get the information so that we can test the proposals you are making. don't blame you if you don't have it, but I am just asking you a simple question and I think it is one that you can answer.

Mr. JOHNSON. My reasoning is this, that the alcohol made from this grain, and the amount you are going to pay for this grain, it will be sold for less than the alcohol now made from the petroleum products and the greater part if not all of the replaced would be replaced by alcohol from this spoiled grain that you are now making from petroleum products

Mr. POAGE. At what price does grain sell or have to sell to be competitive with this petroleum alcohol? You told us something about it being sold for 68 cents. Now, obviously, the existing grain alcohol manufacturers can buy this grain at 75 cents and they can buy it

Mr. WELSH. I do not think that is correct; I didn't make that statement. I said under $1 a bushel and I thought between 85 cents-but there had been carloads full of corn that were sold as low as 68 cents a bushel.

Mr. POAGE. What are you paying at the present time?

Mr. WELSH. I don't know. I did not come down as an expert on

that.

Mr. POAGE. We have been told before that corn coming out of Iowa sold at 72 cents. Is that right? And if it is selling for that, those people probably know about it and probably are paying no more for it, and I think that is a reasonably fair figure and then you are telling me that we cannot compete with petroleum alcohol at 72 or 75 cents for corn; is that right?

Mr. WELSH. No

Mr. POAGE. Can you make alcohol as cheaply from corn as from petroleum?

Mr. WELSH. Well, will you tell me what the petroleum price of alcohol is?

Mr. POAGE. I haven't any idea.

Mr. WELSH. If we start from there, I can tell you.

Mr. POAGE. But you are telling me now that by opening this plant you will be below the petroleum products price, but unless you know the petroleum products cost, how do you know you will be lower? Mr. WELSH. I told you that I thought the petroleum price was some place in the vicinity of 45 cents a gallon.

Mr. POAGE. You think the petroleum price is 47 cents?
Mr. WELSH. That is right.

Mr. POAGE. I am just told by our staff that Friday's price on corn ethyl alcohol, 190-proof ethyl alcohol, was 20.6 cents. That would mean, would it not, that if these figures are correct they would have to buy this corn for less than 60 cents a bushel? Isn't that about right? Mr. WELSH. To make 20-cent alcohol?

Mr. POAGE. Yes.

Mr. WELSH. Yes; I would say 50 cents to make 20-cent alcohol.

Mr. POAGE. Now you surely do not contemplate buying this corn at less than 60 cents a bushel? As a matter of fact, isn't this grain alcohol selling because of what it is made of, rather than because of its price? There is no grain alcohol even today selling in price competition with petroleum alcohol, is there?

Mr. WELSH. I am not in the business today, sir.
Mr. POAGE. I beg your pardon?

ing higher price supports for farmers, he announced in the same message that he was raising supports part way for the year 1956— an election year-but for that year alone.

Your recent legislation designed to hold some kind of a line against newly announced cuts in farm prices by freezing the 1957 price support and acreage levels was similarly applauded by most farmers.

Since leaving Government service I have been reluctant to testify on these matters because I soon found my views to be almost diametrically opposite to those of the Eisenhower policies. But you have been good enough to ask for whatever historical perspective I can give this subject and I believe that the urgency of the farm depression and the extreme hardship of many thousands of farm families call for a plain and forthright expression at this time.

During the past few months, I have been participating in a series of farm policy development conferences sponsored by the Farmers Union in cooperation with various other groups and institutions. These meetings have taken me into 13 States to hear the views of farmers themselves about what is happening to them and what is needed to save agriculture as we have known it to be since the settlement of this great land. The meetings were excellent. In fact, several of your committee members attended and helped to make them successful. The conferences were held in Illinois, Iowa, Indiana, Ohio, Michigan, Wisconsin, Montana, Utah, Colorado, Oregon, South Dakota, Texas, and Kansas.

I will not purport to include an exact summary of those meetings in my remarks today, for votes were seldom taken at the meetings. However, I think it both fair and accurate to say that a substantial portion of the farm people do not understand the policies of this administration toward American agriculture, and are mystified and frustrated by its administrative methods and procedures and are fearful for their economic existence if the present policies and practices are pursued much further.

