Mr. GINSBURG. Where the local community has taken adequate action to control rents, and has in fact controlled them, no Federal power exists under this bill.

Senator BANKHEAD. Have you considered the District rent bill? Mr. GINSBURG. Yes, sir. We worked with their people in connection with it.

Senator BANKHEAD. What do you think about putting it into this bill for the Nation?

Senator BROWN. There is such a provision in this bill.

Mr. GINSBURG. I think it would be inadvisable, sir, because that bill was intended for the District of Columbia. It was tailor-made for the District of Columbia. There were certain provisions put in it which I think are peculiar to this community, and I rather doubt that it would be advisable to extend that law generally throughout the country.

As a matter of fact, what we had planned to do was to work with the real-estate boards and the other interested people in the preparation of a model statute which would be offered in lieu of regulation under section 2 (b) of this act.

Senator TAFT. Then, as I understand it, what these hotel people must be objecting to is this date on page 5. That part reads that

The Administrator shall ascertain and give due consideration to the rents prevailing for the accommodations, or comparable accommodations, on or about April 1, 1940

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They are claiming, as I remember it now, that hotel rates in many places have been greatly depressed. There are many cities in the country where there has been a great oversupply of hotels, and that what they could charge at that time had no relation to what the basis of cost was at that time and should not be used in determining their proper rates. That is their argument. I present it for whatever it is worth.

Senator BROWN. I announced on yesterday that the hearings would be closed at 11 o'clock today. I now declare them to be officially closed.

I want to say to the Senators that if there is anything received by any of you that you want placed in the record, we will see that it goes into the record if it is received before tomorrow night.

The committee will now go into a short executive session.

(Thereupon, at 11 a. m., the hearing was concluded, and the committee met in executive session.)

(The following was submitted for the record :)

TABLE 19 SUBMITTED BY SENATOR BUTLER ON THE TREND OF FARM PRICES AND

FACTORY WAGES, 1909 TO DATE

The attached table shows the trend of factory wages and of prices during the past 30 years. It is perfectly clear from this table that farm prices are far, far below a parity relationship with wages, since factory hourly wages are now better than three and one-half times as high as they were during the base period, while farm prices have increased only 31 percent. In other words, factory hourly wages have gone up more than eight times as fast as farm prices.

If there is danger in the inflationary spiral of wages such as we had in the last war, then that danger has already happened, since wages are already higher than the absolute peak they reached during that last inflationary period, and they are still going up, and apparently this administration, and the sponsors of this bill, have no intention of stopping them.

TABLE 19

Trend of farm prices and factory wages, 1909 to date

[Index of hourly earnings of factory workers recomputed to base of 1910-14=100]

Source: The Demand and Price Situation, October and November 1941, Bureau of Agricultural Economics.

STATEMENT MADE BY SENATOR BANKHEAD AT A BANQUET HELD IN Birmingham, ALA., OCT. 7, 1941

There seems to be an impression in some quarters that if a price ceiling on cotton is fixed at the parity price level that farmers would then receive parity prices for their cotton. It is agreed that farmers are entitled to receive parity prices without legal interference through price-cortrol devices, if under fair-trade conditions the market price goes that high. It is true, however, that if a price ceiling is fixed by law at the parity price, there would be no reasonable chauce for farmers to sell their crop of cotton at the full parity price. The reasons for the result stated are obvious and well known in cotton-trade circles.

The market price of cotton and a number of other agricultural commodities is ascertained by daily trading on the commodity exchanges. If there are more buyers than sellers the price advances. If the sellers predominate, the price declines. When a cotton merchant or a cotton mill buys a quantity of cotton, prudent business management calls for hedging sales on the exchange to insure against loss as the result of declining prices. Investors and speculators who believe the price will advance and thereby produce a profit buy the hedges. If an annual crop is 12,000,000 bales and the annual consumption is 10,000,000 bales, who buys the ntire crop during the 4 or 5 months of the marketing seasons? Consumers buy their current requirements, and traders, who believe that a profit will accrue by holding the cotton, buy the rest of it.

