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IS'^^' ^ WEEKLI MARKET REVIEW AND FARM OUTLOOK 



^jM^.^^ By Q-, L. Jordan/ 



W Professor. AcrrlGultural 



Professor, Agricultiiral Economics 

 University of Ill3/nois 

 College of Agriculture -»- -^-.. 



// 



(Prepared September 25) 1 



There £ire two developments in Washington that may eventually 



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have a very Important bearing upon t^e prices of farm products. They 



are (l) the action that may eventually be taken relative to price fix- 



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ing and controls of that natiire, a/id (2) the quantity of food that 

 will be exported under the lease- ^end law. Last week Bernard Baruch, 

 who was connected with the War Industries Board during the fxrst World 

 War, in his testimony before the House Banking and Currency Committee 

 came out emphatically for a rigid control of all prices including 

 prices of farm products, waives;, rents, and interest. Leon Henderson, 



heaji of the Office of Price Adnjini strati on, favors less drastic and 



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 more piece— meal action. He figured that clamping down on wages would 



tend to interfere with th^ armataent program and thought that the inf la- 



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 tion of prices might be prdventied by limiting prices of individual 



commodities. Senator Bankhead, ^in commenting on Baruch* s proposal, 



indicated that it was not likely that a price ceiling on farm products 



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 would be established by this Congress at a figure below 110 per cent of 



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 parity. Since that time, Henry 'Morgenthau Jr., Secretary of the 



Treasury, has proposed a definite maximum of 6 per cent profit for 



corporations. ' 



At the same time that Secretary Morgenthau was proposing 



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 this limitation on profits, the Federal Reserve Board 'raised reserve 



requirements of member banks about one-seventh, up to the highest point 

 permitted by present laws. This would have a pendency to reduce 

 present excess bank reserves from around 5 billion dollsirs to about ^ 

 billion dollars. The object is to prevent a runaway inflation through 



