has to say, "I do not know. I will have to take it up with the Secretary and see what rate of interest he is going to give me on the debentures which I will receive if you fail to pay me."

It seems to me that it would be better to have that fixed and determined.

Mr. OPPENHEIMER. Exactly that same situation has been operating without any difficulty under the Federal Housing Act. Regulations are issued periodically fixing the maximum interest rates and they have been fluctuated on the basis of the credit market available at the time.

Mr. FULMER. Mr. Chairman, may I state right at that point, because of that policy, it is operating very badly against the best interests of the party that is borrowing this money. I had an occasion some few days ago brought to my attention where a notice had been issued or a statement that the monthly payments, or quarterly payments, or whatever they are, will be so much beginning at a certain period, and this man has been paying a certain amount. He cannot understand why they go up or go down. If that thing could be settled, where it would be definite, the borrower would know just what he had to pay, and in the case of the party that accepts the mortgage guaranteed by the Federal Government he would understand over a period of years just what he would get.

I agree with the gentleman from Georgia, Mr. Pace, that there ought to be something done in connection with that.

Mr. Chairman, I want to ask one or two other questions. Perhaps Mr. Baldwin would be able to give me this information.

Mr. BALDWIN. Yes, Mr. Fulmer.

STATEMENT OF C. B. BALDWIN, ASSISTANT ADMINISTRATOR, FARM SECURITY ADMINISTRATION

Mr. FULMER. I want to ask just what is being done by the Farm Security Administration in administering the act in connection with the operation of the tenant farmer in comparison with landowners operating their own farms? That is, as to being helpful to the tenant landowner that is not now being done by the landowner or adjoining tenants, in operating their farms. Just what are you doing to make him more successful in carrying on his operation than the farmer who owns his own land and who is operating it, land adjoining the tenant farmer?

Mr. BALDWIN. A tenant who is a rehabilitation client?

Mr. FULMER. How is that?

Mr. BALDWIN. Who is a rehabilitation client?

Mr. FULMER. I am talking about where you have bought the land and sold that to a tenant.

Mr. BALDWIN. We do give him certain technical information or help him with advice on his farming operations, Mr. Fulmer. Mr. FULMER. Could you mention them?

Mr. BALDWIN. We assist in drawing a farm plan for him and give him some supervision which I think is helpful to him.

Mr. FULMER. Well, now, you have to operate under the program of the Agricultural Adjustment Act as to allotments of acreage for cotton and wheat and then the soil-conservation program as to rotation and building up of land?

Mr. BALDWIN. Yes.

Mr. FULMER. Is there anything that you can add to that?

Mr. BALDWIN. Well, I think the technical advice given by super

visors.

Mr. FULMER. What type of technical advice?

Mr. BALDWIN. Sir?

Mr. FULMER. What type of technical advice?

Mr. BALDWIN. Well, the supervisor advises with the farmer and helps him work out a farm plan.

Mr. FULMER. You act as supervisor of that farm, have men go around supervising those farms?

Mr. BALDWIN. We give him supervision; yes.

Mr. FULMER. What about the county agent doing the same line of work for all farmers in that community, and also the employees in connection with the soil conservation and then under the Agritural Adjustment Act and various and sundry employees who are doing the same thing?

Mr. BALDWIN. I do not think any other organization is doing this same thing, Mr. Fulmer. I think the distinction between the work that the extension service is doing and we are doing under our rehabilitation purchase program is that the extension service generally works with groups of farmers, and the county agent has many duties to perform, as you know. He is a key person in the county in the administration of the Agricultural Adjustment Act. He does not help these farmers work out individual farm plans. Our people, our supervisors work with the individual families on their farms.

Mr. FULMER. Under the act and under the soil-conservation program you cannot work that any differently from the other farms? Mr. BALDWIN. As long as we fellow the provisions of the Soil Conservation Act

Mr. FULMER. You have to follow those.

Mr. BALDWIN. We have to follow those; yes, sir. Of course, it is not mandatory that they comply with A. A. A., but they do cooperate in practically all instances. I think that you will find that the people who borrow from us do cooperate with the Agricultural Adjustment Administration in order to receive its benefits.

