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tins the first one that I have here is under date of February 4, 1957. I quote:

Floods of the week: Devastating floods in southeast Kentucky, southern West Virginia, southwestern Virginia, and portions of Tennessee caused a loss of more than a dozen lives and millions of dollars in damages. The floods were the highest in 100 years at numerous points, and the waters rose many feet over any flood previously experienced by residents.

Mr. Poate. May I interrupt right there? These bills are all confined to areas that have already been declared disaster areas by the Department; aren't they?

Mr. PoAGE. We do not have to go into whether this is a disaster.

Mr. GATHINGS. If you will ask me to put this into the record I will stop here. I wanted to show the vast area of the rainfall that has happened.

Mr. Poage. Put anything you want in the record-read anything you want to—I do not mean to cut you off. It is true, is it not, that every one of these bills are limited to areas that have already been found to be disaster areas?

Mr. GaThings. That is true.

Mr. Poage. And we do not have to go back to the question of proving that it is a disaster because it was established last year by action of the Department of Agriculture and there will not be any discretion in these bills, as I understand it as to that—the determination of the disaster has already been made ?

Mr. GATHINGS. That is right; by the President, and then by the Farmers' Home Administration.

Mr. Poage. That is right; that has already been established.

Mr. GATHINGS. This applies only to those areas that have been designated as disaster areas.

Mr. Poage. I do not mean to cut you off.

Mr. GATHINGS. I introduced a bill which will set up a revolving fund of $200 million to make these loans available to pay these accounts that are past due that were incurred during 1957. The new Jones bill, H. R. 10954, is preferable to the bill that I had originally introduced.

Mr. Jones has been down to Missouri, which is one of the hardest hit areas and which adjoins my district. The floodwaters that hit there in southeast Missouri hit northeast Arkansas, and we did have more than 100 inches of rainfall where the normal rainfall was about 45 inches in parts of my district in the north end next to the Missouri line.

He made this trip down to Missouri during the week of the Lincoln Birthday adjournment and met with various committees over southeast Missouri. He worked tirelessly on this problem.

After talking with his farmers in many of the counties during that week, he traveled over a large area, he came back with the ideas that are incorporated in this legislation. He had this bill drafted.

I do think it is better than the bill that was originally introduced by several of us earlier, because of the fact that it keeps these agencies and these farmers in their present status. It keeps them dealing with the same people. It keeps them dealing with the bank, if the bank had been making crop loans to them. It keeps them with the Production Credit Association if they are dealing with these farmers, and it keeps them with the Farmers' Home Administration where the Farmers' Home Administration is making loans to these particular individuals.

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I like the 10 percent item, also, that is the 90 percent guaranty provision that is in the bill, because of the fact that that 10 percent would cause these 3 different lending institutions to have the interest and incentive to go out and see that that money is repaid. I do believe that his bill is preferable.

Legislation of this kind will be, in my judgment, a recession curb, by pumping new funds into these various affected communities over the Nation. That was one of the principal reasons that I wanted to read the weather reports, to give you an idea of how widespread this disaster was.

It came from Minnesota right down through the Mississippi River area, right on down through to Texas and in recent weeks, no doubt, it would affect the Florida citrus crops, the freeze conditions there.

So it will be a recession curb. The farm losses and crop failures have heretofore caused serious economic trouble. By legislation of this kind it would in a large measure pump new economic breath into these areas that so badly need the loans.

I would like to pass out to the members of the committee these pictures, to give you an idea of the floodwaters in the particular district that I serve.

The farmers were unable to harvest their crops in many instances. The farmer had to wait for the waters to recede. These heavy rains would come and, particularly, one rain when I was home in the fall during the harvest season, there was 6 to 71/2 inches of rain in 24 hours' time. It made it very difficult to harvest the crop. And when the crops were harvested the quality of the product had been reduced to such an extent that the value was cut tremendously.

For example, cotton that would sell for 34 cents, if it is good white cotton, per pound, after those rains came continuously, the quality of that cotton was depreciated to a great extent and they were only getting some 19 to 23 cents a pound. In many instances they were unable to harvest it at a profit at all.

I have, Mr. Chairman, quite a lot of correspondence. And some of it of such note that it should be incorporated in the record. And I would like to ask consent to incorporate paragraphs of telegrams and letters that have come to me with respect to this matter, that they be made a part of the record.

Mr. Poace. Without objection that may be done.

Mr. GATHINGS. The need for emergency refinancing credit assistance to these farmers struck by climatic disasters has been known, and the Department of Agriculture should have been on top of this situation months ago. Certainly, the information was given to them.

Back on August 7, 1957, Mr. Henry L. Alstadt, of Rector, Ark., wrote me, enclosing an article from the Arkansas Gazette, in which the president of the Arkansas Farmers Union criticized severely the narrow scope of surveys of the disaster needs by the Farmers' Home Administration. Based on this survey, however, the Department did find that their programs would not be adequate.

On August 16, 1957, I wrote to Acting Secretary of Agriculture Morse, stating in part:

Since receiving your letter of August 15, regarding our discussions of the situation in eastern Arkansas, I have been informed that calamity in the form of another 6.63-inch rain has added to the plight of these disaster-stricken


these purposes, but the Department of Agriculture's attitude opposed such an expanded program.

