Evening star., 1934-08-19


bought by farmers whose purchasing
power was based on 30-cent wheat and
15-cent corn.
The number of moving machines
sold, for example, dropped from 120,-
900 in 1929 to $4,000 in 1881. Mean
while the average wholesale value per
mower dropped from s55 to s54, and
the prices farmers paid as reported
by local dealers dropped from $84 to
were reduced so per cent or more.
That is not the road to exchangeability.
The N. r. A. and the A. A. A.,
therefore, were given Complementary
functions, the one to raise the pur-
chasing power of labor, the other to
raise the purchasing power of the
farmer, until exchangeability might be
restored. There were other important
functions, of course, but exchange
ability was the principal objective
And there followed the radical appeal
to management and capital to sacri-
flee immediate profits in lieu of put
ting men back to work, with dollars
in their pockets.
Some industries and businesses re-
sponded to that appeal; some didn't.
In total there has been gratifying
| increase in factory pay rolls and en-
ployment. Much of that is a direct
product of N. r. A; much of 1t is a
product of A. A. AS benefit pay
mentS and higher farm prices, which
were Immediately converted into pur-
| chases of city goods. A host of other
administration measures monetary
policy, public works, C. w. A. and c.
G. G., among others-really belong in
this list, but they are not so directly
concerned with the mechanism of ex-
changeability as N. r. A. and A. A. A.
Public works projects may prime the
pump, but they cannot take the place
of the well of purchasing power.
Much Done Privately.
Private enterprise in agriculture and
industry, in partnership with Gov
| eminent through NJ r. A. and A. A,
A, succeeded measurably in putting
incomes. They did not, it is true, put
all OF the 100000 unemployed to
work nor raise the gross farm in
comes from $4,000, 900, 900 to the pre-
depression figure of $11 600, 900 900 or
$l2 900, 100000. But no one, I think,
expected that to be done in a year or
two. If farm incomes and factory pay
rolls are back to 1928 levels by 1896,
say, it will be excellent progress. To
have gross farm incomes increase
from about IS ,O0O, 900 900 to about So
500,000,000 is fairly satisfactory
achievement for the first year, the
more so when it is balanced by COM
parable gains in factory pay rolls and
numbers employed.
incidentally, in measuring the gains
in the farm sector it is not accurate
to refer merely to price levels. It is
true, Of course, that the gain in farm
prices has been matched by a corre-
spending gain in industrial prices and
that If open market price were the
only source of farm income the farmer
would not be much better of than he
was a year ago. The fact is, however,
that the adjustment programs of the
A. A. A. were intended to operate, and
have operated, to supplement the mar
ket price with benefit payments. Thus
the wheat grower may get only rs
cents a bushel for his wheat at the
local elevator, but if he is cooperating
in the adjustment program he gets in
addition % cents a buShel or 81 per
cent-the proportion domestically con-
sumed-of his crop. With parity or
fair exchange value a little over a
dollar, the grower is therefore getting
an income from wheat very close to
parity. That benefit payment can tide
him over until the effect of the re-
duced supply is felt in higher prices.
1t is likely that further immediate
gains in the farm sector must await
gains in the industrial and business
sector. That is where the purchasing
power of the urban masses comes
from, notably for such farm products
as milk, eggs, meat, fruit and vege-
tables. Higher farm prices and bene-
fit payments have stimulated indus
tries directly and indirectly dependent
on rural buyers, but there has to be
action on both sides of the equation.
Obviously we cannot have a full
measure of recovery with millions still
unemployed, with factories idle-and
with prices out of line.
Builders Not Convinced.
Which brings me to the most i'm
portant thing we have not succeeded
in doing; that is, we have not sue
ceeded in convincing industrialsts and
business generally that concern for
volume of production and low over
head costs unit ought to come ahead
of concern for price. Unlike agricul-
ture, industry caters to an elastic de-
mand, which is far from being satiated.
Unless we can induce industry to re-
linquish its fondness for rigid prices,
for profits regardless of purchasing
power, then we are in for years of
trouble. When the recovery programs
were launched that seemed to me the
central issue, and it is still the central
issue.
Whether We have found, in N. r. A.
and A. A. A, devices through which
private enterprise can effectively use
the centralizing powers of government
in the common good remains to be
seen. In any event the devices must
be subject to continual modification,
and this process seems to be going on
in both N. r. A. and A. A. A. If it is
finally determined that they are to be
continued obviously they will have to
remain flexible and democratic. The
hearings, code authorities and boards
of N. r. A., the hearings and county
associations Of A. A. A. have achieved
CONTINUED on Fourth Psge.)