1112 GENERAL FARM PROGRAM 



society. In fact, with the ratio of $7 of national income for each $1 

 of gross farm production, the increase in our national income from a 

 proper price for tung oil would have greatly exceeded any possible 

 benefit from buying cheap timg oil from China. 



Without a tariff or equalization fee to protect our domestic price 

 level, we are forced into the position of supporting the price structure 

 of the entire world to provide parity for agriculture and in turn, 

 national solvency for the United States. With a tariff as a support 

 price, our problem is relatively simple. 



An equalization fee or import fee at the parity level would auto- 

 matically and indirectly support the price of 85 percent of American 

 production without any further legislation. A tarifl" at the parity 

 level protects our domestic trade volume and also, by protecting our 

 ability to consume, protects our volume of foreign trade. Commodity 

 loans on eight basic, nonperishable crops, which take up 85 percent of 

 our harvested crop acres, would support directly a sufficient founda- 

 tion of price for our internal market. These loans should be callable 

 at parity. 



Reserves of at least 50 percent of these nonperishable crops should 

 be carried at all times to protect our source of supply in peace and 

 war and to protect our livestock industry which processes more ton- 

 nage of raw materials than all of our other factories combined. 



With such a reserve any further increase in production can be con- 

 trolled by a soil-conservation program. Crop acres can be shifted to 

 grass. Our harvested crop acres total about 365,000,000 acres. At 

 a cost of about $10 per acre, 10 percent of this acreage could be shifted 

 to grass at a cost of $365,000,000. This would remove any possibility 

 of surjDlus production. The amount thus spent is not a cost but an 

 investment in a source of future materials and income for the Nation. 



Last year our total exports of agricultural products amounted to 

 $3,420,000,000. The extreme cost, even if we gave these exports to 

 other nations, ^vIlile at the same time protecting our price structure 

 at a level of $225,000,000,000, would be a minor item of costs to the 

 American people. 



If this committee will draft a program providing for price supports 

 at the parity level, which should be at least 169 percent of the 1925 to 

 1929 price level in order to be at par with the increase in th|p price of 

 gold, through tariffs or equalization fees, commodity loans at 90 per- 

 cent of parity, and make provisions for a soil-conservation program, 

 such as I have suggested, you can underwrite, weather permitting the 

 production, the national income of the United States at $225,000,- 

 000,000 a jT^ear and pay off the national debt in 50 years. 



For each 1 percent that average farm prices are permitted to go 

 below parity, the Nation will lose approximately $2,000,000,000, and 

 all segments of our economy — agriculture, labor, business, trade, 

 service, and government — will lose its proportionate share. 



In closing, our foreign economic policy, if it is to be successful, must 

 start with parity prices for agricultiu-e in the United States. From 

 that as a foundation, we rliould help bring about a i-corganizatiou, 

 in the years to come, of foreign exchange and wage levels at a par 



