time when everything was darkest, the Federal land bank just went in there and foreclosed. The joint-stock bank, on the other hand, worried along with him through receivership, permitting him to be the receiver and working with him, of course.

They took a deficiency judgment against that man. You can see where the joint stock was sitting over there, trying to bail a man out, working along with him, with the Federal land bank holding the big deficiency judgment over him.

It took me and by the way, as a director of the Land Bank too— a year to get that deficiency judgment lifted.

Senator BANKHEAD. The deficiency judgment destroyed all credit for him.

Mr. DICKINSON. Certainly; and besides that, it left us in the JointStock Bank in a bad way over there, too, sitting there with that additional debt.

Senator MILLER. I think that the worst thing about a deficiency judgment is the fact that it destroys the chances of a man to rehabilitate himself through other lines of credit.

Mr. DICKINSON. That is right. On the other hand, there are cases, Senator, where deficiency judgments are thoroughly justified. But the point is that I want to see it out of the law, because it is in the way of this great majority. Trying to catch two or three fellows. here and hurting two or three hundred thousand other fellows is hardly justified.

I know one fellow who is speculating in land. He got hold of a piece of property Federal land-bank stuff, too—and went along until the depression hit him, and he decided he had a bad investment.

He said, "I want to deed it back. I want to get out from under." But they wouldn't let him, and I think they were justified in holding that man's feet to the fire.

But I do not want to see hundreds of thousands of others handicapped with deficiency judgments for the sake of catching two or three crooks.

If a man on a farm just keeps dragging along, telling the bank, "I am going to take care of this," when he does not have any idea of doing so, and the bank through its magnanimity carries him on for 2 or 3 years and then turns him loose, when he never did expect to do anything, why, then, I think a deficiency judgment for the amount of the normal rental during the years they were carrying him along with, probably advances for taxes, should be imposed. In that case, probably, the bank should have some way of getting that. Otherwise I am opposed to deficiency judgments.

DECENTRALIZATION AND "INDEPENDENCE" FOR F. C. A.

Let us not be fooled by the cry for decentralization, especially when that cry is unaccompanied by any proposals for fundamental changes in the system. Farmer participation in the past has certainly been so unsatisfactory as to convince all of us that something fundamental needs to be done. We believe that this bill by making fundamental changes, including the placing of more responsibilities upon the members of the associations will encourage much more genuine interest by members in their lending institution, and especially since they would not be exploited by the 5-percent stock shake-down. Some of the opponents of this bill, who are now so much for decentralization,

only a few years ago were loudest in their objections to placing any appreciable amount of responsibility for the system upon the borrower members. In 1936 the Association of N. F. L. A's, led by Merton L. Corey, had a bill introduced into Congress designed to take the system away from the Governor and place it back under a bipartisan board of five members, at $10,000 a year salary apiece, as per the Gillette bill, as has been advocated by some of the opponents of this bill in their testimony before your committee. You will remember that some of the present champions of decentralization opposed that bill, and that the then Governor Myers also appeared before this committee and opposed that bill. We wonder why they have changed their position.

Senator HUGHES. Governor Myers has now changed his position. Mr. DICKINSON. He wants it taken out of the Department of Agriculture and is for the Gillette bill, so I am told.

We can see nothing to be gained by going back to the same old system which was in operation when this great lending agency collapsed. If it would not work in those days, what assurances can your committee have that it will work today. Surely each member of this committee has not forgotten the thousands of foreclosures of those days. We might as well be practical and face the facts. I am not so sure that it would be healthy for the institution to be turned over to the farmers by giving them two-thirds of the directors of the land banks and thereby placing control of this institution directly in the hands of the farmer-borrowers. They are scattered from coast to coast, from Canada to Mexico. They are not closely in touch with each other. They know but little of sectional difficulties far removed from them. There is a question whether they would have a deep enough interest in the system to maintain it as a sound cooperative lending agency. Of course, if the Government is willing to continue subsidics regardless of whatever the experience of the banks might be, then it makes but little difference; but it is quite doubtful in my mind that Congress would continue to be enthusiastic about subsidizing the system, when it realized that we would be putting money into a system over which the Government had no control. Again I repeat, we would like to see a strong, truly cooperative system, and if the opponents of this bill can offer something practical that will make it more cooperative, we shall be the first to join them in demanding such legislation.

