Agricultural Adjustment Act of 1938

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Conference Report to Accompany
Agricultural Adjustment Act of 1938
H.R. Rep. No. 75-1767 (3d Sess., 1938)

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75TH

CONGRESS}

3d Session.

HOUSE OF REPRESENTATIVES {

REPORT

No. 1767

AGRICULTURAL ADJUSTMENT ACT OF 1938

FEBRUARY

Mr.

"-

JONES,

7, 1938.-0rdered to be printed

from the committee of conference, submitted the following

CONFERENCE REPORT
[To accompany H. R. 8505]

The committee of conference on the disagreeing votes of the two
Houses on the amendments of the Senate to the bill (H. R. 8505) to
provide for the conservation of national soil resources and to provide
an adequate and balanced flow of agricultural commodities in interstate and foreign comrnerce, having met, after full and free conference,
have agreed to recommend and do recommend to their respective
Houses as follows:
That the House recede from its disagreement to the amendment of
the Senate and agree to the same with an amendment as follows:
In lieu of the matter proposed to be inserted by the Senate amendment insert the following:
That thi8 Act may be cited as the "Agricultural Adjustment Act of 1938".
DEOLARATION OF POLIOY

SEO. 2. It is hereby declared to be the policy of Congress to continue
the Soil Conservation and Domestic Allotment Act, as amended, for the
purpose of conserving national resources, preventing the wasteful use oj
soil fertility, and of preserving, maintaining, and rebuilding the farm and
ranch land resources in the national public interest; to accomplish these
purposes through the encouragement of soil-building and soil-conserving
crops and practices; to assist in the marketing of agricultural commodities
for domestic consumption and for export; and to regulate interstate and
foreign commerce in cotton, wheat, corn, tobacco, and rice to the extent
necessary to provide an orderly, adequate, and balanced flow of such
commodities in interstate and foreign commerce through storage of reserve
supplies, loans, marketing quotas, assisting farmers to obtain, insofar as
practicable, parity prices for such commodities and parity of income, and
assisting consumers to obtain an adequate and steady supply of sucl,
commodities at fair prices.

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AGRICULTURAL ADJUSTMENT ACT OF 1938

TITLE I-AMENDMENTS TO SOIL OONSERVATION AND
DOMESTIO ALLOTMENT AOT
POWERS UNDER SOIL-CONSERVATION PROGRAM

SEC. 101. Section 8 (b) and (c) of the Soil Oonservation and Domestic
Allotment Act, as amended, are amended to read as follows:
" (b) Subject to the limitations provided in subsection (a) of this sec­
tion, the Secretary shall have power to carry out the purposes specified in
clauses (1), (2), (3), (4), and (5) of section 7 (a) by making payments
or grants of other aid to agricultural producers, including tenants and
sharecroppers, in amounts determined by the Secretary to be fair and
reasonable in connection with the effectuation of such purposes during the
year with respect to which such payments or grants are made, and meas­
ured by (1) their treatment or use of their land, or a part thereof, for soil
restoration, soil conservation, or the prevention of erosion; (2) changes in
the use of their land; (3) their equitable share, as determined by the Sec­
retary, of the normal national production of any commodity or commodi­
ties required for domestic consumption; or (4) their equitable share, as
determined by the Secretary, of the national production of any commodity
or commodities required for domestic consumption and exports adjusted to
reflect the extent to which their utilization of cropland on the farm con­
forms to farming practices which the Secretary determines will best effec­
tuate the purposes specified in section 7 (a); or (5) any combination of
the above. In arid or semiarid sections, (1) and (2) above shall be con­
strued to cover water conservation and the beneficial use of water on indi­
vidual farms, including measures to prevent run-off, the building of check
dams and ponds, and providing facilities for applying water to the land.
In determining the amount of any payment or grant measured by (1) or
(2) the Secretary shall take into consideration the productivity of the land
affected by the farming practices adopted during the year with respect to
which such payment is made. In carrying out the provisions of this sec­
tion in the continental United States, the Secretary is directed to utilize
the services of local and State committees selected as hereinafter provided.
The Secretary shall designate local administrative areas as units for ad­
ministration of programs under this section. No such local area shall
include more than one county or parts oj different counties. Farmers
within any such local administrative area, and participating or cooperat­
ing in programs administered within such area, shall elect annually from
among their number a local committee of not more than three members for
such area and shall also elect annually from among their number a dele­
gate to a county convention for the election of a county committee. The
delegates from the various local areas in the county shall, in a county con­
vention, elect, annually, the county committee for the county which shall
consist of three members who are farmers in the county. The local com­
mittee shall select a secretary and may utilize the county agricultural ex­
tension agent for such purpose. The county committee shall select a sec­
retary who may bethe county agricultural extension agent. If such county
agricultural extension agent shall not have been elected secretary of such
committee. he shall be ex officio a member of the county committee. The
county agricultural extension agent shall not have the power to vote. In
any county in which there is only one local committee the local committee
shall also be the county committee. In each State there shall be a State
committee for the State composed of not less than three or more than five

AGRICULTURAL ADJUSTMENT ACT OF 1938

3

farmers who are legal residents of the State and who are appointed by the
Secretary. The State director of the Agricultural Extension Service shall
be ex officio a member oj such State committee. The ex officio members
of the county and State committees shall be in addition to the number of
members of such committees hereinbefore specified. The Secretary shall
make such regulations as are necessary relating to the selection and exercise of the functions of the respective committees, and to the administration, through such committees, oj such programs. In carrying out the
provisions oj this section, the Secretary--shall, as far as practicable
protect the interests of tenants and sharecroppers; is authorized to utilize
the agricultural extension service and other approved agencies; shall accord such recognition and encouragement to producer-owned and producercontrolled cooperative associaiions as will be in harmony with the policy
toward cooperative associations set forth in existing Acts of Oonqress ani/,
as will tend to promote efficient methods of marketing and distribution;
shall not have power to acquire any land or any right or interest therein r
shall, in evelY practicable manner, protect the interests of small producers;
and shall in every practical way encourage and provide for soil-conservin{;f
and soil-rebuilding practices rather than the growing of soil-depleting
crops. Rules and regulations governing payments or grants under this
subsection shall be as simple and direct as possible, and, wherever practicable, they shall be classified on two bases: (a) Soil-depleting corps and
practices, (b) soil-building crops and practices.
"(c) (1) In apportioning acreage allotments under thib section in the
case of wheat and corn, the National and State allotments and the allotmente to counties shall be apportioned annually on the basis of the acreage
seeded for the production of the commodity during the ten calendar years
immediately preceding the calendar year in which the national acreage
allotment is determined (plus, in applicable years, the acreage diverted
under previous agricultural adjubtment and conservation programs), with
adjustments for abnormal weather conditione and trends in acreage during
the applicable period.
" (2) In the case of wheat, the allotment to an y county shall be apportioned annually by the Secretary, through the local committees, among the
farms within such county on the basis of tillable acres, crop-rotation practices, type of soil, and topography. Not more than 3 per centum of such
county allotment shall be apportioned to farms on which uheo: has not
been planted during any of the three marketing years immediately preceding the marketing year in which the allotment is made.
"(3) In the case of corn, the allotment to any county shall be apportioned
annually by the Secretary, through the local commuieee, among the farms
within such county on the basis of tillable acreage, type of soil, topography,
and crop-rotation practices.
"(4) Notwithslanding any other prooisum of this subseccion, if, for any
reason other than flood or drought, the acreage of wheat, cotton, corn, or
rice planted on the farm is less than 80 per centum of the farm acreage
allotment for such commodity for the purpose of payment, such farm acreaq« allotment shall be 25 per centum in excess of such planted acreage.
"(5) In determining normal yield per acre on any farm under this
section in the case oj wheat or corn, the normal yield shall be the average
yield per acre thereon for such commodity during the ten calendar years
immediately preceding the calendar year in which such yield is determined, adjusted for abnormal weather conditions and trends in yields.
If for any reason there is no actual yield, or the data therefor are not
I

4

AGRICULTURAL ADJUSTMENT ACT OF 1938

available for any year, then an appraised yield for such year, determined
in accordance with regulations of the Secretary, shall be used. If, on
account of drought, flood, insect pests, plant disease, or other uncon­
trollable natural cause, the yield in any year oj such ten-year period is
less than 75 per centum oj the average (computed without reqara 110 such
year), such year shall be eliminated in calculating the normal yield
per acre.
"(d) Any payment or grant of aid made under subsection (b) shall
be conditioned upon the utilization of the land, with respeci to which
such payment is made, in conformity with farming practices which the
Secretary finds tend to effectuate anyone or more of the purposes specified
in clause (1), (2), (3), (4), or (5) of section 7 (a).
"Any pa,yment made under subsection. (b) with respect to any farm
(except for lands which the Secretary determines should not be utilized
for the harvesting of crops but should be used for grazing purposes only)
shall, if the number of cows kept on such farm, and in the county in which
such farm is located, for the production of milk or products thereof
(for market), exceeds the normal number of such cows, be further con­
ditioned upon the utilization of the land, with respect to which such
payment is made, so that soil-building and soil-conserving crops planted
or produced on an acreage equal to the land normally used for the pro­
duction of soil-depleting crops but, as a condition of such payment,
not permitted to be so used, shall be used for the purpose of building
and conserving the fertility of the soil, or for the production of agri­
cultural commodities to be consumed on the farm, and not for market.
Whenever it is determined that a county, as a whole, is in substantial
compliance with the provisions of this paragraph, no payment shall be
denied any individual farmer in the county by reason of this paragraph;
and no payment shall be denied a farmer by reason of this paragraph
unless it has been determined that the farmer has not substantially com­
plied with the provisions of this paragraph. Whenever the Secretary
finds that by reason of drought, flood, or other disaster, a shortage of feed
exists in any area, he shall so declare, and to the extent and for the period
he finds necessary to relieoe such shortage, the operation of the condition
provided in this paragraph shall be suspended in such area and, if
necessary to relieve such shortage, in other areas defined by him. As
used in this paragraph, the term 'for market' means for disposition by
sale, barter, or exchange, or by feeding (in any form) to dairy lioestock
which, or the products of which, are to be sold, bartered, or exchanged;
and such term shall not include consumption on the farm. An agri­
cultural commodity shall be deemed consumed on the farm if consumed
by the farmer's family, employees, or household, or if fed to poultry or
livestock other than dairy livestock on his farm; or if fed to dairy livestock
on his farm and such dairy livestock, or the products thereof, are to be
consumed by his family, employees, or household. Whenever the Secre­
tary has reason bo believe the income of producers of livestock (other
than dairy cattle) or poultry in any area from such sources is being ad­
versely affected by increases in the supply for market of such livestock or
poultry, as the case may be, arising as a result of programs carried out
under this Act, he shall make an investigation with respect to the existence
of such facts. If, upon investigation, the Secretary finds that the income
of producers of such livestock or poultry, as the case may be, .im any area
from any such source is being adversely a..fJected by such increases he
shall, as soon as practicable, make such provisions in the administration

AGRICULTURAL ADJUSTMENT ACT OF 1938

5

d} this Act with respect to the use oj dioerted acres as he may find necessary
to protect the interests oj producers oj such livestock or poultry in the
affected area."
REDUCTIONS AND INOREASES IN PAYMENTS UNDER SOIL OONSERVATION
PROGRAM

SEC. 102. Section 8 oj the Soil Oonservation and Domestic Allotment
Act, as amended, is [urther amended by adding a new subsection as
~~w:

.

"(e) Payments made by the Secretary to farmers under subsection (b)
shall be divided among the landlords, tenants, and sharecroppers of any
farm, with respect to which such payments are made, in the same propor­
tion that such landlords, tenants, and sharecroppers are entitled to share
in the proceeds of the agricultural commodity with respect to which such
payments are made, except that payments based on soil-building or soil­
conserving practices shall be divided in proportion. to the extent which such
landlords, tenants, and sharecroppers contribute to the carrying out oj
such practices. Such payments shall be paid by the Secretary directly
to the landlords, tenants, or sharecroppers entitled thereto, and shall be
computed at rates which will permit the Secretary to set aside out of the
funds available for the making of such payments for each year an amount
sufficient to permit the increases herein specified to be made within the
limits of the funds so available. Ij with respect to any farm the total
payment to any person for any year would be:
"(1) Not more than $.tEO, the payment shall be increased by 40
per centum;
"(2) More than $20 but not more than $40, the payment shall be
increased by $8, plus 20 per centum of the excess over $20;
"(3) More tham $40 but not more than $60, the payment shall be
increased by $12, plus 10 per centum of the excess over $40;
"(4) More than $60 but not more than $186 J the payment shall be
increased by $14; or
"(5) More than $186 but less than $200, the paymel1t shall be
i11 creased to $200.
In the case oj payments oj more than $1, the amount of the 'Rayment which
shall be used to calculate the 40-, 20-, and 1O-per-centum uicreasee under
clauses (1), (2), and (3) shall not include that part, if any, oj the payment
which is afraction of a dollar.
"Beginning unih. the calendar year 1939, no total pasnneni for any year
to any person under such subsection (b) shall exceed $10,000. In the
case of payments made to any uuhoidual, partnershop, or estate on account
of l erf ormance onfarms in different States, Territories, or possessions, the
$10,000 limitat'ion shalt appLY to the total of the payments for each State,
Territory, or possession, jor a year and not to the total of all such pay­

mente.'
TENANT PROVISIONS

SEO. 103. Section 8 oj the Soil Oonservation and Domestic Allotment
Act, as amended, is further amended by adding the following new

subsection»:
H(f) Any change between the landlord and the tenants or sharecroppers,
with respect to any farm, that would increase over the previous year the
amount oj payments or grants of other aid under subsection (b) that would
H. Repts., 75-3, vol, 1-38

