"Some Day This War Will End. THEN... 



WW 



CHESTER DAVIS GIVES LONG-RANGE VIEW OF 

 PROBLEMS FACING AGRICULTURE IN POST-WAR 

 ECONOMY. GIVES FORTHRIGHT VIEWS ON OUTLOOK 



"S 



i<.)Ml-; day llii> w.ir \vi!| .,iid. Then 

 tlif dcmaru] tor r.irm prodiKt^ 

 will he raJually ^ll.ln^L.i. IIil-ii ut 

 will ii.ivt millions mort men to cm|iloy 

 tli.m ever worked in peacetime before; 

 we will li,i\e the yreatcst endowment 

 of natural and mechanical resources 

 known to the world; and we will have 

 the monetary basis for expanded pro 

 diiitive activity far greater than ever 

 existed heretofore. And we will ha\e 

 an almost unlimited i:ap ot unfilled 

 human wants and needs. 



That is the outhiok 1 want you to 

 keep in mind as background tor my 

 talk, whik I tr\ to throw a flashliuht 

 on two p.irts ot the general picture 

 which seem to me to he poult^ that are 

 \erv important. 



Point No. 1 : I want to talk 

 jihiinly about some problems ami 

 dangers which, unless you over- 

 come them, may seriously weaken 

 the u.sefulness of farm leadership 

 to the nation in the years ahead. 

 The American l-'arm Bureau Fed- 

 eration must not only make sure 

 that its policies are foursquare 

 with the broad national interest; 

 it must do a better job than it has 

 been doing to convince the rest of 

 the country that this is the case. 

 Point No. 2: We have seen how 

 a nation fighting for its life can 

 employ all of its human and ma- 



terial resources in high and sus- 

 tained production. We know that 

 this all-')ut effort has meant a high 

 and widely distributed national in- 

 come. The problem that confronts 

 us is to continue high levels of 

 production and inctime after the 

 nation has turned from war to 

 peace. 



. . Returning now for a closer look 

 at Point No. 1 : What you and other 

 farm organizations do now to fit agri- 

 cultural policy into national policy will 

 attect decisively your influence in the 

 postwar years, ^'ou need to take a stand 

 on wartime prices for farm products, 

 .md to make your position clear. As I 

 discuss that c|uestion. and the accom- 

 panying one of food subsidies that has 

 gripped the nation's attention. I expect 

 that some ot you will not like every- 

 thing I say. 



The general public believes the 

 American rami Bureau is opposing the 

 administration's program of general 

 food subsidies because you want a 

 chance to raise the level of farm prices. 

 If that is not your position - - and I do 

 not believe that it is — then you have 

 failed in getting across to the non- 

 farming public and to press and radio 

 just what your position is. 



I am not trying to settle the argu- 

 ment over whether the advanced prices 



Excerpts from the address 

 of Chester C. Davis, presi- 

 dent. Federal Reserve Bank 

 of St. Louis, before the 25th 

 annual convention of the 

 American Farm Bureau Fed- 

 eration in Chicago. 



12 



of l.irm products has exceeded the rise 

 in factory workers' income that has 

 t.iken place, or vice versa. A lot de- 

 pends on the date at which you start 

 \our comparison. 



Personally, I am convinced that 

 a degree of improvement in farm 

 prices over those prevailing in the 

 pre-war years 1935-39 should have 

 been permitted without assuming 

 that the adjustment called for 

 wage increases. Bear in mind that 

 the rates of pay of factory workers 

 for the period 1935-.39 were the 

 highest in history up to that time 

 and 14 per cent above the level of 

 1929. In contrast, farm prices were 

 still at depression levels and 27 per 

 cent below 1929. 



rile point I want to make tonight, 

 however, is that the general level of 

 (arm prices in 19)3 has been high 

 enough to yield a cash farm income 

 between 19 and 20 billion dollars as 

 against H.7 billions in 1939 and 11.3 

 billions in 1929. 



. . . b'or 1910-1 I the average net 

 ( not ^'''''ff. not c»;f/j, but Wf/) income 

 is estimated at S3.f> billions, for 193'>- 

 39 S4.7 billions, for 1941 $6.3 billions, 

 for 1942 $9.") billions, and for 191^ 

 512.5 billions. 



.... In the interest of long-time farm 

 welfare any further marked increa.se in 

 the general level of farm prices is un- 

 desirable. Unless their procluction costs 

 materially increase, farmers for their 

 own and general welfare should join 

 wholeheartedly to hold their prices in 

 check. For one thing, further increases 

 would add to the datiger of inflation in 

 (arm real estate prices that already is 

 on the horizon. 



I am talking about the general 

 level of farm prices. Flexibility in 

 adjustment between commodities 

 is needed and is almost wholly 

 lacking in the present OPA->X'FA- 

 Economic Stabilization setup. Some 

 prices have ranged higher than 

 necessary to get needed production 

 and yield satisfactory returns: 

 others are lower than they should 



I. A. A. RECORD 



