486 GENERAL FARM PROGRAM 



are ready to supplant tlie best judgment of thousands and thousands 

 of individual farmers with the judgment of a few people in Wash- 

 ington to try to figure out what the price ought to be. 



On the basis of the past record, I believe it is fair to say that the 

 farmers' record is fairly good in that respect. 



They know what the" level of loans is. Tliey know that if they do 

 get down to normal supply they will have a 90 percent loan. They 

 know that if they are higher than that they can have a somewhat 

 lower loan. 



I would like to call your attention to a paragraph that bears on this 

 thing with regard to the level of loan and the elasticity of demand. 



It is this paragraph on page 9 : 



We are convinced that we cannot protect farm income by adopting price 

 policies wliicli will nndnly restrict the use of products or encourage the use of 

 substitutes. In addition, farm overhead costs on individual farms are relatively 

 fixed and there is a definite point at which net income falls, as output is re- 

 stricted, in order to maintain prices. This is true even th(<ugh it be assumed 

 that price can be maintained and output controlled without cost. 



That varies with different kinds of agriculture. 



If it is an agriculture in which the hand labor of the farmer himself 

 is a major factor, this is a less important item. 



If it is an operation in which capital invested in machinery, for 

 instance, is a big factor, this becomes a very important item. 



I merely cite the fact that it is not just price that decides this whole 

 thing. F'rice is the most important single factor, but it is certainly 

 not the whole picture. 



In agriculture we certainly do want to insist that we have the right 

 to earn and that we get what we earn. We are going to try to get it, 

 but we do not think that the best way to get it is by Government 

 edict. 



Mr. Hope. The only question is whether the edict is going to come 

 before he plants his crops or at harvest time. 



What you have just said may all be very true but has just about 

 as much to do with what we are talking about as does the Einstein 

 theory. 



I cannot see any connection between what you have said and the 

 question I asked. I am not going to take any more time. 



Mr. CooLEY. Mr. Hope, I have had no better luck than you, Init I 

 would like to ask him another question. 



You do agree that forward pricing tends to influence production, 

 do you not? 



Mr. Kline. Yes; the level of prices influences production. 

 Mr, CooLEY. And you realized that when you made the statement to 

 the effect that prices should be used in helping to influence production. 

 I want to see if I can get one thing cleared up. Did you intend by this 

 statement to say that if ^'■ou wanted to decrease production the best 

 w&,j to do it was to decrease the price and if you wanted to increase 

 production the best way to do it was to increase the price. 



Mr, Kline, That is not an accurate statement. We did not say it 

 was the best way but that it would help. 



Mr. Cooley. You will admit, then, that price will influence produc- 

 tion up or down ? 

 Mr. Kline. Yes. 



Mr. CooLEY. You approve the Aiken bill, as I understand it. 

 Mr. Kline. Yes, sir. 