6

AGRICULTURAL ADJUSTl\.1ENT ACT OF 1938

otherwise be made to any landlord shall 'not operate to increase such pay­
ment or grant to such landlord. Any reduction in the number of tenants
below the average number of tenants on any [arm during the preceding
three years that would increase the payments or grants of other aid under
such subsection that would otherwise be made to the landlord shall not here­
after operate to increase any such payment or grant to such landlord.
Such limitations shall apply only if the county committee finds that the
change or reduction is not justified and disapproves such change or
reduction.
"(g) A payment which may be made to afarmer under this section, may
be assigned, without discount, by him in writing as security for cash or
advances to finance making a crop. Such assignment shall be acknowl­
edged by the farmer before the county agricultural extension agent and
filed with such agent. The farmer shall file with such county agricultural
extension agent an affidavit stating that the assignment is not made to
pay 01' secure any pre-existing indebtedness. This provision shall not
authorize any suit against or impose any liability upon the Secretary or
any disbursing agent if payment to the farmer is made without regard to
the existence of any sucli aseummeni:"
APPORTIONMENT OF FUNDS

SEC. 104-. Section 15 of the Soil Oonservation and Domestic Allotment
Act, as amended, is amended by inserting at the end thereof the following
new paragraph:
"The funds available for payments (after allowing for estimated
administrative expenses, and not to exceed 5 per centumfor payments with
respect to range lands, noncrop pasture lands, and naval stores) shall be
allocated among the commodities produced with respect to which payments
or grants are to be computed. In allocating funds among the commodities
the Secretary shall take into consideration and give equal weight to (1)
the average acreages planted to the various commodities (including rotation
pasture), for the ten years 1928 to 1937, adjusted for abnormal weather
and other conditions, including acreage diverted from production under
the agricultural adjustment and soil conservation programs; (2) the value
at parity prices of the production from the allotted acreages of the various
commodities for the year with respect to which the payment is made; (3)
the average acreage plamied to the various commodities during the ten
years 1928 to 1937, including the acreage diverted from production
under the agricultural adjustment and soil conservation programs, in
excess of the allotted acreagefor the year with respect to which the payment
is made; and (4) the value based on average prices for the preceding ten
years of the production of the excess acreage determined under item (3).
The rate of payment used in makuu; payments to the producers of each
commodity shall be such that the estimated payments with respect to such
commodity shall equal the amount of funds allocated to such commodity
as herein provided. For the purpose of allocating funds and computing
payments or grants, the Secretary is authorized to consider as a commodity
a group of commodities or a regional or market classification of a com­
modity. For the purpose of computing payments or grants, the Secretary
is auihorized.to use funds allocated to two or more commodities produced on
farms of a designated regional or other classification to compute payments
uiiih. respect to one of such commodities on such farms, and to use funds , in
an amount equal to the estimated payments which would be made in any

AGRICULTURAL ADJUSTMENT ACT OF 1938

7

county,jor making payments pursuant to a special program under section
B approved by the Secretary for such county: Provided, That farm acreage
allotments shall be made for wheat in 1938, but in determining compliance
wheat shall be considered in the group with other crops for which special
acreage allotments are not made."
EFFEOTIVE TIME OF SEOTIONS 101, 102, 103, AND 104­

SEo.l05. The amendments made by sections 101,102,103, and 104­
shall first be effective with respect to farming operations carried out in the
calendar year 1938. Nothing contained herein shall require reconstitut­
ing, for 1938, any county or other local committee which has been con­
stituted prior to February 1, 1t938.
TITLE II--ADJUSTMENT IN FREIGHT RATES, NEW USES
AND MARKETS, AND DISPOSITION OF SURPLUSES
ADJUSTMENTS IN FREIGHT RATES FOR FARM PRODUOTS

SEO. 201. (a) The Secretary of Agriculture is authorized to make com­
plaint to the Interstate Commerce Commission with respect to rates,
charges, tariffs, and practices relating to the transportation of farm pro­
ducts, and to prosecute the same before the Commission. Before hearing
or disposing of any complaint (filed by any person other than the Secre­
tary) with respect to rates, charges, tariffs, and practices relating to the
transportation of farm products, the Commission shall cause the Secre­
tary to be notified, and, upon application by the Secretary, shall permit
the Secretary to appear and be heard.
(b) If such rate, charge, tariff, or practice complained of is one affect­
ing the public interest, upon application by the Secretary, the Commission
shall make the Secretary a party to the proceeding. In such case the
Secretary shall have the rights of a party before the Commission and the
rights of a party to invoke and pursue original and appellate judicial
proceedings involving the Commission's determination. The liability oj
the Secretary in any such case shall extend only to liability for court
costs.
(c) For the purposes of this section, the Interstate Commerce Commis­
sion is authorized to avail itself of the cooperation, records, services, and
facilities of the Department of Agriculture.
(d) The Secretary is authorized to cooperate with and assist cooperative
associations of farmers making complaint to the Interstate Commerce
Commission with respect to rates, charges, tariffs, and practices relating
to the transportation of [arm products.
NEW USES AND NEW MARKETS FOR FARM OOMMODITIES

SEC. 202. (a) The Secretary is hereby authorized and directed to
establish, equip, and maintain four regional research laboratories, one
in each major farm producing area, and, at such laboratories, to conduct
researches into and to develop new scientific, chemical, and technical uses
and new and extended markets and outlets for farm commodities and
products and byproducts thereof. Such research and development shall
be devoted primarily to thosefarm commodities in which there are reqular
or seasoval surpluses, and their products and byproducts.

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AGRICULTURAL ADJUSTMENT ACT OF 1938

(b) For the purposes of subsection (a), the Secretary is authorized to
acquire land and interests therein, and to acceptin the name of the United
States donations of any property, real or personal, to any laboratory
established pursuant to this section, and to utilize voluntary or uncom­
pensated services at such laboratories. Donations to anyone of such
laboratories shall not be available for use by any other of such laboratoriee.
(c) In carrying out the purposes of subsection (a), the Secretary is
authorized and directed to cooperate with other departments or agencies of
the Federal Government, States, State agricultural experiment stations,
and other State agencies and institutions, counties, municipalities, busi­
ness or other organizations, corporations, associations, universities,
scientific societies, and individuals, upon such terms and conditions as
he may prescribe.
(d) To carry out the purposes of subsection (a), the Secretary is
authorized to utilize in each fiscal year, beginning with the fiscal year
beginning July 1, 1938, a sum not to exceed $4,000,000 of the funds
appropriated pursuant to section 391 of this Act, or section 15 of the
Soil Conservation and Domestic Allotment Act, as amended, for such
fiscal year. The Secretaru shall allocate one-fourth. of such sum annually
to each of the four laboratories established pursuant to this section.
(e) The Secretary shall make a report to Congress at the beginning of
each regular session of the activities of, expenditures by, and donations to
the laboratories established pursuant to subsection (a).
(f) There is hereby allocated to the Secretary of Commerce for each
fiscal year, beginning unih. the fiscal year beginning July 1,1938, out of
funds appropriated for such fiscal year pursuant to section 391 of this
Act, or section 15 of the Soil Oonservation and Domestic Allotment Act, as
amended, the sum of $1 ,000,000 to be expended for the promotion of the
sale of farm commodities and products thereof in such manner as he shall
direct. Of the sum allocated um der this subsection to the Secretary of
Oommerce for the fiscal year beginning July 1, 1938, $100,000 shall be
devoted to making a sur'vey and imceetiqaiion of the conue or causes of the
reduction in exports of agricultural commodities from the United States,
in order to ascertain methods by which the sales in foreign countries of
basic agricultural commodities produced in the United States may be
increased.
(g) It shall be the duty of the Secretary to use available funds to stimu­
late and widen the use of all farm commodities in the United States and
to increase in every practical way the flow of such commodities and the
products thereof into the markets of the world.
SEC. 203. Section 32, as amended, of the Act entitled "An Act to
amend the Agricultural Adjustment Act, and for other purposes",
approved August 24, 1935, is amended by striking out ": Provided
urther, That no part of the funds appropriated by this section shall be
used for the payment of benefits in connection with the exportation oj
unmanufactured cotton", and is further amended by adding at the end
thereofthefollowing: "Notwithstaf/1;ding any otherprovision of this section,
the amount that may bedevoted, during anyfiscal year after June 30, 1939,
to anyone agricultural commodity or the products thereof in such fiscal
year, shall not exceed 25 per centum of the funds available under this
section for euclifiscal year."

AGRICULTURAL ADJUSTMENT ACT OF 1938

9

CONTINUATION OF FEDERA.L SURPLUS OOMMODITIES OORPORATION
SEC. 204. The Act entitled ".L4.n Act to extend the time [or purchase
and distribution of surplus agricultural commodities for relief purposes
and to continue the Federal Surplus Oommodities Oorporation", ap­
proved June 28, 1937 (Public, Numbered 165, Seventy-fifth Oongress), is
amended by striking out "continued, until June 30, 1939," and inserting
in lieu thereof "continued, until June 30, 1942,". The Federal Surplus
Oommodities Corporation shall submit to Oongress on thefirst day of each
regular eeeeion an annual report settingforth a siatemen» OJ the aciioisie«,
receipts, and expenditures of the Oorporation during the previous fiscal
year.
TITLE 111- LOANS, PARITY PAYMENTS, OONSUMER
SAFEGUARDS, AND MARKETING QUOTAS
SUBTITLE A-DEFINITIONS, LOANS, PARITY P A.YMENTS,
SUMER SA.FEGUARDS

A.:lD

OON­

DEFINITIONS
SEC. 301. (a) GENERAL DEFINITIONS.- For the purposes of this titl~
and the declaration of policy­
(1) "Parity", as applied to prices for any agricultural commodity,
shall be that price for the commodity which will give to the commodity a
purchasing power with respect to articles that farmers buy equivalent to
the purchastng power of such commodity in the babe period; and, in the
case of all commodities for which the base period is the period August 1909
to July 1914, which will also reflect current interest paymentb per acre
on farm indebtedmese secured by real estate, tax payments p(r acre 011 farm
real estate, and freight rates, as contrasted with such interest payments t
tax payments, and freight rates durillg the bast period. The base perioa
in the case of all agricultural commodities except tobacco shall be the
period August 1909 to July 1914, and, in the case of tobacco, shall be the
periodAugust 1919 to July 1929.
(2) "Parity", as applied to income, shall be that per capita net income
of individuals on farms from farming operations that bears to the per
capita net income of individuals not on farms the same relation as pre­
vailed during the period jrom. August 1909 to July 1914.
(3) The term "inierstaie and foreign commerce" means sale, marketing,
trade, and traffic between any State or Territory or the District of Oolumbia
or Puerto Rico, and any place outside thereof; or between points within
the same State or Territory or within the District of Columbia or Puerto
Rico, through any place outside thereof; or within any Territory or within
the District of Oolumbia or Puerto Rico.
(4) The term "affect interstate and foreign commerce" means, among
other things, in such commerce, or to burden or obstruct such commerce
or thefree and orderlyflow thereof; or to create or tend to create a surplus
of any agricultural commodity which burdens or obstructs such commerce
or thefree and orderlyflow thereof.
(5) The term "United States" means the several States and Territories
and the District of Oolumbia and Puerto Rico.
(6) The term "State" includes a Territory and the District of Ool1JRlbia
and Puerto Rico.

10

AGRICULTURAL ADJUSTMENT ACT OF 1938

(7) The term "Secretary" means the Secretary oj Agriculture, and
the term "Department" means the Department oj Agriculture.
(8) The term "person" means an individual, partnership, firm, joint­
stock company, corporation, association,' trust, estate, or any agency oj
a State.
(9) TM term "corn" means field corn.
(b)

DEFINITIONS APPLIOABLE TO ONE OR MORE OOMMODITIEs.-For

the purposes oj this title­
(1) (A) "Actual production" as cpplied to any acreage oj corn means
the number of bushels of corn which the local committee determines uiould
be harvested as grain from such acreage if all the corn on such acreage
were so harvested. In case of a disagreement between the farmer and the
local committee as to the actual production of the acreage oj corn on the
farm, or in case the local committee determines that such actual production
is substantially below norrnal, the local committee, in accordance with
regulations of the Secretary, shall weigh representative samples oj ear corn
taken from the acreage involved, make proper deductions for moisture
content, and determine the actual production oj such acreage on the basis
oj such samples.
(B) "Actual production" of any number oj acres oj cotton on ajarm
means the actual average yield jor the jarm times such number oj acres. '
(2) "Bushel" means in the case oj ear corn that amount oj ear corn,
including not to exceed 15}~ per centum of moisture content, which weighs
seventy pounds, and in the case of shelled corn, means that amount oj
shelled corn including not to exceed 15}~ per centum oj moisture content,
which uieiqh« fijty-six pounds.
(3) (A) "Carry-over", in the case oj corn and rice, jor any marketing
year shall be the quantity oj the commodity on hand in the United States
at the beginning oj such marketing year, which was produced in the
United States prior to the beginning oj the calendar year then current.
(B) "Carry-over" oj cottonjor any marketing year shall be the quantity
oj cotton on hand either within or without the United States at the begin­
ning oj such marketing year, which was produced in the United States
prior to the beginning oj the calendar year then current.
(0) "Carry-over" oj tobacco jor any marketing year shall be the quan­
tity of such tobacco on hand in the United States at the beginning of such
marketing year, which was produced in the United States prior to the
beginning of the calendar year then current, except that in the case oj
cigar-filler and cigar-binder tobacco the quantity oj type 46 on hand and
theretofore produced in the United States during such calendar year shall
also be included.
(D) "Carry-over" of wheat, for any marketing year shall be the quan­
tity of wheat on hand in the United States at the beginning of such market­
ing year, not including any wheat which was produced in the United
States during the calendar year then current, and not including any wheat
held by the Federal Orop Insurance Oorporation under Title V.
.
(4) (A) "Commercial corn-producing area" shall include all counties
in which the average production of corn (excluding corn used as silage)
during the ten calendar years imrnediately preceding the calendar year
for which such area is determined, after adjustment for abnormal weather
conditions, is four hundred and fifty bushels or more per farm and four
bushels or more for each acre of farm land in the county.
(B) Whenever prior to February 1 oj any calendar year the Secretary
has reason to believe that any county which is not included in the com­

