There is another factor involved in this, and that is the production of turkeys by the farmer in individual operation, and not a complete operation. It has its ramifications all through the Nation, and it has been my purpose in the Congress, and I think the purpose of all who are interested in agriculture, to shape our laws and our policies with a view to making agriculture not an industry but a method of making a living. There will never be a big financial return for the farmer, but we do hope that those whose lot is cast with the land, producing the essentials of life, of food, shelter, and clothing, can, as a family undertaking, make enough cash to have some of the decent comforts if not the luxuries of life, and that we will not force agriculture to congregate in our cities, as was done in recent years, and then the collapse came and millions and millions of men with no roof over their heads, no food coming in each day, on relief at tremendous expense to the Government. I say we are not dealing with a corporate problem, we are dealing with an individual problem that affects vitally some 30 million people.

I had occasion to check the effect of the agreements with the United Kingdom and Canada upon our cattle market, also upon our milk and cream market. I frankly tell you that I think those effects have been greatly exaggerated. Of course they came in under very restricted quotas and with no major reduction in the tariffs, but I did find this to be true: At the entry point for Canadian livestock at Newark, as it was related from Buffalo and Minneapolis, it did affect temporarily the price on American cattle.

But I did find specific instances where Canadian importations of beef affected the price that the Virginia cattleman got at Newark, and that the Wyoming cattleman got at Minneapolis by reason of that temporary concentration, and the advantage that these commission men took of that situation.

Now what would be the result of the 10-cent dressed Argentine turkeys upon the domestic market? They would not come in at just one point, they could go to any storage house anywhere in the United States. It would not be Newark and Minneapolis. They would say to the local producers, "Our market is flooded. We will have to cut your price.' It will be every storage plant throughout the United States that ships to any poultry commission firm saying, "Why, the market is flooded with these cheap Argentine turkeys. We cannot afford to pay you."

I will tell you the psychological effect of it. Even if we make a slight reduction in this tariff, even if we had such a small quota, like the importations in 1937 and 1938, if the 23,000 turkeys came in against 32,000,000, you can easily see the effect it would have. You might say, "Well, we will just make a little concession and let them ship in 100,000 birds. It will not have any practical effect."

I will tell you it will. The psychological effect of these birds going to any kind of storage anywhere in the United States will depress the whole market.

For those reasons, gentlemen, I appear before you, as I say, as a friend of this program, expressing the earnest hope that those charged with its administration will exercise the greatest care to see that it is carried out in accordance with the clear intent and purpose of the Congress, to do no injury to agriculture and to be fair in this matter of the competitive situation.

Here you have got $50-an-acre land against land worth 50 cents in some foreign country. Here you have got labor at $30 a month against labor at $5 or $6 a month. Here you have got corn at 50 cents, wheat at 90 cents, that has to be fed to these turkeys against turkeys fed on the plains, where you feed them nothing but what they pick up on the plains, and drive them in to the market. Of course they are inferior turkeys. They compare just about as a milk-fed Plymouth Rock compares with the barnyard chicken. The Argentine turkey has bone and muscle, that is true, but we do not pay a big price for bone and muscle. If the Argentine turkey comes in, so far as the trade is concerned, it is a turkey. They will not say his breastbone is setting out like the prow of a ship, they won't say he is a luscious, fat, juicy bird like we raise in Rockingham.

The CHAIRMAN. The next witness is Congressman Hull, of Wisconsin.

STATEMENT OF HON. MERLIN HULL, REPRESENTATIVE IN CONGRESS FROM THE STATE OF WISCONSIN

Mr. HULL. I will merely try to supplement some of the statements made by my colleague, Mr. Murray, of Wisconsin, and I will be just as brief as I can in my testimony.

Mr. Murray's district and mine are the two largest dairy districts in Wisconsin. We have approximately 3 or 31⁄2 percent of all of the cows in the United States in those districts. About 75 to 80 percent of all of our dairy products go to market in manufactured formbutter, cheese, condensed milk, powdered milk, casein, and so forthand I think that I can state that probably 95 to 100 percent of the farmers in my district feel that they have been badly treated in the reciprocal trade treaties, and are even more fearful of what will happen if this policy continues.

We made our objections in the House, and of course because of the political situation over there, we do not feel that our arguments carried much weight. Possibly they will not carry any weight here or elsewhere, but the fact remains that our manufacturing dairy sections of Wisconsin, Minnesota, and Iowa are up against this tariff game harder than probably any other farm crop or product in the United States.

We are up against it for this reason-the tariff of 1930, the HawleySmoot tariff gave to those dairy farmers only about one-half of what they asked for. We did not know at the time--we found out afterward that this Tariff Commission which is touted as a great factfinding body, are said to have advised that committee that there was only one principal competing country with the dairy people of this country, and that was Canada, and because of the cost of production in Canada, being near to that of the United States, they fixed these rates lower than we requested at the time. From that day to this our dairy industry has been on the decline.

