GENERAL FARM PROGRAJVI 363 



111 conclusion, let me emphasize to the committe our view that the 

 matter before you is a very urgent matter. The Nation stands now 

 at an economic cross roads. During and since the war years, the 

 United States has achieved a level of national income of gross 

 national production, that was undreamed of even a decade ago. It 

 also has acquired an equall}^ undreamed of national debt and service 

 charge, as well as national budget and national tax bill. 



In doing this, we have shown that, as a Nation, we can accomplish 

 miracles. We have established an economy of abundant production 

 with almost unlimited possibilities. It is true that the content of 

 this production contains a large proportion of sterile items, such as 

 armament expenditures, and that income is not as yet sufficiently well 

 distributed to raise levels of living as rapidly as the total national 

 income goes up. But we can work toward the correction of these 

 conditions within the framework of an expanding economy, operat- 

 ing at a high level of activity that provides at least enough jobs 

 for all of those able and willing to work. 



There is one thing, however, that we cannot do, and that is to 

 pursue a national policy of drift comparable to that pursued in 

 1929-33. The United States came through the ordeal of those year;} 

 in relatively good shape, despite the vast suffering of millions oi 

 people. The stakes today are much greater. The economy is more 

 complex and yearly each of its infinitely complex parts becomes 

 more closely dependent upon each other. Indeed, national solvency 

 has become contingent upon the continuation of high incomes, high 

 production, high total employment, and high taxes. 



Thus, it seems to me of the greatest importance that certain pass- 

 ages in Secretary Brannan's statement here be repeated again and 

 again. These are the paragraphs that begin "most depressions have 

 been farm-led and farm-fed.'' The seeds of the great 1929-34 crash 

 and depression were sown in the years 1919-21, of which Chester 

 C. Davis has written : 



Agricultural prices were the first to break iu in20. The .Tuly index of prices 

 paid to producers was ten points under the .June index ; the August index, 15 

 points below the .July ; and the September index, !."> points below the August. In 

 contrast there was no noticeable di'op in nonagricultural prices imtil near 

 the end of the year. The blow struck the farmers at about the time the grain 

 crop of the United States was coming on the market. Within a few months 

 every industry and producers of every class were swept along under the ava- 

 lanche of descending prices. The boom market, which had endured while 

 credits granted to Europe renujined unexpended, and while, at home, citizens 

 were cashing bonds to buy goods, had come to an end. The collapse of agri- 

 cultural prices, particularly while the rigidity of nonagricultural prices and 

 wages was creating a new and alarming disparity between farm income and 

 costs, prodiiced vehement protest from farmers everywhere. 



Agriculture did not recover from that blow, and the failure of the 

 McXaiy-Haugen bills left us peculiarly vulnerable when the even 

 greater crisis of 1929 occurred. 



I submit that the only difference between what Mr. Davis has 

 described and what we now face is in the matter of timing. Our 

 credits to Europe under the European recovery program will last 

 longer, but eventually they will end. Already Europe seeks to shift 

 from buying agricultural to nonagricultural goods. Consumer buying 

 power is being very severely strained, and citizens are dipping into 

 their savings to buy goods. In other words, we have merely slowed 