AGRICULTURAL ADJUSTMENT ACT OF 1938

11

mercial corn-producing area determined pursuant to the provisions of
Isubparagraph (A), but which borders upon one of the counties in such
area, or that any minor civil division in a county bordering on such
area, is producing (excluding corn used for silage) an average of at
least four hundred and fifty bushels of corn per farm and an average
of at least four bushels for each acre of farm land in the county or in
the minor civil division, as the case may be, he shall cause immediate
investigation to be made to determine such fact. If, upon the basis of
such investigation, the Secretary finds that such county or minor civil
division is likely to produce corn in such average amounts during such
calendar year, he shall proclaim such determination, and, commencing
with such calendar year, such county shall be included in the commercial
corn-producing area. In the case of a county included in the commercial
corn-producing area pursuant to this subparagraph, whenever prior to
February 1 of any calendar year the Secretaru has reason to believe that
facts justifying the inclusion of such county are not likely to exist in
such calendar year, he shall cause an immediate investigation to be made
with respect thereto. If, upon the basis of such investigation, the Secre­
tary finds that such facts are not likely to exist in such calendar year,
he shall proclaim such determination, and commencing with such calendar
year, such county shall be excluded from the commercial corn-producing
area.
(5) "Farm consumption" of corn means consumption by the farmer's
family, employees, or household, or by his work stock; or consumption by
poultry or livestock on hisfarm if such poultry or livestock, or the products
thereof, are consumed or to be consumed by the farmer's family, em­
ployees, or household.
(6) (A) "Market", in the case of cotton, wheat, and tobacco, means to
dispose of by sale, barter, or exchange, but, in the case of wheat, does not
include disposing of wheat as premium to the Federal Orop Insurance
Oorporation under Title V.
(B) "Market", in the case of corn, means to dispose of by sale, barter,
or exchange, or by feeding (in any form) to poultry or livestock which,
or the products of which, are sold, bartered, or exchanged, or to be so dis­
posed of.
(C) "Market", in the case of rice, means to dispose of by sale, barter,
or exchange of rice used or to be used for human consumption.
(D) "Marketed", "marketing", and ''for market" shall have corre­
sponding meanings to the term "market" in the connection in which they
are used.
(7) "Marketing year" means, in the case of the following commodities,
the period beginning on the . first and ending with the second date specified

belou»
Corn, October I-September 30;

Cotton, August 1-July 31;

Rice, August i-July 31;

Tobacco (flue-cured), July L-shime 30:

Tobacco (other than flue-cured), October 1-September 30;

Wheat, July i-June 30.

(8) ,,National average yield" as applied to cotton or wheat shall be the
national average yield per acre of the commodity during the ten calendar
years in the case oj wheat} and durin,g the five calendar years in the case
of cotton, preceding the year in which such national average yield is used
in any computation authorized in this title, adjustedfor abnormal weather

12

AGRICULTURAL ADJUSTMENT ACT OF 1938

conditions and, in the case oj wheat, but not in the case oj cotton, for trends
in yields.
(9) "Normal production" as applied to any number oj acres oj corn,
cotton, or wheat means the normal yield jor the jarm times such number
oj acres.
(10) (A) "Normal supply" in the case oj corn, cotton, rice, and wheat
shall be a normal yetlr's domestic consumption and exports oj the com­
modity, plus 7 per centum in the case oj corn, 40 per centum in the case oj
cotton, 10 per centum in the case q, rice, and 15 per centum in the case oj
wheat, oj a normal year's domestic consumption and exports, as an allow­
ance for a normal carry-over.
(B) The "normal supply" oj tobacco shall be a normal year's domestic
consumption and exports plus 175 per centum oj a normal year's domestic
consumption and 65 per centum oj a normal year's exports as an allow­
ance for a normal carry-over.
(11) (A) "Normal year's domestic consumption", in the case oj corn
and wheat, shall be the yearly average quantity of the commodity, where­
ever produced, that was consumed in the United States during the ten
marketing years immediately preceding the marketing year in which such
consumption is determined, adjusted for current trends in such con­
sumption.
(B) "Normal year's domestic consumption", in the case oj cotton and
tobacco, shall be the yearly average quantity oj the commodity produced
in the United States that was consumed in the United States during the
ten marketing years immediately preceding the marketing year in which
such consumption is determined, adjusted for current trends in such
consumption.
(0) "Normal year's domestic consumption", in the case oj rice, shall
be the yearly average quantity oj rice produced in the United States that
was consumed in the United States during the five marketing years imme­
diately preceding the marketing year in which such consumption is deter­
mined, adjusted for current trends in such consumption.
(12) "Normal year's exports" in the case oj corn, cotton, rice, tobacco,
and wheat shall be the yearly average quantity oj the commodity produced
in the United States that was exported jrom the United States during the
ten marketing years (or, in the case oj rice, the five marlceting years)
immediately preceding the marketing year in which such exports are
determined, adjusted for current trends in such exports.
(13) (A) "Normal yield" for any jarm, in the case oj corn, shall be
the average yield per acre oj corn for the farm during the ten calendar
years immediately preceding the year in which such normal yield is used
in computing any jarm marketing quota or adjustment thereof, adjusted
for abnormal weather conditions and trends in yields.
(B) "Normal yield" for any farm, in the case oj wheat or cotton, shall
be the average yield per acre 0.1 wheat or cotton for the jarm, adjusted for
abnormal weather conditions, and, in the case oj wheat but not in the
case oj cotton, jor trends in yields, during the ten calendar years in the
case oj wheat, and five calendar years in the case oj cotton, immediately
preceding the year with respect to uihicl: such normal yield is used in any
computation authorized under this title.
(0) In applying subparagraph (A) or (B), if jor any such yea,r the
data are not available, or there is'no actual yield, an appraised yield for
such. year, determined in accordance with regulations issued by the
Secretary, shall be used as the actual yield for such year. In applying

AGRIOULTURAL ADJUSTMENT ACT OF 1938

13

if, on account of drought, flood, insect pests, plant
diseuse, or other uncontrollable natural cause, the yield in any year of
such ten-year period or five-year period, as the case may be, is less than 75
per centum of the average (computed without regard to such year), such
year shall be eliminated in calculating the normal yield per acre.
(D) "Normal yield" per acre of rice for any land planted to rice in
any year shall be the average yield per acre thereof during the five calendar
years immediately preceding the calendar year jor which such normal
yield is determined. If, tor any reason, there is no actual yield or the
data therefor are not available for any yea.r, then an appraised yield for
such year, determined in accordance with the regulations Qf the Secretary~
shall be used. If the average of the normal yields jor all lands plantea
to rice in any year in the State (weighted by the acreage allotments therein)
exceeds the average yield per acre jor the State during the period used in
determining normal yields, the normal yields for such lands in the State
shall be reduced pro rata so that the average of such normal yields shall
not exceed such State average yield.
(14-) (A) "Reserve supply level", in the case oj corn, shall be a normal
year's domestic consumption and exports oj corn plus 10 per centum of
a normal year's domestic consumption and exports, to insure a supply
adequate to meet domestic consumptioti and export needs in years of
drought, flood, or other adverse conditions, as wel,' as in years oj plenty.
(B) "Reserve supply level" of tobacco shall be the normal supply plus
5 per centum thereof, to insure a supply adequate to meet domestic con­
sumption and export needs in years of drought, flood, or other adverse
conditions, as well as in years of plenty.
(15) "Tobacco' means each one of the kinds of tobacco listed below
comprising the types specified as classified in Service and Regulatory
Announcement Numbered 118 of the Bureau of Agricultural Economics
of the Department:
Flue-cured tobacco, comprising types 11,12,13, and lJ,.;
Fire-cured and dark air-cured tobacco, comprising types 21, 22,
23,24,35,36, and 37;
Burley tobacco, comprising type 31;
Maryland tobacco, comprising type 32;
Oigar-filler and cigar-binder tobacco, comprising types 4f, 49, 44.,
45, 4-6, 51, 52, 53, 54-, and 55;
Oigar-:filler tobacco, comprising type 41.
The provisions of this title shall apply to each of such. kinds of tobacco
8everally.
(16) (A) "Total supply" of corn, cotton, rice, and wheat for any
marketing year shall be the carru-ooer of the commodity for such market­
ing year plus the estimated production of the commodity in the United
States during the calendar year in which such marketing year begins.
(B) "Total supply" of tobacco for any marketing year shall be the
carry-over at the beginning of such marketing year plus the estimated pro­
duction thereof in the United States during the calendar year in which
such marketing year begins, except that the estimaied :production of type 4-6
tobacco during the marketing year with respect to uihicli the determination
i8 being made shall be used in lieu of the estimated production of such
type during the calendar year in which such marketing year begins in l
determining the total 8'Upply oj ciqar-filler and cigar-binder tobacco.
I
(c) The latest available statistics of the Federal Government shall b'l
used by the Secretary in making the determinations required to be made b~1
the Secretary under this Act.
I,uch subparagraphs,

14

AGRIOULTURAL ADJUSTMENT ACT OF 1938

LOANS ON AGRIOULTURAL OOMMODITIES
SEC. 302. (a) The Commodity Credit Oorporation is authorized, upon
recommendation of the Secretary and with the approval of the President,
to make available loans on agricultural commodities (including dairy
products). Except as otherwise provided in this section, the amount,
terms, and conditions of such loans shall befixed by the Secretary, subject
to the approval of the Oorporation and the President.
(b) The Oorporation is directed to make available to cooperators loams
upon wheat during any marketing year beginning in a calendar year in
which the farm price of wheat on June 15 is below 52 per centum of the
parity price on such date, or the July crop estimate for wheat is in excess
of a normal year's domestic consumption and exports, at rates not less
than 52 per centum and not more than 75 per centum of the parity price
of wheat at the beginning of the marketinq year. In case marketing
quotas for wheat are in effect in any marketing year, the Oorporation is
directed to make available, during such marketing year, to noncooperators,
loans upon wheat at 60 per centum of the rate applicable to cooperators.
. A loan on wheat to a noncooperator shall be made only on so much of his
wheat as would be subject to penalty if marketed.
(c) The Oorporation is directed to make available to cooperators loans
upon cotton during any marketing year beginning in a calendar year in
which the average price on August 1 of seven-eighths Middling spot cotton
on the ten markets designated by the Secretary is below 52 per centum of
the parity price of cotton on such date, or the August crop estimate for
cotton is in excess of a normal year's domestic consumption and exports,
at rates not less than 52 per centum and not more than 75 per centum of
the parity price of cotton as of the beginning of the marketing year. In
case marketing quotas for cotton are in effect in any marketing year, the
Corporation is directed to make available, during such marketing year, to
noncooperators, loans upon cotton at 60 per centum of the rate applicable
to eooperaiors. A loan on cotton to a noncooperator shall be made only
on so much of his cotton as would be subject to penalty if marketed.
(d) The Oorporation is directed to make available loans upon corn
during any marketing year beginning in the calendar year in which the
November crop estimate for corn is in excess of a normal year's domestic
consumption and exports, or in any marketing year when on November 15
the farm price of corn is below 75 per centum of the parity price, at the
following rates:
75 per centum of such parity price if such estimate does not exceed
a normal year's consumption and exports and the farm price of
corn is below 75 per centum of the parity price on November 15;
70 pel' centum of such parity price if such estimate exceeds a
normal year's domestic consumption and exports by not more than
10 per centum;
65 per centum of such parity price if such estimate exceeds a
normal year's domestic consumption and exports by more than 10
per ceniuni and not more than 15 per centum;
60 per centum oj such parity price if such estimate exceeds a
normal year's domestic consumption and exports by more than 15
per centum and not more than 20 per centum;
55 per centum oj such parity price it such estimate exceeds a
normal year's domestic consumption and exports b11 more than 20
per centum and not more than 25 per centum;

AGRICULTURAL ADJUSTMENT ACT OF 1938

15

6~ per centum oj such parity price if such estimate exceeds a
normal year's domestic consumption and exports by more than 25
per centum.
Loans shall be made to cooperators in the commercial corn-producing
area at the applicable rate oj the above schedule. Loans shall be made to
noncooperators within such commercial corn-producing area but only
during a marketing year in which farm marketing quotas are in effect
and only on corn stored under seal pursuant to section 324, and the rate
oj such loans shall be 60 per centum oj the applicable rate under the above
schedule. Loans shall be made to cooperators outside such commercial
corn-producing area, and the rate oj such loans shall be 75 per centum
oj the applicable rate under the above schedule.
(e) The rates of loans under subsections (b); (c), and (d) on wheat,
cotton, and corn not of standard grade, type, staple, or quality shall be
increased or decreased in relation to the rates above provided by such
amounts as the Secretary prescribes as properly reflecting differences from
standard in grade, type, staple, and quality.
(j) For the purposes of subsections (b), (c), and (d), a cooperator shall
be a producer on whose farm the acreage planted to the commodity for the
crop with respect to which the loan is made does not exceed the farm acre­
age allotment for the commodity under this title, or, in the case of loans
upon corn to a producer outside the commercial corn-producinq area, a
producer on whose farm the acreage planted to soil-depleting crops does
not exceed the farm acreage allotment for soil-depleting crops for the year
in which the loan is made under the Soil Oonsercaiuni and Domestic
Allotment Act, as amended. For the purposes of this subsection a
producer shall not be deemed to have exceeded his .farm acreage allotment
unless such producer knowingly exceeded his farm acreage allotment.
(g) Notwithstanding any other provision of this section, if the farmers
producing cotton, wheat, corn, or rice indicate by vote in a referendum
carried out pursuant to the provisions of this title that marketing quotas
with respect to such commodity are opposed by more than one-third of the
[armers voting in such referendum, no loan shall be made pursuant to
this section with respect to the commodity during the period from the
date on which the results of the referendum are proclaimed by the Secretary
until the beginning of the second succeeding marketing year for such com­
modity. This subsection shall not l1~mit the availability or renewal oj
any loan previously made.
(h) No producer shall be personally liable for any deficiency arising
from the sale of the collateral securing any loan under this section unless
such loan was obtained throughfraudulent representations by the producer.
(i) In carrying out this section the Corporation is directed, with the
consent of the Secretary, to utilize the services, facilities, and personnel
of the Department.
PARITY PAYMENTS

