Evening star., 1933-03-28
SMITH SAYS FARM
PRICES MUST CO UP
Senator: Explains Provisions
of Pending Bill in Radio
Forum Address.


country genoally is to prosper, Senator
Smith Democrat. or South Carolina
said last night in an address in the
National Radio Forum. arranged by
The Star and broadcast over a coast
to-coaSt network of the National
Bro2 dcasting Co.
Senator Smith, chairman of the Sen
etc Agriculture Committee, explained
the efforts teing made to accomplish
this as represented by the farm relief
bill which has passed the House and is
before the Senate.
CNe section of the bill. Senator Smith
amplified. relates entirely to cotton. and
is designed to restrict production, while
at the same time cOmpenSating the
farmer under an arrangement by which
he will benefit from the sale of the
product now held by the Government
The other sections of the measure
treat farm produce generally and en-
body two principles. One of these is
the leasing of land by the Government!
to cut production and the other TO in
crease prices by taxing the manufac-
turer of raw material
Text of Smiths Address.
The text Of Senator Smiths address
follows:
Since the terrific crash of the stock
market in 1929, resulting in a nation
wide panic and an unprecedented loss
in values, efforts have been made by
Congress to relieve the situation. The
values of securities of all kinds de-
clined SO drastically that our trans
pOrtatiOn system our banking system
and our insurance companies were
seriously threatened with failure.
To meet this situation, Congress
established what is known as the Re-
construction Finance Corporation with
q possible capital Of two billion dollars
It was hoped that by thus liquifying
the frozen assets Of these institutions
that the tide of depression would be
Stemmed, but the situation did not i'm
prove. 1t continued until it reached
the acute stage when the moratorium
on banks was declared. As a result of
lack of purchasing power amongst the
masses, unemployment has reached ap-
p2lllng numbers. Various measures were
introduced: some of them were passed
in the hope Of relieving the tragic con-
0ition of labor The condition Of labor
has not been materially changed. Bills
have been passed looking towards the
relief of the banking situation and
others are pending.
l think it is now conceded by all
students Of the question that before any
permanent relief can come, before pros
perity to a degree may be restored
there must be a radical advance in COM
modify prices. especially in the prices of
farm products. More than a third of
the population of the United States are
directly dependent upon the farm for
their livelihood and from the proceeds
OF the farm for their purchasing power.
Farm products have suffered more
severely in price levels than perhaps
any staple commercial article. AS an
Illustration Of what loss in value farm
crops have suffered: in 1929 the cotton
crop Of America brought one billion five
hundred million dollars; in 1881 a crop
of approximately the same size brought
five hundred million collars. In other
words. the price fell from an average
between 18 and 90 cents per pound to
81 and cents per pound Wheat suf-
fered a like drastic drop in price. From
$3.50 to 50 per bushel it fell to an
average of between IS and 80 cents per
bushel All faru products. including
live stock. grain of all description. truck
resulted IN a condition unparalleled in
the history Of this country. In 1929 the
total value of farm crops was S8,90O,-
O00000 in 1892 S3,0O00OO 900.
1t can read Oily be seen that such a
loss between five and six billion dol
lars in purchasing power, resulted in
disaster, not alone to farmers them
selves, but to every institution in Amer
lea The production of the field is the
real production of wealth in this coun-
try The production Of the fields. of the
forests and of the mines are the only
sources from which real wealth is de-
rived A profitable price to these means
the distribution of wealth, or the dis
tribution of money rather, amongst the
masses. and this in turn makes possible
the sale and distribution Of manu-
factured articles. Hence, the reStora-
ton of remunerative prices on these
products is absolutely necessary for a
restoration of prosperity in this country.
And to this end there has been intro
duced in Congress a bill known as the
farm relief bill. 1t has passed the
House and Is now pending before the
Senate.
Synopsis Of Farm Bill.
1t is my purpose to give synopsis OF
the bill. Title I of this bill relates en-
tirely to cotton. Title I is the bill I
introduced in the preceding Congress.
1t passed both Houses but was not
signed by the President. The public Is
more or less familiar with this Cotton
sustainS a unique position among agri-
cultural products. The amount Of cot
ton exported exceeds domestic consump-
ton: an average of SIS to 80 per cent
of the American cotton crop Is exported.
America furnishes about 10 per cent of
all the cotton consumed outside Of
America. On account of the depression,
the resulting under consumption has
caused the accumulation Of surplus
SO great that its presence makes prac-
tically impossible any substantial in
crease in price until this surplus shall
be reduced. The Government has
framed some two and a half or three
million bales which it now has virtually
in its possession Title I of the bill
now pending before the Senate author
ICES the Secretary of Agriculture to sell
on credit to the cotton farmers this cot
ton in lieu of their producing like
amount. According to the Agriculture
Department the present price Of cotton
is from $50 to $35 bale below the cost
of production This plan proposes that
the Government sell to farmer GER
tain per cent of this cotton under q
contract with him that he will reduce
his production this year q like per cent.
To illustrate, farmer who produces
100 bales of cotton. takes SO bales OF
this Government cotton and reduces his
production to SO bales; thus when the
Fall comes when cotton is sold he will
have the normal amount to sell, namely
100 bales, SO bales of which the Gov
eminent has furnished at a price far
below the cost of production and the so
bales which he has produced. When the
Government disposes of the so bales
allotted to the farmer the Government
deducts the aggregate amount that the
cotton represents at the price 1t was
sold to the farmer plus the necessary
overhead since the date of purchase and
RENTS to the farmer whatever profit
there Is. Under this plan, if carried
out successfully, the surplus will be re-
duced by two and a half to three mil
lion bales and production will be re-
duced by like amount. The great in
ducement to the cotton farmer to avail
himself of this plan is that he gets a