FEDERAL LICENSING OF CORPORATIONS MONDAY, MARCH 1, 1937 UNITED STATES SENATE, SUBCOMMITTEE OF THE COMMITTEE ON THE JUDICIARY, Washington, D. C. The subcommittee reconvened in the committee room of the Committee on the Judiciary, Capitol, at 11:30 a. m., Senator O'Mahoney presiding. Present: Senators O'Mahoney (chairman), McCarran, and Austin. STATEMENT OF MORDECAI EZEKIEL, ECONOMIC ADVISER TO THE SECRETARY OF AGRICULTURE, WASHINGTON, D. C. Senator O'MAHONEY. Mr. Ezekiel, will you be good enough to take the stand, and give your name to the reporter? Mr. EZEKIEL. Mordecai Ezekiel. Senator O'MAHONEY. What position do you hold with the Government? Mr. EZEKIEL. Economic adviser to the Secretary of Agriculture. Senator_O'MAHONEY. How long have you been with the Govern ment? Mr. EzeKIEL. Since 1922, 15 years. I started with the Department of Agriculture at that time. Senator O'MAHONEY. In what capacity? Mr. EzEKIEL. Junior economist. Senator O'MAHONEY. When you say you started as junior economist, I take it you mean that was a position under the civil service? Mr. EZEKIEL Yes, sir; through civil-service examination. Senator O'MAHONEY. The Civil Service Commission in years past has held examination for economists of various grades? Mr. EZEKIEL. Yes, sir. Senator O'MAHONEY. And that was the opening grade? Senator O'MAHONEY. Where did you get your training? Mr. EZEKIEL. I graduated at the Maryland State College of Agriculture and took postgraduate work at the University of Minnesota and the Robert Brookings Graduate School. Senator O'MAHONEY. So that you have given your life to the study of economic problems affecting agriculture? Mr. EZEKIEL. Yes, sir. Before going into the Department of Agriculture I ran a small farm in Maryland and was also with the Census Bureau. Senator O'MAHONEY. What positions have you held in the Government service? Mr. EZEKIEL. I held the position of junior economist, and was promoted through successive grades to senior economist. In 1930, after the Federal Farm Board was created, I joined their staff as assistant chief economist. In 1933, when Secretary Wallace was appointed, he asked me to join the Department of Agriculture again, as his economic adviser. Senator O'MAHONEY. You have been attending the previous hearings of this committee at which testimony was brought out respecting the character of commerce among the States in agricultural products, have you not? Mr. EZEKIEL. Yes, sir. Senator O'MAHONEY. And the interrelation of production processing, transportation, and distribution of the agricultural commodities which are the subject of commerce? Mr. EZEKIEL. Yes, sir. Senator O'MAHONEY. Will you be good enough to make your statement? Mr. EZEKIEL. The material I have prepared covers two phases, the interstate character of the commerce in agricultural products and also the extent of corporate control in a number of the major products. I am going to present rather briefly material bearing on remaining agricultural products, other than those presented by Mr. Harlan and Mr. Myers. Before starting I want to make a brief comment on the material that they presented, which is this-that both cotton and livestock are products that are largely produced in one State and consumed in other States, involving interstate commerce by the business organizations that handle them between the point of production and the point of consumption. In the case of livestock, the dominant organizations buy the animals, the raw product, in some cases, directly from the farmers in the country points where they are produced, and those same organizations handle every bit of intermediate transportation and distribution covering the products, through to sale to the retailer, and also to the ultimate consumer, in the case of hotels. So there are very widespread business organizations or concerns covering almost the whole field from the point of production to the point of consumption. In the case of cotton, there is no dominant organization. There is a whole series of different concerns involved in it, some marketing the cotton, others spinning it, others dyeing it, stil others manufacturing the clothing, and others selling the clothing. Those two represent two extreme types of business organization handling agricultural products, one handling the whole process of distribution and processing between the farmer and the retail store and the other type handling it through a number of different organizations. Senator O'MAHONEY. To what do you attribute that difference? Mr. EZEKIEL. I think it is due to the character of the products, having such diversified character. There are a large number of products made from animals, but cotton goes into even a more diverse set of uses Senator O'MAHONEY. With respect to that, have you made any