GENERAL FARM PROGRAM 205 



Mr. Pace. And to give the amount necessary to have that pur- 

 chasing power at this time. 



Secretary Brannan. And may I indicate that the selection of the 

 144 was an arbitrary selection and it was chosen because it happens 

 to be the parity index figure for this very month. It may be less. 

 The indications are that it might be a point or two less than is indi- 

 cated on here. 



Mr. Pace. Then when you get this general income support level 

 of $26,000,000,000-plus, you attempt to break that down for indi- 

 vidual commodities. 



Secretary Brannan. That is right. That is step two. Somehow 

 or other you have to relate a price support program to the price of 

 individual commodities. 



Mr. Pace. Then to do that you go back to the left-hand side of 

 the column and get the average cash receipts for the 10 years. 



Secretary Brannan. Yes, sir. 



Mr. Pace. Then why in the one case do you use the average 

 purchasing power in the right-hand column of $18,000,000,000, but 

 when you break them down to individual commodities you go back 

 to the left-hand side of the column and take the average cash receipts 

 instead of the average purchasing power? 



Secretary Brannan. You are trying to relate this individual com- 

 modity price standard to the purchasing power of the present dollar 

 and you have not completely abandoned the top column on the right- 

 hand side because that figure, reached as a result of the computations 

 in the top column plus a parity index, gives you the 26.2. You do 

 have your representation of your objective purchasing power in 

 present dollars. That comes out at about 26.2, if you use 144 as 

 your index. You have to relate that to the dollar income of farmers. 



Mr. Pace. What is the average at the bottom on the left-hand 

 side? 



Secretary Brannan. Twenty-one billion. 



Mr. Pace. You relate that to the $26,000,000,000? 



Secretary Brannan. Yes, sir, by division. 



Mr. Pace. You sought there to give us an estimate of support 

 prices on January 1? 



Secretary Brannan. That is right, sir. 



Mr. Pace. You estimated 1949 cash receipts at $27,500,000,000? 



Secretary Brannan. That is right, sir. 



Mr. Pace. And you pulled that into the formula and dropped the 

 figure for 1939? 



Secretary Brannan. Yes, sir. 



Mr. Pace. Then you struck a new average of purchasing power of 

 $19,000,000,000 instead of $18,000,000,000? 



Secretary Brannan. Yes, sir. 



Mr. Pace. Or did you. 



Secretarv Brannan. Well, vou strike a new average of about 

 21,000,000^000. 



Mr. Pace. But you did not wi-ite the 27,-500,000,000 and take that 

 into account in figuring your 1950 prices. 



Secretary Brannan. Certainly we did, because the 21.000,000,000 

 is the average of the figures for the years 1940 to 1949. xVgain, 

 in order to give some kind of clear delineation, if this is a clear 

 delineation, we had to make some estimates. 



