74TH CONGRESS 1st Session } SENATE { REPORT No. 136 BRIDGE ACROSS THE WABASH RIVER AT LA FAYETTE, IND. FEBRUARY 15 (calendar day, FEBRUARY 21), 1935.-Ordered to be printed Mr. SHEPPARD, from the Committee on Commerce, submitted the following REPORT [To accompany H. R. 5701] The Committee on Commerce, to whom was referred the bill (H. R. 5701) granting the consent of Congress to the State of Indiana to construct, maintain, and operate a free highway bridge across the Wabash River at or near La Fayette, Ind., having considered the same, report thereon with a recommendation that it pass. The bill has the approval of the War and Agriculture Departments, as will appear by the letters attached on a similar bill. WAR DEPARTMENT, February 1, 1935. Respectfully returned to the Chairman Committee on Interstate and Foreign Commerce, House of Representatives. So far as the interests committed to this Department are concerned, I know of no objection to the favorable consideration of the accompanying bill H. R. 4877, Seventy-fourth Congress, first session, to authorize the State of Indiana to construct, maintain, and operate a free highway bridge across the Wabash River near La Fayette, Ind., if amended as indicated in red thereon. GEO. H. DERN, Secretary of War. Hon. SAM RAYBURN, DEPARTMENT OF AGRICULTURE, Committee on Interstate and Foreign Commerce, House of Representatives. DEAR MR. RAYBURN: Careful consideration has been given to the bill H. R. 4877, transmitted with your letter of January 29 with request for a report thereon and such views relative thereto as the Department might desire to communicate. This bill would authorize the State of Indiana to construct, maintain, and operate a free highway bridge, and approaches thereto, across the Wabash River at or near La Fayette, Ind. Favorable action on the bill is recommended. Sincerely, H. A. WALLACE, Secretary. 74TH CONGRESS 1st Session } SENATE { REPORT No. 143 AUTHORIZING FEDERAL TRADE COMMISSION TO MAKE AN IN VESTIGATION WITH RESPECT TO AGRICULTURAL INCOME AND THE FINANCIAL AND ECONOMIC CONDITION OF AGRICULTURAL PRODUCERS GENERALLY FEBRUARY 15 (calendar day. FEBRUARY 21), 1935.-Ordered to be printed Mr. WHEELER, from the Committee on Agriculture and Forestry, submitted the following REPORT [To accompany S. J. Res. 9] The Committee on Agriculture and Forestry, to whom was referred the joint resolution (S. J. Res. 9) authorizing the Federal Trade Commission to make an investigation with respect to agricultural income and the financial and economic condition of agricultural producers generally, having considered the same, recommend that the resolution do pass with the following amendments: On page 3, line 10, beginning at the word "and" strike out all of said sentence down to and including the word "products" in line 12, and insert in lieu thereof the following: "engaged in the sale, manufacturing, warehousing, and/or processing of the principal farm products, and of the other principal sellers, manufacturers, warehousemen, and/or processors of the principal farm products,". On page 6, line 20, strike out the figures "$50,000" and insert in lieu thereof "$150,000." It might be noted that the first amendment was made at the suggestion of the Federal Trade Commission for clarifying purposes. This resolution is identical with Senate Joint Resolution 124 (73d Cong., 2d sess.), which was passed by the Senate on June 19, 1934, but which did not pass the House of Representatives. One by one in the last 40 years the great industries of the United States have been seized and dominated by monopolized agencies and combines. Perhaps this change is an irresistible economic evolution. At any rate, this Nation has moved from a country of free, unbridled competition to a controlled and regulated set of industries under the domination of interlocked corporations and directorates astonishingly few in number. For 40 years there was an effort to control and to prevent developing monopoly. It failed, until today there is no longer a single line of worthwhile industry, with the possible exception of farming that is not largely shaped and controlled by a trust or trusts. Now, most reasonable people will admit mere size in itself is not an evidence of thievery. Such a condition does demand study and investigation so that we may know what has happened, why it happened, and determine if corrective measures are wise. To ferret out the true facts with relation to the farming industry is the real purpose of this resolution. To go into the question without preconceived opinions and be fair to all will be the duty of the Federal Trade Commission should the resolution become law. Dr. Frederick Howe of the Consumers' Council Division has estimated that of the total value of farm products, roughly $5,000,000,000, some 10 percent, or $500,000,000, is wastage due to improper grading so far as the farmers are concerned. Dr. Howe admits that his facts are incomplete but other statisticians bear out his preliminary estimates. Under this resolution, it will be the duty of the Federal Trade Commission to analyze and allocate the costs of producing and distributing foods to the American consumer. One statistician has estimated that it cost the final consumer of five major American farm products in 1932, $19,021,000,000. That is the sum the consumer paid to the retail merchant. Of this total sum it is estimated that the farmer received but $7,566,000,000 and that it cost somewhere in the neighborhood of $11,500,000,000 to get the farmer's products to the consumer. The distressing part of this situation is that apparently the farmer is getting a smaller and