Bureau of Agricultural Economics, United States Department of Agriculture. NOTE. Cucumbers for market were included in the old index but not in the new.

Mr. WILLIAMS. I asked you about the fluctuations in the index of agricultural commodities.

Mr. HENDERSON. The index went up from 71.6 in July 1913

Mr. WILLIAMS. You mean from the base period?

Mr. HENDERSON. Yes, sir.

Mr. WILLIAMS. The prices of 1914 we are taking, are we, as the basis of 100?

Mr. HENDERSON. No; 1926 is the basis of the Bureau of Labor Statistics index. We have agricultural commodities at 71.6 in July 1913, and in May 1920, at 169.8, or a percentage increase of about 140.

Mr. WILLIAMS. Do you have that information with respect to the time that we entered the war-say the beginning of 1917, or especially the close, I will say of 1915, about the time that the general index started up so rapidly?

Mr. HENDERSON. I can give you that. It was 73.1 for December 1915. April 1917, it was 125.1.

Mr. WILLIAMS. And it reached its highest point in May 1920?

Mr. HENDERSON. May 1920; yes, sir.

Mr. WILLIAMS. Was that a continual upgrade, or were there some recessions in it?

Mr. HENDERSON. It followed pretty much the contour of all prices in the last war. It zigzagged a bit, but it followed pretty generally the contour of other prices. I have a chart on it.

Mr. WILLIAMS. What is its peak?

Mr. HENDERSON. At its peak it was 169.8, which represented a 140 percent increase from the June 1913 period. When the United States entered the war in April 1917 it was 125.1.

I think that we can show that to you by this chart.1 Here [indicating] is the total farm products group.

Mr. WILLIAMS. Have you the parity prices of these different agricultural commodities?

Mr. HENDERSON. Yes, sir.

Mr. WILLIAMS. Now?

Mr. HENDERSON. Yes, sir; as of July 15, 1941. That was the last computation made.

1See chart 23, p. 40, supra.

Mr. WILLIAMS. Of course, this parity price is based upon the base period from 1909 to 1914?

Mr. HENDERSON. Yes, sir.

Mr. WILLIAMS. I do not know that we want, as far as I am concerned, to read all of that into the record, but I think that it should be in the record if the figures are available.

Mr. HENDERSON. The figures are available, and I will insert them in the record.1

Mr. WILLIAMS. Are there any of those agricultural commodity prices above parity?

Mr. HENDERSON. Yes, sir; about eight of them are above parity. I might read you the percentage above parity of some of them: Rice is 102 percent of parity, as of July 15, 1941.

Cottonseed is 120 percent of parity, as of July 15, 1941.

Butter fat, 112 percent of parity.

Milk equivalent, 102 percent of parity.
Chickens, 111 percent of parity.
Eggs are at parity.

Hogs, 106 percent of parity.
Beef cattle, 127 percent of parity.
Veal calves, 114 percent of parity.
Lambs, 117 percent of parity.

Maryland tobacco, 188 percent of parity.

Wool, 149 percent of parity.

Those are the ones which are above. I think that is about 11 or 12.

Mr. FORD. Where is corn?

Mr. HENDERSON. Corn is 81 percent of parity.

Mr. WILLIAMSs. While we are on that, let us take all of the so-called basic commodities, wheat, oats, and so forth.

Mr. HENDERSON. Wheat is 73 percent of parity, corn 81, and oats 62. Mr. WILLIAMS. Tobacco and rice are the others, and you mentioned rice.

Mr. HENDERSON. Rice, 102 percent of parity; cotton, 87, and the only one computed on tobacco is Maryland tobacco, 188.

Mr. WILLIAMS. You say that cotton is only 87?

Mr. HENDERSON. As of July 15, 1941.

Mr. WILLIAMS. What is it now, on the 29th of July, the date fixed here in this bill?

Mr. HENDERSON. I think that it is about the same.

Mr. WILLIAMS. What is the parity price of cotton, if you know? Mr. HENDERSON. The parity price of cotton is 16.49.2

Parity prices of certain agricultural commodities, July 15, 1941:
Rice

-per bushel_

$1. 103 -per ton-- 35.90 per pound-

. 366 168 256 10. 20 8.78

10. 27 9. 13 35 363

696 856

327

. 1432

do__.
-per dozen..
per 100 pounds.

do-
_do
do
-per pound.

do.

per bushel.

do.

do

per pound.

Mr. WILLIAMS. Is it not selling at over 17 cents?