SEo.303. If and when appropriations are made therefor, the Secretary

is authorized and directed to make payments to producers of corn, wheat,
cotton, rice, or tobacco, on their normal production of such commodities in
amounts which, together. with the proceeds thereof, will provide a return to
such producers which is as nearly equal to parity price as the funds so
made available will permit. All funds available for such payments with
respect to these commodities shall, unless otherwise provided by law, be
apportioned to these commodities in proportion to the amount by which

16

AGRIOULTURAL ADJUSTMENT ACT OF 1988

each fails to reach the parity income. Such payments shall be in addition
to and not in 8ubstitution for any other payments authorized by law.
CONSUMER SAFEGUARDS
SEO. 304-. The powers conferred under this Act shall not be 'Used to
discourage the production of supplies of foods and fibers sufficient to
maintain normal domestic human consumptso« as determined by tht­
Secretary from the records of domestic human consumption in the years
1920 to 1929, inclusive, taking into consideration increased population,
quantities of any commodity that were forced into domestic consumption
by decline in exports during such period, current trends in domestic
consumption and exports of particular commodities, and the quantities of
substitutes available for domestic consumption within any general class
of food commodities. In carrying out the purposes of this Act it shall
be the duty of the Secretary to [Jive due reqard to the maintenance of a
continuous and stable supp~y oJ agricultural commodities from domestic
production adequate to meet consumer demand at prices fair to both
producers and consumers.
SUBTITLE B-MARKETING QUOTAS
PART I-MARKETING QUOTAS-TOBACCO
LEGISLATIVE FINDING
SEO. 311. (a) The marketing of tobacco constitutes one of the great basic
industries of the United States with ramifying activities which direttly
affect interstate andforeign commerce at every point, and stable conditions
therein. are necessary to the general welfare. Tobacco produced for
market 1~S sold on a Nation-wide market and, with its products, moves
almost wholly in interstate and foreign commerce from the producer to
the ultimate consumer. The farmers producing such commodity are
subject in their operations to uncontrollable natural causes, are widely
scattered throughout the Nation, ~·n many cases such farmers carryon
their [armitu; operations on borrowed money or leased lands, and are not
so situated as to be able to orqaniz« effectivfly, as can labor and 1:ndu~try
through unions and corporations enjoying Government protection and
sanction. For these reasons, among others, the farmers are unable with­
out Federal assistance to control effectively the orderly marketing of such
commodity with the result that abnormally exceseux supplies thereof are
produced and dumped indiscriminately on the Nation-wide market.
(b) The disorderly marketing of such abnormally excessive supplies
affects, burdens, and obstructs interstate and foreign commerce by (1)
materially affecting the volume of such commodity marketed therein, (2)
disrupting the orderly marleeting of such commodity therein, (3) reducing
the price for such commodity with consequent injury and destruction of
interstate and foreign commerce in such commodity, and (4) causing a
disparity between the prices for such commodity in interstate amd foreign
commerce and industrial products therein, with a consequent diminution
of the volume of interstate and foreign commerce in industrial products.
(c) Whenever an abnormally exceesioe supply of tobacco exists, tM
marketing of such commodity by the producers thereof directly and sub­
Btantially affects interstate and foreign commerce in such commodity and

AGRICULTURAL ADJUSTMENT ACT OF 1938

17

its products, and the operation of the provisions of this Part becomes
necessary and appropriate in order to promote, [osier, and maintain an
orderly flow of such supply in interstate and foreign commerce.
NATIONAL MARKETING QUOTA

SEC. 312. (a) Whenever, on the 15th day of November of any calendar
year, the Secretaru finds that the total supply of tobacco as of the beginning
of the marketing year then current exceeds the reserve supply It vel therefor,
the Secretary shall proclaim the amount of such total supply, and, begin­
ning on the first day of the marketing year next following and continuing
throughout such year, a national marketing quota shall be in effect for the
tobacco marketed during such marketing year" The Secretary shall also
determine and 8J:,ecify in. such proclamation the amount oj the national
marlceiinq quota in terms of the total quant1"ty of tobacco which may be
marketed, which 'Will make available during such marketing year a supply
of tobacco equal to the reserve supply level" Such proclamation shall be
made not later than the l st day of December in such year.
(b) Whenever in the case of burley tobacco and fire-cured and dark
air-cured tobacco, respectively, the total supply proclaimed pursuant to
the provisions of subsection (a) of this section exceeds the reserve supply
level by more than 5 per centum and a national marketing quota is not
in effect for such tobacco during the marketing year then current, a national
marketing quota shall also be in effect for such tobacco marketed durinq the
period from the date of such proclamation to the end of such current
marketing year, and the Secretary shall determine and shall specify in
such proclamation the amount of such national marketing quota in terms
of the total quantity which may be marketed, which will make available
during such current marketing year a supply of tobacco equal to the re­
serve supply level. The provisions of this subsection shall not be effective
prior to the beginning of the marketing year beginning in the calendar
year 1938.
(c) Within thirty da·ys after the date of the issuance of the proclamation
specified in subsection (a) of this section, the Secretary shall conduct a
referenedum of farmers who were engaged in production of the crop oj
tobacco harvested prior to the holding of the referendum to determine
whether such farmers are in favor of or opposed to such quota. If in the
case of burley tobacco, or fire-cured and dark air-cured tobacco, respec­
tively farmers would be subject to a national quota for the next succeeding
marketing year pursuant to the provisions of subsection (a) of this section,
and also to a national marketing quota for the current marketing year
pursuant to the provisions of subsection (b) of this section, the referendum
shall provide for voting with respect to each such quota. If more than one­
third of the farmers voting in the referendum oppose such quota, the Secre­
tary shall, prior to the 1st day of January, proclaim the result of the refer­
endum and such quota shall not be effective thereafter.
(d) In connection with the determination and proclamation of any
marketing quota-for the 1938-1939 marketing year, the determination by
the Secretary pursuant to subsection (a) of this section shall be made and
proclaimed uYithin fifteen days following the daie of the enactment oj this
Act, and the proclamation of the Secretary pursuant to subsection (c) oj
this section shall be made within forty-five days following the date oj the
,nactment of thi,.q .Act.

18

AGRIOULTURAL ADJUSTMENT ACT OF 1988

(e) Marketing quotas shall not be in effect with respect to cigar-filler
tobacco comprising type 41 during the marketing year beginning in 1938
or the marketing year beginning in 1939.
APPORTIONMENT OF NATIONAL MARKETING QUOTA
SEC. 313. (a) The national marketing quota jor tobacco established
pursuant to the provisions oj section 312, less the amount to be allotted
under subsection (c) oj this section, shall be apportioned by the Secretary
among the several States on the basis oj the total production oj tobacco in
each State during the five calendar years immediately preceding the calen­
dar year in which the quota is proclaimed (plus, in applicable years, the
normal production on the net acreage diverted under previous agricultural
adjustment and conservation programs), with such adju8tments as are
determined to be necessary to make correction [or abnormal conditions oj
production, jor small farms, and for trends in production, giving due
consideration to seed bed and other plant diseases during such five-year
period: Provided, however, That to prevent in any case too sharp and
sudden reduction in acreage oj tobacco production in any State, the market­
ing quota [or flue-cured tobacco[or any State for any marketing year shall
not be reduced to a point less than 75 per centum oj the production oj
flue-cured tobacco in such State for the year 1937.
(b) The Secretary shall provide, through the local committees, for the
allotment oj the marketing quota [or any State among the jarms on which
tobacco is produced, on the basis oj the jollowing: Past marketing of
tobacco, making due allowance jor drought, flood hail, other abnormal
weather conditions, plant bed, and other diseases: land, labor, and equip­
ment available jor the production oj tobacco; crop-rotation practices; and
the soil and other physical.factors affecting the production oj tobacco:
Provided, That, except jor [arms on which jor the first time in five years
tobacco is produced to be marketed in the marketing year jor which the
quota is effective, the marketing quota jor any jarm shall not be less than
the smaller oj either (1) three thousand two hundred pounds, in the case
oj flue-cured tobacco, and two thousand jour hundred pounds, in the case
oj other kinds of tobacco, or (2) the average tobacco production [or the
farm during the preceding three years, plus the average normal production
oj any tobacco acreage diverted under agricultural adjustment and con­
servation programs during such. preceding three years.
(c) The Secretary shall provide, through local committees, jor the
allotment oj not in excess of 5 per centum oj the national marketing quota
(1) to [arms in, any State whether it has a State quota or not on which jor
the first time in five years tobacco is produced to be marketed in the year
for which the quota is effective and (2) jor further increase oj allotments
to small [arms pursuant to the proviso in subsection (b) oj this section on
the basis oj the jollowing: Land, labor, and equipment available jor the
production oj tobacco; crop-rotation practices; and the soil and other
physical [actors affecting the production of tobacco: Providing, That
jarm marketing quotas established pursuant to this subsection [or farms
on which tobacco is produced-for the first time infive years shall not exceed
75 per centum of the jarm marketing quotas established pursuant to
eubsection (b) oj this section jor jarms which are similar with respect to
the following: Land, labor, and equipment available for the production oj
tobacco, crop-rotation practices, and the soil and other p]~ysical factor.
,affecting the production of tobacco.

AGRICULTURAL ADJUSTMENT ACT OF 1938

19

(d) Farm. marketing quotas may be transferred only in such mummer
and subject to such conditions as the Secretary may prescribe by regulations.
PENALTIES
SEC. 314.. The marketing oj any tobacco in excess of the marketing
quota for the farm on which the tobacco is produced, except the marketing
of any such tobacco for nicotine or other byproduct uses, shall be subject to
a penalty of 50 per centum of the market price of such tobacco on the date
of such marketing, or, if the following rates are higher, 3 cents per pound
in the case of flue-cured, Maryland, or burley, and 2 cents per pound in
the case of all other kinds of tobacco. Such penalty shall be paid by the
person who acquires such tobacco from the producer but an amount equiva­
lent to the penalty may be deducted by the buyer from the price paid to the
producer in case such tobacco is marketed by sale; or, if the tobacco is
marketed by the producer through a warehouseman or other agent, such
penalty shall be paid by such warehouseman or agent who may deduct an
amount equivalent to the penalty from the price paid to the producer:
Provided, That in case any tobacco is marketed directly to any person
outside the United States the penalty shall be paid and remitted by the
producer.

PART II-MARKETING QUOTAS-OORN
LEGISLATIVE FINDING
SEO. 321. Oorn is a basic source of food jor the Nation, and corn
produced in the commercial corn-producing area moves almost wholly in
interstate and foreign commerce in the form of corn, livestock, and live­
stoclc products.
Abnormally excessive and abnormally deficient supplies of corn acutely
and directly affect, burden, and obstruct imierstate and foreign commerce
in corn, livestock, and livestock products. lf7hen abnormally excessive
supplies exist, transportation [aciliiiee in interstate and foreiqn. com­
merce are overtaxed, and the handling and processing facilities through
which the flow of interstate and foreign commerce in corn, livestock, and
livestock products is directed become acutely congested. Abnormally
deficient supplies result in substantial decreases in lioestoclc production
and in an inadequate flow of livestock and livestock producis in inter­
state and foreign commerce, with the consequence of unreasonably high
prices to consumers.
Violent fluctuations from year to year in the available supply of corn
disrupt the balance between the supply of livestock and livestock products
moving in interstate and foreign commerce and the supply of corn availa­
ble for feeding. When available supplies of corn are excessive, corn
prices are low and farmers overexpand livestock producium in order to
find outlets for corn. Such expansion, together with the relative scarcity
and high price of corn, forces farmers to market abnormally excessive
supplies of livestock in interstate commerce at sacrifice prices, endangering
thefinancial stability of producers, and overtaxing handling and processing
facilities through which the flow of interstate and foreign commerce in
livestock and livestock products is directed. Such excessive marketings
deplete livestock on farms, and livestock marketed in interstate and foreign
commerce consequently becomes abnormally lo~~ with resultant high prices
to consumers and danger to the financial stabitity of persons engaged in

20

AGRICULTURAL ADJUSTMENT ACT OF 1938

transporting, handling, and processing livestock in interstate and foreign
commerce. These high prices in turn result in another overexpansion oj
livestock production.
Recurring violent fluctuations in the price of corn resulting from cor­
responding violent fiuctuations in the supply of corn directly affect the
movement of livestock in inierstaie commercefrom the range cattle regions
to the regions where livestock is fattened for market in interstate and for­
eign commerce, and also directly ~ffect the movement in interstate com­
merce of corn marketed as corn which is transported from the reqions
where produced to the regions where livestock is fattened for market in
interstate amdforeum commerce.
SUbstantially all the corn moving in interstate commerce, substantially
all the cornfed to livestock transported in interstate commercefol'fatteningt
and substantially all the corn fed to livestock marketed in interstate ana
foreign commerce, is produced in the commercial corn-producing area.
Substantially all the corn produced in the commercial corn-producing
area, with the exception of a comparatively small amount used for farm
consumption, is either sold or transported in interstate commerce, or is fed
to livestock transported in interstate commerce for feeding, or is fed to
livestock marketed in interstate and.foreum commerce. Almost all the corn
produced outside the commercial corn-producing area is either consumed,
or is fed to lioeetock which is consumed, in the State in which such corn is
produced.
The conditions affecting the production and marketing of corn and thB
livestock products of corn are such that, urdhou: Federal assistance,
farmers, individually or in cooperation, cannot effectively prevent the
recurrence of disparities between the supplies of livestock moving in
interstate and foreign commerce and the supply of corn available for
feeding, and provide for orderly marketing of corn in inte.rstate andforeign
commerce and livestock and livestock products in interstate and foreign
commerce.
The national public interest requires that the burdens on interstate and
foreign commerce above described be removed by the exercise of Federal
power. By reason of the administrative and physical impracticability
of regulating the movement of livestock and livestock products in interstate
andforeign commerce and the inadequacy of any such regulation to remove
such burdens, such power can befeasibly exercised only by providing for
the 'UYithholding from market of excessive and burdensome supplies oj
corn in times of excessive production, and providing a reserve supply oj
corn available for market in times of deficient production, in order that
a stable and continuous flow of livestock and livestock products in inter­
state and foreign commerce may at all times be assured and maintained.
FARM MARKETING QUOTAS

SEC. 322. (a) Whenever in any calendar year the Secretary determines
from available statistics of the Department, including the August pro­
duction estimate officially published by the Division of Orop and Live­
stock Estimates of the Bureau of Agricultural Economics of the Depart­
ment, that the total supply of corn as of October 1 will exceed the normal
supply thereof by more than 10 per centum, marketing quotas shall be
in effect in the commercial corn-producing area for the crop of corn
grown in such area in such calendar year, and shall remain in effect
until terminated in accordance with the provisions of this title.

