Evening star., 1938-10-21
By the Associated Press,

products to the needy at lou pricesJ
By the Associated Press.
Would the proposal Of Secretary
Wallace to sell surplus farm products
to underprivileged families at re-
duced prices place heavy financial
burden on the Government?
This question has been raised by
many persons since Mr.. Wallace an
nounced the Agriculture Department
was studying system under which
the needy could buy foodstuffs now
piling up in storage or going to waste.
at prices considerably below those In
regular markets
The Secretary said losses incurred
by the price cutting would be borne
by the Government.
Critics of the proposal declare it
would entail an enormous outlay in
Federal funds.
Agriculture Department officials
contend 1t need not materially increase
amounts being spent in an effort to re-
store farm prices and income to pros
perity levels. They believe that in
time the scheme might be operated
IN such way that present farm sub
sides could be reduced sharply.
$420,000.000 Theoretical Deficit.
Under their theory, for example,
surplus fruits, vegetables, dairy and
meat products having normal mar
ket value of $840,OOOOOO might be
sold annually to 100000 low-income
families for s420,o0ooO0, or half the
market price. Theoretically, there
would be deficit of $420 900
which the Government would have to
make up.
Under the departments program,
the bulk of this deficit would be
shifted to the upper two-thirds" of
the Nations consumers by means of
increased prices. This would require
greater control OF surplus crops and
the marketing machinery by producers
and the Government.
This control could be obtained, Off
cialS contend, under laws which give
producers and shippers. in co-opera-
ton with the Government. the right
to regulate and restrict the flow of
such commodities as fruits, vegetables
and dairy products into regular mar
ket channels
This system could be employed,
officials said, to release into the regu-
lar channels only enough commodities
to supply consumers not classed as
underprivileged. The purpose would
be to raise prices and thereby increase
the growers income on that portion
OF the crop, helping to compensate
for the lower price received from
needy consumers.
Higher Standards Seen.
Such process, officials declare.
would tend to give producers a larger
income than would be possible were
the whole crop, surplus and all, be
dumped on the market to depress
prices and income. They contend it
would have the added advantage of
raising living standards of the low
income groups. ..
Critics say the proposal would bring
about virtual governmental control of
the marketing system.
The problem Of surplus cotton could
not be met in just the same way,
officials say. because of manufacture
ing costs, which are from four to five
times the cost of the raw cotton.
Ofdcials suggest that to get prices
Of cotton goods down to where low
income families could materially In
crease their consumption, it might be
necessary for the Government to sub
sidize textile and clothing mills with
raw cotton and financial grants. Funds
for the grants might be raised, they
say. by a tax on higher quality cotton
goods-those consumed by the upper
two-thirds."
The Government already owns
sufficient cotton to supply several mil
lion families with greater quantity
of clothing and cotton goods More
than 100000 bales have been put up
by growers as collateral for Govern
ment loans. Offlcials say it is probable
most Of this will be turned over to
the Government in payment.