To get this land out of production you have to go, do you not, where the production is?

Mr. MCLAIN. Yes.

Mr. ANDERSEN. And naturally you pay in proportion to what you feel the particular land will produce?

Mr. MCLAIN. Yes.

CRITERIA FOR THE CONSERVATION RESERVE

Mr. ANDERSEN. Now when the ASC committees send men out to check on the particular contracts or offers, they have certain criteria. to follow, do they not?

Mr. MCLAIN. Yes, they do.

Mr. ANDERSEN. What are those criteria?

Mr. MCLAIN. I would rather that Mr. Hamilton answer that question because he is closer to it.

Mr. HAMILTON. We have the fixed rate in every State in the Nation and we have a fixed rate in every county. Now these are based on an average national rate of $10 per acre. The county or the State committees took the State rate and kept the rates in the counties based upon the relative productivity of one county to another. Our present regulations do not allow county committees to adjust upward from the fixed rates in those counties. They can adjust downward when the productivity of the land warrants.

Mr. ANDERSEN. With regard to these men that you send out, are they supposed by regulation to check carefully into any land that is offered for lease to the Government with regard to its productivity factor, its previous crop-raising history, and so forth?

Mr. HAMILTON. That is correct.

Mr. ANDERSEN. You do not, do you, rent land which has not a crop history back of it?

Mr. HAMILTON. That is correct, we do not.

Mr. ANDERSEN. If a man has a piece of wheatland that never produced anything, which was subject to overflow 4 out of 5 years, you do not pay him good rental for that land?

Mr. HAMILTON. The only land that can come into our program, as provided by the basic law, is land, as I stated before, in current crop production, or land having a crop history in the year immediately preceding the year in which it comes into the conservation reserve

program.

Mr. ANDERSEN. Now just how strict are the various county committees in checking into the validity of the various contracts or offers of contracts?

Mr. HAMILTON. Well, our instructions on that score are very specific, and in carrying out those instructions they are in violation of the instructions if they allow land to come in without a cropping history. Mr. ANDERSEN. If certain land is leased to the Government under false premises there is a way, is there not, for the Government to recover upon those particular contracts?

Mr. HAMILTON. We have terminated some contracts.

Mr. ANDERSEN. You have terminated some contracts?

Mr. HAMILTON. We have terminated contracts where ineligible land was brought under contract.

Mr. ANDERSEN. In other words, you have a continuing check nationwide, as far as you are able to do so, of any skulduggery, so to speak, in the original issuance of these contracts?

Mr. HAMILTON. We most certainly do.

Mr. ANDERSEN. And have you been advised officially by the chairman of this subcommittee as to the various points which have been discussed here today in connection with what appears to be contracts which should not have been entered into by the Government for various reasons? Have you looked into any of those particular cases? Mr. HAMILTON. We most certainly have.

Mr. ANDERSEN. May I ask you this: If you have done so, do you find the committee's investigative report justified in every instance? Mr. HAMILTON. Well

Mr. ANDERSEN. In most of the instances? Let us put it that way. Mr. HAMILTON. In most of the instances the committee brought to our attention we have had previous correspondence on. The matter of trusts, for instance, was brought out in the report. We realized that our regulations needed some tightening up in that respect, and prior to the committee bringing this to our attention we had taken steps to amend our regulations to close that loophole. We had some regulations pertaining to minor trusts effective with contracts entered into on or after November 15, 1957, and we now say a family shall include the grandchildren or the stepchildren of a child of the settler or any minor related to the settler by blood or marriage. Previously we had interpreted a family to mean the father or mother and their immediate children. We broadened it so I think we have a pretty airtight situation on the matter of so-called minor trusts.

Mr. ANDERSEN. So you feel that you have tightened up there?
Mr. HAMILTON. That is right.

Mr. ANDERSEN. Have you tightened up also relative to some of these other points also called to your attention by the committee?

Mr. HAMILTON. Yes, we have. We made a change in our regulations this past year relative to ownership of a farm prior to its coming under contract. We now require that a farm must have been operated for 1 year by the man bringing it under contract before it can be placed under a conservation reserve contract.

