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<br />1916
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<br />COl':GRESSIONAL RECORD-APPENDiX
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<br />A1885
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<br />1,-1-'1 formula. This 1-1-1 formula has
<br />oo,'er been refuted. It has held approxl.
<br />ma~ly constant since 1921; nor has 1~
<br />ever ~n recO{l'nlzed by Congress or ex-
<br />perts l1\our various departments of Gov.
<br />ernmcnt... The 1-1-7 formula 1s probably
<br />the most ~JXlrtant ever prewnted to the
<br />Amencan p~ple. Falltlfe to use the for-
<br />mula in the '~rlod 193~1 caused the
<br />Nat.lon to losa. $4'13.000,000,1100 of na-
<br />tJonalincorne. '
<br />In t106 pcll~,,"ar 'Ilr{a. failure to recognize
<br />the Importance of t~e formUla can result
<br />in a loss of 1'15.000.&pO.OOO annuaUy to
<br />the united Btates. Ei\c;h dollar 01 farm
<br />income results In,' of national Income;
<br />agriculture produces 65 pe)feot Q.f all raw
<br />materials. "
<br />Factory pay roll.!.Ne Lk'd' 'to. Illfrltul-
<br />turallncorne. anti ..f rarm'pJ1~ receded
<br />in the latter part ot 1937 and'- reduced
<br />farm Income appl'ox,matd)' a billion dal-
<br />Iars In 1939, factary pay rails came'llov.-n
<br />In ratio.. .
<br />The only way that the Cenll'ress eM
<br />Increase factery pay rollll wltbout incur,
<br />ring a huge addltien to. the national debt
<br />18 to first Incn-s.se the basiC farm Incoml'.
<br />Reffil'mber, anything done that reduces
<br />the farmer's income $1, mQre ar less, like-
<br />wise affects other groups, and reduc('$ the
<br />natlanal income $7. mare or less. That
<br />the reverse Ja also true. vlz, anything
<br />done to increase the farnler's Income $1,
<br />more ar leas, likewise ll1tects other groups
<br />and Increases the national Income ''1,
<br />more ar leu.
<br />Can CanllTMiS not clearly see that tl1~
<br />Income far the farmer for hb products is
<br />the foundation for full employment and
<br />natlenal prosperity?
<br />COOP "^&M Pa1CJllI. T1tZD. 1UL\T'Io.KSHlP 1'0
<br />FSOoUCTION
<br />The average value ef our manufac-
<br />tured goods is 80 percent af the naUonal
<br />inceme. Do we want the value af manu-
<br />factured goods to. be 80 per~nt of $150,-
<br />000,000.000 ar let the brm lnC()me g>)
<br />bact; to 1940 levels, getting 80 percent cf
<br />$75.000.COO.GOO? Por each 1 percf'nt that
<br />farm lncome is belaw parity prJ~", we
<br />wJJl haTe a loss af 1 percent In value ef
<br />ro!UIO~&Dd 1 p<<cent unpmplQY-
<br />Ine1It. Ii We permit our Ia.nn Income tl)
<br />eireI' back 1.0 UtI) levels., we wUl wiPcl cut
<br />$'i5.tltj "GO,COO a rear ef uatJonal incomt!.
<br />Retail .'Isles averaged apprcxim~te1y 60
<br />percent Qf n..'\tion~ Income. 00 we want
<br />60 pereent af Il$O.OOO.CI'O,OOO of national
<br />income In r('tAil-sales volume ... 6{l per-
<br />c~nt of S7S,OCO.llOO.OOO? The farm In.
<br />(erne W1ll determine which It Is to be,
<br />l1ic;hcr f:l.TIn prl~es do net mean ~her
<br />living CO$t& Ilil!her farm prices do not
<br />result In blahl"r living costs whtn caleu_
<br />tatKl en the bal;13 cf the lncreued per
<br />CXl!)lta tnCl'nle gcnet1\1.t!d by higher farm
<br />Income. The ~Imple facts are Ihat with
<br />hl.c:h':lr f:;.:m prices we h:1ve a correspor.d-
<br />Ing Incre~ b l:tcarne for all groups
<br />an'.! Ihe con <.'f lMng en Ule basis 0.1
<br />j!!Cco:.e dCC5 not incre:l5e as farm prices
<br />Incl'tase. It rrmalns yracllcaily constant.
