GENERAL FARM PROGRAM 535 



w-ould not receive an equitable price while the former would receive 

 more than an equitable price, in many instances no doubt a ]3rice 

 sufficient to cause them to produce to the utmost and thereby augment 

 the surplus, unless the program were accompanied by further produc- 

 tion controls. I might add here we do not believe it would be possil)le 

 to administer it without almost complete production controls. 



We are greatly disturbed by the tendency to increase taxes for such 

 purposes in the* belief that they can be shifted to the other fellow. 

 We see most disturbing results in some of the European democracies 

 which promptly vote out of office anyone who supports a sound tax 

 system with balanced budget. We feel justified in quoting a few sen- 

 tences from a recent column of Dorothy Thompson on this subject, 

 commenting on what she found in England : 



The workingman must look to the state to care for him in every emergency of 

 life ; he cannot provide for his own emergencies. And, as Sir Stafford Cripps 

 i-ecently reminded him, he cannot "have his cake and eat it too," and social serv- 

 ices are not free. 



A married couple with two children begin to pay income tax at .$1,600 per year 

 and it eroes up quicklv and steeplv. From .S2.400 they pay $2-55 to the Govern- 

 ment ; from $3,200 it is $432 ; out "of .$4,000 they pay .ST20. If they earn $10,000 

 they give back $3,260. If they earn $40,000, they keep less than $14,000. 



Most people in Britain really don't know what the basic things of life are cost- 

 ing them, because of the system of subsidies and social services. 



A large part of their food — meat, eggs, sugar, fats, bacon — is rationed and sold 

 to them at way below the cost of production. Actually, the cost of food in Britain 

 (to the Government) is almost exactly the cost of food in the United States to the 

 consumer. The consumer here (in England), however, buys breast of lamb for 

 8 cents a pound, lamb chops for 30 cents, steak for 44 cents — in very small 

 (luantities. He gets 90-cent eggs (three per person per week if his grocer has 

 them) for a pittance by American comparisons. He pays 40 cents a pound for 

 80-cent butter and so forth. The prices simply are concealed and taken out of 

 his taxes and the taxes of the higher earners. 



The subsidies, and, therefore, concealed costs, have given the British worker the 

 habit of looking at his wages as pocket money. (On this Laborites and Conserva- 

 tives agree.) "When the prices rise, however infinitesimally. as they do in Sir 

 Stafford Cripps' new budget, there is huge disappointment among the workers, 

 w^jo still, I think, do not really understand that either prices or the taxes that 

 conceal them must rise and that the subsidies cannot conceivably be met by taxes 

 on the rich. 



How much of the Government's contribution to furnishing food to 

 British consumers at less than cost comes from American loans and 

 American aid, we do not know, but surely part of it. We have no out- 

 side source to draw upon to support such uneconomic practices. 



For the Government to administer subsidies to producers would 

 require a tremendous administrative and policing force which in our 

 opinion is almost a total economic waste. 



Despite our basic objection to subsidies, we recognize that conditions 

 may arise justifying support of commodities which may be under 

 destructive economic pressure, where neither the purchase nor loan 

 method is practical. We recommend that "cash production payments" 

 be made available under proper safeguards designed to assure that 

 their use is confined to cases where no other method is practical. How- 

 ever, if cash production payments are to be made, we believe they 

 should be financed by a self-supporting price-insurance method. 

 Obviously, if some method of price insurance has l)een in effect the last 

 half dozen years, we would now have funds available for meeting all 

 ordinary risk of disastrous price declines for years to come. There 

 would be no politics involved. There would be no doubt as to the 



