PRICES OF FARM PRODUCTS. 23 



The amount by which the agricultural situation is worse than the 

 general condition is largely due to excessive production and the 

 checking of exports. 



There would doubtless have been industrial depression in any 

 event, but the serious breakdown in the farmers' purchasing power, 

 due to the extremely low prices of farm products, has had much to 

 do with the severity of the industrial depression. 



Many forces are at work to correct the situation. The following 

 are but a few of the many things to be done : 



A general adjustment to some fairly stable price level will greatly 

 help toward making it possible for each class of workers to use the 

 output of other workers, and thus open the channels of production 

 and trade. Wages, freight rates, retail prices, far"m prices need to 

 become adjusted to the same general price level as quickly as pos- 

 sible. Some important things are yet double the prewar price. 

 Others are cheaper than before the war. Industry can not progress 

 in a normal way with such violent maladjustments. Prices and 

 charges that have not been decidedly reduced should come down. 

 Those that have dropped excessively should rise. 



Encouragement of exports of farm products will do much to rees- 

 tablish the buying power of the farmers, so that they can again 

 absorb the products of factories. Since those countries most in 

 need of food have the least credit, the problem is not easy, but con- 

 siderable is being done. If European demand is to return, a policy 

 of financing exports is better than a readjustment of farming only to 

 have to change back when the demand returns. 



If the countries of Europe are to economize so that they will 

 call for less food and clothing from the United States, or if they 

 develop their colonial possessions or otherwise become more nearly 

 self-sustaninig our farming must be adjusted to the new conditions. 

 For some years a study of world supply and demand for farm products 

 will be of unusual importance to American agriculture. Until the 

 future demands are better known, it seems desirable not to make too 

 violent changes in our agriculture. If European countries turn to a 

 self-sufficing economy, our farming will necessarily have to be re- 

 adjusted. If our National policy is to be one of a self-sufficing farm 

 economy, we can for example produce more of our wool and sugar, 

 and produce less cotton and pork for export. A settled national 

 policy must precede a settled farm policy. 



In any event, the individual farmer may well turn to a more nearly 

 self-sustaining system of farming. Farmers are forced to a policy 

 of retrenchment. Drastic reductions in business costs and living 

 expenses have been necessary. A policy of making the farm produce 

 more of the food for the family and otherwise become more nearly 



