Now, I have with me statements from some of the counties where they make the assertion that 90 per cent of the farmers are bankrupt, as the result of these conditions.. Money is not available; loans are being called. It was very evident from what the bankers stated in that committee in Sioux Falls, S. Dak., that the money was going to be called-and it was.

Going back to what I stated in the beginning about the loyalty they have in our country, there has been a feeling, however, that the Capitol of our country is too far from the great grain and stock sections, and that the great interests that control the country are in the East. There seems to be some connection between the two; and we have sometimes wished that we could be more closely in touch with the head of our Government.

But as I said in the beginning, we are pleased to have this opportunity to come before you, our Nation's high tribunal; and the thought has come to me that we, like Paul before King Agrippa, are happy to have this opportunity. And I hope we shall not stop in these hearings until we have gone thoroughly to the bottom of this thing, because I feel that this is not a trivial matter. It is something similar to a question of life and death in our country; and we want to see the solution which is being sought here found, and I believe it can be found when there is cooperation between the people and the representatives of the people. When we are in earnest and mean business, I feel that we can take hold of this proposition and put it across.

We are willing to start at the bottom again out there if it is proven that there is no artificial deflation program back of this. We are not going to quit, even though we lose everything; we are not going to whine or become calamity howlers, or followers of the red flag. We are going to do like they did at Valley Forge in the early days when things looked very dark.

Now, the request has been made that I give a personal experience. And if I do so, I do not want you to think that I am a calamity howler, or am complaining. I am willing to take whatever happens to me and meet the finish, whatever it is. It has been so out in my country that I could go to a banker and borrow $5,000 on my note without any security. It happens that I have a good quartersection of land, well improved, for which I have been offered $325 per acre. I also could furnish proof that I have farmed that land well, and have had a heavy production on that place.

It may be possible that I have lived a little better than a farmer should. We have different standards of living on farms. I know some farmers where they work seven days in the week and part of the night, and in the rain, and where they spend nothing on their family; they live on a lower level. And perhaps that is the standard that the farmer has to look forward to.

But that will be the last resort with me. My belief is that farmers should have education and higher standards of living, as high a standard as any other class. I believe that in a State like South Dakota, where the vast bulk of the money comes from farming, the farmer has a right to a good home, a right to keep a vehicle to ride in, and is not unreasonable when he wants the comforts and conveniences of life. I have heard them criticized; I have heard it said that the farmer must give up riding in his jitney; that he has

got to put more time in the cornfield, and that his standard of living must get down to a level with those of the peasants of Europe.

I resent that. As I look upon the city of Minneapolis, for example, with its miles and miles of mansions, and even in some of those little villages, with their fine houses, the question occurs, from what were they built? From the profits coming from the farm; selling to the farmer and buying from him. And those profits have been too big. But we are not here to complain.

Going back to my personal experience as requested, I used to be able to borrow money. That is not the case now. The personal experience is that I owe $8,000, and on account of some unfortunate accidents to some of our boys, that required three of them to be in the hospital at the same time, the matter of the payment of interest. lapsed, although the money was in the bank to pay it with. And this oversight caused the calling of the loan by the insurance company. I stated the circumstances by letter to the insurance company, also the fact that I was carrying $11,000 insurance with them. which should strengthen my credit. They paid no attention to that. They said, "Your loan is now running 10 per cent.'

to a bank, and I said, "What can you do for me?" I am well acquainted and friendly with the bankers. One of the bankers said, "I can get you money at 7 per cent," but he wanted 61 per cent or $500 commission for handling it.

Senator ROBINSON. In addition to the interest?

Mr. BATCHELLER. Yes, sir; that was his commission for getting the loan.

Senator ROBINSON. What rate are you paying on your loan?
Mr. BATCHELLER. 10 per cent.

Representative SUMNERS. Is that the one you are most friendly [Laughter.]

with

Mr. BATCHELLER. I would not say that. Now, I do not care to carry this to any great extent. I could give you in detail the conditions over the State.

We are here looking for a remedy for these conditions. We want this Federal farm land bank functioning. And what I have tried to do out there is to try to see whether I could hook on to that Federal land bank for a loan myself. And they said it would be useless to apply, because all the money available was taken up at the moment. And so I have not done anything with that; this other loan is resting easy-outside of the 10 per cent.

