Evening star., 1928-05-23

Senate bill 3555, called the surplus
! control act, is In some respects an Inn
provement over Senate bill 4808 OF the
last Congress It includes several pro-
visions which. If unincumbered by OBJ
jectionable features, would form basis
for measure that should do much to
develop stronger business organizations
in agriculture. But the present bill
contains not only the So-called eQuali-
zation fee and other features of the
old measure prejudicial, in my opinion,
to sound public policy and to agricul-
ture, but also new and highly obiec-
tionable provisions In its entirety Ii is
little less undesirable than the earlier
measure The bill still is unconstitu-
!tional This position is supported by the
opinion of the Attorney General, which
IS hereto attached.
In its essentials the Objectionable plan
proposed here is the stimulation of the
1rice of agricultural commodities and
products thereof by artificially con-
trolling the surpluses SO that there will
be an apparent scarcity on the market.
This is to be done by means of board
having supposedly adequate powers and
| ADEQUATE funds to accomplish such pur-
pose through various agencies, govern
mental and private. The Surpluses OF
the different selected commodities so
accumulated BY the board are then to
be sold by export and otherwise directly
or through such agencies at whatever
loss is necessary in making the DISPOSE
ton. The fund to pay the losses and
other costs while at first furnished by
the Government is ultimately TO be re-
placed and thereafter repleniShed from
time to time by means of a tax or fee
charged against the product The theory
is that the enhanced price of the COM
modify would enable the producer to
pay the equalization fee and still reap
a profit.
Surplus Of Deep Concern.
The recurring problem of surpluses
in farm products has long been SUBJ
ject of deep concern to the entire Ma
| ton, and any economically sound,
! workable solution of it would command
not only the, approval but the pro-
| found gratitude of our people. The
present measure, however, falls far
short of that most desirable objective;
inoeed, although 1t purports to provide
| farm relief by leSsening the cares OF
our greatest industry, it not only fails
to accomplish that purpose, but actual
| lv heaps even higher its burdens of po-
litical control, of distribution costs and
of foreign competition. 1t embodies a
| formidable array of perilS for agricul-
ture which are all the more menacing
because of their being obScured in a
maze of ponderously futile bureaucratic
paraphernalia. In fact, in spite OF the
| inclusion in this measure of some con-
structive steps proposed by the admin
| istration, it renews. most of the more
vicious devices which appeared In the
bill that was vetoed last year. This
document is much altered from Its
previous form. but its substance, par
| ticularly as TO its evident ultimate ef-
feet of tending to delude the farmer
with a fantastic promise of unavoidable
governmental price regulation, is still
as repugnant as ever to the spirit OF
our institutions, both political and COM
| mercial.
A detailed analysis of all the objec-
| tionS to the measure would involve a
| document OF truly formidable proper
| tions However, its major weakness and
perils may be summarized under six
headings:
/. Its attempted price-hxing fallacy.
H. The tax characteristics OF the
equalization fee.
III The widespread bureaucracy
which 1t would set up
". Its encouragement to profiteering
and wasteful distribution by middle
men.
| " Its stimulation OF overproduction
VI It's aid to our foreign agricul-
| tural competitors.
These topics by no means exhaust the
| list of fallacious and indeed dangerous
aspects of the bill, but they afford am
pie ground for Its emphatic rejection.
T. Price Fixing.-This measure is as
cruelty deceptive in its disguise as gov
ernmentai price fixing legislation and
| involves quite as Enthusiastically the I'M
possible scheme OF attempted govern
mental control Of buying and selling OF
agricultural products through political
surplus control bills In fact. in GER
| tain respects 1t is much broader and
more fiagrant In its scope. The heights
70 which price lifting might be prom
fsed are freed from the limitation fixed
| in previous measures. The bill care
fully avoids any direct aliusion TO such
| price fixing functions. but there can
be no doubt about It's intentions and au-
| thorizations TO the Federal Farm Board
| in this respect. There is apparently no
/ change In the import OF the bill in
| the resolution TO impose upon the farm
er and upon the consumers Of farm
| produce q regime Of futile. delusive ex-
| periments with price fixing. with indi-
rect governmental buying and selling
and with nationwide system OF regu-
latory policing intolerable espionage
and tax collection. on vast scale.
These provisions would disappoint
| the farmer by naiyely implying that
the law Of supply and demand can
| thus be legIslatiyely distorted in his
favor Economic history is filled with
the evidences of the ghastiy futility Of
such attempts. Fiat prices match the
folly Of fat money.
Definite Yardsticks Omitted.
The board would be compelled to ar
rive in some way al the premium on
! the domestic price which would be
demanded from the consumer, and this
figure would have to be fixed In the
contracts which IL would make with the
millerg, packers, Gamers, spinners and
other professors. Such prices and other
| terms fixed in the contracts would be
used by the board To calculate the
losses upon which II will base the size
Of the equalization fee This procedure
Is tne very essence OF price-fixing no
matter how cumbersome and crldely
camoufiage6 IT may be. BY throwing
the very large resources Of the Govern
rnent in tc' this operation the present
bin gives the widest latitude for the
most vicious temptations adherent in
autocratie authority In complete COM
mand OF vast industries and trades.
In previous bills definite yardsticks
have been determined by which prices
we're TO be established by the Govern
ment. They are omitted from this bill
which thereby leaves almost no re-
Eiraint whatever upon the discretion
II the board in this respect The pres
ent measure, therefore. has even less
merit than It's It's predecessors in this
regard since 1t carries no limitation as
to the extent Of price imitation WHICH
ii can undertake.
H. The equalization fee, which Is the
kernel Of this legislation, is sales tax