<br />In 19S3, with appl'o~imau>!)' 65 percent
<br />of farm parlly. we had 65 percent cm-
<br />pleyml.'nt. 1'1 I'H, w:'h I!p~rox;m~tely
<br />85 pcr::~~t d fr!~ r:r:t~., we h:-.d 85
<br />"'~;'~e:nt (If cm!Jlc:.-rr' ;h: the foundeUon
<br />fQr full (L~::!\,';';_;~:.:.t !: r-;.:~'.,Y prtce for
<br />
<br />agriculture. Per each 1 percent that
<br />larm prices are belaw parity we wllllose
<br />approximately 1 percent 01 the physical
<br />production of our fartQries. Labor
<br />shaUld support higher prices for farmers
<br />becawe that Is the foundatien for cen-
<br />tinued lactory output.
<br />fMCIlZll$Z III ..UK ftJc. WU-L lOor 1LAD TO
<br />INf'L4TIQ!'I
<br />The cost ef raw material In detnmln-
<br />lng prices 15 small. The resultlnl In.
<br />crease In prlce!l to the censumer wUl be
<br />InsJgnlficant. What is mere convincing
<br />Is the fact that every dollar of Increased
<br />income ler the farm will bring $'1 In-
<br />creased income throughout the Natian.
<br />With this 51 Increased national tnceme
<br />people can more than afford the small
<br />Inerea.se In price and have quite. sum
<br />It'll. oller. To say that we must keep
<br />farm prlres down to step inlll,tlen Is the
<br />reasontng ef a dumbeU.
<br />HlGHD ....aK PSJCQ, TlU:U lUtWlT10N5KlP TO
<br />n.t.1lS&"'DWOllLll~CI!:
<br />
<br />America now has no surpluses 01 a&rl-
<br />cultural preducts: there may be an ac-
<br />~cumulat1en 0.1 certain commodJUes that
<br />~ere held eft the market-due to war
<br />ai\4 other cendltlons. Higher farm
<br />Pri~S Is the 1I01utlon ef eur economic
<br />rlddll\. Had high farm prices prevoJled
<br />fer th~period of the se-called surpluses,
<br />money ("{ nef'ded new Industries wauld
<br />have been'avallable on reasonable terms
<br />as and wh~ It was wanted and there
<br />weuld have l1\en nQ unemployed.
<br />In 1930-39 we were laoot1ng under a
<br />sur">lus compl~apd eus farm produc-
<br />tlo.I'dld not e:q)~aboVe the 1925-29
<br />le("d: we had low ce!I which In turn
<br />lave us a lew natlen l1ncome and under
<br />consumption; we dld'qot have surplus
<br />productlen.
<br />
<br />,
<br />ILUL&o.uI lMCOMll ^ GOOD. ssuuur.
<br />,
<br />Oross eperatlng revenues'vl our nul-
<br />rcads followed farm Incem(\ down In
<br />ratio. and they fellowed fann..lncome
<br />when It r06e again. In the postfar, If
<br />we permit farm incame to drop b~k to
<br />1940 levels, the railroads wUllooe $t.~,-
<br />coo,ceo per yMr, with like ratle af loan
<br />to. ether ereups. TQtal transportatle!\.
<br />Incnme is ,.Vpro.'tima!eiY one.half of -
<br />gT051 Ia.rm Income.
<br />New construction averacll'S approxl-
<br />mawly 12 percent 0.1 the nat~onal In-
<br />(".orne. ApproxlD1:1.tely 2,800,000 jebs in
<br />-the construclJen Industry are available
<br />In the reconverstQn period 11 ml!.terlals
<br />are reJet:.sed and eth::-r controls remeved.
<br />In 19::0 all farm p,lces started dewnward
<br />~'1nKlnl al50ut the depretlSlen of 1921.
<br />l"aLure to ra~ farm prices In the 1930-
<br />41 per::oo prevent<<!. eur Natian from
<br />again hln:..,1C full empleyment and nor.
<br />mallncame; and, ca~ us to lose $473,.
<br />COO.OOO.OOO 0.1 pt't.ential m<:ome In that
<br />12-ye:;.r perlcd,
<br />The record prov~ ;utte clearly that
<br />our first step 8.$ a natlon Is to. ha,\'e OPA
<br />rnise prices for agricultural products.
<br />By stablJ.1:';ing farm prices In the United
<br />States. we 9.utcmatically stabilize ever
<br />to percent ef thc income ef tl1e world
<br />and, ~1th full parity far farm product.s
<br />in the Untted States we \ctll lay the first
<br />foundatlcn stone in bringing about werld
<br />prosperity as ." fcur:d:.tlen for perm!l-
<br />nent pe1r.ce.
<br />
<br />Our tariff sheuld be flexible, automat_
<br />Ically representing the dlt'ference be-
<br />tween our parity price level and the
<br />landed cost ef any Imported product.