The present parity price is 17 cents for seven-eighth-inch middling cotton. If it is made unlawful to sell cotton at a higher price than that, who will buy the cotton or the hedges? If the mills cannot sell hedges, they can with prudence buy cotton only as needed for current use. Without buyers, every offered sale will drive down the price. Until the price goes low enough from the ceiling and parity price to attract buyers there can be no future sales. Without that reduction in the price and without a margin wide enough to encourage speculators and investors to buy, there would be no market for cotton except in quantities sufficient to supply the immediate needs of the mills. Such a situation would produce unhappy results as follows:

1. The farmers would not get parity prices.

2. Farmers would be deprived of a market for a large part of their crop during the marketing season.

3. It would result in mortgage and other lien foreclosures or cause long delays for creditors.

If an all-time market for cotton is maintained, there must be fluctuations in prices. If a price ceiling is fixed for cotton, the fluctuations will all be below

that price. If parity is the ceiling point, all cotton will be sold below that point. A maximum price fixed by law at the parity level would mean either a price to the farmers lower than that price or the closing of the markets for the sale of cotton except as needed for prompt use. Such a situation is unthinkable and will be resisted to the bitter end.

If cotton, wheat, and corn producers are to be given a chance to get parity prices and parity income, there must be reasonable flexibility in price ranges above parity prices, as well as below those price levels. If inflexible ceiling prices are to be fixed by law, without having adequate floor prices, then a fair and reasonable margin must be provided between the parity price and the ceiling price. There is a difference of opinion among sincere farm leaders on what that margin should be; 10 percent and 20 percent have been suggested; the floor price under the basic commodities is 15 percent below parity. It seems to me that fair and reasonable adjustment would be to permit a similar margin of 15 percent above parity prices. The price would then fluctuate between these two levels and would be governed by the trade law of supply and demand.

If advocates of a lower ceiling are not willing to accept a ceiling price of less than 10 percent above parity, then I submit that the floor price should be increased from 85 to 90 percent of parity, leaving a margin of 10 percent above and 10 percent below for price flexibility. Under this formula, if adopted, present prices for cotton would range between the loan price-85 percent of parity on August 1-16.49 cents a pound, plus 25 points which represents the difference between seven-eighths-inch middling and fifteen-sixteenths-inch, making 16.74 cents as the low, and 19.80 cents which is 15 percent above present parity of 17 cents plus the 25 points difference in staple as the high.

Under no circumstances, in my opinion, can a bill pass Congress which limits the price of the production-controlled basic crops to a point less than 10 percent above parity. The administration has agreed to that price as a ceiling point.

It is generally agreed that when a surplus of any commodity exists there can be no inflationary price for that commodity. The object of the pending pricecontrol bill is to prevent inflationary prices. There exists in this country large surpluses of cotton, wheat, corn, and tobacco. There is no sound reason for including these commodities in a price-control law so long as there are large surpluses in the ever-normal granary.

Another important reason, from the farmer's standpoint, for objection to a price ceiling at the parity price is the fact that parity income is more important than parity unit prices. The mere fixation of a price per pound for cotton establishes only one of the income factors. The other is volume. Price times volume. This year, in the face of rapidly rising prices of everything the farmer buys, there is a reduction in production of cotton of about 15 percent over last year. The reduction may be 20 percent. A price ceiling fixed at the announced parity price would leave the producers 15 or 20 percent short in income. Parity income calls for parity price on the average quantity produced.

Dr. Stine, an outstanding economist in the Bureau of Agricultural Economics, has furnished me with the definition of parity income, as distinguished from parity price. It is as follows:

“Parity income takes into account quantities and prices for all products of the farm. Costs are deducted and the net income for farming is compared with the net income from other sources in terms of per person living on farms, and per persons not on farms. Parity prices indicate the exchange relation in terms of prices per unit between the products of the farm and the items farmers buy for production and living. In this there is no allowance for changes in volume of production nor in volume of purchases of goods."

