GENERAL FARM PROGRAM 553 



NEGOTIABLE CERTIFICATE, BACK VIEW 



I hereby acknowledge receipt of full Extension of validity of certificate 



face value of this certificate on this 13th 



dav of October 1949 This certificate is herebv validated 



(Signed) John Doe. ^^T V^^ for the purpose for which it was 

 ^ •= originallv issued to: 



Date:" December 31, 1950. 



(Signed) James Poe. 



m 



(Official validating officer for the Gov- 

 ernment of the United States of America) 



Place: Macon, Ga. 

 Date: July 1, 1950. 



The merits and weaknesses of these three plans will be briefly com- 

 pared. The McNary-Haugen plan involves far more machinery and 

 administrative red tape than either of the other two. It also appears 

 to be a bonus on exports and might incite foreign retaliations more 

 than the certificate plan. This latter fault of inciting discrimination 

 is especially true of the debenture plan which pays a bonus debenture 

 on all exports. Under the certificate plan products are allowed to 

 move through domestic channels and to export at free market prices 

 and should not incite retaliation. The certificate plan also has the 

 decided superiority of paying the farmer his parity payment when he 

 sells liis crop. This also is self-financing as is not the case with the 

 debenture plan. 



I have just roughed out an illustration of that and will explain it 

 at this point. It will take just a moment. 



This is to operate on 10 bales of cotton when 5 bales are considered 

 for domestic consumption and 5 for export. That proportion would 

 be declared at the beginning of the marketing year by the administra- 

 tive agency an^ all farmers wQuld receive parity benefits for half of 

 the cotton they sold with each sale. In other words, you would just 

 pay tliem the declared domestic proportion at the time they made the 

 sale. 



I^ow. liow would the two segregations of cotton be policed through 

 the channels of trade, one bale out of each two going to export and 

 one going to the mill ? 



I would do it by these two certificates [illustrating]. If you will 

 follow the first certificate through without asking how a farmer gets 

 his i^ayment. I will explain how the cotton first is policed through 

 the channel by this certificate which we could call a parity supporting 

 certificate. 



If you were supporting a price at 5 cents a pound the 10 bales 

 would have a total support value of $250. The first buyer of cotton 

 would go to a local agency of the Treasury and file a certificate and 

 pay the full parity benefit on all 10 bales, both the domestic and the 

 export, for the certificate. In other words, he would loay the total 

 amount of the certificate value on all the cotton. The certificate would 

 always be sold witli the cotton; therefore, each Iniyer of the cotton 

 and the certificate would get the price for his certificate back as he 

 passed the cotton through the channels of trade. One bale, or 5 out 

 of 10. let us say, would go to export, to a port for export with $125 

 worth of certificates covering the commodity. The cotton would be 

 loaded on a boat ; the certificates would be turned over to the port 

 authority, and the port authority would pay the final exporter the 

 price of the certificates. Now, it is easy to see those five bales have 



