The important place which agriculture holds in the economic and social life
of the Nation can not be overestimated. The National Government is
justified in putting forth every effort to make the open country a
desirable place to live. No condition meets this requirement which fails to
supply a fair return on labor expended and capital invested. While some
localities and some particular crops furnish exceptions, in general
agriculture is continuing to make progress in recovering from the
depression of 1921 and 1922. Animal products and food products are in a
more encouraging position, while cotton, due to the high prices of past
years supplemented by ideal weather conditions, has been stimulated to a
point of temporary over production. Acting on the request of the cotton
growing interests, appointed a committee to assist in carrying out their
plans. As it result of this cooperation sufficient funds have been pledged
to finance the storage and carrying of 4,000,000 bales of cotton. Whether
those who own the cotton are willing to put a part of their stock into this
plan depends on themselves. The Federal Government has cooperated in
providing ample facilities. No method of meeting the situation would be
adequate which does not contemplate a reduction of about one-third in the
acreage for the coming year. The responsibility for making the plan
effective lies with those who own and finance cotton and cotton lands.
The Department of Agriculture estimates the net income of agriculture for
the year 1920-21 at only $375,000,000; for 1924-25, $2,656,000,000; for
1925-26, $2,757,000,000. This increase has been brought about in part by
the method already referred to, of Federal tax reduction, the elimination
of waste, and increased efficiency in industry. The wide gap that existed a
few years ago between the index price of agricultural products and the
index price of other products has been gradually closing up, though the
recent depression in cotton has somewhat enlarged it. Agriculture had on
the whole been going higher while industry had been growing lower.
Industrial and commercial activities, being carried on for the most part by
corporations, are taxed at a much higher rate than farming, which is
carried on by individuals. This will inevitably make industrial commodity
costs high while war taxation lasts. It is because of this circumstance
that national tax reduction has a very large indirect benefit upon the
farmer, though it can not relieve him from the very great burden of the
local taxes which he pays directly. We have practically relieved the farmer
of any Federal income tax.
There is agreement on all sides that some portions of our agricultural
industry have lagged behind other industries in recovery from the war and
that further improvement in methods of marketing of agricultural products
is most desirable. There is belief also that the Federal Government can
further contribute to these ends beyond the many helpful measures taken
during the last five years through the different acts of Congress for
advancing the interests of the farmers.
The packers and stockyards act,
Establishing of the intermediate credit banks for agricultural purposes,
The Purnell Act for agricultural research,
The Capper-Volstead Cooperative Marketing Act,
The cooperative marketing act of 1926,
Amendments to the warehousing act,
The enlargement of the activities of the Department of Agriculture,
Enlargement of the scope of loans by the Farm Loan Board,
The tariff on agricultural products,
The large Federal expenditure in improvement of waterways and highways,
The reduction of Federal taxes, in all comprise a great series of
governmental actions in the advancement of the special interest of
agriculture.
In determination of what further measures may be undertaken it seems to me
there are certain pitfalls which must be avoided and our test in avoiding
them should be to avoid disaster to the farmer himself.
Acting upon my recommendation, the Congress has ordered the interstate
Commerce Commission to investigate the freight-rate structure, directing
that such changes shall be made in freight rates as will promote freedom of
movement of agricultural products. Railroad consolidation which I am
advocating would also result in a situation where rates could be made more
advantageous for farm produce, as has recently been done in the revision of
rates on fertilizers in the South. Additional benefit will accrue from the
development of our inland waterways. The Mississippi River system carries a
commerce of over 50,000,000 tons at a saving of nearly $18,000,000
annually. The Inland Waterways Corporation operates boats on 2,500 miles of
navigable streams and through its relation with 165 railroads carries
freight into and out of 45 States of the Union. During the past six months
it has handled over 1,000,000 bushels of grain monthly and by its lower
freight rates has raised the price of such grain to the farmer probably
21/2 cents to 3 cents a bushel. The highway system on which the Federal
Government expends about $85,000,000 a year is of vital importance to the
rural regions.
The advantages to be derived from a more comprehensive and less expensive
system of transportation for agriculture ought to be supplemented by
provision for an adequate supply of fertilizer at a lower cost than it is
at present obtainable. This advantage we are attempting to secure by the
proposed development at Muscle Shoals, and there are promising experiments
being made in synthetic chemistry for the production of nitrates.
