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1937 Mr. POPE. That was my understanding of the Senator's position.

Mr. McNARY. Not at all. It is not in the interest of either grower or the consumer, in my judgment. We will leave it that way.

Mr. POPE. The Senator will observe that if the price should fall below parity the Secretary could require the establishment of the ever-normal granary. That is all this whole section means, as I understand it.

Mr. McNARY. The Senator may be wrong, or he may be right. I am thinking about the farmer. In my judgment it would not be safe for anyone who plants and harvests wheat or corn not to withhold from the market 20 percent of his product through the marketing year, which means 12 months, for fear that at sometime, quoting the language-

If the Secretary, at any time during the marketing year for such crop • • • determines that such storage is necessary in order to carry out during such marketing year the declared policy of this act.

The declared policy of the act is parity prices, the ever-normal granary, and a surplus reserve loan corporation. So, if this language means anything, it declares that the farmer shall place in storage 20 percent during the whole marketing year. It is possible that during that period the Secretary of Agriculture may release it, or he may not release it. To be safe, however, the farmer must keep 20 percent impounded during the whole year, and if he does so, it means he will have to pay storage charges, suffer the loss due to atmospheric depreciation, and interest paid to the corporation or the bank. That may represent the difference between a very large loss and coming out even in his crop year.

Mr. POPE. Mr. President, I call the attention of the Senator, in the first place, to the provision that not to exceed 20 percent is to be stored. The estimates which have been made by the Department and the Secretary are to the effect that perhaps 7½ percent or 10 percent would be all that would be necessary. At any rate, 20 percent is the maximum that might be stored, and the price of the commodity must be lower than parity.

Mr. McNARY. Of course, the Secretary might say 10 percent. I am speaking as a farmer. The market year begins June 1 and is 12 months in duration. The farmer harvests his wheat in July. In the face of this language I would feel it incumbent upon me, commanding upon me, to store at least 20 percent of the crop during the whole marketing year, whether it was released or not, because it provides that that must be done unless it is satisfactory to the Secretary.

Mr. McGILL. Mr. President, will the Senator yield at that point?

Mr. McNARY. Just a moment. It says, "If the Secretary, at any time during the marketing year, determines that such storage is necessary." Of course, but the Secretary has the whole year to determine that fact, and in order to comply with the mandatory language, and save himself from penalties, the farmer would have to keep stored not more than 20 percent of his crop. I think in most instances 20 percent would represent any profit he might make, if he received any at all, because he would have to keep the crop out of the current trade, keep it off the market, pay the storage, the insurance on the wheat, and interest on the money during the whole period. That is the language if I read it aright. It may be satisfactory, but I do not think it is, and I am suggesting to the Senator that we let this go over for sometime and seek to remedy it. I do not want to see a provision like this in the bill.

Mr. McGILL. Mr. President, will the Senator yield?

Mr. McNARY. I very gladly yield.

Mr. McGILL. My interpretation of the language is a little different from that of the Senator from Oregon. The provision is that the Secretary may, during the year, require storage under seal of a portion of a farmer's stock of the current crop year-a portion of his stock. In my judgment that means such as he may have on hand at the time. It is his stock of the current year, not 10 or 20 percent of the current crop year, but 10 percent of his stock such as he may have on hand. I do not believe it applies to a farmer who might have disposed of his stock or requires him to seal his stock just to see what the Secretary is going to do. In addition to that, I assume the Senator recognizes the fact that the amendment is merely a transposition of language contained in the original bill to this point in the bill.

Mr. McNARY. That may be.

Mr. McGILL. I believe that the Senator, in construing this as meaning that 20 percent of the entire crop must be stored, is not giving a correct construction to the language. My judgment is that it means that if the farmer should have 20 percent of the crop on hand, then he might be required to store it; but it applies at any time during the marketing year as to the stock on hand.

Mr. McNARY. That interpretation cannot be given. because it does not say "stock on hand." On line 12, page 19, it says plainly "his stock of the current crop." What does "current crop, mean?

Mr. McGilL. His stock of the current crop, whatever he might have at the time.

Mr. McNARY. Not at all. The whole bill proceeds upon the theory of a carry-over, which is one thing; of putting it under seal, which is another thing; of the normal granary, which is another thing. The current crop means the crop of this year, not what be might have held over from 1933, or 1935, or 1936.

Mr. McGILL. I concede that if a farmer had on hand 20 percent of the crop of the current crop year, he might be required to store that amount under seal. In my judgment, this provision would not require him to keep it in order to see what action the Secretary would take.

Mr. McNARY. That is a half admission that is bad.

Mr. McGILL. No; it is not a half admission.

Mr. McNARY. If it is three-fourths of an admission, it is bad. As almost a full admission, it is bad. Whether it is stock held over or not, it is not fair to the farmer. But it means the current crop. The Senator cannot get away from that.

Mr. POPE. In a discussion a few days ago, and again today, the Senator from Oregon has referred to the cost of the storage, and has implied that that would be paid by the farmer. I may say to the Senator that there have been two corn loans, I believe, and in each case storage as a practical matter did enter into consideration. All the corn, or practically all the corn, was stored on the farm, without any storage charge to anyone. There is a provision in the bill that the commodity must be the exclusive security for the loan and, I assume, incidental expenses, and therefore, while in the ultimate the producer might have to stand the cost, the crop itself will be sold for enough to take care of the storage and the loan. If not, the Government loses that much.

So as a practical matter I will say to the Senator that under the experience in connection with the other loans the matter of storage has not been an important question.

The PRESIDING OFFICER (Mr. in the chair). The time of the Senator from Oregon on the amendment has expired.

Mr. POPE. Mr. President, if I may be recognized, I shall take the floor and yield to the Senator from Oregon.

Mr. McNARY. I appreciate that courtesy. The provision that I mentioned is written in the adjustment contract, that 20 percent of the current crop must be placed under seal.

Mr. POPE. Not exceeding 20 percent.

Mr. McNARY. Not exceeding 20 percent. That is in the contract. The farmer cannot get around that provision, because it is a contractual provision.

I wish to make a statement with respect to storage. We had experience in connection with the storage of corn when the Stabilization Corporation was operating under the farm bill. I wrote a report on that measure which was not favorable to the operation of the bill. It was clearly indicated at that time that the man who stores his wheat must pay and does pay 16½ cents a bushel per year for storage. So I say storage is a tremendous item. That item covers simply storage and does not include insurance and interest.