GENERAL FARM PROGRAM 427 



phases, as we have stated, in a declining economy, if wages are to go 

 down, if mass-purchasing power is to go down, if employment is to 

 rise. 



Our whole theory and proposal is based upon a full economy so 

 that the Congress itself will have to deal with other segments of the 

 economy in its relationship to the ])roblems of agriculture and main- 

 taining support prices or anything else, in my judgment, unless we 

 can maintain a high level of economy that can hope to service a Federal 

 debt of :2r)0-odd-niil]ion dollars and the multiples of that in terms of 

 State, county, and munici})a] debt, and on top of that the private debt 

 in this country. 



If we are to service that kind of thing and maintain a standard of 

 living for farmers or anyone else, we will have to have a full, high- 

 level economy with substantially full employment and minimum-wage 

 levels in our judgment are going to have to be related to the require- 

 ments of a high-level economy for a distribution of mass-purchasing 

 power to consumers in this country. 



Certainly the lower wages go and the more unemployment there is, 

 if you start with compensatory or production payments on non- 

 storables regardless of consumer needs, the lower mass-purchasing 

 power goes, the lower the market will, in effect, reflect that mass- 

 purchasing power and the wider would be the gap the Government 

 would be expected to nuike up in terms of com])ensatory or production 

 payments. With a high-level economy as we have experienced in the 

 last 7 or 8 years, with substantially full employment, large pay rolls, 

 and more nearly adequate purchasing power. I think we have had an 

 experience with that kind of an economic level in this country that 

 people do drink more milk if they can afford to drink it. and that the 

 limitation on milk presently is in terms of the price and its relation- 

 ship to the buying power of the consumers in the lower-income 

 hrackets. That. I think, holds true with most of the so-called 

 nonstorables. 



I should say. and I am sure you will agree. Congressman Hope, that 

 it applies almost in an inverse ratio to wheat. As purchasing power 

 goes down the curve of consum])tion of wheat goes up slightly. The 

 curve of per-capita consumption is very nearly level, but such fluctua- 

 tions as there are usually for domestic use, for human food, the con- 

 sumption of wheat and its products, are slightly higher in periods of 

 low economic activity and great economic unemployment and slightly 

 lower in periods of high level economic activity for the simple reason 

 that when a fellow's pay check or lack of it is to low, he quits drinking 

 milk and eating butter and foods and vegetables and pork chops and 

 beefsteaks and he gets down to the very irreducible minimum to keep 

 soul and body together. 



As his iJurchasing power goes up, he will eat more of the protective 

 foods and more meat products and dairy products and all of the rest 

 of it. and slightly less of wheat and its products. 



Wheat is one of the major farm commodities that I know of where 

 that theory works in inverse ratio and it works very slightly that 

 way. 



Mr. Hope. Potatoes might be another one. The demand seems to 

 be about as inelastic for potatoes as wheat. 



