AGRICULTURAL RELIEF
the price of the 600,000,000 bushels. I do not think there is any-
thing in that psychology or legerdemain, that would ipso facto raise
it; 1 am not that optimistic. You have not answered my question.
The point I am talking about and what is bothering me is, from whom
are they going to buy that 200,000,000 bushels of wheat. They will
buy it from the farmer who produced it, will they not?

Mr. Caverno. No.

Mr. KiNcHELOE. Where will they get it? :

Mr. Caverno. The wheat will come off the market and go into
export through the channels of trade. Let me illustrate that.

Mr. KincreLOE. You are fuller of theory than anybody I know of.
I am trying to get down to facts. I thinkI know how they would get
that wheat. I think it would come from the fields of the farmer who
raised it. I do not care what agency it comes through. They would
pay the world’s price to them, would they not—the market price?

Mr. Caverno. Not under the Haugen bill.

Mr. KincaeLoe. What would they pay the farmer for the surplus?

Mr. Caverno. They would pay him 26 cents above the world or
Liverpool price to the man on the farm.

Mr. KincaeLoE. Under the circumstances, I say.

Mr. CaverNo. Yes; under the circumstances—the 800,000,000-
bushel crop and the 200,000,000-bushel surplus.

Mr. Kercuam. If the world price was a dollar; that would mean
they would pay $1.26?

Mr. CaverNo. Yes. The Liverpool price on any farm is known.
You understand what I mean about that. That means that the
Liverpool price on my farm is the Liverpool price less what it costs
to get it there. Therefore, every man has a Liverpool price on his
own farm. The board would start in with unlimited power to buy
up wheat and would actually take the wheat off the market at the
vg price. This is the Liverpool price on this table [illus-
rating].

Mr. KincHELOE. Let us put it at a dollar.

Mr. Caverno. All right. Here is 42 cents which is tariff duty,
and the board is going to take enough of this wheat off the market
to put it on an import basis, which would be $1.42.

Mr. KincHELOE. Right.

Mr. Caverno. All right. How are they going to do it? They are
zoing to take part of that 42 cents and finance the loss on exporting
200,000,000 bushels, and take the other part of it to be the increased
price on the American market. There would be two American prices.
Wheat will flow in from the farm at $1.27 basis. That is what the
farmer will get.

Mr. KinceHLOE. How do you know he will? That is what I want
to get at.

Mr. Caverno. Because it is necessary to go and buy the wheat.
| Mr. KincueLoE. You said 26 cents awhile ago and now you say
27.. I want to know how you get either one of those.
tT: Caverno. We are using 15 cents for the equalization fee and

a means 26 cents by taking it from 42 cents.
the fob? INCHELOE. How do you know it will take 15 cents to finance

Mr. Caverno. Well, we will suppose

’ your agencies have actuall
zone to work and bought 200.000.000 bushels and sent. it nbroad.

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