Evening star., 1940-02-17
Production Control
Declared unwise
For tobacco
Virginia Tech Expert
Points to Boom in
Foreign Output
BY tha Associated Press.

by tne A1eoc1ate0 Pfe8S.
BLACKSBURG, Va, Feb. IT.
Pointing to q 193 per cent increase
In foreign tobacco production during
the last nine years, DR. J. L. Maxton,
Virginia Tech agricultural economist,
said today that where . product Is
on an export basis, q policy Of con-
tinual production control and main-
tenance Of prices at an artiflcially
high level soon becomes an impossi-
biNty."
As an alternative, he declared that
more emphasis should be placed on
increasing industrial production and
less emphasis on restricting agricul-
tural production. The chances Of
success are greater because the
weather hazard in industry can
largely be controlled. An improved
industrial output should benefit ag-
riculture indirectly many times the
sum Of the present Government pay
ments to farmers"
Calls Plan Unsound.
Except in the case OF temporary
emergency, the economist argued re-
duction Of production appears un-
sound from the viewpoint Of the
general public. Only by production
can there be consumption, and only
by an increase in consumption can
standards Of living be raised.
when production Is restricted in
the United States and prices are
held high artificially, he said, I'VE
invite increased foreign production.
Growers IN foreign countries, whose
costs IN relation to returns on a
world price basis have excluded them
from production, now take advan-
tage of the artificiallv higher price
level and increase their paintings.
= "In the long run. policy of this
nature umbrella holding for pro-
ducers In other nations) encourages
production in other countries and.
when producers there learn to pro-
duce at lower and lower costs, may
result In a slow strangulation of the
industry affected In this country"
Taking the case Of flue cured to-
bacco as an example, DR.. Maxton
said that figures published by the
Bureau Of Agricultural Economics of
the United States Department Of
Agriculture show foreign production
OF f1ue cured tobacco increasing
from 1873 million pounds in 1930-3l
to 405 million pounds in 1937-38. The
price during the 1930-1938 period in
the United States averaged 179 cents
per pound. The price averaged 20
cents or above in five out of nine
years. One year it averaged 273
cents per pound.
Foreign Growers Aided.
statistics show that an average
price of 17.9 cents per pound for
f1ue cured tobacco in the United
States has resulted in an increased
production OF 1913 per cent in foreign
countries in the last nine years"
The fallacy, he said. Is the lack of
understanding that the price of an
export product such as flue cured to-
bacco is determined by demand and
supply conditions throughout the
world, and not by our domestic mar
ket supply, demand, and price. We
should recognize that we do not
exercise monopoly control.
Therefore, restriction in do
mestic production when accompanied
by an increase In foreign production,
such as has occurred, in the long run
cannot lead to higher prices. His
tory informs us that a restriction
program, with an export commodity
lacking monopoly control, cannot
long be successful. Some temporary
gain is possible and we have had
that, but ultimate failure is inevi-
table If the policy is continued.