If an inflexible price is fixed at 17 cents (present parity price), how would the cotton farmers' income compare with the income of industrial labor whose wage scale is positively fixed except as it increases from time to time?

Present so-called parity prices for agricultural commodities do not truly represent parity between agriculture and industry. This country cannot have real lasting prosperity until a real balance in earning power between these two groups is established. The debt-paying and purchasing power of farmers should be readjusted upward. That can be done now only by increasing the daily, weekly, and annual earnings of the agricultural workers.

Walter Lippmann has recently made a suggestion for the treatment of this subject which seems to merit full consideration. His formula, as stated by him, is in part as follows:

"If we can tie farm prices to industrial prices by the rule of parity, and if we can tie wage rates to the cost of living, then we can concentrate our regula65913-41-36

tion (price control) principally upon industrial prices. We shall have obtained by consent of the farm organizations and the labor unions a rule which keeps farm prices and wage rates fastened to industrial prices. Then, when we keep industrial prices under strict control-if necessary by requisition and rationing the Government will be fulfilling the contract with the farm organizations and the labor movement, and vice versa, just because farm prices and wage rates stay in balance with industrial prices, it will be possible for the Government, as it otherwise would not be, to succeed in controlling industrial prices." Farmers do not favor a run-away inflation. Neither do they favor drastic limitations on the prices of their products with no compensatory limitation on inflationary price factors which increase the prices of the things they buy. They ask only for fair treatment after considering the price of things they must buy.

The subject of legal price controls is a complicated one. Many difficulties inhere in it. As a member of the Senate Committee on Banking and Currency, the committee which has jurisdiction of the pending bill, and as a member of the Senate, I will do my very best to help work out a measure that will be to the best interest of all the people of our beloved country.

STATEMENT OF THE CONGRESS OF WOMEN'S AUXILIARIES OF THE CONGRESS OF INDUSTRIAL ORGANIZATIONS ON THE PRICE CONTROL BILL BEFORE THE SENATE COMMITTEE ON BANKING AND CURRENCY, DECEMBER 16, 1941

We, too,

The Congress of Women's Auxiliaries of the Congress of Industrial Organizations, on behalf of the women in the homes of American workers who are members of the Congress of Industrial Organizations, strongly supports the proposals on price-control legislation presented by Philip Murray, president of the Congress of Industrial Organizations, before your committee. "urge most earnestly the passage of effective price-control legislation with teeth in it, legislation of the character proposed by the responsible administration officials." We support "the firm and unqualified opposition of the Congress of Industrial Organizations to the inclusion of wage control in the price-control bill."

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We take this stand not only as part of the Congress of Industrial Organizations but as women and as Americans who have pledged every effort to our Government, including the unquestioning and unstinting acceptance of all necessary sacrifice to win the war against Hitler. We ask the Senate Banking and Currency Committee not to impede our efforts either by permitting unbriddled profiteering to undermine the health and the morale of the American home or by legislating the freezing of wages which for many Americans in many parts of the country are now inadequate for the minimum nutritive requirements. We speak to you as wives of workers in defense production, as wives of agricultural workers, and as mothers of American soldiers and sailors and of America's future citizens. What we have to say is quite brief. Defense of the Nation.-We women cannot enlist in the armed forces of the country; many of us cannot contribute directly toward the great battle of production in which our men are engaged, but we have been called upon by the defense agencies of our Government to perform other important defense tasks which we have gladly accepted and toward which we are giving our best and most earnest endeavor. The women of this country have been called upon to fight on these important battlefronts:

The battle against malnutrition and disease.-In May 1940 a historic conference, called by the President of the United States, in which we participated, was given the task of developing a program and embarking on a crusade to wipe out the shameful and disastrous spread of malnutrition in this country. The figures presented by Government experts indicated that three-fourths of the American population is inadequately nourished, that one-third of the population is dangerously and definitely undernourished, and, further, that there is a direct relation between malnutrition and low incomes. A panal composed of representatives of food industries, Government experts, social workers, educators, labor, consumers, and others found that "malnutrition is more preva* * * lent among families in low-income classes than in high its incidence is highest among those of low economic status * to combat malnutrition increased production and consumption of the foods that are rich in those nutrients now consumed in less than adequate quantities is needed.

