Evening star., 1938-01-11
Unemployment
Continued From First Page.)

motor and construction industries.
The jam might be broken, Col. Ayres
continued. by a series of legislative
actions. first of them the repeal of the
undistributed corporate profits tax.
The Cleveland baker predicted that
the bottom of the present decline will
be reached early this year, to be fol-
lowed by a recovery slower than the
decline. Events abroad, he said, will
have an important bearing on de-
Velopments here.
The appearance of John L. Lewis,
chairman Of the Committee for In
dustrial Organization, originally sched-
uled for today has been postponed.
Secretary Wallace told the COM
nittee that certain events of recent
months have greatly aggravated the
rural problem. He listed them as
follows:
l. Increasingly serious drought con-
, ditions in certain areas of the Great
Plains.
2. A rapid decline in farm prices.
3. The industrial recession which
has gravely affected the conditions of
( rural employment.
4. The displacement of farm labor
by agricultural mechanization.
Subsistence Loans,
The Secretary spoke first of the SUBJ
sistence loans now being administered
by the Farm Security Administration.
Up to December l, he said, more than
. $4,000 families had received such
loans in the amount of s151 900, 900.
BY January l, he added, more than
= S45. 100000 of these loans had been
repaid.
Gravest situations center, however,
on those in need of subsistence grants,
a sum barely sufficient for the necessi-
ties of life.
Between July and December, he told
the committee, the number OF families
thus aided increased from 53,929 to
108,707, with the average payments
per family per month rising from
$17.45 to s2096.
There is little likelihood" he add
ed, that the economic status of the
100000 families receiving grants in
December will improve before another
harvest. AS a matter of fact, the ex-
perience of the Resettlement Admin
istration in handling last years prob
lem indicates that it will be necessary
to carry the majority of these families
on grant basis at least through the
remainder of the fiscal year"
1temizing the conditions of need in
particular localities, Mr.. Wallace de-
clared all "are overshadowed by the
Nationwide growth of rural relief
needs caused by the recent slump in
farm prices. Department of Agricul-
tural economists have estimated that
the 1887 production of SO crops was 13
per cent greater than the 1929 pro-
duction. and 40 per cent greater than
the production of 1886, which was con-
siderably curtailed by drought.
The effect of this increase, in the
face OF declining business activity and
urban purchasing power" he said, has
been a sharp drop in farm prices.
Since December, 1886, they have sunk
from 126 per cent of the pre-war level
to 104 per cent Of the pre-war level.
The present level of farm prices is ap-
,proximately 80 per cent below that
of 1929.
Piling Up Of Garry Overs.
''This decline has wiped out a sub
.stantial part of the gains in farm
income made during the recovery
period between the spring of 1888 and
the spring Of 1897. Large crops and
the curtalled domestic consumption of
farm products. coupled with low
volume of exports, is resulting in a
piling up of heavy carry-overs of our
basic commodities, particularly wheat
and cotton. BY next summer, the
combined carry-overs Of cotton, grain
and other commodities are expected
be nearly as large as the record stocks
on hand in 1882 and 1888.
The pressure Of these stocks on
the market, together with the shrink
age Of city purchasing power, prob
ably will mean farm income in 1898
of S to 10 per cent below that of 1897.
We do not anticipate that the large
stocks will produce as disastrous re-
suits as in 1892 because present and
prospective legislation should give US
power to cushion the shock"
As the committee resumed its hear
1ngs it had before 1t q disturbing
picture Of increased direct relief de-
mands in 81 cities of 100000 or more
population. the number Of cases jump
ing l5.9 per cent between November
and December.
: The information, compiled by the
Social Security Board, carried the
comment that relief figures Of today
fe4hct picture of acute need"
Included In the list Of cities was
Warrington, with 1851 cases Of direct
iYelief In December. 4 drop Of rs per
ese~a~.r.s