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FIVE MONTHS AFTER THE INCORPORATION OF TENNESSEE VALLEY AUTHORITY, IN 1933, TWO MEMBERS OF THE CABINET OF THE PRESIDENT, AND THE HEAD OF THE FEDERAL RELIEF ADMINISTRATION PROCURED A CHARTER IN DELAWARE FOR THE FEDERAL SURPLUS COMMODITIES CORPORATION, CAPITALIZED BY THE MONEY OF THE TAXPAYERS

The next excursion of government beyond its constitutional domain was in October, 1933, after the Tennessee Valley Authority had been incorporated, and its aims were as general as human affairs.

Secretary of Agriculture Henry A. Wallace, Secretary of the Interior Harold L. Ickes, and Harry Hopkins, Head of the Federal Relief Administration, took out a charter under the ultraliberal law of Delaware for the Federal Surplus Commodities Corporation. The corporation, the charter recited, would have "perpetual existence."

Up to that time the "undesirable citizens," the persons of "predatory wealth," the "economic royalists," and others who became incorporators never thought of asking for their creatures more than half a century of life or, at most, 99 years. And if they organized under the laws of Delaware, they were, in the eyes of many, immediately suspect. But here the anointed in Government went to Delaware and took out a charter to last forever, until "the wreck of matter and the crush of worlds."

The tip-top corporation of Fascism

In part, the purposes of the charter were as follows (italics added):

1. "To relieve the existing economic emergency by the expansion of markets."

2. To "purchase, store, handle and process surplus agricultural and other commodities."

3. To perform "all functions" that may be "delegated to it under acts of Congress."

(By not authorizing Congress to delegate any functions to any person or group, the Constitution thereby forbids delegation. Yet delegation was done.)

4. "To accept grants ... of monies, commodities, lands or other property of any class, nature or description."

5. To "carry on any or all of its operations and business without restriction or limit."

6. To "hold, own, mortgage, sell, convey" property of "every class."

7. To borrow money on the commodities in its possession.

8. "To encourage the farmers to co-operate in any plan which calls for the reduction of acreage."

9. To engage in warehousing and exporting.

To incur debt in every conceivable way

10. "To borrow money," issue bonds and "all other kinds of obligations . . . without limit."

11. "To loan money, to buy, discount, sell or rediscount or otherwise deal in notes" and every sort of paper.

12. "To take and hold ... by bequest, devise, gift, purchase, lease or otherwise" anything.

13. "To guarantee" or otherwise deal in shares of "any other corporation."

And so on for six more paragraphs of specifications and powers.

No engineers of high finance ever piled a pyramid of corporations with powers to match those in scope or absoluteness.

And, of course, none of those activities is any constitutional business of the United States.[1]

Some of the Fascist activities exhibited

Yet the corporation has been acting with devilish diligence. It has had a part of several grain crops deteriorating in storage, and it has released wheat — the prime food of man — to feed the pigs.

In July, 1944, the Associated Press reported the War Food Administration as saying that it had purchased 10,500 carloads of eggs "for price support between January 1 and July 15."

No clause of the Constitution authorizes the support of prices by the Government of the United States for the benefit of farmers at the expense of the taxpayers. That point was passed upon by the Supreme Court when it held violative of constitutional limitations the original Agricultural Adjustment Act as an attempt to gather money for one class by taxing another.

In August, 1944, the dispatches told of the purchase in the Northwest by the War Food Administration of eggs at $9 a case of 30 dozen each, which it was obliged to sell at 20¢ to 50¢ a case. It dumped 14 railroad carloads of spoiled eggs. It was offering 14 more carloads to the trade. It had sold 26 carloads, about 16,000 cases, for hog feed at 5¢ a case. As stated above, the Government had paid $9 a case for them.

A consignment of 6 carloads was held in Chicago for orders from Washington to destroy them, until freight charges had accumulated to $4,200. But it was the money of the taxpayers!

The egg in its relation to great Government

The Associated Press reported in 1944 that a deputy director of War Food Administration testified before a committee of Congress that he "wished he knew" what could be done "with between $100,000,000 and $150,000,000 worth of eggs bought this year."

"Do you mean to say that the American taxpayers have invested between 100 and 150 million dollars in eggs we have no use for?" demanded the Chairman of the Committee.

"That's right," answered the witness.

