Lost: $177,000,000

Last week the Federal Farm Board went on trial for its life before the Senate Committee on Agriculture. Lifted for the first time was the cloak of official secrecy with which for 28 months it had guarded the details of the Board's wheat and cotton stabilization operations. Curious Senators poked roughly into facts and figures which Farm Boarders had long feared would damage their agency's economic prestige. What was disclosed served to intensify the industrial clamor for the Board to be abolished as a futile waster of public funds. Lobbyists for farm organizations were no less loud in using the same disclosures to argue for its wholesale revamping.

Prime witness for the defense was James Clifton Stone, the Board's harassed chairman. He at last revealed the Board's market dealings in detail:

WHEAT

Amounts (In millions of bushels)

Total purchases . . . . . . . . . . . . . . 329

Sales to June 30, 1931 . . . . . . . . 72

On hand July 1 . . . . . . . . . . . . . . . 257

Foreign sales (Brazil, China, Germany).... 48

Quota sales (5,000,000 bu. per month).... 20

68

On hand Nov.1 . . . . . . . . . . . . . . . . . . 189

Prices (in millions of dollars)

Total cost ...................................................................... 270

Average price per bu .................................................... 82-c-

Investment value of Nov. 1 holdings including losses on prior sales,

storage, etc ................................................................... 222

Market value, Nov. 1 .....................................................120*

''Paper Loss" .................................................................102

Sale price per bu. to break even ..................................$1.17

COTTON Amounts (in bales)

Total purchases ...........................................................1,319,809

All sales ....................................................................... ....9,020

On hand Nov. 1 ............................................................1,310,789

Prices (in millions of dollars')

Total cost ....................................................................... 107

Average price per lb 16 1/3-c-

Investment value Nov. 1 ..............................................120

Market value Nov. 1 .................................................... 45

"Paper loss" ................................................................75

Sale price per lb. to break even ................................18-c-

Though he argued that better times might materially change this statistical picture, Mr. Stone admitted that the Farm Board's book loss on price-pegging amounted to $177,000,000. Other officials figured it as high as $185,000,000.

On June 30 (end of the fiscal year) the Farm Board accounted for its $400,000,000 revolving fund (the last $100,000,000 appropriation did not become available until July 1) in this manner:

FINANCES (in millions of dollars)

Grain Stabilization Corp. loan .................................160

Cotton Stabilization Corp. loan. ..............................75

Price pegging advances .............................................235 Loans to cooperatives:

Cotton .................................................................45 Dairy .....................................................................9 Citrus fruits .......................................................2 Grapes & raisins ...............................................15 Grain ..................................................................13 Livestock ............................................................3 Wool ..................................................................16 Tobacco ..............................................................2 Miscellaneous .....................................................4 Total outstanding advances ............................344 Cash on hand . .................................................66 Total fund ........................................................400

What drew sharp attack on the hearings were the salaries which Farm Boarders, to whom the law allows $12,000 per year, allowed their semi-public agents in wheat and cotton trading. George Sparks Milnor was an able, honest, small-scale miller of Alton, Ill. who had never made more than $36,000 per year when the Farm Board chose him at $50,000 per year to manage Farmers National Grain Corp. and its market subsidiary, Grain Stabilization Corp. National Grain Corp. made $2,418,000 gross profits in two years, paid a $332,000 dividend, employed 947 persons.

Edward Fitzgerald ("Jerry") Creekmore, the large, big-nosed head of American Cotton Cooperative Association and its Cotton Stabilization Corp. is paid $75,000 per year in salary and bonus. He began life as an errand boy in a cotton factor's office in Arkansas. Last week Mr. Creekmore appeared before the Senate committee, explained that he took his present job reluctantly, contributed his $27,000 New York Cotton Exchange Seat to the Farm Board's business. He estimated that the average cotton grower in the South made about $300 per year. "And yet you, as the representative of these poor devils, are drawing down $75,000 per year!" exclaimed Senator Wheeler.

When Senator Norris suggested he ought to reduce his ''princely salary," Cottonman Creekmore shot back: "This isn't a question of salary. The responsibility is so great that a salary, more or less, is of little significance. ... If I reduced all my salary it would not amount to 2-c- a bale. I wonder if some of your constituents in Nebraska don't feel the same about your salary [$10,000 per year]?"

"I believe they do," mused Senator Norris.

Summarized Chairman McNary as the inquiry closed temporarily: "The hearings have disclosed some errors of administration but no delinquencies. The committee generally disapproved of the excessively high salaries. ..."

* Chairman Stone figured this value at 63-c- per bu. when the wheat market was at its recent crest (TIME, Nov. 9). Last week wheat sold for about 53-c- per bu., which knocked approximately $20,000,000 from the value estimated by Mr. Stone.

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