AGRICULTURAL RELIEF 
Mr. Aswern. I am a little fellow, too, and I do not want to be 
skinned by you or anybody else. 
Mr. Cavervo. If you will go over to the Department of Agri- 
culture you will find out they have worked out some empirical 
formulae by which they can forecast the trend of prices. 
Mr. AsweLL. Some of them are very empirical. 
Mr. Caverno. If those formulae had been applied to cotton 
crops during the last 25 years they would have been able to forecast 
the trend of prices. Mr. Anderson spoke about the old system of 
trial and error. It is important in modern scientific management 
that you get as far away from the method of trial and error as you 
can and adopt a scientific basis. But there would have to be some 
trial and error adjustments in finding out what the maximum price 
of cotton is under the law of supply and demand. 
Mr. AsweLL. That would not be the same for any two years. 
Mr. CaverNo. I would go as far as possible in using scientific 
formulae to forecast the trend of prices, and that will give you a 
price curve to work on. I am trying to answer your question. 
Mr. AsweLL. I do not want to take up your time. I am asking 
the question. 
The CHAIRMAN. Ask him a question and give him a chance to 
answer. 
Mr. Caverno. I am trying to answer your question directly; I 
have no other object. 
Mr. AsweLL. Well, hurry on to it. 
Mr. Caverno. The board having that as a basis probable price 
would buy cotton at that price or above; try to peg the cotton at 
that price or above. Look at the conditions they have to meet. 
Here is a probable price; the best that they can get. If they have 
got to buy and sell again without any protection, they dare not go 
above that probable price; in fact, they dare not go up to it. They 
have got to allow an ‘equalization fee’’ below that probable price 
to protect them in their operations—that is, under Mr. Crisp’s bill, 
as I see it; that is how they would operate. They would operate as 
high as they dared to go toward that curve, but they would have 
to protect themselves from a loss. 
Here is an article in the Journal of Agricultural Economics on the 
subject of the elasticity of the law of supply and demand. The 
figures on crops show that there is no direct response of production 
to price, even in industry. Let me put it another way. There is 
a tendency for consumption to increase with a decrease in price and 
for production to increase with a decrease in price. There is not 
an immediate response in production to a higher price or a lower 
price. That gives the board a chance—this brings in the matter of 
overproduction—to raise the price without necessarily causing over- 
production. 
Mr. KiNcHELOE. You say that in the increase in price there is no 
tendency for increased production. 
Mr. Caverno. There 1s a tendency, Mr. Kincheloe, but you will 
notice by the figures left here by Mr. Stone and the figures on the 
wheat crop given last year in the reply by Mr. Dickinson to the 
President’s veto, that acreage in any crop has not responded in a 
good many years to the price of the year before; in other words, 
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