The CHAIRMAN. You are not saying that they fixed these charges at half in the Smoot-Hawley law?

Mr. HULL. Yes, sir; half of what the dairy representatives asked for at that time. We asked for 28 cents on butter. for 19, and we fought all the way down the line. whatsoever in cheese, practically none in casein,

We asked for 24; We got no increase and our casein in

dustry has almost disappeared in the Northwest because of the competition of Argentina.

The CHAIRMAN. How much did they increase the casein from the Fordney-McCumber rates?

Mr. HULL. I think it was from about 21⁄2 cents to 31⁄2 cents. asked for 7 cents.

The CHAIRMAN. They did increase it, however?

We

Mr. HULL. To a minor degree. They did not increase cheese except that they added the 35 percent ad valorem.

This foreign competition which has already injured us is going to increase, especially in the manufactured dairy products. There are four countries now which produce about 1 billion pounds of excess butter fat which they ship to foreign countries for their markets, and are largely regulating price as far as the foreign markets are concerned. The fact that we have these low tariffs-and which on cheese have

already been reduced-is the price fixing influence so far as the prices or our dairy products in the market in our own country are concerned. Senator CONNALLY. Let me ask you this: In the case of cheese, the tariff is not the only determining factor, is it?

Mr. HULL. There are various other factors, of course.

Senator CONNALLY. A lot of people like the foreign brands of cheese.

Mr. HULL. To some extent, the French, Swiss, and Roman cheeses. Senator CONNALLY. And they are willing to pay almost any price to get those foreign cheeses.

Mr. HULL. Yes; they will pay almost any price to get them. Now, take Roman cheese-the cheese tariff was 7 cents a pound and was such that certain sections of northern Wisconsin were we have the newer dairying districts, felt that they could go into Roman cheese making. We have got two factories left up there. But when that occurred, immediately the Italian Government gave an indirect subsidy on the export of Roman cheese. They did it by fixing a price of butterfat for other purposes than that at 33 cents a pound, which at that time was about 10 cents a pound more than we were getting for our butterfat in Wisconsin. They furthermore obtained a large control over the price of rennet which is used in the manufacture of cheese, and our cheese makers in this country, all over the country, are compelled to pay the subsidy which the Italian Government demands upon the export of rennet. That is just one illustration. But there is New Zealand, which is a new dairy country. New Zealand manufactures more butter today than Wisconsin, and we have the second largest butter-producing State in the Union. The entire dairy industry of New Zealand is under government control. Farmers get 30 cents a pound for butterfat and the difference in exchange makes the purchasing power for that 30 cents a pound far greater than it is in this country. They export on the average 180 to 190 million pounds of butter annually. A decade ago, there was practically no cheese, very little cheese made in New Zealand. Today, Wisconsin is manufacturing less cheese than they are in New Zealand. Then, there is Holland, which has developed a very large butter trade since the war. There is Australia, which also has a subsidy plan on its dairy products.

It all resolves itself down to a question of butterfat in butter, cheese, and condensed milk, and those four countries have approximately 14 billion pounds of excess butter fat to export annually. The Tariff Commission figured New Zealand production at the time the Hawley-Smoot tariff law was enacted-placed butterfat costs at 18 cents per pound. That was the cost of butterfat in New Zealand. In this country, the average at that time was about 57 cents. That was one reason why we asked for such a great increase in the tariff on dairy products.

The subject of Canadian cheese and its competition with Wisconsin cheese has been mentioned. Wisconsin manufactures about 60 percent of all of the cheese in the United States, and the cheese farmers up there are getting about $1.25 to $1.30 per 100 pounds in the wintertime, the time of the highest cost of production in Wisconsin, for the milk that does into cheese. We in Wisconsin have very strict regulations of our dairy farmers, more strict than Canada has; not

as strict as they have in the milk shed districts in these large cities where the monopolies are maintained largely by health regulations, but we have a very strict regulation of the dairy industry, the entire dairy industry, even to the inspection of barns and milk houses at the barns. We also have a standard of the water content for our cheese as well as our butter.

The competition of Canada, which manufactures about onethird as much cheese as we do in Wisconsin, comes in not merely from the fact that you have lowered the tariff-that is one thing-but there is a differential there which is made use of by the two large companies which market or which control the markets or obtain the supply of practically 60 percent of all of the cheese made in Wisconsin. They have a lower moisture content for cheese in Canada. A big part of Imported Canadian cheese goes into what is known as processed cheese. As a matter of fact, it is not cheese at all, any more than oleomargarine is butter. It is a processed cheese in which they mix this drier cheese and change the moisture content to 44 to 46 percent and then add skimmed milk, and make a product that goes on the market in attractive form, very widely advertised, and of course it sells in competition with our cheese.

