Evening star., 1935-10-15
WALLACE DEFENDS
PROCESSING TAXES
High Tariff Policy Blamed
by Secretary for Need
of Farm Benefits.

Processing taxes under the agricul-
tural adjustment act were defended
last night by Secretary of Agriculture
Wallace, who declared that it had
been necessary to apply this principle
for the benefit of the farmer because
OF the high tariff policy OF this
country.
Speaking in the National Radio
Forum. arranged by The Star and
broadcast over a Nationwide network
Of the National Broadcasting Co.,
Wallace said:
Apparently it will be necessary to
continue with the processing tax or
something equally effective until the
people of the United States compel
the high tariff groups to behave as
our creditor position demands. Until
we are willing to accept more imports
of goods and services, we cannot hope
for any sound and enduring reStora-
ton of our export trade. Without an
export trade, American agriculture
must continue the painful process OF
throttling down its 100000, ,o00-acre
plant to one of perhaps 325.OOO,0OO
acres. And let me assure you that as
long as those excess acres exist, and
despite benefit payments, farmers Will
find the process of contraction just as
distasteful as any one else"
Caution Also Voiced.
At the same time, Wallace admon-
ished farmers ito make sure that
their device does not run counter to
the interest of the whole Nation.
There IS peril in any producing
group getting special privileges from
the Government unless it continually
recognizes that it must use those Spe-
cial privileges for the interest OF con-
sumers as well as producers" ne
emphasized.
Wallace spoke just few hours aftel
the Supreme Court had agreed to pas:
on the constitutionality of the proc
essing taxes.
The A. A. A. yesterday released q
monthly report moving that las g
result Of court action" processing taz
collections dropped to $l5,364, ,401 in
July. 1885, compared to a total oi
s3os5o,261 in June and $43,013, ,496 in
July, 1884.
The report showed expenditures in
July Of S35,916,328 from available
funds of $177,416,353 carried forward
from June
Want U. S. in Debt.
The text Of Secretary Wallace's
speech follows:
The suggestion has lately been mace
that because the United States has in
vested abroad foolishly, and because
she is unwilling to accept imports in
sufficient quantities, it may be only a
few years until she is again a debtor
nation.
The idea seems to be that the inter-
national bankers of Europe. by skill
fully shifting their balances back and
forth from one country to another, in
comparatively few years will have
outsmarted the Yankee traders and
again reduced the United States to a
position where she owes annually sew
eral hundred million dollars to the
outside world. The suggestion Is tina.
inasmuch as most Americans are un-
happy when this country imports,
therefore by one device or another,
more or less unconsciously, we will
sooner or later render valuelesS the
majority of debts owed us from abroad.
and again bring the United States to
q position as debtor nation. It is said
that the people of the United States
are happy only when this country
owes more money to the outside world
than the outside world owes to us. 1t
Is such situation which enables Us
to export to cur hearts content.
For my own part, while / recognize
much Of truth in this analysis, oues-
tion whether any one at the present
time can say with certainty what
Americas final choice will be. True it
is that during the past two years for
eign nations have piled up in the
United States such enormous quanti-
ties OF liquid capital that they could
easily cause us to appear sometime in
the not-distant future as though We
were temporarily again in the position
Of debtor nation. It is quite possible
that Europe could use its liquid funds
which were created by gold exports to
this country to import temporarily
large quantities Of American exports.
Temporary croSs-currents of this sort
may obscure for several years the
fundamentals as described them a
little over two years ago in the PAM
phlet America Must Choose"
Drought Cut Production.
Another factor, operating in the op-
postte direction, which for the mo-
ment has obscured the fundamental
necessity Of Americas choosing, is the
drought Of 1884. So far as know this
was the worst drought the United
States ever experienced. This drought
reduced production of American grains
by more than 2,000,00O0OO bushels.
No previous drought, in terms Of
bushels of grain, was half as destruc-
tive. 1t is small wonder that in 1885
agricultural exports we're tremendously
diminished. The surprising thing is
tnat there was not greater volume of
agricultural imports. From the stand
point Of the consumer there really
should have been. Nevertheless there
was sufficient reduction in agricultural
exports, and sufficient increase in i'm
ports, so that in the fiscal year 1885
the value Of commodities exported
from the United States was practically
in balance with the value of commodi-
ties imported into the United States,
exclusive Of gold and silver.
From a longtime point of view it
would, Of course, be wise if the United
States Is to remain a creditor nation
and Is not continually to import de-
strucive quantities of gold and silver
for imports to exceed exports by sew
eral hundred million dollars annually.
Many persons surveying import and
export figures for 1885 and not having
any clear-cut understanding of the
long shadow left by the drought will
hastily reach conclusions that the
United States in 1885 was definitely
beginning to act as q creditor nation