Evening star., 1933-05-21
BY WILLIAM HARD.

II the new industrial recovery Dill
is put into active force and vigorously
applied throughout the United States,
then the theories upon which the In
ternational Monetary and Economic
Conference Is to be conducted in Lon
don this Summer must be drasticaily
revised. That is the opinion OF numer-
Gus unattached observers in Washing
ton and also of many of those active
participants in Washington's affairs
who took important parts in preparing
the industrial recovery" bill for pres
entation to Congress.
The principles of the Industrial re-
covery" bill have for the time being
quite overshadowed the special particu-
lar principles of the farm relief" bill
now on the Rooseveltian statute books.
The genuinely unique feature of the
farm relief" bill is to be found in its
provisions for reduction Of acreage and
output and for processing" tax out
of the proceeds of which the farmer
would receive compensation for the re-
! duction accomplished.
y x X
These provisions. however, carried
with them an accompanying mandate
for the imposition of new tariff duties
upon the agricultural commodities
/ benefited. In other words, they COM
manded a raising of tariff levels at the
very time when the President was en-
gagged in preaching and promoting a
lowering of tariff levels throughout the
world in the course of international
agreements which the Economic Con-
ference at London is supposed to begin
to negotiate.
This contradiction the President re-
solved by suspending the acreage re-
duction provisions and the output-re-
duction provisions and the processing"
tax provisions, along with the tariff
raising provisions, of his new farm re-
lief" legislation. There then remained
in that legislation-on behalf Of lift
ing of farm product prices in general
only the provisions for marketing
agreements" among producers and proc
essors and for Licenses" to be issued
to producers and professors by the Gov
ernment.
But these latter provisions are based
on principles virtually identical with
those which animate the proposed oper-
ations of the industrial recovery" act.
Under the industrial recovery" act it
becomes possible for manufacturers to
enter into agreements" regarding prices,
and those agreements" become en-
forceable when sanctioned by the Gov
eminent. Under the industrial recov-
cry act it also becomes possible for the
Government to issue ''licenSes"-or to
refuse to issue 'licenses"-to manufac-
turers in order to impose upon them the
necessity of maintaining the prices and
other conditions of the agreements" or
codes" which may have been brought
into existence.
The Immediately prospective opera
tions of the two laws are therefore in
the same category of legislative thought.
The Department of Agriculture is al
ready proceeding toward the formulation
of marketing agreements" among agri-
cultural producers and among process
sors" of agricultural products for the
purpose of enhancing the prices of such
products. The passage of the industrial
recovery act will be forwarded by the
formulation Of agreements" or codes"
for the purpose Of enhancing the prices
of non agricultural products.
x x
We shall then witness, if all goes we'll
an exciting race on the upward spiral
between the prices of the farm and the
prices of the factory. The objective of
the farm relief" bill, as declared in its
preamble, is the diminishing of the
dhoPdilty UCIWcCH Illc pIlCcS VI IiiC
farm and the prices of the factory.
That is, the prices of the farm we're to
be made to rise level to the prices of
the factory in terms of the farmers
purchasing power as it existed In the
years from 1909 to 1914.
1t was not calculated, when the
farm relief" bill was introduced, that
there would be also an industrial
recovery bill for giving an upward
twist to prices in general. The ques-
tion now arises:
If the Government starts boosting
non-farm prices at the same time it
is boosting farm prices, how will the
gap-the so-called disparity
the non-farm price level and the farm
price level ever get closed?
1t is thought that the Government
may endeavor to answer this question
by causing this agency for non-farm
price lifting to work more cautiously
and more slowly than It's agency for
agricultural price lifting. This will
require a nice adjustment in relativity
Of governmental efforts.
Meanwhile the markets are paying
little attention to any such problem
in Einsteinian economic mathematics.
In the markets the prices of agricul-
tural commodities and of non-agri-
cultural commodities are going up at
often approximately equal speeds. The
farm relief law is only on the verge
of being actually applied and the In
dustrial recovery" bill has not yet been
even debated by Congress. Psychologist
ally, nevertheless, both pieces of legis-
lation are already largely in effect. The
markets have caught the temper of the
administration and are responding to
1t. They are responding to it as heart
lily in cotton cloth as in cotton, in
copper as in corn, in the products Of
city sweatshops as in the products Of
desert ranches. The United States,
alone among the great countries Of the