Evening star., 1933-07-19
RECOVERY ACT HIT
BY PRICE ADVANCE
Quotations for Farm Products
Are Higher Than Congress
Anticipated.
BY MARK SULLIVAN.

1t Is impossible to Ceny that the
mechanism for control of the country's
economic structure. set up here at
Washington, wobbles a little. No one
takes pleasure in the fact. Everybody
hopes for the intricate mechanism to
pull itself together and go on. Literally,
it would be difficult to find any one
who wishes for lack Of success.
OF persons who criticize the expert
ment, and profoundly believe 1t to be
a mistake, there are many. But every
one has a stake in it, whether as busl-
ness man, farmer, wage-ea,ner or in
vestor. Every one realizes the country
is committed to it, that there is now no
other way, and that disaster to the
experiment would be disaster to the
country. There is hardly anv one In
dividual so situated as not to be ad-
versely affected by any mishap that
might occur
It NAV be that no real mishap Is III
sight. Nothing that occurs is recog-
nized as mishap by those directing tne
machine and its parts. Theirs is the
philosophy of experiment. They say IL
is in the nature of experiment to trv hrSt
one way and then another until the
way that will work is found. While
their method includes change and adap-
tation. their objective is fixed: Inc
permanent objective is higher prices LOT
goods. higher wages for labor. 1hat
aim they are determined to attain: II
all other methods should fail, theV nave
always the power of initiating the cur
rency.
Lower Prices Assumed.
The present wobbling may be imma-
terial It occurs in the field OF 1arm
relief. When that bill was devised the
farm prices it's authors and directors
had in mind was the level, roughly, OF
l9O9-l9l4 We must. however. express
the objective more exactly. The precise
words in the law are that prices OF
basic farm crops shall be raised to "a
level that will give agricultural com
modities a purchasing power with re-
spect to articles that farmers buy eQul-
valent to the purchasing power OF agrl-
cultural commodities in the pre-War
period"
The method through which prices are
to be raised, according to the act. is by
laying a process tax" on mlllerS. cotton
spinners and other purchasers Of farm
crops. This tax. after being collected
by the Government, is to be paid to the
farmers subject to certain conditions.
The amount of the tax IS supposed to
be. speaking very roughly. the differ
ence between existing market prices and
the pre-war price The whole spirit
of the act assumes current market
prices to be lower than the prices de-
termined by the act. Surprisingly this
is not now so.
When the bill was first proposed and
passed. prices of farm crops were very
low The object of the bill was to
raise the price. for example, of cotton.
to about 10 cents a pound, and wheat
to about 80 cents a bushel. About that
time, however, all crops started upward.
Today, prices of cotton and wheat are
much above what they would be if the
prices were determined by the Govern
ment according to the formula of the
farm relief act
Unforeseen Complication.
This causes embarrassment to the ad-
ministration Of the act The condi-
| ton makes t illogical to assess the
processing tax" The administrators.
however. need the money. They need it
in order to pay to farmers sums run
ming upward Of 200000,0Q0 to induce
! the farmers to plant smaller crops next
year. The only way to get the money
is to lay on the processing tax" At
first. there was a suggestion that the
! necessary money be taken directly from
the Federal Treasury About this there
was acrimonious discussion within the
administration. In the end, the pro-
cessing tax has been levied.
This is only one of literally hun
dreds of unforeseen complications and
embarrassments which are rolling in on
the administrators of both the farm re-
lief act and the industrial recovery act.
In effect. the administration has set
itself the task of overcoming in the
entire area of industry all the whims
of chance, plus all the whims of
weather. plus all the whims of crop
failure or crop excess, plus all the
whims of price variation, plus all the
whins of human nature of those en-
gagged in industry. whether as proprie-
| tors workers or consumers