Mr. ANDERSEN. Then you do have under study, do you, the various things called to your attention by the investigators' report? Mr. HAMILTON. We certainly do.

Mr. ANDERSEN. What percentage nationwide-speaking of these 89,000 contracts-would you say were questionable?

Mr. HAMILTON. On the basis of visits that I have made to States, and my staff has made, I feel that our county committees have done an exceptionally fine job in administering the conservation reserve. They have tried to do a fair job, and I think by and large the job has been very adequate.

Mr. ANDERSEN. Would you say that one percent of those contracts should not have been entered into from the taxpayers' point of view on the grounds perhaps of misstatements in the contracts, or such?

Mr. HAMILTON. It would be very difficult to spell out a certain percentage.

Mr. ANDERSEN. Is it a small percentage?

Mr. HAMILTON. It would be a very small percentage.

Mr. ANDERSEN. A very small percentage? The point that I am bringing out here is this: even though we do have, as is natural with any new program, some problems which have arisen due to, as Mr. McLain has stated before, human nature, you would not say that those problems are serious enough to condemn the whole program, would you?

Mr. HAMILTON. I most certainly would not.

Mr. ANDERSEN. That is certainly my opinion.

Now, Mr. McLain, do you have some comments?

Mr. MCLAIN. I think the State committees and county committees and the county committees, as you well know, are elected by farmers

Mr. ANDERSEN. And I have great faith in my county committees. Mr. McLAIN. They would resent any insinuations that this were true.

Mr. ANDERSEN. I have great faith in my county committees, and I cannot conceive, gentlemen, that any county committee acting in good faith will permit contracts with any farmer if they thought there was anything shady about it. I am thinking of my own district and county. I do not think any of my county committees-and most of them are of the opposite political party-would intentionally give any farmer a contract if they thought there was anything shady about it. Mr. MCLAIN. I agree with that. We appreciate investigations. I do not want that misunderstood.

Mr. ANDERSEN. Certainly. I think that they are very necessary. Mr. MCLAIN. That helps us to keep on our toes, but I do not think judgment of the whole program should be based on a few instances we find.

Mr. ANDERSEN. That is the point that I am driving at. This program has been too dear to me, the conservation reserve, because, after all, I think I was the first Member of Congress to even propose it. I was joined in that by Mr. Marshall. We urged its adoption. I certainly do not want to see a good program of this nature, which has for its purpose taking land out of production and putting it into a soil bank and thus helping the entire price structure and helping future generations to come, have anything happen to it. Its basic purposes are fine.

I cannot see just because of certain malfeasances perhaps on the part of some of the farmers who enter into these contracts that we should condemn the whole program.

Mr. MCLAIN. I agree with that.

Mr. ANDERSEN. I am very serious about that.

Mr. Chairman, I would like to ask at this point if we may have put into the record any clarifications of these instances pointed out which you have referred to relative to these contracts which seemingly should not have been entered into by the Government, as specified by the investigatior's report. Could we have a detail of them?

Mr. WHITTEN. Earlier I asked Mr. Pope to put into the record those pertinent pages of our hearings.

Mr. ANDERSEN. I understand that. (Discussion off the record.)

REDUCTION IN ACP PAYMENTS

Mr. ANDERSEN. Now, Mr. Chairman, I would like to proceed a little more. I do not want to take too much time.

Mr. MCLAIN. As the chairman has stated, the administration has proposed a reduction of ACP payments to $125 million.

Mr. MCLAIN. That is right.

Mr. ANDERSEN. For the next crop year?

Mr. MCLAIN. Yes.

Mr. ANDERSEN. Do you not feel that that reduction is a little severe ? Mr. McLAIN. I would say this; I have been close to the ACP program from the very beginning because I have been associated with these programs from the very beginning, and I would say that there are vast areas of the country where it has been one of the most popular programs we have had. I can well realize that where that has been so there will be a desire to continue it on the same basis. That has been demonstrated every time a change has been asked. We have felt that as long as we had an overproductive plant-and I think you will agree this is so even though some others may not-this might be something we ought to look into to see whether it is wise to continue an expenditure of this amount of money annually which goes pretty much to continuing the productive plant that we have.

