in executive session in going over the provisions of the bill.

Mr. Cooley. Let me ask a question of this witness. You have read the language on pages 18 and 19 dealing with compromises of claims, have you not?

Mr. LINDSEY. Yes.

Mr. Cooley. Do you not approve of that language?
Mr. LINDSEY. As a whole, I think that language is all right.

Mr. COOLEY. The committee is going to give further consideration to it.

Mr. LINDSEY. Perhaps the committee would like to give some further consideration to it, but as a principle I think it is all right.

Mr. RIZLEY. Mr. Lindsey, of course, the Farm Security Administration has been making loans that are identical or comparable to the same character of loans that your Division of Feed and Seed Loan is making. We certainly do not need two agencies making the same kinds of loans, do we?

Mr. LINDSEY. No; we do not need two agencies making the same kind of loan to the same person.

Mr. RIZLEY. I agree with you 100 percent on that. Of course, I think that is one thing the committee had in mind when we started out. It is a fact that the F. S. A. are making comparable loans with the loans that the Feed and Seed Division of Farm Credit is making. I know that in my section of the country, and undoubtedly you know the same thing is true of various other sections of the country, there is even competition between the local representatives of the two set-ups.

Mr. Lindsey. If there is competition, there should not be.
Mr. RIZLEY. I agree with you.,

Mr. LINDSEY. Because at the central offices a procedure was adopted and an agreement prepared and approved by the staffs of the two central offices which provided that there would not be any overlapping or any duplication of loans. The Farm Security prepared lists of its standard rural rehabilitation clients and furnished those lists to the crop loan men so that our men would not be financing the rehabilitation, the farm-managed clients of theirs. There was not any competition at that point. • Mr. RIZLEY. What has there been to prevent your Division of Feed and Seed set-up from making the same loans that the Farm Security Administration has been making for seed, feed, fertilizer, and so forth?

Mr. LINDSEY. I am not sufficiently familiar with their operations then. I thought they were making a rehabilitation, a farm-managed loan program.

Mr. RIZLEY. That is true, but they make loans for feed, seed, fertilizer, and the same identical things. I think they go a little further. I think there is something else they could make loans for, but under their set-up they make loans for feed, seed, fertilizer, just the same as Farm Credit does. Why could not Farm Credit have made those loans instead of having two agencies making them?

Mr. LINDSEY. Because the Farm Credit Administration entcred into an agreement with the Farm Security Administration that the Emergency Crop and Feed Loan Division would not make loans to the standard clients of the Farm Security Administration, such standard clients to be listed on the schedule prepared by F. S. A. and submitted to the Crop Loan office.

Mr. RIZLEY. In other words, after a man became a Farm Security client, you entered into an agreement with Farm Security that you would not interfere, or would not make any feed, seed, or fertilizer loans to that client?

Mr. LINDSEY. That is right.

not on Rizleri wet-up for has been

Mr. Rizley. Regardless of eligibility to get a loan?
Mr. LINDSEY. To my knowledge, it would be regardless of that

Mr. RIZLEY. You must agree with me it certainly does not make any sense regardless of whether this thing ultimately should go to keep two competitive agencies operating with the whole set-up that is necessary to make that character of loans.

Mr. LINDSEY. That is why I was emphasizing the fact that with all lending agencies being under one head it would be coordinated, and the Governor would see that there was not any overlapping, not any duplication, and not anything confusing to the farmer at the county level.

Mr. RIZLEY. You and I happen to be in full accord.

Mr. GRANGER. That brings me right to the point I was trying to make a moment ago. That is if it develops that there is overlapping in the agencies and agencies in competition, and someone has to go, then what would be your attitude if it is some of your personnel in the field?

Mr. Lindsey. I am pretty jealous of that group in the field, but those who are not qualified certainly should not be retained.

Mr. GRANGER. That has been the complaint about a lot of these agencies in these various counties where there were duplication in lending money to the farmers. As I am inclined to understand this consolidation, it is to weed part of them out where they are in competition, or doing the same kind of work, as Mr. Rizley said.

