308 GENERAL FARM PROGRAM 



problem is surplus. It is with him now and it will probably be with 

 him in a greater degree next year. 



In your study of the problem did you give any consideration to a 

 two-price program? 



Secretary Brannan. Yes, we did. We read a great many books 

 on economics and discussed many plans in the two solid months of 

 intensive work. 



Mr. Abernethy. As I understand it, it works this way: The 

 Government says to the cotton farmer, "We can use so many bales of 

 cotton in this country and no more." We can only use so many 

 pencils and so many shirts and so many tables and so forth. If they 

 produce more than that they cannot sell it. 



If the Government were to suggest to the cotton farmer, "You can 

 raise so many bales to be sold on the domestic market, and you can 

 produce all you wish above that but you are going to have to sell the 

 latter somewhere else," what would you think of that sort of program? 



Secretary Brannan. The two-price system will not operate that 

 simply. 



Mr. Abernethy. I know it is not exactly that simple. 



Secretary Brannan. We would have to say further than that, that 

 they cannot sell it in the United States. Or we would say if they 

 sold it in the United States they could not sell it to millers who make 

 cloth for most things. They would have to sell it to users who make 

 insulation or paper or some other product. Whenever you get into 

 a two-price system, your first limitation is your geography, offshore 

 sales, and the second is classes of use within the country. 



Mr. Abernethy. We have that in the peanut program now? 



Secretary Brannan. Yes, you do, in oil and edibles. We have 

 almost gotten to the place where the two different classes are treated 

 almost as two different commodities. 



When you get into perishables the two-price system is almost 

 impracticable. 



Mr. Abernethy. I think it would be impracticable with perish- 

 ables. I do not know but what it would be impractical with non- 

 perishables. The State Department might not go along with you 

 on it. That is all, Mr. Chairman. 



The Chairman. Mr. Simpson? 



Mr. Simpson. Mr. Secretary, on page 4 of your statement you 

 stated, "How much lower does the public interest permit the farm 

 prices to go without similar cuts for all other groups?" 



Hogs have gone from about $31 down to about $18 and cattle from 

 about $41 or $42 down to $28. 



Corn has gone from about $2.25 down to $1.25. They have all 

 gone down a third or more. With a $40,000,000,000 budget for this 

 fiscal year, if farm prices go much lower and the laboring man does 

 not get the wages, business is not as good, the farmer will not pay the 

 income tax, the businessman will not pay it, the laborer will not pay 

 it, and you will not have $40,000,000,000 to run this country. 



So how can you get the prices much lower and keep up? 



Secretary Brannan. That is a good, long economic discussion, I 

 think, Mr. Simpson. I do not want to duck it but first of all, the 

 "prices of some of our meat animals, during the past year or so have 

 been excessively high, I think. At the same time they have not been 

 out of balance. 



