Evening star., 1941-01-31
Davis Issues Warning
Against Squeezing
In Defense Program
Vigorous Policy, Backed
By Action, Urged by
Commission Leader

Only vigorous policy fortified by
action can prevent the economic
squeezing" Of the farmer, the white
collar worker, professional groups
and the small businessman not par
ticipating in the defense program,
Chester G. Davis. head of the Ma
tional Defense Commissions Agri-
cultural Division, said today.
In an address prepared for de-
livery before the Illinois Agricul-
tural Association meeting in St.
Louis, Mr.. Davis asserted that. in
pessimistic moments, he visualized
such squeezing" occurring as fol-
lows:
"I see industrial management
using the defense program as a de-
vice for recouping the losses of the
lean years. I see it asking prices
and obtaining margins of profit
which enables it to set aside a kitty
for the lean years that may be
ahead.
ST see labor, pressed by higher
living costs, cycling those increased
profits. I see some organized labor
groups exploiting the sudden in
crease in the demand for special
skills or trades. I see the farmer,
the white collar worker, professional
groups and the small businessman
who is not participating in the de-
fense program being squeezed in the
process.
Wants Clear-Cut Policy.
"As I say, I see this picture dur
ing my more pessimiStic moments.
T hope it may never come to pass,
but I think we can only prevent it
by a clear-cut. vigorous policy, well
fortified by action"
Mr.. Davis stressed that profits
on defense orders must be kept to
fair and moderate proportions, with
any undue gains" being recaptured
by excess profits taxation. mo one"
he insisted, sis privileged to get rich
as a result of this armament effort,
through defense expenditures. We
must make every effort to expand
industrial capacity by the time 1t is
needed so as to keep shortages to a
minimum. for every shortage is a
temptation to higher prices. Labor
must not take undue advantage of
any increases in its bargaining posi-
ton. All unjustifable price and
wage increases must be vigorously
curbed."
MIR. Davis told the farm group
that, while the Government will
keep a careful watch on material
and labor shortages affecting agri-
culture, military demands are to
take priority over agricultural re-
quirements. Farmers may have to
make adjustments in the kinds Of
fertilizer they use and sometimes
there may be shortages in certain
types Of farm equipment" he ex-
planned.
Points to Export Trade.
Pointing out that the American
farmers export trade has been di-
minished drastically by the war, Mr.
Davis declared, st am not in favor
of giving ups without a struggle the
chance for American farmers to sell
in world markets. Such loss would
force on us internal adjustments so
drastic as to make the early ven-
lures of the Agricultural Adjustment
Act look like a Liberty Leaguer's
dream of economic paradise"
To help lessen and possibly avert
loss Of American agricultural ex-
ports, Mr.. Davis suggested: Devel-
opment of plans for increased
consumption of food and fiber at
home, particularly by the under
privileged; continuance and possible
enlargement Of storing products to
meet potential bigger domestic
demand or reopening of foreign
markets; treaty provision for Great
Britain to import its normal pro-
portion" of agricultural commodities
from the United States; preparation
for swift shipment of our surplus
products to Europe when the time
for reconstruction arrives, and de-
velopment of an export policy which
would revive the purchasing power
of agriculture and thus provide a
larger domestic market for manu-
featured goods than the manufac-
turers would lose through restriction
of their exports in favor of agricul-
tural products.