In other words, I have had a good many people ask me, newspaper people from the area of thec ountry that know the situation-how can you be consistent in asking for an expenditure of this much money for conservation, permanent conservation, and at the same time you are using money to try to cut back your acreage?

Well, I have a good answer to that, and I always give it to them, but I am saying to you there is a feeling in the country that the big end of ACP funds-and we recognize, as has been pointed out here, that farmers themselves put up a good part of it-go toward the ultimate desire of increasing production. Now, there are some areas where this is not true, because we have areas in the eastern part of the country where they used to do the very opposite of that, get land laid permanently aside, and they can prove it.

This is a debatable thing. It has been. The only point that I think we ought to keep clear here, Congressman Andersen, is I think this is not related to the decision concerning the acreage reserve and the conservation reserve.

Mr. ANDERSEN. I agree that the two programs, except for the good they do conservationwise, are not related at all.

Mr. WHITTEN. Will the gentleman yield?

Mr. ANDERSEN. Just a second. I would like to finish this point. Mr. Chairman, I cannot agree with you that we should shorten the ACP program whatsoever. I am just stating that as my personal opinion. You have stated yours. I believe that we should keep it up on the basis of $250 million each year from now on out for one specific reason. It is just like the point that Mr. Whitten has brought out as to the possibility of discontinuing the soil bank for 1 year. I am very fearful that that particular program will eventually end up in the ashcan if we permit it to go to $125 million and then maybe to $75 million and then on out. So, for that reason, I might say, I am taking the position, after careful study, we should continue it at the $250 million level because when we consider the soils in America it is

But

really not too big a program, even though as you say, and I agree with you, it is sometimes hard to determine the consistency of the two positions. You have expressed your opinion on that.

Mr. McLAIN. If I may say one other thing. Our desire in this thing was to eliminate as much as we could the primary recurring practices that did stimulate production.

Mr. ANDERSEN. I know. I agree with you on that. It should be permanent as far as possible, enduring conservation as far as possible. In my section of the country, and in yours in Iowa, the demand for this is not so great as it is down through the South and over in the New England area.

Mr. MCLAIN. And the conditions are different. We recognize that. Mr. ANDERSEN. The conditions are different. From that viewpoint I could very easily say in my section-Yes, we can go along with a reduction, but when I think of the South, which I know pretty well, and when I think of the New England States, which I know fairly well, I would say that I would think it poor policy, and I have expressed my opinion.

Mr. McLAIN. We have made our recommendations and we know the Congress is going to do in their wisdom what they think right.

Mr. ANDERSEN. I want to ask you this question before I yield to Mr. Whitten: I am very concerned, as are the rest of the committee, the subcommittee, with regard to the overall budget total. If people like myself and Mr. Whitten feel, and the rest of the subcommittee, we should have a $250 million ACP program, then, of course, we would begin to look into the budget to see what possibly we could do to find a little money to at least offset the $125 million added, even though in comparison with the last year we are showing a minus sign because of the fact that we are going to do away with acreage reserve. Mr. McLAIN. That was our feeling.

Mr. ANDERSEN. That is my feeling. As a friend of the soil bank, I call the conservation reserve the soil bank. The other was just tacked onto it. I think it would perhaps be well out of consideration for other sections of the country, not immediately my own, and also out of consideration for the fact that I do not like to see conservation reserve mushroom too rapidly and perhaps not have a firm foundation under it, I feel that perhaps it would be well if we would take some off of the proposed 1959 crop year conservation reserve level and transfer that, plus some other moneys, to the ACP so as to bring back that $250 million figure. I am simply expressing my opinion for the record. When I say that, I do not intend at all to agree to too much of a cut in the size of the conservation reserve. I want to see it gradually come on up. I know that you are a friend of the program. I know every member of the subcommittee is a friend of the program provided that we can make it work. As far as I am concerned, if we have to slow it up just a bit in view of the doubts expressed by some of the members of my subcommittee, I am perfectly willing to slow up a trifle and be sure that we are on the right pathway. But as far as ACP is concerned, I am satisfied that we are on the right pathway. I think this subcommittee is adamant in respect to wanting to put the $250 million figure into the bill. I am open to reason on the side of the conservation reserve. I yield now to my chairman.

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