AGRICULTURAL RELIEF

529

Mr. CLarRkE. Purely psychological and not economic?

Mr. KixcaeLOE. The point I tried a while ago: You said you
were of the opinion that if this board was properly created and
properly financed it would eventually be of assistance to the farmer.

Mr. ANDERSON. Yes.

Mr. KincHeLoE. And then, if I understood you, you undertook
to draw somewhat of a comparison with the reserve board. The
point I had in mind was this: Of course, the purpose of the Federal
reserve act was to mobilize and stabilize and conserve credit?

Mr. ANDERSON. Yes.

Mr. KincueLok. I understand what you are trying to get at here,
not to do that for the farmer so much as to take care of the surplus?

Mr. AnpErsoN. That is true, but in the course of taking care of
that surplus you are attempting one of two things, either to stabilize
his price over a period of years by the orderly control and marketing
of the surplus, or to stimulate that price above the level which that
surplus will economically bring in the market.

My objection to the whole procedure is that the theory upon which
it has been predicated is the stimulation of the price to domestic
consumers above the level which the economic relation of supply and
demand would justify.

Mr. KiNcHELOE. You answer, In response to a question by Mr.
Andresen—and I want to say right here I am anxious to get your
idea about it, because I am frank to say I have great respect for your
opinions about these matters, because of your years of experience
here and natural ability—you said in response to his question that
you thought that a board with sufficient financing could be of assist-
ance to the farmer. Of course, if I understand your position, you
are against an equalization fee, as you have always been; I presume
that 1s true?

Mr. ANDERSON. Yes.

Mr. KincaeLoE. Here is what is in my mind, when you eliminate
the equalization fee, as I said in my speech, when I supported the
bill, I do not know whether it is constitutional and my research as a
lawyer found so few cases in any wise parallel to this proposition
that I could not convince my own mind about it; and I am still not
convinced but I resolved the doubt in favor of the farmer. But I am
convinced of this fact, that if there is any virtue in the equalization
fee at all that it will come nearer preventing overproduction than
anything that has ever been offered.

Now, what I wanted to ask you is that if you have this board and
just simply give them -the funds to take care of the surplus, how in
your opinion could they keep down overproduction in this country,
when we have already raised a surplus of practically every basic
product in the country?

Mr. ANDERSON. You would not get complete stabilization over a
period of years, that is, one price for a period of years. Your price
level would have to move as it does now, depending upon supply and
demand but fluctuation could be ironed out to some extent and
abnormal surpluses prevented from unduly depressing the price.
It makes a difference as to the point at which your stabilization 1s
placed. It is one thing to stabilize your price on the basis of an
economic level representing your present and prospective expectations
as to the total world crop or vour total domestic crop, and quite