AGRICULTURAL ADJUSTMENT ACT OF 1938

21

(b) The Secretary shall determine, on the basis of the estimated average
yield of corn in such area for such crop, the acreage in such area which
the Secretary determines would make available for the marketing year
beginning October 1 a supply of corn (together with the estimated pro­
duction of corn in the United States outside such area) equal to the normal
supply. The percentage which the number of acres so determined is
of the total number of acres of the acreage allotment under section 328
shall be proclaimed by the Secretary. Such percentage is referred to
herein as the "marketing percentage".
(c) The Secretary shall proclaim his determinations of facts under
subsection (a) and his determination of the marketing percentage under
eubsecium (b) not later than August 15.
(d) Within twenty days after the date of the issuance of the proclama­
tion provided for in subsection (c) of this section, the Secretary shall
conduct a referendum, by secret ballot, of farmers who would be subject
to such quotas to determine whether such farmers are in favor of or oppo.~ed
to such quotas. If more than one-third of the farmers voting in the refer­
endum oppose such quotas, the Secretary shall, prior to .September 10,
proclaim the result of the referendum and such quotas shall not become
effective.
(e) Whtrnever it shall appear from the September production estimates
officially published by the Division of Crop and Livestock Estimates of
the Bureau of Agricultural Economics of the Department, that the total
8upply of corn as of the beginning of the next succeeding marlceting uear
will not exceed the normal 8'upply by more than 10 per centum thereof,
the Secretary shall proclaim such fact prior to September 20, if farm
marketing quotas have been proclaimed for such marketing year. There­
upon such quotas shall not become effective.
AMOUNT OF FARM MARKET/NG QUOT..:4.

SEo.323. (a) The farm marketing quota for any farm with respect
to any crop of corn shall be an amount of corn equal to the sum of­
(1) The amount of corn used as silage; and
(2) The actual production of the acreage of corn not used as silage
less the amount required for farm consumption and less the storage
amount applicable to the farm as ascertained under section 324.
(b) No farm marketing quota with respect to any crop of corn shall be
applicable to any farm on which the normal production of the acreage
planted to corn is less than three hundred bushels.
STORAGE AMOUNTS

SEO. 324. (a) If the acreage of corn on the jarm does not exceed the
marketing percentage of the farm acreage allotment, there shall be no
storage amount.
(b) If the acreage of corn on the farm exceeds the marketing percentage
of the farm acreage allotment, the storage amount shall be a number of
bushels equal to the smallest of the following amounts­
(1) The normal production of the acreage of corn on the farm in
excess of the marketing percentage of the farm acreaqe allotment;
(2) The amount by which the actual production of the acreage of
corn on the farm exceeds the normal production 0.1 the marketing
percentage of the farm acreage allotment; or
H. Repts., 75-3, vol. 1-39

22

AGRICULTURAL ADJUSTl\IENT ACT OF 1938

(3) The amount of the actual production of the acreage oj corn on
the farm not used for silage.
(C) If the storage amount ascertained under subsection (b) is less than
100 bushels, there shall be no storage amount.
PENALTIES

SEO. 325. (a) Any farmer who, while any farm marketing quota is in
effectfor his farm with respect to any crop of corn, markets corn produced
on the [arm in an amount which is in excess of the aggregate of the farm
marketing quotas for the farm in effect at such time, shall be subject to a
penalty of 15 cents per bushel of the excess so marketed. Liability for
such penalty shall not accrue until the amount of corn stored under seal
on such farm or in storage cribs rented by the farmer or under his control
is less than the storage amount applicable to such crop plus the storage
amounts, if any, applicable to other crops.
(b) If there is stored under seal on the farm or in such cribs an amount
of corn equal at least to the storage amount applicable to such crop plus
such storage amounts applicable to such other crops, the farmer shall be
presumed not to be violating the provisions of subsection (a). When the
amount of corn stored under seal on the farm or in sucli cribs is less than
the storage amoun-t applicable to such crop plus such storage amounts
applicable to such other crops, the farmer shall be presumed to have mar­
keted, while farm marketing quotas were in effect, corn in violation of the
provisions of subsection (a) to the extent that the amount of corn so stored
is less than the aggregate of such storage amoumis. In any action brought
to enforce the collection of penalties providedfor in this section, the farmer,
to the extent that the amount of corn so stored is less than the aggregate of
such storage amounts shall have the burden of proving that he did not
market corn in violation of the provisions of subsection (a).
(c) For the purposes of this Part, corn shall be deemed to be stored by
the farmer under seal only if stored in such manner as to conform to the
requirements of such regulations as the Secretary shall prescribe in order
more effectively to administer this Part.
ADJUSTMENT OF FARM MARKETING QUOTAS

SEO. 326. (a) Whenever in any county or other area the Secretary
finds that the actual production of corn plus the amount of corn stored under
seal in such county or other area is less than the normal production of the
marketing percentage of the farm acreage allotments in such county or
other area, the Secretary shall terminate farm marketing quotas for corn
in such country or other area.
(b) Whenever, upon any farm, the actual production of the acreage of
corn is less than the normal production of the marketing percentage of the
farm acreage allotment, there may be marketed, without penalty, from such
farm an amount of cornfrom the corn stored under seal pursuant to section
324 which, together with the actual production of the then current crop, will
equal the normal production of the marketing percentage of the farm
acreage allotment.
(c) Whenever, in any marketing year, marketing quotas are not in
effect with respect to the crop of corn produced in the calendar year in
which such marketing year begins, all marketing quotas applicable to
previous crops oj corn shall be terminated.

AGRIOULTURAL ADJUSTMENT ACT OF 1988

23

PROOLAMATIONS OF SUPPLIES AND COMMEROIAL OORN-PRODUOING AREA

SEo.3S7. Nut later than September 1, the Secretary shall ascertain
and proclaim the total supply, the normal supply, and the reserve supply
leveljor such marketing year. Not later than February 1, the Secretary
shall ascertain and proclaim the commercial corn-producing area. The
ascertainment and proclamation oj the commercial corn-producing area
[or 1938 shall be made not later than ten days after the date ofthe enactment
oj this Act.
-AORE-AGE -ALLOTMENT

SEo.328. The acreage allotment oj corn for any calendar year shall
be that acreage in the commercial corn-producing area which, on the basis
of the average yield jor corn in such area during the ten calendar years
immediately preceding such calendar year will produce an amount oj
corn in such area which the Secretary determines will, together with corn
produced in the United States outside the commercial corn-producing
area, make available a supply jor the marketing year beginning in such
calendar year, equal to the reserve supply level. The Secretary shall pro­
claim such acreage allotment not later than February 1 oj the calendar
year jor which such acreage allotment was determined. The proclamation
oj the acreage allotment jor 1938 shall be made as soon as practicable after
the date of the enactment oj this Act.
APPORTIONMENT OF .A.OltEAGE ALLOTMENT

SEO. 329. (a) The acreage allotment for corn shall be apportioned by
the Secretary among the counties in. the commercial corn-producing area
on the basis o.l the acreage seeded for the production of corn during the
ten calendar years immediately preceding the calendar year in which the
apportionment is determined (plus, in applicable years, the acreage
diverted under previous agricultural adjustment and conservation pro­
grams), with adjustments for abnormal weather conditions and for
trends in acreage during such period and [or the promotion of soil-con­
servation practices: Provided, That any downward adjustment for the
promotion oj soil-conservation practices shall not exceed 2 per centum
of the total acreage allotment that would otherwise be made to such county.
(b) The acreage allotment to the county for corn shall be apportioned
by the Secretary, through the local committees, among the farms within
the county on the basis of tillable acreage, crop-rotation practices, type
oj soil, and topography.
PART III-MARKETING QUOTAS-WHEAT
LBGISLATIVE FINDINGS

SEO. 881. Wheat is a basic source offood for the Nation, is produced
throughout the United States by more than a million farmers, is sold on
the country-wide market and, as wheat or flour, flows almost entirely
through instrumentalities of interstate and foreign commerce from
producers to consumers.
Abnormollu excessive and abnormally deficient supplies of wheat on
the country-wide market acutely and directly affect, burden, and obstruct
interstate and foreign commerce. Abnormally excessive supplies over­
faa; the facilities of interstate and foreign transportation, congest terminal

24

AGRICULTURAL ADJUSTMENT ACT OF 1938

markets and milling centers in the flow of wheat from producers to con­
sumers, depress the price of wheat im. interstate and foreign commerce,
and otherwise disrupt the orderly marketing of such commodity in such
commerce. Abnormally deficient supplies result in an inadequate flow
of wheat and its products im. interstate and foreign commerce with con­
sequent injurious effects to the instrumentalities of such commerce and
with excessive increases in the prices of wheat and its products in inter­
state and foreign commerce.
It is in the interest of the general welfare that interstate and foreign
commerce in wheat and its products be protected from such burdensome
surpluses and dieireesinq shortages, and that a supply of wheat be main­
tained which is adequate to meet domestic consumption and export require­
ments in years of drought, flood, and other adverse conditions as well as
in years of plenty, and that the soil resources of the Nation be not
wasted in the production of such burdensome surpluses. Such surpluses
result in disastrously low prices of wheat and other grains to 1J)heat
producers, destroy the purchasing power of grain producers for industrial
products, and reduce the value of the agricultural assets supporting the
national credit structure. Such shortages of wheat result in unreason­
ably high prices of flour and bread to consumers and loss of market outlets
by wheat producers.
The conditions a;ffecting the production and marlcetinq of 'wheat are
such that, without Federal assistance, farmers, individually or in co­
operation, cannot effectively prevent the recurrence of sucli surpluses and
shortages and the burdens on interstate and foreign commerce resulting
therefrom, maintain normal supplies of wheat, or provide for the orderly
marketing thereof in interstate and foreign commerce.
The provisions of this Part affording a cooperative plan to wheat
producers are necessary in order to minimize recurring surpluses and
shortages o.f wheat in interstate and foreign commerce, to provide for the
maintenance of adequate reserve supplies thereof, and to provide for an
adequate flow of wheat and its products in interstate and foreign com­
merce. The provisions hereof for regulation of marketings by producers
of wheat whenever an abnormally excessive supply of such commodity
exists are necessary in order to maintain an orderly flow of wheat in
interstate and foreign commerce under such conditions.
PROCLAMATIONS OF SUPPLIES AND ALLOTMENTS

SEC. 332. Not later than July 15 of each marketing year fOT wheat,
the Secretary shall ascertain and proclaim the total supply and the normal
supply of wheat for such marketing year, and the national acreage allot­
ment for the next crop of wheat.
NATIONAL ACREAGE ALLOTMENT

SEC. 333. The national acreage allotment for any crop of wheat shall
be that acreage which the Secretary determines will, on the basis of the
national average yield for wheat, produce an amount thereof adequate,
together 'With the estimated carry-over at the beginning of the marketing
year for such crop, to make available a supply for such marketing year
equal to a normal year's domestic consumption and exports plus 30 per
centum thereof. The national acreage allotment for wheat for 1938 shall
be sixty-two million fioe hundred thousana acres.

AGRICULTURAL ADJUSTlVIENT ACT OF 1938

25

.APPORTIONMENT OF NATIONAL AOREAGE ALLOTMENT

SEO. 334. (a) The national acreage allotment for wheat shall be ap­
portioned by the Secretary among the several States on the basis of the
acreage seeded for the production of wheat during the ten calendar year8
immediately preceding the calendar year in which the national acreage
allotment is determined (plus, in applicable years, the acreage diverted
under previous agricultural adjustment and conservation programs),
with adjustments for abnormal weather conditions and for trends in
acreage during such period.
(b) The State acreage allotment for wheat shall be apportioned by the
Secretary amonq the counties in the State, on the basis of the acreage seeded
for the production of wheat during the ten calendar years immediately
preceding the calendar year in which the national acreage allotment is
determined (plus, in applicable years, the net acreage diverted under pre­
vious agricultural adjustment and conservation programs), with adjust­
ments for abnormal uieaiher conditions and trends in acreage during such
period and for the promotion of soil-conservation practices.
(c) The allotment to the county shall be apportioned by the Secretary,
through the local committees, among the farms within the county on the
basis of tillable acres, crop-rotation practices, type of soil, and topography.
Not more than 3 per centum of such county allotment shall be apportioned
to farms on which wheat has not been planted during any of the three
marketing years immediately preceding the marketuu; year in which the
allotment is made.
MARKETING QUOTAS

SEo.335. (a) Whenever it shall appear that the total supply of wheat
as of the beginning of any marketing year will exceed a normal year's
domestic consumption and exports by more than 35 per centum, the Secre­
tary shall, not later than the May 15 prior to the beginning of such mar­
keting year, proclaim such fact and, during the marketing year beg-inning
July 1 and continuing throughout such marketing year, a national mar­
keting quota shall be in effect with respect to the marketing of wheat.
The Secretary shall ascertain and specify in the proclamation the amount
of the national marketing quota in terms of a total quantity of wheat and
also in terms of a marketing percentage of the national acreage allotment
for the current crop which he determines will, on the basis of the national
average yield of wheat, produce the amount of the national marketing
quota. Marketing quotas for any marketing year shall be in effect with
respect to wheat harvested in the calendar year in which such marketing
year begins notwithstanding that the wheat is marketed prior to the begin­
ning of such marketing year. No marketing quota with respect to the
marketing of wheat shall be in effect for the marketing year beginning
July 1,1938, unless prior to the date of the proclamation of the Secretary,
provision has been made by law for the payment, in whole or in part, in
1938 of parity payments with respect to wheat.
(b) The amount of the national marketing quota for wheat shall be
equal to a normal year's domestic consumption and exports plus 30
per centum thereof, less the sum of (1) the estimated carry-over of wheat
as of the beginning of the marketing year with respect to which the quota
is proclaimed and (2) the estimated amount of wheat which will be used
on farms as seed or livestock feed during the marketing year.