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For

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some population groups this means more of all kinds of foods order to obtain higher incomes for city and village groups there must be higher wage rates and increased employment in many sectors of our economy. Labor organization affords a democratic method of improving the level of living of wage earners. Free collective bargaining must be maintained and extended among all workers including those at the lowest income level."

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Miss Eloise Davison, director of Women's Activities of the Office of Civilian Defense, has repeatedly said that one of the important aspects of the war effort is that every human being is important; every person represents two hands which can do something for the defense of our country. Our organization, which has pledged full support to the national-nutrition program for teaching housewives how to cook nutritiously, how to pack nutrition into the lunch box of the defense-production worker, how to build our children into strong Americans, asks this committee not to freeze wages which cannot even now buy the minimum food necessary to our productive workers. Efficient production for war will not be possible if we freeze one-third of the population into a state of starvation for the duration. Our organization asks, also, that you do not render present wages worthless by permitting prices to soar, for that also would undermine our Nation's war production.

The battle against waste.-The women of this country have been called upon to conserve materials needed for the defense program and to prevent inflation. We have pledged our effort in that direction. We understand our responsibility in saving the things which are necessary for the defeat of Hitler. But the housewife will be able to do her share with much greater determination when she is sure that the Government is protecting her from unnecessary sacrifices imposed by profiteers. We want price-control legislation "with teeth in it" to help us to do our job of bringing the full understanding and confident support of the housewife to the defense of our country. She needs to know that lives as well as materials are being conserved.

Army and civilian morale.-Our sons and brothers and husbands who are serving their country in the land, sea, and air forces, and in the great defense industrial plants, are entitled to the utmost encouragement and cheer that we, their women folk, can give them. We pledge our every material and spiritual resource, to that end. But we know that the greatest contribution to the morale of the men at the front is the guaranty of the well-being of their families back home. So we ask on their behalf, as well as our own, that this committee and the Congress of the United States help us to "keep the home fires burning" by passing a price-control bill which will effectively end the undermining of the Nation's strength through profiteering and which will leave the democratic processes of collective bargaining unhampered.

In conclusion permit us to assure you of our complete endorsement of the statement presented to your committee by President Philip Murray, of the Congress of Industrial Organization.

FARMERS EDUCATIONAL AND COOPERATIVE UNION OF AMERICA,

Washington, D. C., December 19, 1941.

STATEMENT OF THE NATIONAL FARMERS UNION AND THE NATIONAL FEDERATION OF GRAIN COOPERATIVES ON H. R. 5990 TO THE SENATE COMMITTEE ON BANKING AND CURRENCY BY ROBERT HANDSCHIN, RESIDENT SECRETARY

The National Farmers Union and the National Federation of Grain Cooperatives desire to urge the Committee on Banking and Currency to make certain amendments to the selective price-control bill in order to better attain the final purpose of such legislation. Our organizations firmly believe that "Abundance for Victory" must be the central slogan and guiding thought behind our entire war effort. Agriculture, through the national farm programs and through the support of all farm organizations, is leading the way in providing that abundance so necessary for military victory and the establishment of a sound peace. Only a total economic program which discards traditional scarcity practices and thinking in terms of dollars, and replaces it with the maximum production of goods and services of all kinds, can assure us real victory. A price-control program which does not rest upon and encourage such maximum production of defense and consumer goods and their proper rationing will fail in its purpose. Fully adequate