PURCHASING POWER OF THE WAGE EARNERS DOLLAR
IN THE UNITED STATES

CHART 32

PRESENT WAR

inflation in that period.
down more than half; it was down to 48 cents.
dollar, as far as the wage earner was concerned.

This reflects the It was a 48-cent

At present, we start with the year 1939, with a 100-cent dollar. In June 1941, it is 94 cents, and if what I think is going to come true happens when those wholesale prices are reflected in the retail prices, when the shortages occur, when there is a reduction in the number of automobiles, in the number of vacuum cleaners and in the number of radios that can be manufactured because there is a shortage of material, there will be a further decline in the purchasing power of the wage earner's dollar.

I put a question mark as to what that will be in June 1945. That question mark relates to all of them. It relates to the extent to which we will control the forces that are brought together.

We can have inflation. It would be an easy thing. All you need to do is to pay no attention to what is going on now. Or we can do what other countries are doing. We can keep it within bounds.

CHART 33

FARM MORTGAGE DEBT, VALUE PER ACRE OF FARM REAL ESTATE, AND GROSS FARM INCOME, 1910-39

Chart 33 will be of major interest to the Congressmen from the agricultural communities. It compares the value per acre of farm land with the gross income, and particularly with the farm mortgage debt.

The war caused a great increase in land values, which meant to the farmer a higher mortgage debt. Farm income, which rose markedly during the war, slumped severely in the post-war depression. The value per acre of farm real estate did also, but the particular thing to which I wish to draw your attention is this, that the farm mortgage debt continued to advance, rising more than would be indicated by the value per acre.

Thus, in 1923, the farm-mortgage debt was 174 percent of the 191014 average, as compared to a farm income and to a value per acre which were only 63 percent and 35 percent, respectively.

FIRST WORLD WAR
PRESENT WAR

1939

1915

1914

UNITED STATES DEPARTMENT OF LABOR
BUREAU OF LABOR STATISTICS

BUSHELS OF CORN
REQUIRED TO PAY INTEREST AND TAXES

ON MORTGAGED FARMS IN IOWA

1940

1916

1941°

CHART 34

1917

AVERAGE REQUIREMENT PER MORTGAGED ACRE

1918

1919

1920

1921

1922

BASED ON 1940 TAXES AND INTEREST AND AVERAGE PRICE OF CORN FOR FIRST 6 MONTHS OF 1941

and it speaks pretty much for itself. In 1914 it took 4.7 bushels to per acre necessary to pay the interest and taxes on a mortgaged farm, As a final chart (chart 34), we have computed the bushels of corn

pay the mortgage debt. In 1915 it took 5 bushels. In 1916 it took 4.8 bushels. In 1917 it took only 2.7 bushels.

In other words, from 1917 to 1920 the farmer was getting a very real advantage. But look what happened to him after the war. In 1921, the bushels of corn needed to pay interest and taxes rose to the enormously high level of 12 bushels per acre. The interest and taxes reflect the value paid for farm land, and the fact that you can get a price, but you cannot keep it. But, when you get a mortgage, it stays with you.

The CHAIRMAN. Mr. Henderson, there is pending in the House at least one measure, and possibly two measures, that require the attendance of the members of the committee. This makes it desirable that we attend. For that reason, it is impracticable to hold a session of the committee this afternoon. So the committee will meet again tomorrow morning at 10 o'clock, at which time I should like to have you resume your discussion of the bill, and the members will desire to interrogate you.

The committee will stand adjourned until 10:30 o'clock tomorrow morning.

(Thereupon, at 12:05 p. m., the committee adjourned until Wednesday morning, August 6, 1941, at 10 a. m.)

PRICE-CONTROL BILL

WEDNESDAY, AUGUST 6, 1941

HOUSE OF REPRESENTATIVES,
COMMITTEE ON BANKING AND CURRENCY,

Washington, D. C.

The committee met at 10: 15 a. m., Hon. Henry B. Steagall (chairman) presiding. The members present were: Messrs. Steagall, Williams, Spence, Ford, Brown, Patman, Barry, Sacks, Gore, Mills, Monroney, Lynch, Kopplemann, Boggs, Hull, Wolcott, Gifford, Crawford, Gamble, Kean, Miss Sumner, Messrs. Kunkel, Rolph, and Dewey. The CHAIRMAN. Mr. Henderson, we will be glad to have you resume the discussion of this bill. At the outset, it might be well to direct your attention to one phase of this legislation in which members are interested and about which they have made inquiry; that is, the subject of wages. You will be called upon before the discussion is over to direct your attention to that phase of the subject involved in the bill. Pursuing your statement of yesterday, I thought we might direct our discussion along lines that will reach those suggestions that will be first to arise in connection with the bill.

I might say now there are three things that will be discussed, which if not first, are at least among the important matters that will come up in the discussion. One will be wages, another will be utilities, neither of which is affected by this bill; then there will, of course, arise a discussion as to the agricultural provision of the bill, which treats agriculture specially, as has been done by the Congress under existing law.

There is still another matter that I think will arise, which you might approach in your own way-I am not undertaking to direct your discussion, except to call attention to these particular phases of the bill-that is, the Guffey Coal Act. There will be considerable interest in any proposal that changes or sets aside that act now in operation.

I do not care to take time with specific questions, but I thought I should suggest you direct any discussion along those lines that you see fit this morning. In the interest of time I am going to refrain from discussing the bill with Mr. Henderson now and I yield to give opportunity to other members to do so.

Mr. KOPPLEMANN. Might I add, Mr. Chairman, that he might direct his discussion to rents as well?

The CHAIRMAN. Of course, he will discuss rents, but rents are specifically covered by this bill-that is, authority is granted in this bill to deal with the subject of rents, within certain limitations. And that is true with respect to coal, for that matter. But there is no provision as to utilities, or as to wages, while agriculture is treated specially, as under existing law.

If you do not care to discuss that, I will be glad to yield to Mr. Williams and let him interrogate you. We want to get along and save time.

64300-41-pt. 1- -5

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