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 relieve farmers from this chaotic condition and to make possible the refinancing of chattels with longer term credit. It is exceedingly important that the facilities and trained personnel of Farmers Home Administration be 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 4% percent. In other words, we figure we will lose about 42 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 they will look to back home, and I do trust that we will move in here and pass this legislation. Mr. Chairman, give us this bill or a similar bill, approve it and send it on to the full committee. And give these farmers an opportunity to have these small debts refinanced in addition to their regular requirements for 1958. That concludes my statement. Mr. POAGE. Thank you, Mr. Gathings. We appreciate your coming in here. Are there any questions? Does anyone want to ask any questions? Mr. JONES. I want to remind you of one thing that happened in your district. I drive through Mr. Gathings' district as I come back to Washington. And as I came back to Washington the latter part of December I drove through his district where floodwaters were, and I saw in one soybean field where the land was completely covered, with the beans sticking out of the water about his high, and the farmer had a combine in that field with huge tires on it on a Sunday afternoon because the sun happened to be shining and he was trying to combine soybeans in a field covered with water. That is how desperate those people were down there at that time trying to just salvage a little bit of the crop that in ordinary times would have been just abandoned. That was on a Sunday afternoon. Mr. GATHINGS. Our people faced crop failures throughout our whole area and they were trying to harvest every bit of their crop that they could get irrespective of the adverse conditions that you saw. Mr. POAGE. May I say to this subcommittee, that I believe that we are pretty thoroughly familiar with the fact that you had a disaster. I believe we are pretty thoroughly convinced that those areas that were declared disaster areas by the Department last year are disaster I don't believe anybody has to sell this subcommittee on the proposition that we had disasters in various parts of this country. What we have got to have, though, gentlemen, is a real study of the words of this bill. I have read this bill further and I find blank spots in this bill. This subcommittee is not going to report a bill with blank spots, in my opinion. Mr. JONES. Are you talking about the amount of money? Mr. POAGE. Yes. We will take judicial knowledge of the fact that there was a disaster, but we want to know what is in it. Mr. GATHINGS. I realize that you will painstakingly go into this language. Mr. POAGE. I am just suggesting that we will make more progress in talking about the details of this bill than about the disaster. Mr. JONES. May I say this, Mr. Chairman, that blank space for the total amount of money to be authorized was left blank purposely to give this committee an opportunity to determine. Mr. POAGE. We would like to have your suggestions on these details, rather than telling us it is a disaster. Mr. JONES. Here is the reason. Most of the bills introduced prior to the time I introduced this last bill, had reached up in the air and grabbed a figure of $200 million. I don't know whether that is the right figure or not. I could have put $200 million in. Mr. POAGE. What do you think we ought to put in? would cost considerable capitalization, that you would have to increase the capital in order to operate in that field? Mr. SMITH. For a few months we did advance loans in the Missis sippi and Arkansas and Missouri delta areas for the refinancing of secured debts only. We advanced funds for the paying of other cred itors up to the value of the farm machinery. He had to release his lien and we took a first mortgage on the farm machinery. And then we would advance him funds for the production of the crop. But our loan was a fully secured loan. any Mr. GATHINGS. I am glad to get that information in the record. Mr. POAGE. Are there any further questions? Are there further comments? If not, we are very much obliged to you gentlemen for spending so much time with us and giving us so much help. We appreciate it. The committee will stand adjourned. (Whereupon at 12: 45 p. m., the hearing was adjourned.) RICE ACREAGE, 1958 #JUN ** 23888 HEARINGS BEFORE THE SUBCOMMITTEE ON RICE OF THE 4 COMMITTEE ON AGRICULTURE EIGHTY-FIFTH CONGRESS SECOND SESSION MARCH 20 AND APRIL 29, 1958 Printed for the use of the Committee on Agriculture Serial WW UNITED STATES WASHINGTON: 1958 |