Barnes v. Legge

Bad blood was let last week by the Senate Lobby Committee when, with many a painful poke and jab, it lanced the blister of feeling between the Federal Farm Board and private grain commission men (TIME, Dec. 23). The two-and-a-half hour operation without anesthetic was performed upon Julius Rowland Barnes, chairman of the board of the U. S. Chamber of Commerce, head of a three-million-dollar grain export house (Barnes Ames Co.) and chief of President Hoover's Business Committee. Patient Barnes, restless in the witness chair, steadied his nerves by chewing on a lead pencil.

Mr. Barnes made a specific complaint against the Farm Board: "The Government should not loan money at 3 1/2% to the [farm] cooperatives to buy grain in competition against the grain dealers who have to pay 6%." He called such loans "official favoritism," suggested that they should be made to all grain dealers at the same interest rate.

Another Barnes objection: The pegging of wheat values by the Farm Board for cooperative loans ($1.25 per bu. at Minneapolis, etc.).

Under pressure Mr. Barnes described to the Lobby Committee a meeting he had arranged this month at his Washington office between Chairman Alexander H. Legge of the Federal Farm Board and five big grain commission men to work out their difficulties. Said Mr. Barnes:

"The grain men asked Mr. Legge if the Farm Board had any deep-seated antagonism to their trade and he told them no. We then discussed the unfair competition between cooperative buyers and private buyers. Mr. Legge said he recognized this unfairness and that the present board policy is to lend cheap money only to the big wheat corporations--not to local buyers. . . . Mr. Legge said that, before promulgating any new policies, he would consult with business men to avoid unfairness. . . ."

With the committee Mr. Barnes left two impressions: 1) the Farm Board had at his protest changed its loan policy; 2) private dealers would have a chance to review future policies of the Board.

Mr. Barnes was hectored by the Committee. He repeatedly denied that he "lobbied" against the Farm Board or that he was a grain speculator. Chairman Caraway, accusing him of being "uncandid," remarked: "If you sold wheat abroad the way you answer this committee's questions, you'd never sell a bushel." Senator Blaine of Wisconsin asked Mr. Barnes "to cut out the Wall Street talk and speak in the language of the West."

Chairman Legge rushed to the defense of his Farm Board. To the U. S. Chamber of Commerce, of which Mr. Barnes is board chairman, Mr. Legge retorted: "The Chamber wants the Farm Board to hang its clothes on a hickory limb but not go near the water. . . . They want to go forward slowly. If their idea of the Farm Board is the correct one, a 21-year-old boy should be made chairman, for we men in the middle 60's would never live to carry out such a program. . . . The only fellow who has any real concern in the matter is the one who never gets any closer to real wheat than a pink ticket."*

After Mr. Barnes had testified, Chairman Legge publicly corrected him: "The Board did not alter its policies as a result of the hearing given the grain trade nor has the board agreed to submit its policies to the grain trade before action. . . . I don't think Mr. Barnes intended to convey this impression."

In, the House Mr. Barnes and William Butterworth, president of the U. S. Chamber of Commerce, were flayed for "misuse of power." Exclaimed Representative Garber of Oklahoma: "What does this episodical news reel disclose? Little men rattling around in big places. . . . A bunch of swaggering bullies making a noise without sufficient information. . . ."

What caused widest concern among farm cooperative leaders was the revelation by Chairman Legge of how his Board would handle future wheat loans: The Board would advance its funds to the National Farmers Grain Cooperative at 3 1/2% which in turn would farm out in smaller loans to individual cooperatives, adding "a small additional charge," presumably 2% or 3%. In effect the cooperatives would be paying the same rate--6%--as private commission men for cash. Chairman Legge carefully explained that whatever profit the national cooperative made from the additional interest imposed would in the end go back to the local cooperatives as members of the national body. To many a husbandman this seemed a long and risky way round to the "cheap money" he had been promised.

First to flay Farm Board Chairman Legge for his conference with Chairman Barnes was Chairman Caraway of the Senate Lobby Committee who wrote him:

"Your announcement is a surrender to these grain people . . . a disclaimer of any intention of a desire to be helpful to cooperative associations and a determination to disregard both the spirit and intent of the law. . . . If the policy of the board is to be determined in secret meetings with the speculative interests, the board is functioning in the interest of the grain people and in opposition to the farmers."

Convalescing rapidly from the Lobby Committee's surgery, Mr. Barnes busied himself about his duties as Chairman of the Hoover Business Committee. He announced appointment of 140 representatives of widely assorted businesses, from soap to steel, from gravel to groceries, as his committee's advisory body. Their task: to report weaknesses in their respective fields, so that "remedial measures" may be taken.

* In the wheat trading pits a "pink ticket" is the receipt for grain purchased but undelivered.

This file is automatically generated by a robot program, so reader's discretion is required.