The Ypsilanti daily press. (Ypsilanti, Mich.) 1928-1962, 1943-12-10
BY Roger W. Babsen

Washington, d. c., Dec. l0-So
many inquiries come TO me ask
ing for an explanation OF "subsi.
oies" that | am in Washington
getting the story Frankly. there
are two sides to the problem and
am convinced that the leaders on
both sides are honest II you be-
lieve in "paying-as you-go' and let
ting nature take its course, then
you will oppose subsidies: but If
you believe in borrowing and post
poning the day OF settlement. then
you will favor subsidies. To be
specific, the farmers are opposing
subsidies; but labor Is urging sub
sides.
What Are Subsidiesf
A subsidy bears the same reia-
tion to prices as a dam bears TO
an unFuly stream OF water. A
dam does not destroy the water;
but the flow. can be regulated by q
dam. Dams are, therefore, usetui
in food control but il too much
water Is damned up 1T either flows
over the dam or else breaks the
dam. In the long run. you cannot
fool or have q substitute for the
Law OF Demand and Supply. There.
fore, subsidies are useful TO regu-
late prices; but only for a short
time. Subsidies are no good 10
prevent price rises which are due
to a permanent increase demand
or shortage OF supply.
II the producers OF wheat are
not making enough money, they will
stop raising wheat There are
two ways 10 prevent this. One Is
to let the price OF wheat 90 up so
that production will again IN
crease; the other is for the govern
ment to "appease' the farmers by
giving them a small bonus or sub
sidy for raising wheat. CA few years
ago we gave them bonus for not
raising vheat,) In way, the sub
sdy plan seems fair because then
the extra cost would he distributed
all over the country through taxa.
ton and not fixed upon the farmers
alone.
Subsidies Prevent Price
Pyramldllng
When the Law of Supply ano
Demand is permitted freely TO work
as it must be in the long run
there is a considerable pyramIdng
Of profits. For instance. when the
farmer raises his price for wheat,
the convertors, wholesalers and re-
tailers are not content to add the
equivalent amount to the price OF
-four and bread but all increase
their prices on percentage basis.
This could result in the price of
bread increasing FIVE cents when
the farmer receives only one cent
more for the wheat in the bread.
Hence. the labor unions want sub
sides.
President Roosevelt and his al.
visors are having terrible struggle
to keep wages at their present
level and this can be done only by
keeping prices at their present
level. The Administration is in
an especially tough spot at the
present time because next year is
election year. II will be very
dificult to hold both the farmer
vote and the labor vote, to say
nothing regarding the consumers
vote. Subsidies do not solve the
problem; but they could postpone
the solution until after the election:
Subsidies Are a Political Gamble
This country now is much like
man who needs to have surgical
operation, but he has some very i'm
portant affairs facing him and can
not now afford the time to 20 to
the hospital. Therefore, the doc.
tors give him a belt to wear and
certain pills to take which will
delay the necessity Of an immediate
operation. Moreover. once in
awhile. during such delay, nature
cures the patient and the opera
ton is not needed at all. Although
believing In their hearts that the
subsidy program will give only tenn
porary aid, the Presidents advisors
do know that there is one chance
in ten OF It giving permanent re-
lief.
Subsidies are 'habitiorming. To
start subsidies may be like a man
starting TO use a drug. A man
believes he can quit it any time,
but too many have been sadly dis
appointed. Subsidies are like GER
tain drugs, on occasions
maybe, but very dangerous. After
substituting one product, producers
OF other products will try TO
get similar government aid;
soon the country could be in an
awful mess. As it is always easier
TO start habit than to break It up
it will be much more difficult to cut