-3- 



branches 

 ^u reserves built up by the social security/ and use them for defense pur- 

 poses. This would prevent the increase in total buying power that 

 would result if the government borrowed the money directly from the 

 banking system. It would be a form of compulsory savings. Although 

 other branches of the government would have spent the contributions 

 paid in for social security purposes, they would turn over to the social 

 security division evidence of indebtedness in the form of notes or bonds 

 which could later be turned into cash as needed, either by redemption 

 by the government or by sale in the investment market. The total 

 indebtedness of the government would be no greater than if the borrow- 

 ing were done from a nongovernmental agency. 



(xrain Prices . Wheat prices have improved about 2 cents during 

 the past week. Although wheat supplies in the United States for the 

 year beginning July 1, 19^1, are now estimated at l,3W-,000,000 bushels, 

 or 2^6,000,000 bushels above the supply a year ago, ari^ it is expected 

 that exports will be even less than the 3"^" million bushels exported 

 last year, there is no serious pressure of wheat on the cash markets. 

 Although supplies are abundant, they seem to be strongly held and a 

 large amount of wheat is being impounded into the loan. The tariff is 

 no longer effective in keeping out wheat, but the import quota restric- 

 tion on wheat and flour prevents Canada and Argentina from sending large 

 quantities of wheat to the United States. j 



The Commodity Credit Corporation raised its selling price of 

 corn 1 cent at Chicago this week. Although the cash price of corn at 

 Chicago is considerably below the price at which the Commodity Credit 

 Corporation offers to sell corn, the reluctance of this agency to sell" 

 at the going cash price would seem to lend credence to the writer's 

 belief that the price of corn is likely to rise considerably before 

 next May. v ■ ' 



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