Now may I turn to the consideration of legislation at hand.

Let us test these proposals by asking what is required of an effective farm income improvement program. I would like to suggest at least four criteria by which to judge a program.

First, the program must effectively serve the farmer and his family. As an isolated individual, the farmer has no control over the prices he will receive, and no adequate way of adjusting the total market volume of his commodities to the changing demand.

Second, in serving the farmer the program must not discriminate unfairly against any other group. It should also be fair to consumers and business people. The customers of agriculture want plentiful and steady supplies, and they have a right to expect that a program supported by the public will help meet this need.

Third, the program must be efficiently operated and the cost must be commensurate with the benefits to the Nation.

Fourth, it must serve general policy objectives, including national security, the maintenance of high-level employment, and cooperation with other nations in the interests of peace and prosperity.

In short, the farm program must serve the best interests of all our people, and in my opinion that is the only kind of program the farm people want or expect.

Unfortunately, too many people still think of a farm program as some kind of class legislation. There is too little appreciation of the direct and definite ways in which it can benefit all the people and can help make this the kind of a country they want it to be.

The criteria which I have just suggested are not new. In fact, I deliberately took them verbatim from a statement I made in this room almost exactly 9 years ago. The occasion was a joint meeting of this committee with its counterpart in the Senate on April 7, 1949, when I answered the committee's request for recommendations to improve the price support program on a long-range basis.

I hope I may be forgiven for taking note of the fact that since changing political fortunes put them in power, the opponents of those proposals adopted one of the ones they flailed so energetically. I refer to the use of direct payments to farmers as a method for supporting the price of wool, a proposal which many of you will recall was in the so-called "trial run' Pace bill which was passed by this committee.

I hope also that I will be pardoned for saying that I have wondered ever since the Eisenhower administration sought direct payments on wool, why a price-support method which worked so well for wool was not good enough for some other commodities. This is particularly true since direct payments had been used for supporting sugar beets

since 1935.

I raise these points only to illustrate that recommendations for improving the farm program-like those for improving anything— should be considered on their merits rather than by labels or personalities. Secretaries of Agriculture-and even Presidents-come and go, but the problems of the American farmer deserve the most constructive, serious attention that can be given at all times.

This is why the agricultural committees of Congress are so important. They provide great continuity in national policy, along with administrative guides for those who carry out the laws. I hope that your committee will continue these guides and make them even more explicit.

We have seen too many examples recently of clever dismantling of programs by public officials who do not believe in those programs. Congress must do everything it can to prevent its policy from being either thwarted or actually violated by officeholders who are entrusted with their administration.

On this subject, I recall an incident which occurred on this subject during one of my appearances before the Senate Committee on Agriculture and Forestry, June 19, 1952. Senator Aiken of Vermont was questioning me closely about why I wanted specific minimum levels of price supports written into the law, instead of agreeing to broad discretion on the part of the Secretary for setting supports along a sliding scale. The Senator was good enough to express confidence that I would never allow supports to go below a fair level.

Then he repeated his question. I told him that I appreciated his confidence but that some day there might be a Secretary of Agriculture like Allan Kline, who was then President of the American Farm Bureau Federation and the leading exponent of the sliding scale. The Senator replied: "I think it would be time for Congress to act."

the rest of the corn area. I think we need to develop is purely from the standpoint of combining the market for this man who is not going to have a market, or if he does, it is going to be a distressed market.

Mr. POAGE. I want to correct a statement which I made a few minutes ago because Mr. Heimburger just called my attention to the fact that he had secured a wrong figure on the price of ethyl alcohol; it is actually selling for 47 cents instead of 20 cents. Apparently the price of grain alcohol and of alcohol made from petroleum is competitive.

Mr. HARRISON. That is the information that came to me the other day in making inquiry of the Defense Department as to

Mr. POAGE. I do not know where we got this 20 cents. Anyway, the Department of Agriculture supplied the figure, and says this is the right price, and I am sure it is.

Mr. HOEVEN. May I ask Mr. Welsh a question? May I ask this one more question?

Mr. WELSH. Yes.

Mr. HOEVEN. Do you know of any other avenue of approach to take care of this so-called wet corn except to convert it into industrial alcohol?

