GENERAL FARM PROGRAM 1063 



sive. In so doing, since the price for the 1935-36 crop relates to the marketing 

 period November 1, 1935 to March 31, 1936, this really includes 2 months of a 

 season which is not within the base period called for in H. R. 29, namely January 

 1, 1936 to December 31, 1940. This, however, has been the customary practice 

 in this type of situation in calculating United States parity prices. On the other 

 hand, to use prices for the seasons 1936-37 to 1940-41, inclusive, to get a 5-year 

 period would require using 3 months which are beyond the latter end of the base 

 period specified in H. R. 29. 



If we are correct in believing that the 5 years 1935-36 to 1939-40, inclusive, are 

 those which you desire to use for the base period, you may wish to change the last 

 two lines on page 1 of H. R. 29 to read, "In the case of tung nuts, such base period 

 shall be the period August 1. 1935 through Juh- 31, 1940." This would throw 

 the five seasons used in computation entirely within the specified base period. 



You will recall, I think, that in the case of commodities with a pre-World War I 

 base period the legislation specifies an August 1909-July 1914 base period. 



Similarly, for a group of commodities with a post-World War I base period the 

 law specifies August 1919-July 1929. The base period for burley and flue-cured 

 tobacco is August 1934-July 1939. and for Maryland tobacco, an August 1936- 

 July 1941, so that there is adequate precedent for using the August-July season. 



H. R. 29 would amend the Agricultural Adjustment Act of 1938, as amended; 

 but the latter is also replaced as of January 1, 1950, by the Agricultural Act of 



1948, insofar as parity calculations are concerned, so that H. R. 29, if enacted, 

 would presiunably be effective only until the first of next year. Under the for- 

 mula of the Agricultural Act of 1948 the parity price of tung nuts as of April 15, 



1949, wovild be $106, and the adjusted base-period price would be $43. These 

 calculations necessarily use prices for the 10 crop years 1939-48, whereas, effective 

 January 1, 1950, the Agricultural Act of 1948 would use average prices for the 

 crop years 1940-49. 



Available data for States and the United States are presented on page 52 of 

 the enclosed publication. Fruit and Nut Prices. Recent data have been added. 

 With respect to your inquiry as to what a $74 per ton parity price might mean 

 in terms of equivalent price for tung oil, we estimate that it is equivalent to a 

 price of oil, in drums (carlots) at New York of approximately 30 to 32 cents per 

 pound, or from 28 to 30 cents in tanks at producing mills. 

 Sincerely yours, 



C. V. Wells, Chief of Bureau. 



Mr. Prichard. Mr. Chaiiman, while you were called out this morn- 

 ing, Senator Holland was here and suggested that I incorporate 'in 

 your record the statement which was made before Senator Gillette's 

 subcommittee. 



Mr. Pace. You mean a statement of yoiu- owti? 



Mr. Prichard. A statement that I gave them. The first one here 

 which I believe every one is familiar with gives the history of the tung 

 oil support price programs and some factual data regarding tung nuts 

 and tung oil in this country. 



Mr. Pace. File that with the clerk for insertion at this point in the 

 record. 



(The statement is as follows:) 



Statement by George L. Prichard, Director, Fats and Oils Branch, Pro- 

 duction AND Marketing Admini.stration, Department of Agriculture, 

 IN Regard to the Tung Oil Situation 



Tung nuts ana oil were first produced in the United States in commercial quan- 

 tities in 1929. Stimulated by the availability of submarginal and cut-over land 

 at low prices, tung acreage in five Southern States increased gradually during the 

 next 10 years. However, there was no great expansion of the industry until 

 curtailment of Chinese imports and increased demands for war purposes caused 

 a rise in the price of tung oil from an average of 14.2 cents per pound during the 



