Mr. LOVRE. Right along that line, Mr. Secretary, have you as Secretary and your Department given any thought to the selffinancing, self-supporting, long-range farm program?

Secretary BRANNAN. We certainly have given consideration to every possible suggestion that has been called to our attention and some of them that we have just come across in the course of our discussions.

Mr. HARVEY. I would like to say, if I may, in conclusion in pursuance of the food-subsidy subject that one of the most unfortunate outcomes of that program as I view it was the fact that the average person came to believe that these subsidies were for the benefit of the farmer, whereas, as a matter of fact, they were actually consumer subsidies.

The CHAIRMAN. Mr. Secretary, we thank you very much for your appearance and for your very fine statement.

I will ask Mr. Poage to take the chair while the committee transacts some other business.

(Whereupon, at 11:40 a. m. a recess was taken; to reconvene at the call of the Chair.)

82877-51-ser. g-vol. 1- 3

COMMODITY CREDIT CORPORATION AND PRODUCTION

AND MARKETING ADMINISTRATION

THURSDAY, APRIL 26, 1951

HOUSE OF REPRESENTATIVES,
COMMITTEE ON AGRICULTURE,
Washington, D. C.

The committee met, pursuant to call, at 10 a. m., in room 1310, New House Office Building, Hon. Harold D. Cooley (chairman) presiding.

The CHAIRMAN. The committee will please be in order.

We have with us this morning Mr. G. F. Geissler, and the Chair would like first to congratulate Mr. Geissler, and also congratulate the Secretary of Agriculture upon having him in the new position of President of Commodity Credit Corporation and Administrator, Production and Marketing Administration.

We would like very much to hear from you now, Mr. Geissler.

I might say that this committee was prompted to start these hearings by reason of the fact that we believe that a lot of misinformation has been given to the public through the press and radio concerning the farm program, and particularly with reference to the effect of the farm program on the rising cost of living.

Some people seem to be under the impression that the support program, has caused an undue rise in the cost of living and I would like, if you would do so, Mr. Geissler, to have you give us the facts and figures pertaining to and related to that particular matter.

If the price-support program has in fact caused a substantial increase in the cost of living, we would like for you to say so, and if it has not so caused, we would like for you to say so, and tell us something about the PMA regulations as they relate to the price support program.

The purpose of having you here is not only for the benefit of the committee, particularly the new members, but for the public generally. We want a full statement of facts to come before the committee and be presented to the public with regard to this important matter.

81

STATEMENT OF G. F. GEISSLER, ADMINISTRATOR, PRODUCTION AND MARKETING ADMINISTRATION, AND PRESIDENT, COMMODITY CREDIT CORPORATION; ACCOMPANIED BY ROBERT BEACH, CHIEF, OFFICE OF BUDGET, PRODUCTION AND MARKETING ADMINISTRATION; ELMER KRUSE, VICE PRESIDENT, COMMODITY CREDIT CORPORATION; EDWARD SHULMAN, DEPUTY SOLICITOR, USDA; AND L. C. HOLM, EXECUTIVE ASSISTANT TO ADMINISTRATOR, PRODUCTION AND MARKETING ADMINISTRATION

Mr. GEISSLER. Thank you, Mr. Chairman.

I first of all want to express my appreciation for your kind remarks. I have with me some of our folks from the PMA and the Commodity Credit Corporation this morning, and I would like to introduce them, as they will have to assist me in answering some detail questions.

The CHAIRMAN. We will be glad to have them sit with you. Will you gentlemen step forward, please.

Mr. GEISSLER. Thank you. We have Mr. Shulman from the Solicitor's Office; Mr. Holm, Assistant to the Administrator in my office; Mr. Beach, Budget Officer, and Mr. Kruse is Vice President of the Commodity Credit Corporation.

The CHAIRMAN. All right. You gentlemen just move around to these other chairs.

Mr. GEISSLER. Mr. Chairman, I do not have a prepared statement with me, but with your permission I would like to make a brief statement which I think will touch on some of the questions that you raised. The CHAIRMAN. Very well.

Mr. GEISSLER. First of all, let me say that I appreciate this opportunity so soon after stepping into this new position to appear before you.

The CHAIRMAN. May I interrupt you right there to ask a question? Mr. GEISSLER. Certainly.

The CHAIRMAN. You are President of the Commodity Credit Corporation at the present time?

Mr. GEISSLER. That is right.

The CHAIRMAN. And you are also the Administrator of PMA?
Mr. GEISSLER. I am Administrator of the PMA, yes, sir.

The CHAIRMAN. All right.

Mr. GEISSLER. I want to say that I appreciate this opportunity of getting together with this committee so soon after I have stepped into these responsibilities, because I hope for close working relationships between our office, the Department, and this committee. I hope from time to time to have the opportunity of coming before this committee and discussing our problems with you, and getting your suggestions and your guidance in the tremendous job we have got in connection with the various farm programs.

I feel that our interests are identical, and the purpose for which we are working is to serve agriculture as best we can, and thereby serve the Nation.

Under the heading of current responsibilities we, of course, are engaged in an all-out production effort with respect to commodities which are most greatly needed, and which we expect are going to be

most needed in the immediate future. That is important, of course, I am sure you understand, in connection with the defense effort. So far as I am concerned, I think that food is just as important in a mobilization effort or defense effort as the weapons of war, or anything else we might be producing.

I also feel that adequate supplies of foods would give us the best protection against inflation that we could possibly have. It is, in my opinion, the best permanent solution to inflationary difficulties.

In this all-out effort of production, and being within a mobilization period when all-out effort of production is going in other directions also, we, of course, are beset by the usual problems that you will encounter under such circumstances. They are very similar to the ones we encountered during the last war.

We have the problem of getting adequate steel supplies for farm machinery, for processing machinery, and handling the products of the farm. We are going to have to work hard to get enough fertilizer in order to get the maximum production. Labor is going to be a serious problem, as is transportation and storage. All of these are things that we have to work on in order to get adequate production and then care for that production after it is produced.

I think, in that connection, that I would like to raise another matter which is going to become increasingly more important, and that is agricultural credit, particularly of the type that is going to be needed and not available from present sources of credit.

I feel that as we go into this production effort we are going to find many circumstances where expansion is asked for, which is going to call for increased investments and increased operational costs. This will particularly be true of part of the small farms and groups that are not backed with a great deal of capital, where we can get tremendous increases of production if we can get some credit facilities or money to furnish those folks in order to make that kind of an expansion.

I think it will be applicable in cases like the situation probably in cotton this year. They are going to plant quite an acreage, I am sure. The infestation of the boll weevil is great down there, and it is entirely conceivable that many people who lost their crops last year may get financing to get their crops planted, but when the threat of insect damage occurs they might have to have some kind of special financing in order to be able to buy the insecticides in order to protect their crops, and bring it through.

Mr. GATHINGS. The Farmers Home Administration is authorized to make loans up to $2,500 under its original authority. It is essential, in those particular areas where we have boll weevil infestation and flooded conditions, that we go up over that figure in order to make loans available to farmers who are engaged in the production of cotton and other commodities. A $5,000 loan, or $10,000, or $20,000 may be needed. It is essential to have adequate agricultural credit available to them.

Mr. GEISSLER. I just merely wanted to raise the problem. I am not prepared to say how we should approach it, but I think that we need to give consideration to it.

The CHAIRMAN. In connection with your discussion of the importance of insecticides, many people have suggested to me that it might be advisable for the PMA to provide some program putting insecticides in an approved farm practice, so that the PMA might