914 GENERAL FARM PROGRAM 



Mr. Gordon. I think what Mr. Holman has in mind — and he is 

 assuming that we are all thinking the same thing — is that this $162,- 

 000,000, or whatever the figure is, is a temporary thing. If we do 

 not have it the price of milk will be much higher for the tendency of 

 the farmer is to sell cows because of low prices. 



The Chairman. What has brought about the low price at the 

 present time? 



Mr. Gordon. I think that you have to go back to the war to get 

 that. As far as butter is concerned, it was an unbalance brought 

 about by the decision of the Department of Agriculture that there 

 had to be a lot of other products, especially cheese, evaporated and 

 nonfat milk powder shipped abroad. There was a ceiling price placed 

 on butter so low the producer sold to other types of factories. 



Mr. Hope. Wliat Mr. Holman says as to the increase would be 

 true only, would it not, if the price level depended entirely upon the 

 support price and you had no prices above support prices, or no 

 prices below support prices. 



Air. Holman. It would depend to a great extent upon the support 

 price, although once you get your levels of your manufactured com- 

 modities stabilized, stabilized slightly upward, you then automati- 

 cally support your fluid milk market. There will still be a narrowing 

 of the spread between those two commodities. 



Mr. Hope. In other words, you are never going to be able to com- 

 pute exactly what any support-price program would result in so far as 

 the cost to the consumer is concerned, or the farmer is concerned, 

 because there are too many intervening factors there. 



Mr. Holman. Can we anticipate what the bu3dng power of the 

 consumer will be? 



The Chairman. You have given us definite figures with regard to 

 the minimum cost, but as pointed out by Mr. Hope, that does not 

 mean the maximum cost. This is a floor below which you think the 

 dairy people should not be depressed. 



Mr. Holman. We think that demand and supply would be a great 

 regulator of that. 



The Chairman. You want to lift the floor, as indicated in your 

 statement. 



Mr. Holman. Yes. 



The Chairman. And you think that you are justified in doing that 

 because of the policies invoked during the war when we kept the 

 price of milk down. You look upon this as a restoration of dairy 

 income rather than as an increase in dairy income. 



Mr. Holman. A restoration of dairy income that prevailed, say, at 

 the first of the year, which was a very drastic condition. 



Mr. Hope. That would still occur if the price-support program was 

 fully eft'ective. 



Mr. Holman. I think that is correct. 



The Chairman. I hope you do not understand me to say this pro- 

 gram would cost the Government, or the taxpayer, that amount. I 

 meant that it would cost the consumer, not the taxpayer. It does 

 not cost the taxpayer a penny. 



Mr. Holman. I understood you to say that. 



Mr. White. Mr. Holman, I understand from your statement that 

 you believe it is desirable to have a fluctuating general price level as 

 would be permitted under the flexible price support system of the 

 Aiken bill. 



