GENERAL FARM PROGRAM 263 



Mr. Pace. No; I cannot, agree with you there, because you are 

 chargeable under the present law not with fixing nonsupported 

 commodities on a basis comparable to the price on the market; you 

 are chargeable now with fixing those commodities at a comparable 

 parity figure. 



Let me get this straight: Under your plan you fix your over-all 

 national income level and then you break that down to give support 

 prices to individual commodities by comparing their respective prices 

 in the market place during the last 10 years; do you not? 



Secretary Brannax. Yes. 



Mr. Pace. All right. You have 10 commodities over here that we 

 will call the priority commodities. 



Secretary Brannan. Yes; and which contribute about 75 percent 

 of the farm income. 



Mr. Pace. That does not make any difference. 



Secretary Brannan. Yes; it does. 



Mr. Pace. You have to treat them all fairly. 



Secretary Brannan. That is right. 



Mr. Pace. These 10 are supported at 100 percent support level. 

 Here is a commodity, I do not care what it is, that has no support 

 at all, and it moves at all times at the market price. Therefore, 

 each year when you get your over-all total and begin to divide it 

 among the individual commodities on the basis of their respective 

 prices in the market place, this goes up and this comes down, and 

 under the plan that you propose, Mr. Secretary, it seems to me that 

 the priority prices of supported commodities will gradually move up, 

 up, and up. 



Secretary Brannan. Which you would like to have; is not that 

 what you said a moment ago? 



Mr. Pace. No, sir. The parity price of the commodities which you 

 are supporting will go up and up, and the parity prices of the commodi- 

 ties you do not support will go down and down. When the time comes 

 to support a commodity which has not been previously supported, 

 its parity price will be insignificant. 



Secretary Brannan. Mr. Pace, I am sorry to have to disagree with 

 you entirely. I think what will control the price of that very com- 

 modity which you are holding in your right hand is the supply and 

 demand of that commodity in the market place. Let us say it is 

 a watermelon. 



Mr. Pace. All right. 



Secretary Brannan. Let us say w^atermelons are short this year, 

 and that the purchasing power is high, as it is this year, the price of 

 that watermelon might be four times any support price level for it, 

 or it might be a terrifically high price. 



Mr. Pace. That is so only of the 10 priority commodities; that 

 is not true of the unsupported commodities. 



Secretary Brannan. All right. But that high price of the sup- 

 ported commodities will show up in the average of the commodities 

 in step 2 of the computation, and, therefore, it will reflect the higher 

 price on it. 



Mr. Pace. You do not contend, Mr. Secretary, that the priority 

 price of the nonsupported commodities under this formula proposed 

 here and in the Aiken bill, that is the comparable market price over 

 a period of 10 years; you do not contend that the parity price of the 



