196 ‘AGRICULTURAL RELIEF
WORLD-WIDE INDUSTRIAL CRISIS AND THE WAY OUT IN 1928
[A statement by George Shibley, director of the Research Institute of Washington, D. C.; member of
United States Supreme Court Bar]
Mr. Chairman and gentlemen of the committee, I am an independent econo-
mist, operating as the Research Institute of Washington, D. C. I am supplying
my own funds. This I have been doing for 44 years, engaged in constructive
researches. My biography is in “ Who's Who in America.”

My purpose in presenting this statement is to place before you a description
of the world-wide industrial crisis and the way out.

To-day not only are the farmers in this Republic in distress, but this has
existed for now the eighth consecutive year. While nature has been bountiful
our National Government has been such as to injure the farming population, a
third of the entire population; and all of the consumers of the products of the
mines and of the factories have been taxed for the treasuries of the organized busi-
ness interests. You, gentlemen of this committee, are familiar with this chain
causation. (See accompanying table.)

COMPARISON OF AGRICULTURISTS’ AND BUSINESS FIRMS’ PRICES
The following index numbers are of the prices of 30 farm products and of the
nonagricultural products, also the relative index numbers describe the relation-
ship between the two. The base is 100, the average for the five years August
1909, to July, 1914.

910... -
Y___

|

30 farm
oroducts

N onagri-
cultural
products

x
0

10¢
¢

16

10
.
3

hy
0%

.QG,

Relative
yurchas-
ing
power of
farmers’
wroducets

¢
te

97
107
105

L mE
Be mm mR

..¢ (March)...
1927 (September)...

30 farm
products

“16

Nonagri-
cultural
products

2.

16%
16¢
171
162
165
161

Relative
purchas-
ing
power of
farmers’
nraoducts

85
69
74
79
83
89
85
82
92

In 1917 the drop in the business men’s prices in relation to farm products was
when the liberal government during the World War took direct control of price
regulation (food control act) and held the wholesale prices at the levels decided
apon. . }

After the close of the war the outlook was for falling prices—a falling price level
and heavy losses by the business interests—and President Wilson by proclamation
from time to time removed the governmental control of prices. Then unex:
pectedly the Federal Reserve Board changed its policy of deflation to inflation,
February, 1919; and other countries did likewise to increase profits in business
and thus supply employment for the armies about to be disbanded. And the
organized business interests were by the Government permitted to violate the
antitrust law and shove up their prices in 1919. (See the relative index.) This
condition continued year after year. After five years of severe losses to the
agriculturists there was an approach to a restored equilibrium of prices, as
pledged by the party in power, but then the National Supreme Court on June 1,
1925, by a vote of 6 to 3—with Chief Justice Taft in the minority—changed the
national economic policy by validating an extreme form of the trade association
of the organized business interests, and again disaster came back to the farmers
in an extreme form, and to all consumers. (See the relative index.) It resulted
in political revolution at the polls the next year, 1926. Ce.

For May, 1921, the average for farm products was down to about two-thirds
of the average for business men’s producte—the ruination of the farmers. Gradu-