AGRICULTURAL RELIEF

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Mr. KiLGore. In case there are future operations.

Mr. Fort. It says that specifically.

Mr. KILGORE. Suppose you do not have profits in future operations?

Mr. Fort. I would say under either bill if it did not produce
profits in any year’s operations, the plan will not last. It is eco-
nomically unsound either way, if it does not operate at a profit
sometimes.

Mr. KiLGoreg. I think that is precisely the weakness of the loan
bills. If they are operated at a loss, then they would be merely
temporary measures, and with the tariff-protected products there
would be certain losses, and they would be almost surely temporary
measures, while with the equalization fee there to take care of any
losses, to insure the permanency of the revolving fund, that that would
be a permanent measure. I think there is a big difference.

Mr. Fort. Because you think the equalization fee proposal is an
operation in contemplation of permanently recurring losses?

Mr. Kingore. I think it would be there to insure that sort of
operation; it would insure permanency in the bill and continue its
operation.

Mr. Fort. But, in operation, to incur permanently recurring losses?
ar KiLGore. If they occurred, ability would be there to meet
them.

Mr. Fort. If they are not recurring annually, if there are years of
profit, either plan would work equally well, would it not?

Mr. KiLGore. Yes; if there were any provision in the loan bills to
meet carrying charges. But we do not believe that will be so: in
fact, we know——

Mr. Forr. I think there is the point, Doctor, where you and I
have the greatest difference of opinion. I do not believe that you
can work any plan in permanent anticipation of losses and ultimately
expect to work a profit out for anybody.

Mr. KiLGoRE (continuing). What I mean to say is that if the
farmer, because of the payment of the equalization fee was able to
get a better price for his entire production, then he would be willing
to sustain losses on his surplus if necessary.

Mr. Fort. Eventually, the equalization fee would use up the
profits?

Mr. KiLGore. I wonder if we would agree on this: We say we
have agreed to disagree on the other—that under the MceNary-
Haugen bill with the equalization fee, because it would take care
of any losses, that there would likely be a stabilization of the price
at a higher level than there would be under the loan bill?

Mr. Fort. No; I do not think we do agree on that, not if the
Haugen bill is going to be operated intelligently.

Mr. KiLcore. I think there would be a stabilization of prices
under the McNary-Haugen bill, with the equilization fee, at a higher
level than would be possible under the mere loan bills, because you
would have a fund there that the growers would pay to absorb the
losses, and for that reason they would stabilize at a higher price.

Mr. Fort. Then, Doctor, I asked you the other day, I want to
come back to it again: If you think they are going to stabilize at a
higher price under the Haugen bill, what happens to the argument
that the equilization fee will check production?