Losses of taxpayers' money on ventures of the kind described were reported as to nearly every agricultural commodity. The Federal Surplus Commodities Corporation and its subsidiaries became possessed, by using the money of the taxpayers, of many surpluses of enormous — almost fabulous — cost, which they had to dump. The "ever-normal granary" of Henry A. Wallace, one of the incorporators of the Federal Surplus Commodities Corporation, turned out upon trial to be an instrumentality for feeding wheat to pigs. And Harry L. Hopkins, another of the incorporators, never made any apologies, probably because of the belief which he once expressed that "the people are too damned dumb to understand."

A potato famine resulting from abundance

On December 31, 1946, the Associated Press reported from Washington that "millions of bushels of frozen and rotten potatoes will be dumped under Government instructions." The Department of Agriculture had underwritten the 1946 crop up to 90 per cent of parity. The crop turned out to be 100,000,000 bushels larger than the "planners" had expected. Then prices tumbled. The Department loaned money to the growers at the guaranteed price and asked them to store the potatoes until the price should rise. It did not rise. The great loss came from those loan-stored potatoes. The dispatch carefully did not tell what price the Government guaranteed. Here is an illustration of the worst feature of centralized authority — its deceit, its adroit concealment of facts, its purposeful misleading of the public.

The loss from damp, vermin, and deterioration of wheat and other grains which the Corporation ordered held in storage for better rates, the while paying out of the pocket of the taxpayers unjustifiable prices to the farmer, was enormous, and the true extent of it will probably never be known.

One of the great "plungers" in debt

The Federal Surplus Commodities Corporation had a capitalization of $100,000,000, and all the stock was owned by the United States — which has no authority from the Constitution to own stock in any corporation. By the acts of 1938 and 1945 it was empowered to borrow up to $4,750,000,000 on obligations guaranteed by the United States, which has no authority from the Constitution to guarantee the borrowings of any corporation.

The Associated Press reported from Washington on May 23, 1949, that the total of subsidies provided for favored classes by the taxpayers without their permission for 17 years amounted to $15,571,060,000, of which $10,300,000,000 went to farmers. No clause in the Constitution authorizes Congress to appropriate money for such purposes.

Unquestionably the farmer has been put in a very serious predicament by the high costs of help on the land, and the high costs of labor going into farm implements, machinery, fertilizer, and all the other things that he has to buy. Those costs were increased out of all reason by the aid of the administration at Washington to the monopoly of organized labor, now so powerful at the polls that it holds the President captive.

Rejection of external government needed

But the cure for the grievances of the farmer, and of every other citizen weighted down by the operation of indefensibly high wages, is not the bestowal of subsidies from the taxpayers of the country, but the removal of the cause — the rejection for the future of the external government of the United States, and the exclusion of the President from the field of low politics.

And the Federal Surplus Commodities Corporation is only one of a number, the magnitude of the spending of which nobody certainly knows. At least, that is what is gathered from the reports of Senator Byrd on his efforts to find out what is doing by the spenders and wasters.

Congress, by setting up such activities in competition with man, assailed his liberty to live, unhampered and unannoyed, which it was its duty to safeguard.

No such corporation in Jackson's administration

On the proper and only place of Government in the affairs of men, President Andrew Jackson said more than a century and a decade ago:

"The duty of Government is to leave Commerce to its own capital and credit, as well as other branches of business, protecting all in their legal rights, giving exclusive privilege to none."

That cogent statement contains the American philosophy laid down in the Declaration of Independence, that Government is limited strictly to giving protection to men from men and to men from Government, and it is entirely without grant from the Constitution of any paternal authority.

The idea of President Jackson and other right-thinking Americans, that Government has no place in business, is sustained by the report of the Commodity Credit Corporation for the last fiscal year. A dispatch from Washington dated September 26, 1949, and sent by the United Press, said that the fund for the support of prices of farm commodities for the year had been set at $500,000,000. That was altogether wiped out, and an additional "red" expenditure was made of $170,000,000.

The "planner" and the bagatelle

The loss of cash in price support was $254,000,000
Inventory losses were 416,000,000
Losses on potatoes were 203,886,000
Losses on peanuts were 23,000,000
Losses on corn were 99,000,000
Losses on cotton were 36,000,000

On wheat there was written off as lost $56,000,000, of $529,000,000 invested.

