larger appropriations by Congress to be distributed to the farmers in the matter of parity payments, without regard to how the Treasury gets the money, whether by processing taxes, stamp taxes, or anything else. Your objective is to appropriate the money.

Mr. SHORT. That is right.

Senator BANKHEAD. That is all.

Senator LA FOLLETTE. In other words, you do not hesitate to lean on the Federal Government to get parity for the farmer, but you do not want to lean on the Government except as you are now leaning on it, to provide the farmer with a credit system that will give him his money at low rates of interest and permit him to refinance his obligations?

Mr. SHORT. I feel this way, Senator La Follette, that the disparity position that agriculture finds itself in today is due largely to policies of government and that so long as those policies are in effect in this country, and so long as the consuming public demands of the farmers that they produce food, fiber, and feed necessary to keep this country amply supplied, in order to meet seasons of drought, and other things, the Federal Government and the tax-paying public owe something in the way of governmental policy that will offset the disadvantages that agriculture has suffered over the years through other policies of government which are largely responsible for placing us in the position which we are today. It is certainly unenviable from the standpoint of purchasing power.

Senator LA FOLLETTE. But you do not hesitate to rely on the Government for help in getting parity income for the farmer?

Mr. SHORT. I think we have got to rely on the Government for it. Senator LA FOLLETTE. But you do not want to rely on Government excepting as you are doing it now, by indirect guaranty of these bonds or obligations of the system and by subsidies from the Treasury for the purpose of providing low interest rates?

Mr. SHORT. I do not think we are in any different position there, Senator, because under this proposed bill you propose to pay back all stock and relieve all borrowers and all associations and banks from any losses. That will all be borne by the Government. I do not see that there is any difference in position between you and me on that, Senator.

Senator LA FOLLETTE. I thought there was. I thought you said, in answer to Senator Bankhead's question, that your only answer to this problem of getting parity income was more appropriations from the Treasury. But your whole appearance here has been a warning against this system leaning on the Government so far as credit is concerned.

Mr. SHORT. If you had been here this morning you would have seen that our big objection is that by this bill you bring about a centralization of this whole system; and I am just wondering if the Senator is in favor of the centralization that is possible under the bill as now written and which is before this committee for discussion.

Senator LA FOLLETTE. You talk about centralization and you claim that this other system is decentralized. We just do not agree about the net effect and how it works. We could debate here for a week and we would not be together.

Mr. SHORT. Well, you know, Senator, that it is possible to bring about a greater decentralization of the present system.

Beaton La Pocera. There has been a long time in wach to do

Penator Le Potter. You have had to admit here, as I have heard your testiumy, wai pracay all of ice ameorang effects which have been producen have been produced as the result of govvernmental policy,

Mr. Hort. I don't understand your question.

Senator BASKHEAD. It was not a question; it was a statement.
Are there any questions by any of the other Senators?

Senator FRAZIER. I am interested in what Mr. Stort said about the farmers having their purchasing power restored and getting better prices. There has been pending in both branches of Congress for two or three sessions a cost-of-production bill which would fix prices and which we believe would restore purchasing power; but your organization has fought against that measure, too.

There is an amendment providing for a parity price instead of costof production price. There is another bill pending providing for cost of production or parity by a sort of processing tax or certificate plan; and your organization is opposed to that. I cannot quite understand your argument. What do you want to do to raise the price of farm products?

Mr. Showr. I feel that our organization has put forth a great deal of effort and has taken the lead in many proposals in an effort to bring agriculture to parity position. I am sure that you will find us extending ourselves even to a greater extent in the future, and we hope that we will be able to get the Congress to respond and to bring about the desired condition just as soon as it is possible, because we not only feel that it is essential to agriculture, but we feel that it is essential to every other consuming and economic group in this country. Senator FRAZIER. It should have been possible years ago, because the farmers have been in this bad condition not only for a few years but for a long time. If you are afraid of some of the situations to which you have called attention, why not make these land banks regular farmers' banks; let them issue money just the same as the Federal Reserve System does; let them put up their land-bank bonds for security to the Government for the land-bank notes and pay at a lower rate of interest than they are doing now; Why not?

Mr. Showr. I am told that we are now borrowing money on a short time basis cheaper than you can actually print it.

Senator FRAZIER. It does not cost much to print it. It is 0.07 of a cent per bill, whether it is a $10 bill or a $1,000 bill. So it does not cost much to print the money. The Federal Reserve System prints its money that way, putting up Government bonds or any other security, and all they pay the Government is just the cost of printing, and the cost of the paper.

Mr. Snowr. I am not a student of the subject. We might explore the posability of giving, in times of stress or when money may not be available at reasonable rates, the discount privilege to the Federal Reserve. I would like this committee to explore that feature, because that would be strengthening the indirect guaranty of these bonds.

We are willing to do any thing in our power to strengthen that fosture of the program in order that farmers will be able to enjoy the chospast interest rates possible.