26

AGRICULTURAL ADJUSTMENT ACT OF 1938

(c) The farm marketing quota for any farm for any marketing year
,hall be a number Qf bushels of wheat equal to the sum oj­
(1) A numoer oj bushels equal to the normal production oj a
number oj acres determined by applying the marketing percentage
specified in the quota proclamation to the jarm acreage allotment
for the current crop; and
(2) A number oj bushels oj wheat equal to the amount, or part
thereof, 0/ wheat from any previous crop which the farmer has on
hand whtch, had such amount, or part thereof, been marketed during
the preceding marketing year in addition to the wheat actually
marketed during such preceding marketing year, could have been
marketed without penalty.
In no event shall the jarm marketing quota jor any jarm be less than the
normal production of half the jarm acreage allotment jor the jarm.
(d) No jarm marketing quota with respect to wheat shall be applicable
in any marketing year to any jarm on which the normal production oj
the acreage planted to wheat oj the current crop is less than one hundred
bushels.
REFERENDUM

SEC. 336. Between the date oj the issuance oj any proclamation oj any
national marketing quota for wheat and June 10, the Secretary shall
conduct a referendum, by secret ballot, oj farmers who will be subject to
the quota specified therein to determine whether such farmers javor or
oppose such quota. Ij more than one-third oj the farmers voting i11
the referendum oppose such quota, the Secretary shall, prior to the effective
date oj such quota, by proclamation suspend the operation of the national
marketing quotas with respect to wheat.
ADJUSTMENT AND SUSPENSION OF QUOTAS

SEC. 337. (a) Ij the total supply as proclaimed by the Secretary
within jorty-five days after the beginning oj the marketing year is less
than that specified in the proclamation by the Secretary under section
335 (a), then the national marketing quota specified in the proclamation
under such section shall be increased accordingly.
(b) Whenever it shall appear from either the July or the August pro­
duction estimates, officially published "hy the Division of Crop and Live­
stock Estimates oj the Bureau oj Agricultural Economics oj the Depart­
ment, that the total supply of wheat as oj the beginning oj the marketing
year was less than a normal year's domestic consumption and exports
plus 30 per centum thereof, the Secretary shall proclaim such jact prior
to July 20, or August 20, as the case may be, if jarm marketing quotas
have been announced with respect to the crop grown in such calendar year.
Thereupon such quotas shall become ineffective.
TRANSFER OF QUOTAS
SEO. 338. Farm marketing quotas for wheat shall not be transferable,
but, in accordance with regulations prescribed by the Secretary for such
purpose, any jarm marketing quota in excess oj the supply oj wheat for
euch farmjor any marketing year may be allocated to otherfarms on which
the acreage allotment has not been exceeded.

AGRICULTURAL ADJUSTl\1:ENT ACT OF 1938

27

PENALTIES
SEO. 339. Any farmer who, while jarm marketing quotas are in effect,
markets wheat in excess oj the jarm marketing quota [or the jarm on
which such wheat was produced, shall be subject to a penalty of 15 cents
per bushel oj the excess so marketed.

PART IV-MARKETING QUOTAS-OOTTON
LEGISLATIVE FINDINGS
SEO. 31,1. American cotton is a basic source of clothing and industrial
products used by every person in the United States and by substantial
numbers oj people in foreign countries. American cotton is sold on a
world-wide market and movesfrom the places of production almost entirely
in interstate and foreign commerce to processing establishments located
throughout the world at places outside the State where the cotton is produced.
Fluctuations in supplies oj cotton and the marketing of excessive sup­
plies of cotton in interstate and foreign commerce disrupt the orderly
marketing of cotton in such commerce with consequent injury to and
destruction of such commerce. Excessive supplies oj cotton directly
and materially affect the volume of cotton moving in interstate and foreign
commerce and cause disparity in prices of cotton and industrial products
moving in interstate and foreign commerce unih. consequent dirninution of
the volume of such commerce in industrial products.
The conditions affecting the production and marketing of cotton are
such that, without Federal assistance,farmers, individually or in coopera­
tion, cannot effectively prevent the recurrence o.f excessive supplies of
cotton and fluctuations in supplies, cannot prevent indiscriminate dump­
ing of excessive supplies on the Nation-wide and [oreum markets, cannot
maintain normal carry-overs of cotton, and cannot provide for the orderly
marketing of cotton in interstate and foreign commerce.
It is in the interest of the general icelfare that interstate and foreign
commerce in cotton be protected from the burdens caused by the marketing
oj excessive supplies of cotton in such commerce, that a supply of cotton
be maintained which is adequate to meet domestic consumption and export
requirements in years of drought, flood, and other adverse conditions as
well as in years of plenty, and that the soil resources of the Nation be not
wasted in the production of excessive supplies of cotton.
The provisions of this Part affording a cooperative plan to cotton pro­
ducers are necessary and appropriate to prevent the burdens on interstate
and foreign commerce caused by the marketing in such commerce of exces­
sive supplies, and to promote, foster, and maintain an orderly flow oj an
adequate supply of cotton in such commerce.

FINDING AND PROOLAMATION OF SUPPLIES, AND SO FORTH
SEO. 31,2. Not later than November 15 of each year the Secretary
shall find and proclaim (a) the total supply, the normal supply, and the
carry-over of cotton as oj August 1 of such year, (b) the probable domestic
consumption oj American cotton during the marketing year commenc­
ing August 1 of such year, (c) the probable exports of American cotton
during such marketing year, and (d) the estimated carry-over oj cotton
as oj the next succeedinq August 1. For the marketing year 1937-.J9.CiJ8

28

AGRICULTURAL

ADJUST~IENT ACT

OF 1938

the Secretary shall make all the findings and proclamations provided
for in this section not later than ten days ajter the date of the enactment
oj this Act.
AMOUNT OF NATIONAL ALLOTMENT

SEC. 343. (a) Not later than November 15 oj each year the Secretary
shall find and proclaim the amount oj the national allotment oj cotton for
the succeeding calendar year in terms oj standard bales of five hundred
pounds gross weight. The national allotment shall be the number oj bales
oj cotton adequate, together ioith. the estimated carry-over as oj August 1
oj such succeeding calendar year, to make available a supply oj cotton,jor
the marketing year beginning on such August 1, equal to the normal supply.
The finding and proclamation oj the national allotment for the calendar
year 1938 shall be made not later than ten days ajter the date oj the enact­
ment oj this Act.
(b) If the national allotment [or 1938 or 1939 is determined to be less
than ten million bales, the national allotment for such year shall be ten
million bales for such year, as the case may be. If the national allotment
for 1938 or 1939 is determined to be more than eleven million five hundred
thousand bales, it shall be eleven million five hundred thousand bales for
such year, as the case may be.
(c) Notwithstanding the foregoing provisions of this section, the national
allotment jor 1938 and [or 1939 shall be increased by a number of bales
equal to the production of the acres allotted under section 344 (e) for such
year.
APPORTIONMENT OF NATIONAL ALLOTMENT

SEO. 344. (a) The national allotmentjor cotton for each year (excludi.ng
that portion oj the naiional allotment providedjor in section 343 (c)) shall
be apportioned by the Secretary among the several States on the basis oj
the average, for the five years preceding the year in which the national
allotment is determined, of the normal production oj cotton in each State.
The normal production of a State for a year shall be (1) the quantity
produced therein plus (2) the normal yield of the acres diverted in each
county in the State under the previous aqriculiural adjustment or conserva­
tion programs. The normal yield of the acres diverted in any county in
any year shall be the average yield per acre of the planted acres in such
county in such. year tirnes the number oj acres diverted in such county in
such year.
(b) The Secretary shall ascertain, on the basis oj the average yield per
acre in each State, a number oj acres in such State which will produce
a. number of bales equal to the allotment made to the State under sub­
section (a). Such number oj acres is referred to as the "State acreage'
allotment". The average yield per acre for any State shall be determined
on the basis oj the average of the normal production for the State [or the
years used in computing the allotment to the State, and the average, jor
the same period, oj the acres planted and the acres diverted in the State.
(c) (1) The State acreage allotment (less the amount required for
apportionment under paragraph (2)) shall be apportioned annually by
the Secretary to the counties in the State. The apportionment to the
counties shall be made on the basis of the acreage planted to cotton during
the five calendar years immediauls; preceding the calendar year 1·n which
the State allotment is apportioned (plus, in applicable years, the acteaqe
diverted under previous agricultural adjustment and conservation pro­

AGRIOULTURAL ADJUSTMENT AOT OF 1938

29

grams), with adjustments for abnormal weather conditions and trends in
acreage during eucbfive-year period.
(2) Not more than 2 per centum oj the State acreage allotment shall be
apportioned tojarms in such State which were not used jor cotton produc­
tion during any o.l the three calendar years immediately preceding the year
jor which the allotment is made, on the basis oj land, labor, and equipment
available jor the production oj cotton; crop rotation practices; and the soil
and other physical jacilities affecting the production of cotton.
(d) The allotment apportioned to the county under subsection (c) (1),
plus any amount allottedto the county under subsection (e), shall beappor­
tioned by the Secretary, through the local committees, among the farms
within the county on the following basis:
(1) To each farm on which cotton has been planted durina any
any oj the previous three years there shall be allotted the smaller oj
the following­
(A) Five acres; or
(B) the highest number of acres planted to cotton (plus the
acres diverted from the production of cotton under the agricul­
tural adjustment or conservation programs) in any year of such
three-year period;
(2) Not more than 3 per centum of the amount remaining, after
making the allotments provided for under paragraph (1), shall be
allotted, upon such basis as the Secretary deems fair and equitable,
to farms (other than farms to which an allotment has been made
under paragraph (1) (B)) to which an allotment oj not exceeding
fifteen acres may be made under other provisions of this subsection:
and
(3) The remainder of the total amount available to the county
shall be allotted to [arms on whi.ch cotton has been planted during
any of the previous three years (except [arms to uihich. an allotment
has been made under paragraph (1) (B)). The allotment to each
jarm under this paragraph, together with the amount of the allot­
ment to such jarm under paragraph (1) (A), shall be a prescribed
percentage (which percentage shall be the same jor all such[arms in
the county or administraiue area) of the acreage, during the preced­
ing year, on the jarm which is tilted annually or in regular rota­
tion, excluding from such acreage the acres devoted to the producti.on
of wheat, tobacco, or rice jor market or for feeding to livestock for
market: Provided, however, That if a farm would be allotted under
this paragraph am acreage, together with the amount of the allotment
to such farm under paragravh (1) (A), in excess oj the largest
acreage planted to cotton plus the acreage diverted from the produc­
tion of cotton under the agricultural adju~,Jm'3nt or conservation
program during any of the preceding three years, the acreage allot­
meni tor such farm shall not exceed such largest acreage so planted
and diverted in any such year.
(e) For 1938 and 1939, the Secretary shall allot to the several counties,
to which an apportionment is made under subsection (b), a number of
acres required to provide a total acreage for allotment under this esctioti
t.o such counties of not less than 60 per centum of the sum of (1) the acreage
planted to cotton in such counties in 1937, plus (2) the acreage therein
divertedfrom cotton production in 1937 under the agricultural adjustment
and conservation program. The acreage so diverted shall be estimated 1:n
case data are not available at the time oj making such allotment.

30

AGRICULTURAL ADJUSTMENT ACT OF 1938

(j) In apportioning the county allotment among the farms within the
county, the Secretary, through the local committees, shall take into con­
sideration different conditions within separate administrative areas
within a county if any exist, including types, kinds, and productivity of
the soil so as to prevent discrimination among the administrative areas of
the county.
MARKETING QUOTAS

SEC. 345. Whenever the Secretary determines that the total supply of
cotton for any marketing year exceeds by more than 7 per centum the
normal supply thereof for such marketing year, the Secretary shall pro­
claim such fact not later than November 15 of such marketing year (or,
in case of the marketing year 1937-1938, within ten days after the date
of enactment of this Act), and marketing quotas shall be in effect during
the next succeeding marketing year with respect to the marketing of cot­
ton. Ootton produced in the calendar year in which such marketing year
begins shall be subject to the quotas in effect for such marketing year not­
withstanding that it may be marketed prior to August 1.
AMOUNT OF FARM MARKETING QUOTAS

SEC. 346. (a) The farm marketing quota for cotton for any farm for
any marketing year shall be a number of bales of cotton equal to the sum

of­

(1) A number of bales equal to the normal production or the actual
production, whichever is the greater, of the farm acreage allotment,
and
(2) A number of bales equal to the amount, or part thereof, oj'
cotton from any previous crop which the farmer has on hand, which,
had such amount, or part thereof, been marketed during the preceding
markfiting year in addition to the cotton actually marketed during
such preceding marketing year, could have been marketed without
penalty.
(b) The penalties provided for in section 348 shall not apply to the
marketing of cotton produced on any farm for which a farm acreage
allotment has been made for the current crop if the production of the current
crop does not exceedone thousand pounds o.flint cotton.
REFERENDUM

SEC. 347. Not later than December 15 of any calendar year in which a
proclamation of farm marketing quotas pursuant to the provisions of this
Part has been made, the Secretary shall conduct a referendum, by secret
ballot, of farmers who were engaged in production of the crop harvested
prior to the holding of the referendum to determine whether they favor or
oppose such quotas. If more than one-third of the farmers voting in the
referendum oppose such quotas, the Secretary shall, prior to the end of such
calendar year, proclaim the result of the referendum, and upon such
proclamation the quotas shall become iaiefiectu», If a proclamation
under section 345 is made with respect to the 1938 crop, the referendum
with respect to such crop shall be held not later than thirty days after the
date of the enactment oj this Act and the result thereof shall be proclaimed
not later than forty-five days after such date.