Mr. JOHNSON. I do not know of any other approach because at the time that we were using this corn, we also had two pilot plants in our plant that we were working on, on other processes, and we could not find any other use for it at that time, and we worked on it for more than 3 years. When we get into the processing of spoiled cornwe spoil the part of the grain that we can use for other purposes. Now the proteins can be separated in No. 2 corn and used for human food before the corn is processed, and for the long-range program that, in my opinion, is what must be done. Because the entire world is short of proteins in their food, and instead of sending large sums of money to help out with food in some of these foreign countries, we could do a great deal better if we would send them a protein to put in, just the same as the K-food that Kellogg is making now. We went into that process and partially developed it. The Department of Agriculture in their laboratories have gone further with it, and in my opinion, that is going to be the final outcome of this whole agricultural program, to separate the proteins from the starches and put the starches into alcohol, that would be a byproduct at that time and can be sold at most any price because the proteins will then pay for the cost of the grain. Of course, that is the long-range program. But we went far enough into it so that we know that program is a sound program.

Mr. HOEVEN. Well the only thing that disturbs me in this entire picture is the time element involved, and what in the world can we do right now to remedy this situation. We cannot get this plant into operation for 90 or 120 days. That is the thing that confronts this committee. I think, as to the long-range program, we would have ample time to work that out.

Mr. JOHNSON. Of course my estimate on that is based on full operation. Of course, you would probably get it in operation and use some corn, but I am thinking about using 40 bushels a day. And I think it will take that long before you get it up to full production. Mr. POAGE. We are very much obliged to Mr. Welsh and Mr. Johnson for going into this. We only have a few minutes left.

Mr. SMITH. I would like to ask a question, Mr. Chairman?
Mr. POAGE. I cannot refuse. Go ahead.

I am just trying to move along, but go ahead, Mr. Smith, please. Mr. SMITH. Has anything ever been tried to store this alcohol underground, the same as they store many other commodities now? Do they have to pack

it.

Mr. JOHNSON. I do not know what the Government is doing about We have always stored it in tanks, about the same as oil is stored. At this plant there is storage for more than 2 million gallons of alcohol.

Mr. POAGE. That is all. Thank you, gentlemen, very much. We have only a few minutes left, and we must have an executive session before we close.

Congressman Jensen is with us, and he wants to testify and we want to hear from him. We have other expert witnesses from the Department, so I am going to try to enforce a rule that no questions be asked-starting with the chairman-and try to limit the witness. However, we want to hear from you, Mr. Jensen.

Mr. JENSEN. I will finish quickly.

Mr. POAGE. Proceed.

STATEMENT OF HON. BEN F. JENSEN, A REPRESENTATIVE IN CONGRESS FROM THE SEVENTH CONGRESSIONAL DISTRICT OF THE STATE OF IOWA

Mr. JENSEN. I am pleased, Mr. Chairman, and grateful for this opportunity to come before the committee on this important matter. I am very much in favor of this legislation to open the plant at Omaha. I think it is one of the most important steps that we can take today to finally get started on a program, I hope, that will relieve the farm problem.

Now you have been talking considerably about this wet corn. Of course, we all know that wet corn is in Government storage, it is in the hands of noncompliers, it is in the hands of compliers, and it simply must be used up in some manner rather than just letting it lay and go to pot. Now I am informed by a gentleman who runs an elevator, and he is in this room right now, Mr. Smithberger of Stanton, Nebr., an elevator man, that it cost him 38 cents a bushel to dry corn, and when he gets all through drying it it is worth just about as much as chaff. Here is some of it right here. Mr. Smithberger has a sack full of it.

Now this corn, when it is wet, of course, is worth whatever they can pay for it to feed. After they spend 38 cents a bushel to dry it, it takes most of the oil out of it and the feed value has been reduced. You can see this corn, you can bite into it, like we farmers do, and you will see that it is nothing but chaff. There is not much feed value left in it.

So it is very important that we use this surplus grain that we have, this wet grain, in industrial alcohol. And that alcohol can be used, of course, for many purposes, as the gentlemen have explained.

I have great respect for the two gentlemen who have just testified before you, and they have tried their best to stay on the subject. I think at times they were lead off the subject.