Senator FRAZIER. That would help to bring up prices, too. The Federal Reserve Bank is not a farmers' bank by any means, and the farmers are entitled to a bank the same as other people are, in my opinion.

You are in favor of interest rates being fixed by law, as in this bill; are you not?

Mr. SHORT. I think we have demonstrated our position on that. We favor the subsidy of interest rates; we have always favored the lowest interest rates possible under a sound operating system.

Senator FRAZIER. You have no objection to their being fixed in the bill, have you?

Mr. SHORT. No.

Senator MILLER. Gentlemen, I want to ask the committee to request the Farm Credit Administration to file with the committee the following information, if the committee wants it:

Ownership of capital stock of Federal land banks, including the amount owned by present borrowers, and the borrowers who have paid their loans.

The amount of bonds issued by Federal land banks and now outstanding.

Divide this into districts.

The amount of bonds issued or assumed by Federal Land Bank mortgage companies and now outstanding.

The amount of delinquencies by districts and the average amount of loss.

The number of foreclosures and amount of same during the last 7 years.

A copy of regulations relating to the fiscal management of land. banks.

That refers to the regulations issued by the Farm Credit Administration.

Senator BANKHEAD. I think that would be helpful information. Senator MILLER. That information is available, practically, all of it, in the reports of the Farm Credit Administration; but we do not want to have to go through them and dig it out; at least, I do not. Senator BANKHEAD (presiding). Unless there is objection on the part of some member of the committee, it will be agreed that that request will be made.

(The matter referred to follows:)

Capital stock ownership of the Federal land banks at Dec. 31, 1939

1 Stock owned by borrowers in national farm-loan associations is outstanding in an equivalent par amount. In addition, association stock owned by borrowers in the par amount of $4,095,600 had been retired but the owners thereof had not received the proceeds.

STOCK OWNED BY THE UNITED STATES IS NONPARTICIPATING AS TO DIVIDENDS

Stock of the Federal land banks owned by national farm-loan associations is entitled to dividends if any are declared. Borrowers own stock in national farm loan associations in the same par amount as the associations own in the banks. Stock of national farm-loan associations owned by borrowers is entitled to dividends if any are declared by their associations. Stock owned by a borrower

in a national farm-loan association and by the association in the Federal land bank must be retired when the loan in connection with which such stock was issued is paid. If the association is able to meet currently its obligations to the bank the proceeds of the bank stock owned by the association are paid to the association and unless prevented by the existence of other debts, the association pays the proceeds of its stock to the shareholder. On the other hand, if the association is not able to meet its obligations to the bank currently the proceeds of the retired bank stock_are withheld for application to indebtedness of the association to the bank. In such a case, or in case the association is unable to meet its obligations to creditors other than the Federal land bank, the shareholder whose stock in the association is being retired may not receive any payment in connection therewith unless and until such obligations are paid or adequate provision is made for paying them. On December 31, 1939, as denoted by the footnote to the above table, association stock owned by borrowers in the par amount of $4,095,600 had been retired but the owners thereof had not received the proceeds.

Stock owned by direct borrowers and others represents stock issued to borrowers who obtained loans in territories where national farm loan associations were not operating. Such borrowers pay one-half of 1 percent more than the borrowers through national farm-loan associations and are entitled to dividends if any are declared by the bank. About 20 percent of national farm loan association stock issued to borrowers has now become disassociated from the ownership of the farms securing the loans by reason of sales or other transfers of the properties to new owners who have not become members of the associations. The result is that in many cases persons operating farms subject to loans made through national farm-loan associations and making payments on the loans are not members of the associations and the holders of the stock issued in connection with these loans are not occupying the farms or making the payments on the loans.

Federal Farm Mortgage Corporation bonds outstanding as of Mar. 31, 1940

Issue:

3 percent, due Jan. 15, 1942-47. 234 percent, due Mar. 1, 1942–47. 34 percent, due Mar. 15, 1944–64. 3 percent, due May 15, 1944-49_

Total__

Par amount

$236, 476, 200 103, 147, 500

94, 678, 600 835, 085, 600

1, 269, 387, 900

Holders of all consolidated Federal farm loan bonds outstanding as of Mar. 31, 1940, classified as to year in which bond first becomes callable

Federal land banks

CONSOLIDATED BONDS OUTSTANDING AND ON HAND, BY ISSUES, AS OF MAR. 31, 1940

59, 170, 000 54, 557, 400 426, 616, 440 130, 419, 000 147, 800, 000 55, 610, 90 5, 704, 600 39, 045, 900

Total. 73, 824, 600 159, 607, 700 235, 522, 700 180, 759, 300 191, 986, 700 1,760,625,240 21, 719, 900 1,738,905,340

AMOUNT OF CONSOLIDATED BONDS ON HAND, BY ISSUES, AS OF MAR. 31, 1940