We suffered, as Mr. Murray has already told you, a loss of approximately $9,000,000 on the Wisconsin cheese from the first Canadian treaty in the first few months. Then they reduced that tariff 1 cent more. As a matter of fact, the Revenue Department has very recently found that the Canadian people, that is, with the sanction of the people through its local or National Government, is putting a bounty on cheese, particularly the cheese of low moisture content, 1 percent on the 93 score grade and another of 2 cents a pound on as much as 94 and over. The revenue department very recently issued an order increasing the tariff on those two kinds of cheese from Canada by 1 cent a pound for the 93 grade and 2 cents a pound for the 94. That is an illustration of the manner in which we are competing or have to compete with foreign countries in the importation or exportation of dairy products.

It is true that cheese prices fluctuate in this country. In 1938, butter prices fluctuated. There was apparently an overproduction of butter fat, and the consequence was that butter went down and Congress appropriated a lot of money to the Surplus Commodities Corporation. They spent about $46,000,000 buying dairy products in order to prevent the utter demoralization of the dairy markets of the country. The price went up to 26 cents a pound, due to those purchases, otherwise butter would have gone down to 15 or 16 cents a pound.

But this fact remains regarding all tariff rates and all reductions in the tariff rates by this reciprocal trade program, that the competition, which can come in from abroad where cost of production does not come anywhere near the cost of our production is such that maintains the level of prices for our entire product, which amounts in Wisconsin now to about $160,000,000 a year.

So we are opposed to these treaties. I have been opposed to them constantly since the law was contemplated and since this program was inaugurated. I did not believe in them when Mr. Taft was President, and I don't believe in them under Mr. Roosevelt. To my

own individual view, it is sort of getting into free trade on the installment plan, and I feel that we western farmers

Senator CONNALLY (interposing). What, in your view, is a fair price for butter?

Mr. HULL. Well, it certainly should not be less than it costs our farmers to produce it.

Senator CONNALLY. I am talking about the actual price now.

Mr. HULL. There was more butter consumed per capita at 50 cents per pound than it is when it is 25 cents a pound.

Senator CONNALLY. I did not ask you that, Congressman. I asked you what you thought butter ought to be selling for now.

Mr. HULL. Butter ought to be selling at a price that will let the dairy farmer get the cost of production, whether it is 40 or 45 or 50 cents, no matter what it is.

Senator CONNALLY. You are out there in the country and you know what it costs to make it. Can you tell me what you think it ought to be?

Mr. HULL. The University of Wisconsin once stated that 57 cents cents a pound was the average cost of butterfat.

Senator CONNALLY. Then you are saying 57 cents?

Mr. HULL. No; I am not saying that.

Senator CONNALLY. What is it selling for now?

Mr. HULL. 27 or 28 cents.

Senator CONNALLY. I want to get some idea what you think it ought to be selling at.

Mr. HULL. I am not claiming that in these times you can arbitrarily put up the price of butter to a cost basis unless you adopt a general parity price program. At the same time I do not think that we ought to take any steps to add to the competition which we already have from foreign countries by the reduction of the tariff on cheese or butter or anything else. They have not reduced the tariff on butter any. On the other hand, when you reduce the tariff on cheese, you level the price of cheese to a low rate and naturally affect the price of butterfat.

With your consent, I would like to have a statement inserted in the record.

The CHAIRMAN. Without objection, that may be done. (Same is as follows:)

At this particular time, much credit is being given to reciprocal trade treaties for improvement in general business conditions over what they were in 1932, and a vast array of figures shows how increase of exports and imports have had a bearing upon the improvement. Some interesting charts have been published to prove that as foreign trade has increased, there has been material industrial gains and also gains in employment. That the increase of imports is due to the gains in industrial activities, and that improved conditions in foreign countries have served to increase our exports is lost sight of in the propaganda so widely circulated in support of the reciprocal trade policy.

There are other reasons alleged for the gain in business under other circumstances. Conditions in 1932 were about as bad as could be, but they were not confined to our country alone. In European and South American countries, and in Canada in particular, business, industry, and agriculture were at the lowest ebb. As other factors contributed to our recovery, so also in foreign lands recovery was accomplished regardless of our particular reciprocal trade program. The treaties were not completed with some of those countries, Great Britain for instance, until their recovery has been greater than our own. To ascribe all world progress

in the past 7 years to our reciprocal trade policy is as misleading as it would be to assume that our own improvement was solely due to that same policy. Many influences were at work in foreign countries to aid in their situation just as we have had many other contributions to the gains accomplished in our own country.