Now, the squeeze play is going to come when, and who is going to go, when you get down to that? What personnel is going to goyours, Farm Security, or Production Credit?

Mr. LINDSEY. I believe you have that covered here in your bill. I think that is thoroughly covered with respect to those who are qualified to be retained. I would like to add this for your information: Back in 1933, when the crop loan was consolidated with the Farm Credit Administration, there were several thousand employees and those who were not qualified were dropped.

Mr. FLANNAGAN. I do not think we will have any trouble on that.

Mr. LINDSEY. And as the volume has decreased over the years, the personnel has continued to decrease.

Mr. COOLEY. As of March 31, 1944, North Carolina had a collection record of 94.8 percent. Is that not about the best in the Nation? Is not North Carolina's record the best in the whole Nation-94.8 percent? I just want to get that into the record and clear up that point.

Mr. LINDSEY. I believe that you have been reviewing that, have you not, Mr. Cooley.

Mr. FLANNAGAN. We thank you, Mr. Lindsey, and we will hear the next witness.

STATEMENT OF R. H. McELVEEN, REGIONAL MANAGER OF THE

EMERGENCY CROP AND SEED LOAN OFFICE, COLUMBIA, S. C. Mr. McELVEEN. I am the regional manager of the Emergency Crop and Seed Loan office located in Columbia, S. C., serving North and South Carolina, Georgia, and Florida, where the greatest number of this type of loans is made and the highest percentage of collections is made.

Mr. FLANNAGAN. Mr. McElveen, do you agree in a general way with the statement that Mr. Lindsey made?

Mr. McELVEEN. I do. I agree with the statement that Mr. Lindsey has made.

Mr. COOLEY. Just to sum it up in one question, you think that the authority contained in the bill to compromise, adjust, and reduce the obligations of the three agencies is broad enough in a general way to cover the situation?

Mr. McELVEEN. I would say that is true, although I have just read the bill once and am not familiar with it. However, I heard you read it this morning, and I would say that it does.

Mr. COOLEY. Then I would like to get this clear. You feel as Mr. Lindsey does, that it is wise to consolidate all the agencies of the Government engaged in making direct loans to farmers? You agree to that?

Mr. McELVEEN. Yes. Mr. COOLEY. You are satisfied with this personnel section in here which gives the agency the right to collect only the best qualified personnel which may be necessary to carry on the functions of the agency?

Mr. McELVEEN. I think that is very necessary. I would like to make one statement-I believe that it should be under one common head.

Mr. FLANNAGAN. Mr. Lindsey stated that.

Mr. McELVEEN. For the purpose of eliminating competition in the field which exists today. Mr. FLANNAGAN. We thank you, Mr. McElveen.

Mr. FLANNAGAN. Now, we have with us Mr. Marshall Newton of the Baltimore office.

Mr. NEWTON. Yes, sir. STATEMENT OF MARSHALL NEWTON, JR., REGIONAL MANAGER

OF THE EMERGENCY CROP AND FEED LOAN OFFICE OF THE FARM CREDIT ADMINISTRATION, BALTIMORE, MD.

Mr. FLANNAGAN. What States are covered by your office, Mr. Newton?

Mr. NEWTON. The States of Virginia, West Virginia, Maryland, Delaware, Pennsylvania, and the island of Puerto Rico.

Mr. FLANNAGAN. Mr. Newton, you have heard Mr. Lindsey's testimony. I will ask you to state if you agree, in a general way, with the statements made by him? Mr. NEWTON. Yes, sir.

Mr. FLANNAGAN. If you would like to file a statement for the record we will be glad to have you do so, and you may send it to Mr. Cooley, and he will put it in the record.

Mr. NEWTON. Yes, sir.

Mr. FLANNAGAN. Mr. McElveen, that applies to you also. If you desire to file a statement you may send it to Mr. Cooley and he will put it in the record.

Is there anything further? Mr. PACE. Referring to Mr. McElveen, Mr. Chairman, I would like to ask that he supply us with a statement of the financial operations in that area during the last several years, showing the amount loaned

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