Representative SUMNERS. One of the gentlemen who have appeared here made a suggestion in regard to the Federal land banks-I do not recall his name at this moment.

Senator ROBINSON. Mr. Pollard.

Representative SUMNERS. He suggested that the amount of the loan should be increased above $10,000. But, as applied to the present situation, when you have $100,000,000 or $200,000,000 of applications for loans and a very limited sum out of which those applications can be satisfied, if you allowed one man to get a loan of $20,000, you would cut three or four men out of the chance of getting $4,000 or $5,000.

Mr. POLLARD. Mr. Chairman, may I answer that?
The CHAIRMAN. Yes.

Mr. POLLARD. At the time of the passage of the Federal farm loan act in 1916, the United States Treasurer turned over to the Federal Farm Loan Board a little over $8,500,000, or about $8,750,000, as I remember it. Inside of two years, they had loaned over $270,000,000, although all they got from the Government was about $8,750,000. It is the continuous reselling or revolving of the bonds that has enabled that to be accomplished.

Representative SUMNERS. But it is getting to a situation now where it is pretty difficult to sell $40,000,000 of bonds at one time. And if you have a provision where a man can get $20,000 in one loan, do you not limit the number of people that can participate in the distribution of the fund?

Mr. POLLARD. My own opinion is this: Of course, as I suggested in my remarks, I think Congress ought to fix a limit which is more generous, and to appropriate a little more money-although I am not complaining of Congress. Yet I believe this, that those bonds can be sold if the proper effort is made; and I believe that it is going to work out all right. I believe that is our only salvation, unless Congress steps in and appropriates a great deal of money. Representative TEN EYCK. Mr. Batcheller, is there any legislation pending that you think will help the farmer?

Mr. BATCHELLER. We are interested in preventing this gambling on grain. The statistics given by Mr. Brookhart are the ones that we are accepting out in our country as reliable, and we feel that, to a large extent, the deflation to-day was forced upon us by forced selling caused by manipulation, and that the measure to prevent that would be very beneficial. We believe that the Capper-Volstead bill, legitimizing collective bargaining, would be very beneficial and is essential in order to remedy existing conditions. We are coming to a condition where it is only through cooperation and getting together and meeting interest with interest, not through physical force, but through business enterprise and force, that we can compete with the interests that otherwise will forever keep us under. There may be other measures which would be beneficial, but they are not in my mind just now. Undoubtedly, there are others.

The CHAIRMAN. How about packer legislation?

Mr. BATCHELLER. We are interested in packer legislation-in control and investigation. We would like to understand more about that spread between the price on the hoof and the price of the finished product; and that takes in the matter of the price of hides and every element in the business.

Senator ROBINSON. Have you studied the question of the effect of operations on exchanges on agricultural products?

Mr. BATCHELLER. I have not; I have studied it, but I would not say that I had the full data to work from. I notice this: That the lines of staple commodities that are controlled by the large interests, such as steel, or finished products of any sort, are not handled in that

way.

Will there be any other questions?

Senator ROBINSON. That is all I have.

The CHAIRMAN. If there are no further questions, we are much obliged to you, Mr. Batcheller.

Mr. BARRETT. Mr. Chairman, I would like to put up Capt. Sumners He has been down in our country. He came to see me, and he spoke in our front yard to 20.000 farmers on the Fourth of Julv.

next.

The CHAIRMAN. I assure you that the commission has been hearing from him right along, and expects to continue to do so until it finishes its work.

Mr. BARRETT. Very well. I will call Mr. Thomas, of Virginia.

STATEMENT OF MR. O. A. THOMAS, BEDFORD, VA., BUSINESS AGENT OF THE FARMERS' UNION OF VIRGINIA.

The CHAIRMAN. Please state your name, address, and business connections.

Mr. THOMAS. O. A. Thomas, Bedford, Va.; business agent of the Farmers' Union of Virginia.

Mr. Chairman and gentlemen, addressing myself to something more or less specific along the line of this spread between the price the producer receives and that which the consumer pays, which has some reference to the question that was of interest to the chairman on that 38 and 35 cents proposition, I will say that, while I have not very much data when you take it in comparison with everything that might be gathered, yet I have some specific figures dealing with agricultural commodities, some few agricultural commodities, which will give us some idea as to the spread.

