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
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
2. To "purchase, store, handle and process surplus agricultural and
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
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
13. "To guarantee" or otherwise deal in shares of "any other
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.
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
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
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:
|| Value (Cost)
| Linseed Oil
| Eggs, Dried
| Milk, Dried
| Mexican Meat
| Dried Prunes and Raisins
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.
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
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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