study of the development of the diverse character of products resulting from the processing of livestock? Mr. EZEKIEL. There is material available for that in the Bureau Senator AUSTIN. It has been done, has it not? I will present in somewhat less detail material respecting other commodities. I will start with wheat. The first chart, which I preas exhibit 7, shows the production and distribution of wheat in 1839, quite early in the history of the country. At that time wheat production was scattered quite generally over the eastern part of the country and not concentrated in any single State. Senator O'MAHONEY. By 1839 it apparently had crossed the Appalachian Range and was being extensively raised in Ohio, Indiana, and northern Kentucky, not so much in Illinois and Missouri, and none west of Missouri. Mr. EZEKIEL. Yes, sir. On the Great Plains there was no raising, or not much raising, of wheat at that time. The next chart, exhibit 7A, shows the distribution of wheat acreage according to the 1929 census, which is substantially the present distribution. It shows that wheat production, instead of being distributed throughout the more populous areas, is now concentrated very largely in the great wheat-producing areas. Senator O'MAHONEY. Does the first map show the number of acres in cultivation in 1839? Mr. EZEKIEL. No, sir. That shows the number of bushels produced, and the second shows the number of acres. Senator AUSTIN. Mr. Chairman, since these maps are not numbered according to the testimony, should they not be identified in some way? There is a legend at the bottom. It says "Each dot represents 100,000 bushels." What is the legend on the second? Mr. EZEKIEL. Each represents 10,000 acres. Senator AUSTIN. I think the witness should identify the maps for the record. Senator O'MAHONEY. I think the suggestion of Senator Austin is quite correct. Perhaps a better identification would be "The area of wheat production in 1839." Senator AUSTIN. Very well. Mr. EZEKIEL. I also have exhibit numbers on them. Senator AUSTIN. I did not observe that. Very well. Mr. EZEKIEL. Exhibit no. 2 shows the extent to which wheat production is now concentrated in three areas-the northern Great Plains, the southern Great Plains, and the Pacific Northwest. Those are not the areas which are the most populous. There is a large interstate commerce in moving the wheat from the areas of production to the areas of consumption, which is shown on some of the other exhibits. Senator O'MAHONEY. Is there any difference between the distribution of wheat growing, as shown on this map, with respect to the population, and the distribution of wheat growing as shown on exhibit 1 with respect to population? Mr. EZEKIEL. Exhibit1 shows that in the early period wheat production was scattered quite largely over the country, in somewhat the same proportion the population was scattered at that time. Senator O'MAHONEY. In other words, in 1839 wheat was locally grown and locally consumed? Mr. EZEKIEL. Yes, sir. Senator O'MAHONEY. And 90 years later, in 1929, as shown on Exhibit 2, the growing of wheat is concentrated in western areas, where the population is comparatively small, and consequently is no longer consumed locally? Mr. EZEKIEL. Yes, sir. Senator O'MAHONEY. And it is now transported from where it is produced to where it is consumed? Mr. EZEKIEL. Yes, sir. Senator O'MAHONEY. You may proceed. Mr. EZEKIEL. As exhibit 8 I submit a chart, which shows the production of wheat flour, by States, and the percentage of flour mills in each State. The size of the circle indicates the proportion of wheat milled in each State. Apparently, three States are dominant-Minnesota, Kansas, and New York. It is interesting to note that the Great Plains States, west of Minnesota, which produce a large part of the wheat shown on exhibit 7-A, have only a very small portion of the flour-milling facilities, indicating the extent to which interstate commerce is necessary to get the wheat from the point of production to the point of milling. As exhibit 8A, I submit a similar chart showing the production and distribution of bakery products. The size of the circle in each State indicates the percent of the national total of bakery products produced in that State. It is entitled "Bread, rolls, coffee cake, etc., production, by States, expressed as percentage of United States production, 1931." Senator O'MAHONEY. A glance at this map would indicate that the largest production of bakery products is in those States having the largest population. Mr. EZEKIEL. Yes, sir. They are made largely for local consumption and are located near the population. It involves a very large degree of interstate commerce to get the wheat from the areas of production to the areas where the bread is consumed. |