Mr. HENDERSON. I think that that is the price for some cotton in the market, but that is not the farm price.

Mr. WILLIAMS. Not the spot price?

Mr. BROWN. It went down quite a few cents on the day that the President delivered his message.

Mr. HENDERSON. And it has gone up since.

The CHAIRMAN. It went down 4 points yesterday.

Mr. HENDERSON. Yesterday it was 16.3 in 10 spot markets.

Mr. WILLIAMS. What is the parity price?

Mr. HENDERSON. 16.49, on the farm.

Mr. WILLIAMS. What comprises the difference-the cost of transportation?

Mr. HENDERSON. The cost of transportation, and some bidding factors.

Mr. WILLIAMS. Why were agricultural products placed at 110 percent of parity?

Mr. HENDERSON. Well, I think that the Chairman, in his press conference on Monday-was it not, Chairman Steagall-took the responsibility for that. [Laughter.] I do not want to misquote you, but that is what was reported in the paper.

Mr. WILLIAMS. I was simply inquiring as to the reason for it. I am serious about it, and if there is any reason why it should be placed at 110 percent, I would like to have it.

Mr. HENDERSON. There has been a lot of discussion, Mr. Williams, about where a ceiling should be placed. I think that there has been quite a bit of discussion that parity is something which Congress intended the farmer to receive, if possible, and since sometimes, as you know, prices are under parity, therefore before any ceiling was put on it, it ought to be allowed to fluctuate on the other side a certain amount. I think that 10 percent has been suggested by a number of those who were interested in it. I do not think that it is any one person's concept, but it has pretty generally been discussed in the trade, as we say.

Mr. WILLIAMS. I see that it is based upon a parity which is determined by the Secretary of Agriculture.

Mr. HENDERSON. Yes, sir.

Mr. WILLIAMS. Without the establishment of any base period. Is there any reason for that?

Mr. HENDERSON. The reason for that, as I understand it, is that under the new legislation connected with the Commodity Credit Corporation, there is a mandate on the Secretary of Agriculture to recompute some of the parities and to go beyond the five basic

commodities.

That is legislation that was passed about a month ago.

Mr. WILLIAMS. Would this act give him authority to go beyond the basic period, or to select another basic period for the basic commodities?

Mr. HENDERSON. I do not believe so, but I think that it would enable him to make some adjustments from that period.

Mr. WILLIAMS. Let us have that cleared now. Is it your understanding that the Secretary of Agriculture, so far as parity prices

with respect to the basic commodities are concerned, must base his prices upon the base period from 1909 to 1914?

Mr. HENDERSON. That is my understanding, yes, sir; but, as to others, since it was the intent to bring in a number of other commodities with which the Commodity Credit Corporation would deal, and also to put a limit on what they could sell for, there was this amendment of July 1, 1941, which authorized the Secretary of Agriculture to make a computation and to make it public for use in conpection with the Commodity Credit Corporation's authorization of this year.

Mr. WILLIAMS. In other words, he can select any base period that he pleases for a basis upon which to work out parity prices on any commodities except the basic ones, the five basic commodities?

Mr. HENDERSON. Yes, sir; and he is not limited to a base period. He is limited to some general language

so as to support a price for the producers of any such commodity with respect to such announcement was made of not less than 85 percent of the parity or comparable price therefor.

Mr. WILLIAMS. That applies to everything except the basic commodities, and that is the intention of this bill? It is not the intention of this bill to affect the base period for the basic farm commodities that have been provided for under legislation?

Mr. HENDERSON. That is correct. It is expected that this bill, as far as the term "parity" is concerned, will have the same determinations as the Secretary of Agriculture is making under other legislation.

Mr. WILLIAMS. In other words, that makes the Secretary of Agriculture the administrator so far as the parity prices are concerned? Mr. HENDERSON. Whatever he says on that subject is binding. Mr. WILLIAMS. Binding upon the Price Administration? Mr. HENDERSON. That is correct.

The CHAIRMAN. I assume that Mr. Williams will lead next to a discussion of wages, and no doubt that will take some time. For that reason, I think it would be well to conclude the hearing for this morning. I should like very much to resume the hearing this afternoon, but the minority Members of Congress are having a conference this afternoon at 2 o'clock, as I understand, which will probably take some time, and of course some of us will want to attend that conference.

So, Mr. Henderson, we will expect you back tomorrow morning at 10 o'clock. The committee stands adjourned.

(Thereupon, at 12:05 p. m., an adjournment was taken until Thursday morning, August 7, 1941, at 10 a. m.)