“DANGEROUS POSSIBILITIES.”

Putaruru Press, Volume VII, Issue 299, 1 August 1929, Page 6

“DANGEROUS POSSIBILITIES.”

FARM RELIEF. United States Legislation. Notwithstanding the immense local market of the United States, the proximity of that country to heavily-popu ' lated European countries, its great geo- i graphical advantages and climate range, Australia and —in a lesser degree, perhaps—New Zealand arc more interested in industrial developments in America than in Great Britain. Aus tralia is not only enamoured of the American policy of armour-plating sec ondary industries with extraordinarily heavy duties —duties amounting almost to embargoes; but New Zealand primary producers also focus their attention on every move made by American farmors to utilise political means and organising production and distribution with the ultimate object of extracting the last cent from the domestic market. As the cablegram from Washington published recently showed, the United States Farm Relief Bill has passed the House of Representatives Lt awaits the Senate’s approval. “An extraordinary attempt to achieve prosperity in the farm industry bv Government assistance ’ 7 was the description applied to the Bill in the despatch. I And so it is; and that at the expense of the taxpayers direct and indirect of the United States as a whole. The National City Bank of New York report ing on farm relief legislation only last month, pointed out that the extraordinary session of Congress to enact such legislation was fixed at a time when “ prices of farm products generally were on a favo-p-ab'e levni as com pared with such prices in all years of the past, excepting war years, ana in comparison with the prices of other products. ’ ’ The very fact that the Government will undertake to make prices more remunerative, or that it may temper arily succeed, will of itself encourage people to become or remain farm ers, thus increasing production oi keeping it in excessive volume. Experience as welt as sound theory teaches that anything the Govern ment may do which affects agriculture as a whole, tending to make it a more remunerative busincs, will result in an increase of agiicultural

production, the direct cause of the* farm problem.

Creation of Scarcities Referring to proposals to add p.m “export debenture’’ feature to the Bill drawn up by the Committee on Agriculture to the House of Representatives,, and passed by that body on April 25 r the bank explained that the principle of this plan is to issue a Government debenture to exporters of agricultural products in the amount of one-half of the tariff on such products—such debentures to be receivable in payment of Customs duties by importers, who would buy them up. The assumption isthat by creating a scarcity through stimulating exports the domestic price will rise above world prices to the amount of the debenture. President Hoover gave this plan careful consideration and secured opinions oil its practicability from the Departments of Agriculture, Commerce and the Treasury. In a letter to Senator McNary, the President enumerated lO fundamental weaknesses of the plan, and concluded by saying:— Tt is my opinion that the theoretI ical benefits would not be reflected to I the American farmer; that it would create profiteering; that it containscleraents which would bring American agriculture to disaster. TJie introduction of such a plan would also inevitably confuse and minimise the much more fair-reaching, plan of farm relief, upon the fundamental principles of which there has. been general agreement. Loosely-Drawn Legislation The principal features of the House Bill were the creation of a Federal Farm Board and appropriation of a 500,000,000 dollar fund to be loaned to co-operative marketing associations and stabilising corporations. “In view of m**‘ T nituHe of the task of control - 1 ling prices of agricultural products, and the fact that the method? proposed are untried experiments, the Bill appears to be very loosely drawn, and to carry with it dangerous possibilities whose full extent cannot yet be measured.” Just what price, would be considered “unreasonably ” high or low? ' How can the private dealers ever hope to ascertain what action the Government may take with respect to a commodity f asks the National City Bank. If the Board’s operations cause loss to private operators will they not have a just cause for complaint2 -What of the constitional right to use the taxpayers’ money to raise prices artificially for a selected group?