other agencies had its effect. We moved from a peril.el in
which each vear we had to scrape the bottom of the barrel
for enough wheat for our needs al home and abroad to a time-
when we could remove all restrictions on the use of wheat
and could he fairly generous with areas where shortage was
the rule rather than the exception.
KOREAN WAR POSTPONED PRESENT SQUEEZE
It was at ihe end of 1948 wlie-ii the adjustment ,,f agricultural production and consumption in the I nited States needed
to he accomplished, hut thi' Congress ki'pt going through 1910
high, rigid 90 per cent supports which heul stimulated the
production of agricultural commodities during and alter
World War II. The spread between national income and farm
income continued downward to the end of 1919 eunl onlv lifted
a little toward the end of |95u because wen started in Korea
in the middle of 1950, and we could fill our military pipelines
from our agricultural surpluses and thereby remove the
strain from commodity purchasing.
There were those who had foreseen the possibility of a
drastic reduction in farm income following the two-year
period of the Steagall guaranties. The Department of Agriculture had had a studv committee hiking ^teaelilv at this
problem during World War II. In 1916 there vvas an intensive
drive to bring together the lessons of that long study and
attempt to congeal into new legislation our best knowledge
of what would safeguard American farmers and perpetuate
the favorable relationship between farm and national income.
I am sure vou know the results of that study. We. in the
Department, recommended a program of flexible price supports giving the Secretary ol Viniculture discretion to establish such price levels between about 75 per cent and 90 per
cent a^ would permit him to guide farmers in their planting
and help them toward the balance between production and
consumption which brings about a healthy active market and
a good price lor agricultural commodities in the nieirket place.
We recommended that the Secretarv have broad discretion a*
to the level eil which prie.'- we're' to be fixed. We advocated no
sliding scale hv which the level of price supports was to be
measured against the siipplv ol each commodity hut vve did
feel that the flexibili ivhich had been written into the Agricultural Act of 19311 was a proper power feir a Secretary of
Vgriculture to possess, even though the level recommended
wei- substantially above the 52 to 75 per cenl adopted in the
administration of Presidenl Roosevelt.
Now. if I may return to the chart, I musl point out that
Korea diel great things for our agricultural situation. Heul it
not heen lor Korea, the farm problem in 1950. 1951 and
19.52 would have' been c parable t,, some of our problems
today : lull Korea required that this countrj stockpile enormous quantities of butter, meat and cereals. Whatever quantities the farmer vvas able to produce lln- government stood
read) to buy.
There was a very substantial turndown in income during
10.52. It ha- carried on through 1953, 19.51. and 19.55.
If vou want to know what this loss in farm income has
done, take two quick statistical references:
1) Farm assets have dropped three billion from their
21 Farm debt is up two billion from 1953.
W hat 1 wish to point out particularly is that during all tin-
time from I'll!! through 1051. farmers of thi- countr) heul
whatever protection there i.- in high, rigid 00 per cent price
supports. This greal gap which ha- opened up between national income and farm income opened and developed during
the vein- when the price- support program was pegged te. ei
Charles Shuman, president of the American Farm Bureau Federated '
which the Texas Farm Bureau is a part, in the organization's °.''
Chicago. The Federation claims a membership of 1,600,000. Mr. SI*
goes often to his 200-acre farm near Sullivan. He is the fourth genet
to farm the place on which his grandfather settled in 1853.
rigid 0(1 per cent standard. No farmer should ever f .rgrt » has
Ihis is lhe first vear that flexible price supports haV
operative. The decline under 00 per cent supports began
time when we were relatively free from surpluses. W"
left the Department of Agriculture in \leiv. 191!',. I believj
eill t iiinmoditv Credit leians totaled around 1 ' i billion UM
and a great deal of thai was current and quicklv liqui°|
\e,u our borrowing authority from Commodity Credil [~'
billion dollars and vve arc using the major portion "'
amount with steadily increasing Commodity Credil stool
it is fair to sav that 90 per cent supports had their elm"1
work in a market relatively free from surpluses. If vl
lo he fair we should give flexible price supports a cha"
work in a market not glutted with ei billion extra busfl
wheal emd 12 million extra bales of cotton emd 20 ""
hundredweight of rice and s,, un down the roll call ol ~[l
crops which today makes our whole farm problem '''
if not desperate.
On Oct,.her 17, 1955, the \cil ) ink Times said: "N«
Income Sets \ New Peak, lhe national income alt'*11
record annual rate of $321 billion during the second 'r,
of thi- year, iln- governmenl reported todav." That i**
i- year, On- governmenl reported today, mat '-- -j
than the figures go on mv chart, bul lhe chart i- preps'"
statisticians and hears this footnote: "Department "' ,
ineree estimates "I national income have heen a,l|"" ,
make them comparable vvilh farm income estimates." I '^
however, lhat the- 1955 national income mark will he 4
the 1953 and 10.51 level, hut this I do know the I1'-
income of Farmers vvill he down. The- last estimate I -*-1**
that farm net income now was running at lhe rate <*'
billions for 1955.
'lhe point I eun Irving tee make- lei vein is that i" ,.lll|t
national income was at the level ..I about loo l.illi""r. |llar
that farm income was at lhe level eel about I6'i '" „„.,,
During the next years, national income went up past ■>' (|(1 t
lions but farm income in 1051 at the end of the peril''J ca(e
rigid 01) per cent price supports were in effect had "'" i
to I2.:i billions.*
if.nan Income Situation, FIS 155, Departine-nt ,,l \»iiciilu'r*S >-
31, 1955, p. 3) *AC
Facts Forum \iws. JanuaA