AGRICULTURAL ADJUSTMENT ACT OF 1988

31

PENALTIES

SEa. 348. Any farmer who, while farm marketing quotas are in effect,
markets cotton in excess of the farm marketing quota jor the marketing
year for the [arm on which such cotton was produced, shall be subject to
the following penalties with reepeci to the excess so marketed: 2 cents per
pound if marketed during the first marketing year when farm marketuu)
quotas are in effect; and 3 cents per pound if marketed during any subse­
quent year, except that the penalty shall be 2 cents per pound if cotton oj
the crop subject to penalty in the first year is marketed subject to penalty
in any subsequent year.
INELIGIBILITY

FOR

PAYMENTS

SEa. 349. (a) Any person who knowingly plamte cotton on bis farm in
any year on acreage in excess of the farm acreage allotment for cottonfor
the farm for such year under section 344 shall not be eligiblefor any pay­
ment jor such year under the Soil Conservation and Domestic Allotment
Act, as amended.
(b) All persons applying for any payment of money under the Soil Oon­
servation and Domestic Allotment Act, as amended, shall file with the
application a statement verified by affidaci: that the applicant has not
knowingly planted, during the current year, cotton on land on his farm
in excess of the acreage allotted to thefarm under sectioti 344 for suen, year.
Any person who kno'Uxingly swears falsely in any statement required
under this subsection shall be guilty of perjury.
LONG STAPLE aOTTON
SEa. 350. The provisions of this Part shall not apply to cotton thl
staple of which is 11/ , inches or more in length.
PART V-MARKETING QUOTAS-RIOB
LEGISLATIVE FINDING

SEa. 351. (a) The marketing of rice constitutes one of the great baeio
industries of the United States with ramifying activities which directly
affect interstate and foreign commerce at every point, and stable condi­
tions therein are necessary to the general welfare. Rice produced for
market is sold on a Nation-wide market, and, with its products, moves
almost wholly in interstate and foreign commerce from the producer
to the ultimate consumer. The farmers producing such commodity
are subject in their operations to uncontrollable natural causes, in many
cases such farmers carryon their farming operations on borrowed money
or leased lands, and are not so situated as to be able to organize effectively,
as can labor and industry, through unions and corporations enjoying
Government sanction and protection for joint economic aciio i; For
these reasons, among others, the farmers are unable without Federal
assistance to control effectively the orderly marketing of such commodity
with the result that abnormally excessive supplies thereof are produced
and dumped indiscriminately on the Nation-wide market.
(b) The disorderly marketing of such abnormally excessive supplies
affects, burdens, and obstructs interstate and foreign commerce by (1)
materially affecting the volume of such commodity marketed thers';,,,,,

32

AGRICULTURAL ADJUSTMENT ACT OF 1938

(2) disrupting the orderly marketing of such commodity therein, (3)
reducing the prices for such commodity with Iconsequent injury and
destruction of such commerce in such commodity, and (4) causing a
disparity between the prices for such commodity in interstate and foreign
commerce and industrial products therein, with a consequent diminution
of the volume of interstate and foreign commerce in industrial products.
(c) Whenever an abnormally excessive supply of rice exists, the market­
ing of such commodity by the producers thereof directly and substantially
affects interstate and foreign commerce in such commodity and its prod­
ucts, and the operation of the provisions of this Part becomes necessary
and appropriate in order to promote, foster, and maintain an orderly
flow of such supply in interstate and foreign commerce.

oJ

NATIONAL ACREAGE ALLOTMENT

SEC. 352.' The national acreage allotment of rice for any calendar year
shall be that acreage which the Secretary determines will, on the basis of
the national average yield of rice for the five calendar years immediately
preceding the calendar year for which such national average yield is
determined, produce an amount of rice adequate, together with the esti­
mated carry-over from the marketing year ending in such calendar year,
to make available a supply for the marketing year commencing in such
calendar year not less than the normal supply. Such national acreage
allotment shall be proclaimed not later than December 31 of each year.
APPORTIONMENT OF NATIONAL ACREAGE ALLOTMENT

SEC. 353. (a) The national acreage allotment of rice for each calendar
year shall be apportioned by the Secretary among the several States in which
rice is produced in proportion to the average number of acres of rice in each
State during the five-year period immediately preceding the calendar year
[or which such national acreage allotment of rice is determined (plus, in
applicable years, the acreage diverted under previous agricultural adjust­
ment and conservation programs) with adjustments for trends in acreage
during the applicable period.
(b) Not less than 97 per centum of the acreage allotted to any State
shall be apportioned annually by the Secretary through local and State
committees of farmers among the persons producing rice within such
State on the basis of past production of rice; land, labor, and available
equipment for the production of rice; crop-rotation practices, soil fertility,
and other physical factors affecting the production of rice: Provided,
That not exceeding 3 per centum of the acreage allotted to each State
shall be apportioned annually by the Secretary through local and State
committees of farmers among persons who for the first time in the past
five years are producing rice on the basis of the applicable standards of
apportionment set forth in this subsection: Provided further, That a
person producing rice for the first time in five years shall not be allotted
an acreage in excess of 75 per centum of the allotment that would be
made to him if he were not 'produc1~ng rice for the first time in such five
years.
DOMESTIC ALLOTMENT OF RICE

SEC. 354. (a) Not later than December 31 of each year the Secretary
shall ascertain from the latest available statistics of the Department and
shall proclaim the total amount of rice which will be needed during the

AGRICULTURAL ADJUSTMENT ACT OF 1938

33

next succeeding marketing year to meet the requirements of consumers in
the United States. Such amount is hereinafter referred to as the "do­
mestic allotment of rice" .
(b) The domestic allotment of rice for each marketing year shall be
apportioned by the Secretary among the several States in whicp rice is
produced in proportion to the average amount of rice produced in each
State during the fioe-uear period including the calendar year i rlt which
such domestic allotment is announced (plus, in applicable years, the
normal production of any acreage diverted under previous agricultural
adjustment and conservation programs), with adjustments for abnormal
weather conditions and trends in acreage during the applicable period.
(c) The Secretary shall provide, through local and State committees of
farmers, jor the allotment oj each State apportionment among persons
producing rice in such State. The apportionment of the domestic allot­
ment of rice among persons producing rice in each State shall be on the
basis of the aggregate normal yields oj the acreage allotments established
with respect to such persons.
MARKETING QUOTAS

SEO. 355. (a) Ij at the time of any proclamation made under the pro­
visions of section 354 (a) it shall appear jrom the latest available statistics
of the Department that the total supply oj rice exceeds the normal supply
thereof for the current marketing year by more than 10 per centum of such
normal supply, the Secretary shall also proclaim that, beginning on the
first day oj the marketing year next following and continuing throughout
such year a national marketing quota shall be in effect jor marketings oj
rice by producers: Provided, That no marketing quota shall be in effect
for the marketing year commencing A'ugust 1, 1938. The Secretary shall
also ascertain and specify in such proclamation the amount of the national
marketing quota in terms oj the total quantity thereof which may be
marketed by producers which shall be that amount oj rice which the Secre­
tary determines will make available during such marketing year a normal
supply.
(b) Within thirty days after the date of the issuance of the proclama­
tion specified in subsection (c) oj this section, the Secretary shall conduct
a referendum, by secret ballot, oj producers who would be subject to the
national marketing quota for rice to determine whether such producers
are in favor of or opposed to such quota. If more than one-third of the
producers voting in the referendum oppose such quota, the Secretary shall,
prior to the 15th day oj February, proclaim the result of the referendum,
and such quota shall not become effective.
(c) The national marketing quota shall be apportioned among States
and persons producing rice in each State, including new producers, in
the manner and upon the basis set forth in section 354 for the apportion­
ment of the domestic allotment of rice.
(d) Marketing quotas may be transferred only in such manner and
subject to such conditions as the Secretary may prescribe by regulations.
PENALTIES

SEO. 356. Any producer who markets rice in excess of his marketing
quota shall be subject to a penalty of one-quarter of 1 cent per pound oj
the excess so marketed.

34

AGRIOULTURAL ADJUSTMENT ACT OF 1938

SUBTITLE O-ADMINISTRATIVE PROVISION8
PART 1-PUBLIOATION .AND REVIEW OF QUOTAS
APPLIOATION OF PART
SEO. 361.-This Part shall apply to the publication and review oj
farm marketing quotas established for tobacco, corn, wheat, cotton, and
rice, established under subtitle B.
PUBLIOATION AND NOTIOE OF QUOTA
SEO. 362.-All acreage allotments, and the farm marketing quotas
established for farms in a county or other local administrative area shall,
in accordance with regulations of the Secretary, be made and kept freely
available for public inspection in such county or other local administra­
tive area. An additional copy of this information shall be kept avail­
able in the office of the county agricultural extension agent or with the
chairman of the local committee. Notice of the farm marketing quota
of his farm shall be mailed to the farmer.
REVIEW

BY

REVIEW OOMMITTEE

SEo.363. Any farmer who is dissatisfied ttvith his farm marketing
quota may, within fifteen days after mailing to him of notice as provided
in section 362, have such quota reviewed by a local review committee com­
posed Qf three farmers appointed by the Secretary. Such committee shall
not include any member of the local committee which determined the farm
acreage allotment, the normal yield, or the farm marketing quota for such
farm. Unless application, for review is made within such period, the
original determination of the farm marketing quota shall be final.
REVIEW OOMMITTEE
SEO. 364. The members of the review committee shall receive as com­
pensation for their services the eame per diem as that received by the
members of the committee utilized for the purposes of the Soil Conserva­
tion and Domestic Allotment Act, as amended. The members of the
review committee shall not be entitled to receive compensation for more
than thirty days in a1~y one year.
INSTITUTION OF PROOEEDINGS
SEC. 365. If the farmer is dissatisfied with the determination of ths
review committee, he may, within fifteen days after a notice of such deter­
mination is mailed to him by registered mail,file a bill in eqll
the review committee as defendant in the United States district court, or
institute proceedings for review in any court of record of the State having
general jurisdiction, sitting in the county or the district in which his farm
is located, for the purpose of obtaining a review of such determination.
Bond shall be given in an amount and with surety satisfactory to the court
to secure the United States for the costs of the proceeding. The bill of
cornplaint in such proceeding may be served by delivering a copy thereof
to anyone of the members of the review committee. Thereupon the review
committee shall certify and file in the court a transcript oj the record upon
Jityagain8t

AGRICULTURAL ADJUSTl\iENT ACT OF 1938

35

which the determination complained of was made, together with it.sfindings
of fact.
COURT REVIEW
SEC. 366. The review by the court shall be limited to questions of law,
and the findings of fact by the review committee, if supported by evidence,
shall be conclusive. If appl1·cation is made to the court for leave to adduce
additional evidence, and it is shown to the satisfaction of the court that
such additional evidence is material and that there were reasonable grounds
for failure to adduce such evidence in the hearing before the review com­
mittee, the court may direct such additional evidence to be taken before
the review committee in such manner and upon such terms and conditions
as to the court may seem proper. The review committee may modify its
findings of fact or its determination by reason of the additional evidence
so taken, and it shall file with the court such modified findings or deter­
mination, which findings of fact shall be conclusive. At the earliest con­
venient time, the court, in term time or vacation, shall hear and determine
the case upon the original record of the hearing before the review committee,
and upon such record as supplemented if supplemented, by further hearing
before the review committee pursuant to direction of the court. The court
shall affirm the review committee's determination, or modified determina­
tion, if the court determines that the same is in accordance with law. If
the court determines that such determination or modified determination is
not in accordance with law, the court shall remand the proceeding to the
review committee with direction either to make such determination as the
court shall determine to be in accordance ttoith law or to take such further
proceedings as, in the court's opinion, the law requires.

STAY OF PROOEEDINGS AND EXOLUSIVE JURISDIOTION
SEO. 367. The commencement of judicial proceedings under this Part
shall not, unless specifically ordered by the court, operate as a stay of the
review committee's determination. Notwithstanding any other provision
of law, the jurisdiction conferred by this Part to review the legal validity of
a determination made by a review committee pursuant to this Part shall be
exclusive. No court of the united States or of any State shall have juris­
diction to pass upon the legal validity of any such determination except in a
proceeding under this Part.

NO EFFEOT ON OTHER QUOTAS
SEO. 368. Notwithstanding any increase of any farm marketing quota
tor any farm as a result of review of the determination thereof under thie
Part, the marketing quotas for other farms shall not be affected.