Mr. FULMER. Then that type of service is free to these few tenants that you have in any county and the other farmers do not get that type of service free.

Mr. BALDWIN. I think that is true; yes, sir.

All of the rehabilitation clients get that service.

Mr. FULMER. Yes. What do you do in the way of assisting your farmers along the marketing of their product through any other channel or any other method other than the other farmers are marketing their product, that would mean to the tenant farmer that he is getting something that the other farmers are not getting.

Mr. BALDWIN. Just the difference in individual attention these people get, Mr. Fulmer. They get more individual attention than the other farmers.

Mr. FULMER. I am asking definitely how they market their products. Do they market their products other than other farmers market theirs right on the same market? Is it done in the same manner as other farmers market their products?

212350-40-ser. h-7

Mr. BALDWIN. Of course, we are not attempting to set up any different marketing system for these people. They handle their marketing generally through the same channels. We do assist them in bringing all of the technical knowledge that might possibly be available to them for their benefit. And the practice of the Rehabilitation Division has been to bring many of them information which they have not had, Mr. Fulmer.

Mr. FULMER. Now, take this technical advice you bring to him about marketing, for instance. Is that different from what is going to others?

Mr. BALDWIN. I do not think that I could specify; but I do think that many of them have not known about these services. They may not know about the cooperative marketing services within that county. We encourage cooperation with other farmers and explain it to them and give them any service that is available within the county.

Mr. FULMER. And we have for the last 50 years been explaining to the farmers giving educational work and advice by county agents, bulletins and so forth, and up to the time that these programs were put into operation under these acts passed by the Congress, we never did get any results during Roosevelt's administration. We are now getting some results because of the benefits we are giving to the farmers. Is it not true that until such arrangements are made whereby your tenant farmers, along with every other farmer in that section, will have a real marketing and distribution of his product whereby he will be able to get a fair price, a parity price, that it is impossible to make your program, or any other farm program successful?

Mr. BALDWIN. I think that is the key to it, Mr. Fulmer. I think that there are certain things we can do to help them, but I think this, that the prices that they receive and the improvement in distribution of farm products is certainly going to be the thing that will help them succeed in the long run and it is going to large extent to depend upon that.

Mr. FULMER. I agree with you. It is helpful now to appropriate many for subsidies for the farmers, but we are not getting anywhere or doing anything for the 40,000 farmers who are becoming tenants annually. You are picking up about 1 percent of that number and trying to make landowners out of them, and it can't be done until we correct the thing that is making tenants out of landowners. Mr. BALDWIN. Certainly I would not take issue with that, Mr. Fulmer. I do know that many of these tenant families and other families that we are helping through the rehabilitation program can be encouraged to raise more of their subsistence goods a live-at-home program as it has been called-and that will eliminate the necessity for them making so many outside purchases. I think you can help them greatly with that type of program, with them raising more of their subsistence, and thereby raising their standard of living; but certainly I think that anything that can be done to improve the marketing, the distribution, and the general farm price levels should be done. They are certainly important elements that enter into this thing.

Mr. FULMER. Do you not believe that what I am talking about will have to be done before we can really succeed in keeping landowners on the farm and in making landowners out of tenant farmers?

Mr. BALDWIN. I do.

Mr. FULMER. Those things have got to be done.

Mr. BALDWIN. I think that those things have got to be carried along with such programs as this one under consideration by this committee; yes, sir.

Mr. LEMKE. Mr. Chairman.

The CHAIRMAN. Mr. Murray asked for recognition.

Mr. MURRAY. I just want to clear up one point there. I think that he does not get it as I understand from his observation, or the observations that you make there.

Under the present system you make grants to a man.

You make grants of so many dollars a month to take care of him in case going gets hard; is that right?

Mr. BALDWIN. Of course, we have had very little money available for grants. We make grants chiefly in these stricken agricultural areas where we have had recurring droughts for 7 or 8 years.

Mr. MURRAY. That is one reason why they are getting along better than they would if they did not have those.