Of $81,000,000 in eggs, $38,000,000 was written off.

Of $191,000,000 in linseed and other oils, $73,000,000 was written off.

The dispatch stated, without figures, that the report showed inventory losses on wool, peas, beans, barley, resin, turpentine, prunes, raisins, grains, sorghums, and tobacco.

Wires of the bureaus crossed

Under a multilateral agreement at Geneva in 1947, large imports of potatoes at half tariff rates came to the United States in 1949. That action of the Department of State was negatived by the Department of Agriculture in buying 90 million bushels of domestic potatoes in 1948 to make prices higher — keeping them out of consumption.

In like manner, 60 million pounds of butter imported from Denmark in 1949 was checkmated through the purchase by the Department of Agriculture, for price support, of 93 million, 305 pounds of domestic butter!

A recent dispatch from Washington quoted a member of the Government as saying that its business has become so large that it is next to impossible to handle it. But if the Government would abandon nongovernmental activities and consider the Constitution before taking up something new, its work would be cut by three fourths or more.

Former Secretary Morgenthau considers the situation

Contemplating the enormous volume of foodstuffs kept back from consumers in the United States by the "planning" of the Federal Surplus Commodities Corporation and other bureaus, Henry Morgenthau Jr., former Secretary of the Treasury, wrote an article in October, 1949, advocating the outright gift of the great quantities in storage to the needy in the Far East and the Near East. He gave a "partial listing" of the stocks of goods in possession of the Federal Surplus Commodities Corporation, which, after taking over all the available storage room in the country, must now "finance the building of much new storage capacity." He wrote that "the quantities of farm products which have been bought and paid for with the taxpayers' money, and which continue to be stored in warehouses at the taxpayers' expense, are so tremendous as to be almost beyond belief."

"It costs the United States Government," he added, "$237,000 a day just for storage and carrying charges on these commodities." Those charges now aggregate, he said, $76,281,725.

A table showing unconstitutional prodigality

The following are "partial listings" by Mr. Morgenthau of commodities in storage, which will be increased, he thinks, from the harvests of 1949 and 1950:

Commodity Quantity Value (Cost)
Wheat 190,600,000 bu. $451,722,000.00
Corn 75,000,000 bu. 132,000,000.00
Linseed Oil 212,889 tons 119,218,153.32
Eggs, Dried 65,558,257 lbs. 84,786,714.83
Butter 87,378,000 lbs. 55,048,140.00
Beans 4,950,000 cwt. 40,639,500.00
Barley 27,700,000 bu. 39,334,000.00
Milk, Dried 204,167,000 lbs. 26,541,710.00
Oats 13,250,000 bu. 10,997,500.00
Mexican Meat 34,691,585 lbs. 9,832,679.39
Dried Prunes and Raisins 36,036,330 lbs. 3,646,226.68
Cheese 16,250,000 lbs. 5,525,000.00
Rice 431,000 cwt. 2,439,460.00
Soybeans 580,000 bu. 1,450,000.00
Rye 850,000 bu. 1,351,500.00

The Vice President summarizes those figures

Speaking at Chicago on August 18,1949, Vice President Barkley said that "the Democrats have done more in 17 years for the farmers than ever was done before by any party."

In his campaign speeches in 1948 President Truman appealed directly to agriculturists to remember what had been done for them by his administration. They did.

Government of that sort must be put at end through a return by the States to the exercise of their police power and to the constitutional appointment of presidential electors.


1. In October, 1949, the Fairbanks Daily News-Miner published the secret draft of a charter for a Fascist company to be named The Alaska Development Corporation, which was in the main a copy of the Delaware charter of The Federal Commodities Surplus Corporation. The copy was taken to Alaska by an assistant secretary of the Interior and shown confidentially to a few persons, probably for consultative purposes.

The document went "all out" for everything — construction of electric power systems; loans of money of the taxpayers for any purpose; construction of railroads; operation of ships, docks, and all the equipment of the sea; aid to agriculture and to culture — nothing in the way of uplift is to be without provision. And, of course, the capital of the corporation (like that of the Commodities Corporation) will be taken by the United States out of the pockets of its taxpayers.

The plan for "the electrification of America" and the superseding of the Constitution by the Fascist corporations of Socialism is being driven with a vigor which the believers in the Republic lack.


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