Senator MILLER. Let me ask you a question about the Gillette bill. You probably covered it in your testimony before the House committee.

Mr. DICKINSON. No, sir; I did not testify on the Gillette bill. Senator MILLER. I mean you probably covered it in your testimony on the Jones bill before the House committee.

What do you think of the trend toward civil service in Government agencies and the trend toward removing from Government employees some responsibility as to their own appraisal of their own responsibility and their positions, of course, bearing in mind that that does not apply to policy-making officers, such as the Governor of the Farm Credit Administration?

Might it not be wise, if this bill is enacted here, or substantially as introduced, to provide, instead of centralizing the authority or the discretion in the one man coming from one distinct part of the United

States, a farm board the members of which shall be required to be appointed from the various sections of this Nation in order that that discretion-the exercise of that discretion-may be influenced by the combined judgment of a perpetuating board representing the various sections of the Nation? That is the only thought I had in mind.

Mr. DICKINSON. Senator, my great interest-and remember, it was our organization that started the fight to have the system transferred to the Department of Agriculture, after Congress had passed that law for consolidation of departments

Senator MILLER. Yes, the reorganization.

Mr. DICKINSON. Yes. My main thought on that, as I have stated on the committees of the National Farmers Union back when we were working up the resolutions advocating it, was that probably the Secretary of Agriculture is closer to agriculture in all parts of the Nation than is any other agency.

Senator MILLER. He ought to be.

Mr. DICKINSON. Inasmuch as he was handling other lending agencies, such as Farm Security, and so on, we thought that probably those agencies could be correlated a little better if they were under the one agency, and special policies were correlated a little better, and the interest rates adjusted.

Here we have Farm Security with certain regulations for making loans, and we all admit that Farm Security has done a wonderful job in saving the low-income farmers.

Senator BANKHEAD. One of the best jobs, I think, that has been done.

Mr. DICKINSON. Oh, wonderful. We are permitting them to make 3 percent loans. We are permitting them, when they set up a tenant, and the tenant purchases, to enable the tenant to borrow money up to probably 90 percent at 3 percent interest.

Senator BANKHEAD. A hundred percent.

Mr. DICKINSON. Yes, even probably up to a hundred percent, and then permitting him to make variable payments. In good years he pays more, and in bad years he may pay less. We have not had that

under Farm Credit.

If we could have all these provisions that are worked out in the Department of Agriculture and they have their minds constantly centered on the farm problems of the Nation-probably they would always, regardless of administration, regardless of the President, regardless of the party in power, be a little more responsive and a little more sympathetic to the farmers.

I can see your argument there.

men.

Senator MILLER. I am not worried about the political faith of those I do not think politics decide the policies of our country; I think economic conditions decide the policies of the country, and the economic policies may be Democratic, Republican, or Independent, or whatever it is.

I just wanted your comment on that, because I think that that one feature is entitled to serious consideration by this committee or by any other committee if we make these changes.

Mr. DICKINSON. Senator, here was the trouble with having an "independent" agency. We had Farm Security over here trying to adjust this case, and Farm Security trying to bail these folks out. The Federal land bank, on the other hand, refused absolutely to cooperate. Of

course, they will deny that, but I have sat on those committees, and I know. I do not offer that as any criticism, because they had a job of their own to do and a reputation to make in the bank, and naturally they were trying to do the job with credit to themselves and to the Governor, the Commissioner, and the Government itself.

However, I remember that 3 or 4 years ago a regional director for Farm Security wrote a letter to the bank, and the bank did not answer the letter. I mention this to show you the lack of cooperation when operations are under different agencies. I happened to be a director at the time, so I say down and wrote to the president of the bank and said, "This man is regional director for Farm Security. is with the Government and is trying to do a job the same as you are. I know you are busy, but I think that as a matter of courtesy you should at least answer his letter if you can't meet him.”

