526 GENERAL FARM PROGRAM 



their busines is different from most. They aie in the manufacturing 

 business and consume enormous quantities of industrial goods in their 

 trade. They and those directl}^ dependent upon them for a livelihood 

 make up possibly 40 percent of our people and constitute the largest 

 consuming segment of our economy. Heretofore this group has been 

 historically the first to feel the impact of the forces leading to depres- 

 sion. Its income has been the first to be curtailed, and the resulting 

 decline in rural spending power has been the leading element causing 

 spiraling deflation. No more important contribution to stability could 

 be devised than to prevent the break-through at this particular spot. 

 If farmers coidd receive reasonable compensation for what they pro- 

 duce, it is altogether probable that their norma] spending would pro- 

 vide the largest single stable element needed to enable us to make ad- 

 justments to normal conditions without a collapse. We therefore feel 

 that the determinations on the problems before your committee are 

 possibly the most important of any before the Congress. 



It was in circumstances somewhat similar to those of toda}^ that the 

 Grange developed its three guide posts, and we will do well to keep 

 them in mind in seeking the solution to our present problem : 



(1) All prosperity springs from the production of wealth. 



(2) The compensation of each should be based on what he contrib- 

 utes to the general welfare. 



(3) The prime purpose of government is to protect its citizens from 

 aggression — both physical and economic. 



We would also do well to recognize the fact that in good times and 

 bad, farmers produce a remarkably stable volume of crops; while 

 industry invariably begins to curtail production when markets lag ; 

 that the result of such trends is for the farmer to exchange full pro- 

 duction for a restricted volume of industrial goods, bringing lower 

 prices and bankruptcy to agriculture; in fact, agriculture is the single 

 industry which continues to produce in abundance in times of depres- 

 sion. Ample production is the only means of maintaining prosperity, 

 or of restoring it when once lost, yet farmers, the only group to con- 

 tinue the one essential practice necessary to maintain or restore pros- 

 perity, are the first to feel the impact of so-called surpluses and are 

 the most heavily penalized. This does not make sense in anybody's 

 language, yet we have never found ways to avoid it. That is the heart 

 of the problem now before your committee. 



In order that we may not vmdertake it blindly, we might first take a 

 look at the over-all problem. We are convinced : 



That stable prosperity demands abundant production, making pos- 

 sible reasonably full employment. 



That abundant production demands the maintenance of ability to 

 consume wliat we produce. 



That such consumption demands wide-spread purchasing power. 



That such wide-spread purcliasing power demands that each seg- 

 ment of our econcmy receive fair and equitable compensation for the 

 service it renders, and 



That if all groups do their part in the production and distribution 

 of the wealth necessary to maintain a stable economy, including the 

 various services entering into our complex economic life, and if all 

 are fairly compensated, there is no limit to what we can produce and 

 consume, and no limit to the standards of living possible to attain. 