PART II-ADJUSTMENT OF QUOTAS AND ENFOROEMENT
GENERAL ADJUSTMENTS OF QUOTAS
SEO. 371. (a) If at any time the Secretary has reason to believe that in
the case of corn, wheat, cotton, rice, or tobacco the operation of farm
merketing quotas in effect will cause the amount of such commodiiu
which is free of marketing restrictions to be less than the normal supply
for the marketing year for the commodity then current, he shall cause
an immediate investigation to be made with respect thereto. In the course

36

AGRICULTURAL ADJUSTMENT AOT OF 1938

of such investigation due notice and oppertunity for hearing shall be
given to interested persons. If upon the basis of such investigation
the Secretary finds the existence of such fact, he shall proclaim the same
forthwith. He shall also in such proclamation specify such increase
in, or termination of, existing quotas as he finds, on the basis of such
investigation, is necessary to make the amount of such commodity which
is free 0./ marketing restrictions equal the normal supply.
(b) If the Secretary has reason to believe that, because of a national
emergency or because of a material increase in export demand, any national
marketing quotafor corn, wheat, cotton, rice, or tobacco should be increased
or terminated, he shall cause an immediate investigation to be made to
determine whether the increase or termination is necessary in order to
effectuate the declared policy of this Act or to meet such emergency or
increase 'l:n export demand. If, on the basis of such investigation, the
Secretary finds that such increase or termination is necessary, he shall
immediately proclaim such finding (and if he . finds an increase is neces­
sary, the amount of the increase found by him to be necessary) and there­
upon such quota shall be increased, or shall terminate, as the case may be.
(c) In case any national marketing quota for any commodity is in­
creased under this section, each farm marketing quota for the commodity
shall be increased in the same ratio.
(d) In the case of corn, whenever such proclamation specifies an
increase in marketing quotas, the storage amoumis applicable to corn shall
be adjusted downward to the amount which would have been required to
be stored if such increased marketing quotas had been in effect. Whenever
in the case of corn, such proclamation provides for termination of market­
ing quotas, storage under seal shall no longer be required.
PAYMENT AND OOLLEOTION OF PENALTIES
SEO. 372. fa) The penalty with respect to the marketing, by sale, oj
wheat, cotton, or rice, if the sale is to any person within the United States,
shall be collected by the buyer.
(b) All penalties provided for in Subtitle B shall be collected and paid
in such manner, at such times, and under such conditions as the Secretary
may by regulations prescribe. Such penalties shall be remitted to the
Secretary by the person liable for the penalty, except that if any other
person is liable for the collection of the penalty, such other person shall
remit the penalty. The amount of such penalties shall be cooered into
the general fund of the Treasury of the United States.

REPORTS AND REOORDS
SEO. 373. (a) This subsection shall apply to warehousemen, proc­
essors, and common carriers of corn, wheat, cotton, rice, or tobacco, and
all ginners of cotton, all persons engaged in the business of purchasing
corn, wheat, cotton, rice, or tobacco from producers, and all persons
engaged in the business of redrying, prizing, or stemming tobacco for
producers. Any such person shall, from time to time on request of the
Secretary, report to the Secretary such information and keep such records
as the Secretary finds to be necessary to enable him to carry out the pro­
visions of this title. Such information shall be reported and such records
,hall be kept in accordance with forms which the Secretary shall prescribe.

AGRICULTUR.A.L ADJUSTMENT ACT OF 1938

37

For the purpose of ascertaining the correctness of any report made or
record kept, or of obtaining information required to be furnished in any
report, but not so furnished, the Secretary is hereby authorized to examine
such. books, papers, records, accounts, correspondence, contracts, docu­
ments, and memoranda as he has reason to believe are relevant and are
within the control of such person. Any such person failing to make any
report or keep any record as required by this subsection or making any
false report or record shall be deemed guilty of a misdemeanor and Up01 ..
conviction thereof shall be subject to a fine of not more than $500.
(b) Farmers engaged in the production of corn, wheat, cotton, rice, or
tobacco for market shall furnish such proof of their acreage, yield, storage,
and marketing of the commodity in the form of records, marketing cards,
reports, storage under seal, or otherwise as the Secretary may prescribe as
necessary for the administration of this title.
(c) All data reported to or acquired by the Secretary pursuant to this
section shall be kept confidential by all officers and employees of the De­
partment, and only such data so reported or acquired as the Secretary
deems relevant shall be disclosed by them, and then only in a suit or admin­
istrative hearing under this title.
MEASUREMENT OF FARMS AND REPORT OF PLANTINGS

SEC. 374. The Secretary shall provide, through the county and local
committees, for measuring farms on which corn, wheat, cotton, or rice is
produced and for ascertaining whether the acreage planted for any year
to any such commodity is in excess of the farm acreage allotment for such
commodity for the farm under this title. I] in the case of any farm the
acreage planted to any such commodity on the farm is in excess of the farm
acreage allotment for such commodity for thefarm, the committee shall file
with the State committee a written report stating the total acreage on the
farm in cultivation and the acreage planted to such commodity.
REGULATIONS

SEO. 375. (a) The Secretary shall provide by regulations for the identi­
fication, wherever necessary, of corn, wheat, cotton, rice, or tobacco so as
to afford aid in discovering and identifying such amounts of the commodi­
ties as are subject to and such amounts thereof as are not subject to
marketing restrictions in effect under this title.
(b) The Secretary shall prescribe such regulations as are necessary for
the enforcement of this title.
OOURT JURISDIOTION

SEO. 376. The several district courts of the United States are hereby
vested with jurisdiction specifically to enforce the provisions of this title.
If and when the Secretary shall so request, it shall be the duty of the
several district attorneys in their respective districts, under the direction
of the Attorney General, to institute proceedings to collect the penalties
provided in this title. The remedies and penalties provided for herein
shall be in addition to, and not exclusive of, any of the remedies or penalties
under existing law.

H. Repts., 75-3, vol. 1--40

38
SUBTITLE

AGRICULTURAL ADJUSTMENT ACT OF 1938
D-MISOELLANEOUS

PROVISIONS

~ND

APPROPRIATIONS

PART I-MISOELLANEOUS
OOTTON PRIOE ADJUSTMENT PAYMENTS

SEO. 381. (a) For the purposes of the provisio·ns (relating to cotton
price adjustment payments with respect to the 1937 cotton crop) of the
Third Deficiency Appropriation Act, fiscal year 1937, a producer shall
be deemed to have complied with the provisions of the 1938 agricultural
adjustment program .formulated under the legislation contemplated by
Senate Joint Resolution Numbered 207, Seventy-fijth Conqreee, if his
acreage planted to cotton in 1938 does not exceed his farm acreage allot­
mfJnt for 1938 under the Soil Conservation and Domestic Allotment Act,
a~ amended (including the amendments made by this .44ct) , or under
seetion 344 oj this Act, whichever is the lesser. For the purpose of this
eubsectum a producer shall not be deemed to have exceeded his farm acre­
age allotment unless such producer knowingly exceeded his jarrn acreage
adotmeni. Such compliance shall not be required in any case where the
producer is not engaged in cotton production in 1938. In cases where in
1937 a total or partial crop [ailure resulted [rom hail, drought, flood, or
boll-weevil infestation; if the producer is otherwise eligible jor payment,
payment shall be made at the rate of 3 cents per pound 01~ the same per­
centage of the producer's normal base production established by the Secre­
tary as in the case of other producers. For the purpose of such provisions
of the Third Deficiency Appropriation A.ct, fiscal year 1937, cotton not
sold prior to July 1, 1938, shall be held and considered to have been sold
on June 30, 1938, and all applications for price adjustment paym.ents
shall be filed with the Secretary not later than July 15, 1938. Such pay­
ments shall be made at the earliest practicable time. Application for
payment rnay be made by the 1937 operator of a jarm on behalf of all per­
sons engaged in cotton production on the [arm in 1937 and need be signed
only by such operator, but payment shall be made directly to each of the
persons entitled thereto. In case any person who is entitled to paym.ent
hereunder dies, becomes incompetent, or dieappeare before receiving such
payment or is succeeded by another who renders or completes the required
perjormance, payment shall, without regard to any other provisions of law,
be made as the Secretary may determine to befair and reasonable in all the
circumstances and provide by regulations.
(b) Any producer for whom a loan has been made or arranged for by
the Commodity Credit Corporation on cotton oj his 1937 crop and who
has cornplied with all the provisions oj the loan agreement except section 8
thereof, may, at any time before ,July 1, 1938, transfer his right, title, and
interest in and to such cotton to the Corporation; and the Corporation is
authorized and directed to accept such right, title, and interest in and to
sucli cotton and to assume all obligations of the producer with respect to
the loan on such cotton, including accrued interest and accrued carrying
charges to the date of such transfer. The Corporation shall notify the
Secretary oj Agriculture of each such transfer, and upon receipt oj such
notice, the Secretary shall as soon as compliance is shown, or a national
markeiitu; quotajor cotton is put into ejfect,forthwith pay to such producer
a sum equal to 2 cents per pound of such cotton, and the amount so paid
shall be deducted from any price adjustment payment to which such
producer is entitled.

AGRICULTURAL ADJUSTMENT ACT OF 1988

39

(c) The Oommodity Oredit Oorporation is authorized on behalf oj the
United States to sell any cotton oj the 1937 crop so acquired by it, but no
such cotton or any other cotton held on behalf of the United States shall
be sold unless the proceeds oj such sale are at least sufficient to reimburse
the United States for all amounts (including any price-adjustment pay­
ment) paid out by any oj its agencies with respect to the cotton so sold.
After July 31, 1939, the Oommodity Oredit Oorporation shall not sell
more than three hundred thousand bales oj cotton in any calendar month,
or more than one million five hundred thousand bales in any calendar
year. The proceeds derived jrom the sale of any such cotton shall be
used for the purpose of discharg'ing the obligations assumed by the Oom­
modity Oredit Oorporation with respect to such cotton, and any amounts
not expended for such purpose shall be covered into the Treasury as
miscellaneous receipts.
EXTENSION OF 1937 OOTTON LOAN

SEO. 382. The Oommodity Oredit Oorporation is hereby authorized
and directed to providejor the extension,jrom July 31,1938, to July 31,
1939, oj the maturity date oj all notes evidencing a loan made or arranged
for by the Oorporation on cotton produced during the crop year 1937-1938.
This section shall not be construed to prevent the sale oj any such cotton on
request oj the person liable on the note.
INSURANOE OF OOTTON AND ltEOONOENTRATION OF OOTTON

SEo.383. (a) The Oommodity Oredit Oorporation shall place all insur­
ance of every nature taken out by it on cotton, and all renewals, extensions,
or continuations oj existing insurance, with insurance agents who are
bona fide residents oj and doing business in the State where the cotton is
warehoused: Provided, That such insurance may be secured at a cost not
greater than similar insurance offered on said cotton elsewhere.
(b) Ootton held as security jor any loan heretojore or hereajter made
or arranged for by the Oommodity Credit Oorporation shall not hereajter
be reconcentrated without the written consent oj the producer or borrower.
REPORT OF BENEFITS

SEO. 384. The Secretary shall submit to Oongress an annual report
oj the names cf persons to whom, during the preceding year, payments
were made under the Soil Conservation and Domestic Allotment Act,
as amended, together with payments under section 303 oj this Act, if any, if
the total amount paid to such person exceeded $1,000.
FINALITY OF FARMERS' PAYMENTS AND LOANS

SEO. 385. The [acts constituting the basis jor any Soil Oonservation
Act payment, parity payment, or loan, or the amount thereoj, when officially
determined in c01l:formity with the applicable regulations prescribed by
the Secretary or by the Commodity Oredit Oorporation, shall be final and
conclusive and shall not be reviewable by any other officer or agency oj the
Government.
SEO. 386. The provisions oj section 3741 o.f the Revised Statutes
(U. S. 0., 1934 edition, title 41, sec. 22) and sections 114 and 115 oj the
Oriminul Gode of the United States (U. S. G., 1934 edition, title 18,

40

AGRICULTURAL ADJUSTMENT ACT OF 1938

sees. ~04 and 205) shall not be applicable to loans or payments made
under this Act (except under' section 383 (a) ).
PHOTOGRAPHIO REPRODUOTIONS AND MAPS

SEO. 387. The Secretary may jurnish reproductions oj such aerial or
other photographs, mosaics, and maps as have been obtained in connection
with the authorized work oj the Department to farmers and governrnental
agencies at the estimated cost of jurnishing such reproductions, and to
persons other than farmers at such prices (not less than estimated cost oj
furnishing such reproductions) as the Secretary may deterrnine, the money
received [rom such sales to be deposited in the Treasury to the credit of the
appropriation charged with the cost oj making such reproductions. This
section shall not affect the power ofthe Secretary to make other disposition
oj such or similar materials under any other provisions of existing law.
UTILIZATION OF LOOAL AGENOIES

SEO. 388. (a) The provisions oj section 8 (b) and section 11 of tM
Soil Oonservation and Domestic Allotment Act, as amended, relating to
the utilization of State, county, local committees, the extension service, and
other approved agencies, and to recognition and encouragement oj coopera­
tive associations, shall apply in the administration oj this Act; and the
Secretary shall, jor such purposes, utilize the same local, county, and
State committees as are utilized under sections 7 to 17, inclusive, of the
Soil Oonservation and Domestic Allotment Act, as amended. The local
admimistratuie areas designated under section 8 (b) oj the Soil Oonseroa­
tion and Domestic Allotment Act, as amended, jor the administration oj
programs under that Act, and the local administrative areas designated
for the administration oj this Act shall be the same.
(b) The Secretary is authorized and directed, jrom any junds made
available jor the purposes oj the Acts in connection with which county
committees are utilized, to make payments to county committees ojfarmers
to cover the estimated administrative expenses incurred or to be incurred
by them in cooperating in carrying out the provisions oj such Acts. All
or part oj such estimated administrative expenses oj any such committee
may be deducted pro rata from the Soil Oonservation Act payments,
parity payments, or loans, or other payments under such Acts, made
unless payment oj such expenses is otherwise provided by lane, The
Secretary may make such payments to sucli committees in advance oj
determination oj performance by farmers.
PERSONNEL

SEO. 389. The Secretary is authorized and directed to provide jor the
execution by the Agricultural Adjustment Administration oj such oj the
powers conferred upon him by this Act as he deems may be appropriately
exercised by such Administration; and jor such purposes the provisions
oj law applicable to appointment and compensation oj persons employed
by the Agricultural Adjustment Administration shall apply.
SEPARABILITY

SEO. 390. I} any provision oj this Act, or the application thereof to
File Typeapplication/pdfFile TitleU.S. Farm Bills, National Agricultural Law CenterFile Modified2008-01-30File Created2007-08-07