He

He immediately wrote that regional director a letter and told him he would be glad to see him at the bank.

Just to show you the difference, when the transfer was made, they then wrote to Farm Security and asked for a conference, so that they might correlate and coordinate their work better.

I am giving this to you practically, without any criticism of anybody, because I would not say anything to reflect upon someone else, for I think they are doing a wonderful job.

If you look at the delinquencies, you will see that our bank has the fewest delinquencies in the United States, and our little State of Arkansas-the people they want to make fun of has the lowest delinquency rate in the Union.

The testimony offered to this committee, opposing sections 8 and 9 of S. 3509, for the establishment of county committees in lieu of the National Farm Loan Association where no association exists, is hard to harmonize with the facts submitted in the same testimony showing that consolidation of associations has brought several county associations into one association. It would seem that if farm-debt adjustment committees were not provided for each county, which committees would know the conditions in the county, know the man involved, then the present law should certainly be amended to permit the election of a board of directors for these large N. F. L. A.'s of at least three members from each county. This would seem necessary not only in arriving at an adjustment of the man's debts, but in recommending new loans for the association. We can see no objection whatsoever to these committees as provided in sections 8 and 9, and certainly cannot see how they would lessen the autonomy of the farm-loan associations.

We have no sympathy in the contention made that the autonomy of the associations is being increased through the present subsidizing by the banks, and in placing the responsibility for collections upon them.

Great stress has been placed upon the fact that we are decentralizing; that we now have placed the responsibility for collections, and so on, on these associations. My contention is that that has not increased the autonomy of the association one iota.

Senator MILLER. The only thing in the world it has done has been to add a little more bookkeeping.

Mr. DICKINSON. They are still under the complete domination of the banks. They do not have any responsibility in making new loans,

nor do they have any more voice in shaping the policies of the institution than before.

Senator MILLER. Would you mind answering this question from a practical standpoint. Of course, we all know how the secretarytreasurers are elected. As you say, you have no criticism of that, and neither do I, especially; but actually-in actual practice the election of the directors of the National Farm Loan Association is dictated by the Federal land bank, isn't it?

Mr. DICKINSON. To an extent; yes, sir. I have known them to ask for certain directors. If a director becomes delinquent, they will not accept him, or they suggest that somebody else be elected. In the Production Credit Associations they are very, very positive about that. They go much further in the selection of directors in the Production Credit than they do in the Natlonal Farm Loan Association. But even in the National Farm Loan Association they take quite a good deal of responsibility.

They try to have one of their representatives at the stockholders' meetings of the National Farm Loan Association.

Of course, he works with them and tells them whether this man is satisfactory or not; and if he is not, they try to keep him from being elected.

Under this bill additional responsibilities could be placed upon the association, as we find in section 8 (a) this language:

The Governor is also authorized to delegate to any such association or committee any of the functions vested in him under the provisions of section 12b, 14a, 15, and 16 of this act.

What I am trying to get over to you is that this bill does not limit the responsibilities of the association but rather increases them. That is the point I am trying to get over to you. I have just quoted from the act.

Section 12 (b) provides that the Governor may—

convey the property to the tenant at a price to be determined by the Governor on the basis of its producing value, or for the amount of the mortgage indebtedness on such property at the time it was conveyed to the corporation, whichever shall be less.

Certainly they do not have any such powers today; if they did, these would be delegated powers.

Section 14 (a) provides that the Governor may

provide for payment of obligations or indebtedness under sections 10 to 13, inclusive, of this act, on a variable payment plan.

Section 15 provides for reamortization of Commissioner loans.

Section 16 provides for foreclosure and deficiency judgments. Certainly if the Governor delegated these powers to the association its responsibilities would be enhanced far greater than they could be under the present law, or could be under the Gillette bill advocated by a witness for the opposition.

We do not believe, basing our judgment on experiences of the past, that even though dividends are paid to the association, that a sufficient reserve could be built up in many associations to take care of losses. If the slate could be wiped clean, it might be that with proper supervision, based upon the 23 years of experience of the system, reserves could be maintained in the future where the association has a large volume of loans; but even then if an association had a heavy