smaller share of the consumer's dollar. For example it is estimated that In 1928 the farmer got 47 cents of the consumer's dollar; the distributor and processor 53 cents. It has been stated from all authoritative sources that in 1931, before the depression had gotten under full way, only 2 years later, the farmer got 38 cents out of the consumer's dollar instead of 47 cents, while the processor and distributor got 62 cents. Stepping up again to 1932, just 12 months later, the farmer got only 33 cents while the distributor and processor got 67 cents. In other words, from 1929 to 1932, the share of the farmer fell from 47 cents out of the dollar to 33 cents. Now, if you multiply that by billions, you get an indication of the colossal slump in agricultural income and the colossal increase in the distributor's share. This downward drift has been reversed to some extent in 1933 and 1934. In November 1933 the farmer got 36 cents of the consumer's dollar, while the distributor and processor got 64 cents. In January of this year, 1934, the farmer's share is again 36 cents of the consumer's dollar. It is of interest to note that if the gross farm income is in the neighborhood of $5,000,000,000, each one of the citizens of the United States pays the farmer a little less than a dollar a week for his entire food supply. On the other hand, he pays to the distributors and processors of this food supply almost $2 a week. Charges have been made that the processors and distributors of food supplies now largely united in huge combines have attained their present greatness in part by consistently watering their capital structure. Statements have also been made that some of these concerns could not show an original cash investment reaching company coffers of more than 10 percent of their present capitalization and that this position applies with equal force to the oldest and newest of the food combines, while the demand is insistent that dividends be paid not only upon the cash actually invested in the company but upon all watered stock as well. While the farmer got less, many of the food concerns handling his output paid larger dividends and larger salaries and larger bonuses to their officials throughout the depression. It is the purpose of this resolution to study and ascertain the facts. The resolution calls for an explanation of the method and devices used by such corporations for obtaining and maintaining their alleged control of the farm commodities. It would expose the extent to which fraudulent and unfair methods are employed in the grading and warehousing of these products. It would study the question of whether there is price fixing and manipulation of prices as charged on the commodity exchanges. Finally, the resolution would call for a report upon remedies. It directs the Federal Trade Commission to report on the extent to which cooperative agencies have entered into the processing and marketing of farm products and to the extent which other countries have adopted or promoted marketing agencies of a public or cooperative sort for the simplification and cheapening of processing and distribution charges. Under the resolution the Department of Agriculture, the National Recovery Administration, the Department of Justice, and the other agencies of the Government are directed to cooperate with the Commission in the inquiry. Authority is given the Commission to inspect income-tax returns and to submit any useful information thus obtained to the Congress. For these purposes the resolution appropriates out of any money in the Treasury not otherwise appropriated, the sum of $150,000. The Commission is directed to present a preliminary report to the Congress on January 1, 1936, and a final report with recommendations for legislation not later than July 1, 1936. The resolution has the endorsement of the many farm organizations and cooperative associations in all parts of the country. It also has the endorsement of the National League of Commission Merchants. The commission merchants say: An investigation such as contemplated in the Wheeler resolution, had it been made 10 years ago, would have saved millions of dollars for agriculture and the Federal Government. We feel that even at this late date such an investigation is imperative if complete disaster in agriculture is to be avoided. The Department of Agriculture has not made its report on the resolution introduced this year, but in reporting on Senate Joint Resolution 124 of the last Congress which was identical with this resolution it had the following to say: Such an investigation would lay the basis for a better understanding of the problems of food distribution and should facilitate the elimination of such inefficiencies and abuses as might be discovered. Summary studies made in this Department indicate that during the last 30 years the farmer's share in the dollar spent by the consumer on food has steadily declined while the share going to processing and distribution has correspondingly increased. This fact coupled with the high concentration in several major lines has led to such repeated criticism of the high cost of distribution and allegations of monopoly that an investigation would be most desirable either to disprove the criticisms or to substantiate them. The processing and distribution of food so intimately affects both the farmer and the whole consuming population that any question of inefficiency or abuse warrants further extensive investigation. At the same time, those persons engaged in the processing and distribution of food should be protected from malicious criticism by an impartial analysis of facts. |