Mr. BALDWIN. No; I do not think so, Mr. Murray, because I think that grant proposition has been largely restricted. As a matter of fact, during the last few years, about 80 percent of our grant money has gone to families who are utterly destitute. Most of these farmers are not even borrowers from us.

Mr. FULMER. Are you actually making grants to these people to whom you have made loans to buy lands?

Mr. BALDWIN. No, sir; we do not.

Mr. MURRAY. Right along that line, the information that you send out would certainly lead one to believe that all these people who come under your-I do not know the exact word to use-your influence

Mr. BALDWIN. Rehabilitation program.

Mr. MURRAY. Have made a profit upon the farms which they are operating. That is the way they sound as I read them over and I have been wondering why we do not turn all of the farms in the United States over to you. For example, I remember seeing some reports on some in my district. It picked out an average bunch of them and they made $279.06 profit.

Mr. BALDWIN. I think what was meant there, Mr. Murray, was that their net worth had increased over a year's period by $279.

Mr. MURRAY. Also said that they had not produced crops in competition with the regular farmers, because they had eaten what they had raised.

Mr. BALDWIN. No, sir.

Mr. MURRAY. President Roosevelt has said that you could not eat your cake and have it too.

Mr. BALDWIN. We certainly could not differentiate between the tenant-farm people and other farmers. They are regular farmers. The only thing that we have done is to try to help them by making small loans and by the supervision we have given them to increase their net worth, to get them further away from the relief level. We have done that, of course, generally all over the country. We have made loans of that type to over 500,000 families and they have responded and their net worth has increased, but they are not out of the woods, by any means.

Mr. MURRAY. You do not realy think that they have made a profit?

Mr. BALDWIN. Do not think what?

Mr. MURRAY. That they have made a profit, taken altogether?

Mr. BALDWIN. I do not think that they have gotten a fair return on their investment for their labor, and so on; but I do think by better handling their resources, their position is better than it was a year ago. I am perfectly positive of that, Mr. Murray.

Mr. MURRAY. Also I notice from the many reports that you never pick out the other side of the picture, which is always a part of the picture; where one has borrowed $1.700 and paid back $500, and

so on.

Mr. BALDWIN. Yes.

Mr. MURRAY. That naturally has gone on in a business like that. Mr. BALDWIN. We have not put this on that basis. These people have been farmers all of their lives. We are not taking people who are not farmers and setting them up.

Mr. MURRAY. I understood that you said they were taken from relief.

Mr. BALDWIN. Yes; they are farmers who have been on relief. We had over a million farmers on relief in 1933. We are trying to get those farmers off of relief and we have gotten many of them off of relief. Of course, there are other things which we do which certainly is of major importance and has helped to increase the net worth of these people. What is it that they say-four moves is— Mr. MURRAY. As good as a fire.

Mr. BALDWIN. Four moves equal a fire. And, we have been successful in getting 3- and even 5-year leases for lots of farmers who had no lease arrangement at all.

Mr. LEMKE. Mr. Chairman.

The CHAIRMAN. Mr. Lemke.

Mr. LEMKE. I am in sympathy with this kind of legislation, but is it not a fact that you are doomed to failure before you start unless the farmer can get cost of production for what he produces? How is he going to continue?

Mr. BALDWIN. Well, the farmers have to get enough income to be able to meet their payments and live decently.

Mr. LEMKE (interposing). Unless he gets cost of production he is not getting it.

Mr. BALDWIN. That term is used for so many things, Mr. Lemke. Mr. LEMKE. Well, then, we will say 75 percent of parity. That would not help him out. He has got to get 100 percent of parity, and we have never been able to give him that. We have had two or three such programs but Congress would not give the money, appropriate the money for it. Is that correct? I am not blaming your Department. I am trying to see if we can make this program work. Mr. BALDWIN. Well, these families that have had tenant purchase loans have gotten along fairly satisfactorily.

Mr. LEMKE. You have 27 in Cass County. I know something about them.

Mr. BAILDWIN. They are probably rehabilitation clients. We do not have that many who have borrowed money to buy farms.

Mr. LEMKE. But they are not so happy. They are going in the hole now out there, and I am not discouraging this program.

For my friends on the committee who say that they do not know what to do, I will say that there is legislation before this com