m 



-3- 



bushel In the price of soybeans. Tuesday, the soybean processors 

 advanced the price of meal $3 a ton. Large refineries were reported 

 to have purchased 6 million pounds of soybean oil, Tuesday, and another 

 2 million pounds, Wednesday. We are not only exporting more fats and 

 oils to Great Britain, but domestic consumption has greatly increased, 

 particularly for industrial uses. This demand can be expected to con- 

 tinue to increase and the available supply to decrease until the new 

 crop becomes available. 



With full-fledged entry into the war, we are now hearing 

 estimates of an armament program calling for I50 billion dollars, on 

 top of appropriations already made of approximately JO billion dollars. 

 These sums are enormous and almost beyond human comprehension. Al- 

 though some drastic steps to prevent inflation will undoubtedly be 

 undertaken, it is doubtful if they will be 8.dequate or be adopted soon 

 enough to prevent further rises in prices. 



Leon Henderson, of the Office of Price Administration is 

 reported to have requested permission to fix agricultural prices at 

 100 per cent of parity. With the present emergency facing all of us, 

 and the unity and cooperation that has developed during the current 

 week, it will be possible to establish more dra.stic regulation than 

 would have been possible two weeks ago. On the other hand, it will be 

 difficult to establish prices that will not interfere with the productior. 

 program. One of the chief fimctions of prices is to allocate resources 

 and energy, based upon the changing demands for the various products. 

 To date, the demand for animal products has been so great that in spite 

 of a greatly increased quantity, prices are in many cases above parity. 

 If prices of animal products are limited to parity, it might prevent 

 reaching the goals which have been established for production of 

 animal products. There are some products, such as soybeans, for which 