In making an analysis of these figures, it is impossible for me to tell the commission where the loss is, or how it is that there is such a wide spread, or to offer much by way of solution of the problem. But perhaps I can offer something. The material that I have is largely made up of specific instances, either gathered from my own experience, or gathered from that of somebody that knows, or taken from the statements of people whom everybody knows, or from the statements of the Department of Agriculture.

What I have to say touching the spread between the producer and the consumer will be confined, as far as possible, to a few staple commodities as to which I have been able to gather information. Whenever I have not had personal information, I have relied on the various Agricultural Department reports as to prices, and notably on the Market Reporter. I will take this up by commodities.

First, as to wheat: The price being offered or paid to the farmer for wheat averages at this time approximately $1 per bushel.

The CHAIRMAN. Where?

Mr. THOMAS. Well, the average for the country is about that right at this present time. The quotation on the exchange, Chicago price, is about $1.20; but the price being offered to the farmer in my county, for instance, is 90 cents.

The CHAIRMAN. That is the farm price?

Mr. THOMAS. That is the farm price, at the farm.

Mr. FUNK. Well, they were offered $1.05 in my county the day before yesterday.

Mr. THOMAS. Well, $1 is about the average. That is, for No. 1. Now, 5 bushels of wheat produce a barrel of flour. For that the producer is receiving $5, while the baker or the retailer are paying $8.50 to $9.50 for the manufactured barrel of flour. The purchaser at retail is buying at an average of about $11; that varies in different localities, but it will average close to $11.

Representative SUMNERS. Pardon me one moment. If you will use the same unit of measure for the farmer and the other parties it

will help the record. Now, you speak of a bushel of wheat and of a barrel of flour.

Mr. THOMAS. I spoke of 5 bushels of wheat being equal to a barrel of flour.

Representative SUMNERS. I did not understand that.

Mr. THOMAS. I realize that there is a variation in the unit, and that I have to jump from bushels to barrels, because we are in the habit of regarding flour in that way. But I am treating 5 bushels of wheat as producing a barrel of flour.

Now, the baker converts the barrel of flour into about two hundred and fifty 16-ounce loaves of bread, which are retailing at 10 cents a loaf in most of the cities and towns of this country. That is an average price again. That is to the housekeeper, in whole loaves; the retail price is, on the average, 10 cents for the 16-ounce loaf, which means approximately $25 for this barrel of flour, or for the 5 bushels of wheat for which the farmer receives right now approximately $5. Now, that puts it in the form of bread into the homes of the consumers. I have carried my figures further, because some of uswhen we are here in Washington, for instance-eat in the hotels and restaurants, such as the Capitol lunch room and places like that. And I have found it interesting to follow the thing a little further and take the average of that, because while I am unable to tell what portion of the consumers eat in the hotels and restaurants and lunch rooms of the cities, that is an element or factor in determining the spread between the price paid by the consumer and that received by the producer.

To follow it further, if the bread is consumed as you and I buy a great deal of it, as two or three slice portions in the hotels and restaurants, we pay from 10 to 25 cents per portion, depending on the hotel or lunch room in which we eat. There are from four to six portions to the loaf; taking an average of five, that would be 1,250 portions to the barrel of flour, which, at the low rate of 10 cents per portion, brings the cost to the consumer to $125 for that barrel of flour. If you take the rate that we pay in some places, that might be increased to as much as $300 that some consumers are paying for the bread made from that 5 bushels of wheat.

The CHAIRMAN. Now, is it quite fair to say that they are paying that for the bread without considering the element of service involved? Mr. THOMAS. Oh, the element of service is involved; that is correct. But I am just touching the two points, the consumer's payment and the producer's receipts. All of the labor and service comes in between, to be sure.

Senator CAPPER. You left out something as regards the return to the miller; you stated that he received about $9.50; but you left out what he receives for the bran and the middlings.

Mr. THOMAS. Yes, the bran and the middlings pay for the cost of milling. I figured that in.

Senator CAPPER. But that should be added to what he receives. Mr. THOMAS. Yes; I omitted to mention that.

Now, the farmer receives $5 for the same wheat that some of the city consumers pay anywhere from $125 to $300 for.

If

you look at that wheat in the form of puffed wheat, we must consider that the bushel of wheat brings the producer $1; and whon converted into puffed wheat, that is sold to the housekeeper at the ratə