On January 21, 1958, the president of the Arkansas Farmers Union informed me by telegram:

As you are well aware the need is most urgent for additional adequate farmcredit facilities in our State of an emergency nature to alleviate the financial disaster to our farmers climaxed by weather conditions of 1957. Financiers approach the critical point of having to foreclose on farm equipment and other securities. We urge you to make every effort possible to bring about legislation which will make loan funds available through Farmers Home Administration to reliere farmers from this chaotic condition and to make possible the refinancing of chattels with longer term creclit. It is exceedingly important that the facilities and trained personnel of Farmers Home Administration he utilized in this emergency financing so as to make adequate credit available. FHA officials are well informed as to the seriousness of the situation since they along with the Civil Defense Administration made the original survey and compiled the data which was the basis for declaring this an emergency area.

In the meantime, the Senate and the House adopted S. 2920, to provide emergency loans to business concerns in areas declared disaster areas because of excessive rainfall. In commenting on this action, Mr. R. E. Haywood, of the Clay County Implement Co., of Piggott, Ark., wrote me under date of February 10:

Thanks very much for keeping me informed about S. 2920, which will be a great help to a lot of implement dealers, but the bill you introduced to help the individual borrower if it can be passed will help the farmer more than the small-business bill.

In this same vein, Mr. Louis G. Nash, of the Delta Implement Co., Blytheville, Ark., in a letter dated February 12, stated:

I received your letter in regard to Senate bill 2920 and House bill 10317. In the last two paragraphs of the House bill 10317, this bill is the one that should be passed, and I do not think the Department of Agriculture knows what they are talking about.

I think the farmers and the people that are in business in the disaster area should have some relief. As I have stated before, it is true that small business needs money, but what it needs most is to get the notes and open accounts of farmers collected. The implement people could work a great many more people in our business if the farmer could pay, because we cannot extend them further credit, and their crop loans will not take care of their past due accounts, and the accounts they will make in the year 1958.

Mr. G. R. Brent of the Stamp City Plantation of Hughes, Ark., made the same point:

Some of the farmers, including myself, felt that their need for help was equal, if not greater than that of the small-business man. We are still hoping that aid will be made available to farmers in need of financial aid as well as the smallbusiness man * * *. This idea occurred to me: The reason for the bad condition of the businessmen goes directly to the farmer who can't pay them. If the farmer got money it would enable them to pay the businessman and thereby help them both.

Mr. Billy Driver, of Route 3, Box 44, Blytheville, Ark., had similar views on the problem. In a letter dated' February 19, 1958, Mr. Driver makes this pertinent point:

I cannot understand how the Administration can ask for $4 billion to give away in foreign aid and then refuse to back a bill to loan distressed farmers a measly $200 million. I believe this is a serious mistake on the part of whoever is responsible.

It is not my wish to burden the record with all of the letters and telegrams I have received, and I have selected these as indicative of the thinking of the citizens in the First Arkansas Congressional District.

There is no disagreement on the point that emergency financing credit assistance is needed urgently by the farmers.

Mr. GATHINGS. I would just like to pass on to you a copy of a letter that was sent to me from a businessman in the city of West Memphis, Ark., with regard to the policies of the SBA, in meeting the needs of small business.

This businessman goes on to say: I own a minority interest in the Co. We sell locally, principally to farmers. We carry $75,000 in Goodyear Tire inventory and $54,000 in notes and accounts. Of these notes and accounts 90 percent are to farmers. We made application for $50,000 loan for 10 years. The SBA manager informed our attorneys, Mr. Graves and Mr. May, that the SBA money could not be used to buy merchandise to sell to customers—it could not be used to sell customers who were delinquent and it could not be used to pay back debts.

Mr. Nance asked him what we could use the money for. The manager could not answer this question.

That gives you an idea of the policy that the SBA is following.

Mr. PoAGE. They could use it to pay interest to the Small Business Administration; couldn't they?

Mr. GAThings. Well, in any event, this agency had the best purpose in the world but it is not meeting the needs of small business and I think it is a travesty that the Reconstruction Finance Corporation was folded up by this Congress. I think that is one of the greatest mistakes that we have made because the RFC did make loans to these needy businesses and did a good job and made money. As a matter of fact the RFC, I believe, had a profit of several million dollars over the long pull of its operations.

This money would be paid back, a major part of it. These loans are unsecured, that is true, but let us look at the record of repayment to the Farmers Home Administration.

Here is the record on the emergency credit legislation before this very committee on January 17. I would like to read from a statement of Mr. Bernard, Director of Budget and Statistics Division, Farmers Home Administration, Department of Agriculture. Mr. Bernard :

On all of the various types of emergency loans, Mr. Chairman, we have advanced $390 million as of June 30, 1957. These are the only figures I have on repayment: $330 million of this has fallen due, and we have collected $300 million of it. The payment for 50 percent of maturity. We are carrying a reserve of our books for losses at about 412 percent. In other words, we figure we will lose about 442 percent.

That is a marvelous record of repayments. These farmers will pay the money back to a great degree. There will be some losses. yes. But they want an opportunity; they want a chance to get these debts cleared up.

It is a very distressing matter to have a debt hanging over anyone's head.

This bill of Mr. Jones would do the job.

Regardless of the fact that the Committee on Agriculture is this morning making a study of these different proposals, I do trust that you will see fit to give favorable consideration to the last Jones' bill.

We Democrats are now in the majority in both Houses. The people back home will look to us irrespective of the fact that the Department may oppose these proposals. I do not know what their views are going to be on this legislation, but we are the ones now that

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