534 GENERAL FARM PROGRAM 



Subsidies would throw agriculture directly' into politics. The an- 

 nual volume would run into the billions, and there would be the con- 

 stant necessity to besiege C'ongi-ess to make sure that funds were 

 available for payment. Each year great uncertainty would rule until 

 Congress acted. The availability of funds, and their extent, would 

 inevitably become campaign issues, and one of the soundness and most 

 independent segments of our people, instead of thinking in terms of 

 our national welfare, Avould be compelled, as a matter of self-preserva- 

 tion, to inject ])urely class considerations in their voting, and many 

 would doubtless vote for the candidates promising the juiciest sub- 

 sidies. Important issues involving the welfare of the Nation or other 

 groups would be bartered to get bigger and better subsidies or to pre- 

 vent ruin by farmers who could not live without them. 



We strongly deplore two tendencies which have shown up in dis- 

 turbing strength in recent years. One is to lean on Government for 

 everything, and the other is to create a class consciousness under which 

 loyalty to class is placed above loyalty to country. Both are responsi- 

 ble for a tendency to evade taxes for ourselves and endeavor to "soak 

 the rich" and get as much out of them as possible tlirough public serv- 

 ices supported by income taxes paid by the other fellow. We have 

 been strong supporters of the graduated income tax and inheritance 

 tax, and of a tax system based on ability to pay and benefits received. 

 However, we recognize that there are limitations beyond which we 

 cannot safely go; that practically all taxes find their way back to 

 consumers in the form of rents and high prices; and that not much 

 can be furnished the public l)elow cost without indirect tax pajanents 

 which frequently are compounded far beyond tlie apparent savings 

 made. It may be said that the cost of the subsidy program might be 

 no more than under our present plan. We don't like this argument. 

 We don't like our present plan and are seeking improvements in it, 

 one improvement being less drain on Government funds. Reckless 

 taxation is one of the greatest threats to democracy. 



We do not believe that the Government should furnish food to the 

 public below cost as a means of holding down living costs and the 

 general price level. If this theory is sound, we should start with labor, 

 establishing a low basic wage, with subsidies from the Treasury based 

 on living costs. We advocate no such plan, but it would be far more 

 sound than starting on foodstuffs for two basic reasons : 



First, the price of food has not had a corresponding effect on the 

 general price level. When in the twenties we had a long period of very 

 low food prices, the general price level mounted steadily. 



Second, as will be shown by Dr. Sanders, the general price level 

 fluctuates in very close conformity to wage rates, rather than to food 

 prices. For this reason, if this method of controlling the price level is 

 to be used, it could be used very much more effectively in connection 

 with wages than food. However, we believe neither is sound. 



No subsidy program can be administered equitably. To avoid ob- 

 vious abuses it has been suggested that subsidies paid be based on the 

 average difference in price between amount received and a designated 

 level which we refer to as parity. Let us suppose an average price of 

 25 percent below parity. This average is made up of some who re- 

 ceived the parity price or close to it, and others who received very 

 much less, including many below the average. The latter, of course, 



