Evening star., 1939-05-09
Battle 0verCotton
Subsidy Plan Goes
To Senate Today
Smith and George Pledge
Fight on Proposal
Pushed by Bonkheod
BY the Associated Press,

By the Associated Press.
A proposal for subsidizing Ameri-
can cotton exports created a new
controversy in the Senate today,
following approval of an extra
$382 OTIS 900 for farm aid.
A group led by Senator Bank
head, Democrat, of Alabama sought
to place the cotton subsidy in the
$1,215 100000 bill appropriating
funds for the Agriculture Depart
ment.
Another group of Southerners,
including Senators Smith, Demo-
crat, of South Carolina and George,
Democrat, of Georgia, pledged a
finish fight against the proposal.
The Bankhead plan, put forward
as a compromise with recommends
tons of President Roosevelt, calls
for a Government subsidy of about
$40 bale on new cotton shipped
abroad, up to 100000 bales The
President had suggested that the
subsidy be used to reduce the pres
ent Government loan stocks of
more than IL ,OOO. 900 bales
The dispute over the subsidy plan
was the only major issue awaiting
disposal before final action on the
record breaking farm bill.
The Senate approved committee
and other amendments yesterday
which added, among other items,
$225 900 900 for parity payments to
producers of cotton, corn. wheat,
tobacco and rice; $1l3000,000 for
surplus crop disposal and SIS, 900 900
for farm tenacy loans.
These funds would be in addition
to the $500, 900 900 soil conservation
benefits approved by the House,
along with an estimated $50 900 900
for surplus crop disposal and $24.-
9S4,5O0 for the farm tenancy pro-
gram.
The House had rejected $3.50, ,0OO,-
600 for parity payments and $780,
100000 additional for surplus crop
disposal. but farm leaders believe it
will reverse its stand in view of the
Senate action.
While the Senate was voting on
the additions, Secretary of the
Treasury Morgenthau told reporters
he was greatly disturbed" by the
prospect of such an increase in the
$500 600, 900 Federal deficit esti-
mated for the year beginning July !.
Sees Increase Necessary.
He said Congress should levy new
taxes to cover the excess, but vari-
Gus proposals to enact farm pro-
cessing taxes have received little
favor among the lawmakers.
Secretary Morgenthau said it was
time to start tapering down Federal
deficits, and added that any addl-
tions made it more difficult to revise
taxes as a business stimulant.
Scattered protests from economy
advocates furnished the only opposi-
ton to the Senate increases.
Senator King, Democrat. of Utah
said the Appropriations Committee
and the Senate were "on a spending
spree" OF the floor, Senator Adams
Democrat, of Colorado, observed that
the changes showed Congress is
not going to rise spontaneously and
demand economy"
The increased farm benefits would
reach nearly every class of producer
directly or indirectly.
Price Adjustment Payments.
Under the regular $500 900 600
soil conservation program, farmers
receive checks for conforming to
soil-building practices prescribed by
the Agriculture Department.
Under the parity fund growers of
major crops would receive price ad-
Justment payments designed to bring
their income to IS per cent of the
pre-war level in relation to prices of
other commodities.
Under the surplus disposal pro-
gram, funds could be used by the
Agriculture Department to buy crop
surpluses for distribution to the
needy or for subsidizing exports.
Senator Lucas, Democrat, of Illi-
nois estimated the parity payments
would be divided about as follows:
Cotton, $86 ,818 600; corn, s75 .834 900;
wheat, s58 900 600; rice, $1,000 900,
and tobacco, 81 Sol 900.