A survey should be made of the relation of Government grazing lands to the
livestock industry. Additional legislation is desirable more definitely to
establish the place of grazing in the administration of the national
forests, properly subordinated to their functions of producing timber and
conserving the water supply. Over 180,000,000 acres of grazing lands are
still pastured as commons in the public domain with little or no
regulation. This has made their use so uncertain that it has contributed
greatly to the instability of the livestock industry. Very little of this
land is suited to settlement or private ownership. Some plan ought to be
adopted for its use in grazing, corresponding broadly to that already
successfully applied to the national forests.
The development of sound and strong cooperative associations is of
fundamental importance to our agriculture. It is encouraging to note,
therefore, that a vigorous and healthy growth in the cooperative movement
is continuing. Cooperative associations reporting to the Department of
Agriculture at the end of 1925 had on their membership rolls a total of
2,700,000 producers. Their total business in 1925 amounted to approximately
$2,400,000,000, compared with $635,800,000 in 1915. Legislative action to
assist cooperative associations and supplement their efforts was passed at
the last session of Congress. Important credit measures were also provided
by Congress in 1923 which have been of inestimable value to the cooperative
associations. Although the Federal credit agencies have served agriculture
well, I think it may be possible to broaden and strengthen the service of
these institutions.
Attention is again directed to the surplus problem of agriculture by the
present cotton situation. Surpluses often affect prices of various farm
commodities in a disastrous manner, and the problem urgently demands a
solution. Discussions both in and out of Congress during the past few years
have given us a better understanding of the subject, and it is my hope that
out of the various proposals made the basis will be found for a sound and
effective solution upon which agreement can be reached. In my opinion
cooperative marketing associations will be important aids to the ultimate
solution of the problem. It may well be, however, that additional measures
will be needed to supplement their efforts. I believe all will agree that
such measures should not conflict with the best interests of the
cooperatives, but rather assist and strengthen them. In working out this
problem to any sound conclusion it is necessary to avoid putting the
Government into the business of production or marketing or attempting to
enact legislation for the purpose of price fixing. The farmer does not
favor any attempted remedies that partake of these elements. He has a
sincere and candid desire for assistance. If matched by an equally sincere
and candid consideration of the different remedies proposed a sound
measure of relief ought to result. It is unfortunate that no general
agreement has been reached by the various agricultural interests upon any
of the proposed remedies. Out of the discussion of various proposals which
can be had before the Committees of Agriculture some measure ought to be
perfected which would be generally satisfactory.
Due to the emergency arising from a heavy tropical storm in southern
Florida, I authorized the Secretary of Agriculture to use certain funds in
anticipation of legislation to enable the farmers in that region to plant
their crops. The department will present a bill ratifying the loans which
were made for this purpose.
Federal legislation has been adopted authorizing the cooperation of the
Government with States and private owners in the protection of forest lands
from fire. This preventive measure is of such great importance that I have
recommended for it an increased appropriation.
Another preventive measure of great economic and sanitary importance is the
eradication of tuberculosis in cattle. Active work is now in progress in
one-fourth of the counties of the United States to secure this result. Over
12,000,000 cattle have been under treatment, and the average degree of
infection has fallen from 4.9 per cent to 2.8 per cent. he Federal
Government is making substantial expenditures for this purpose.
Serious damage is threatened to the corn crop by the European corn borer.
Since 1917 it has spread from eastern New England westward into Indiana and
now covers about 100,000 square miles. It is one of the most formidable
pests because it spreads rapidly and is exceedingly difficult of control.
It has assumed a menace that is of national magnitude and warrants the
Federal Government in extending its cooperation to the State and local
agencies which are attempting to prevent its further spread and secure its
eradication.
The whole question of agriculture needs most careful consideration. In the
past few years the Government has given this subject more attention than
any other and has held more consultations in relation to it than on any
other subject. While the Government is not to be blamed for failure to
perform the impossible, the agricultural regions are entitled to know that
they have its constant solicitude and sympathy. Many of the farmers are
burdened with debts and taxes which they are unable to carry. We are
expending in this country many millions of dollars each year to increase
farm production. We ought now to put more emphasis on the question of farm
marketing. If a sound solution of a permanent nature can be found for this
problem, the Congress ought not to hesitate to adopt it.