<br />With eniy 6 pl'rcent af the werld's popu-
<br />hl.Uon we produced approximately 4'1
<br />percent Of the werld's goods. With the
<br />natural resources to produce 98 percent
<br />of everything we need, eur export trade
<br />wm be trivial and Inslgntftcant. II we
<br />will maintain our present larm produc-
<br />tien and maintain eur farm priCes at
<br />high levels we wUl not have any serious
<br />unemployment or depresslen.
<br />At good pr1c~ our farm production
<br />always creates the Inc.ome to censume
<br />our production or in the case of any
<br />surplus, to. consume the products of other
<br />nattons far which we ~change our sur-
<br />plus. Good farm prtCe:!I can end the con_
<br />fusion which now exista IU to eur future
<br />economic policies and make it possible
<br />for industry to carryon a definite pro.
<br />gr:un of reconverston.
<br />THS OP.. SIIOllUl n..n wtT:ElI 1I"tIT'ntlr.
<br />A good place to start giving our farm.
<br />ers the f:lir break Is with butter, Peopl,
<br />want butter. People want to pay a lltU,
<br />more to get butter. There Is no excll.~'
<br />whatever why the OPA should net In.
<br />crease the prtce of butter.
<br />To sum up my whole story in a nut..
<br />shell, here Ls hew I leel about the whol~
<br />watter of larm prices. It Is well summed
<br />up In the fellewlns:letter I have written
<br />t.o Mr, Paul Porter, the OPA Admlntstra'i
<br />tor. Here tt 1s:
<br />WAIteH 29. It-ltJ.
<br />Mr. PAUL A. PolITO,
<br />Admlnlstrlltor, 081~ 01 rrlc~
<br />Admlni,drlltlon, WlI.Ihf71V'o-n. D. C.
<br />MY D1u Mil. PoIr.TD: The dlllry farm"'r,
<br />ot my dlatrlc', which COffipt'lees 14 eountlul
<br />fU'8 ....ry Oluch u~t onr the rumor that th...'
<br />OPA lntendJI to. lower the price (:elUog one.
<br />crflUll 10 the Seplembll!r lll4$ level nr.hrr'!
<br />than rain the price ot butter.
<br />I hsvs mild" a comPlete tour af my dlA-
<br />tr'ct during Ihe laller put of Deormbil!r and'
<br />,January ot tli'" ,eu. and If tbe OP." JOI!lI
<br />through wIth tb'" rullng &Ild reduces tilt!
<br />prlCfl Cl'lIlna on eream n.tber than Inereaa_
<br />1n&" tbs pr!CI of hl.ltw. I know that- It ..-111
<br />deal .. body hlow \0 th" dlLlry lmiu.ou-y In
<br />mJ' d!Arlcl. Wh.., 111 lDCI'I'. t am e.!rtAln
<br />1-allt tllll tum..... will lose all courage to h"-Og
<br />diD. and p.ruduce and llw,. llniI KDlnI W quI,.
<br />'~t the pn!ft'tlt Urn", th" tatml'n srs al_
<br />r-sdt. dllJpo.lnl( ot tbelr milk oows bnau.s
<br />01 t~ high price Of tsed and ts.rm It.lx>r.
<br />Sho.Ul<1\~~1a rullng go through ous cannot
<br />1c1aglne 'po.,,- thl.s dapoo.1ns of mla co....s
<br />1II'1lUld tJa'\.11erease-d.
<br />Tbhl prol!alrm of pr~ce control 1..!l . very
<br />.rlOUllone1ll'lfb me, and laI:il ror It.. lIo".
<br />1!'1'Irr, If l\ bII!cD.... a queetlo::l With me u h
<br />wbleb 1.t more lulponant-pflee control or
<br />ths savlD(!: or thlf. d1i.-y Industry In my d\:l-
<br />tT~t.-1 ",Ill vote 8lptus., p.rlee COJltrol and
<br />,,\'e Ule daIry Indu..1f:OII of ZIly c11$!..-let..
<br />I.. UQ ~o wba~u wby U>t, price ct
<br />butter cannot he lnC'tc'aaed to &1"- tbe
<br />fumer the ~tur::l he ~l'V1!$ on his pr:xl-
<br />Uets. Et'CI'Yllody III ptllng 11 ralH &lld I Sf'O
<br />no reason ~lhy tile t"r:ncr~ -&hoUld belr.r It:.e
<br />hnlntotJ:tl~eontrol,
<br />Pl_. Mr. Porkr, a<<'f':>t HtIA leUer In U:e
<br />I't1rlt In ",hl.;h It \s-..r,tte::l.
<br />WIUlltlndertrqnlds,IIUn,
<br />\"e..,. dnce:"ely yours.
<br />ALn.. E. O'i{o:.-Nm<t.
<br />M<"'"r "" Congr....<', 1enl"
<br />D.,lrldc/ WI4c.l!UIQ,
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