Agricultural relief: Agricultural relief

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Multivolume work

Identifikator:: 1831932415

Document type:: Multivolume work

Title:: Agricultural relief

Place of publication:: Washington

Publisher:: Gov. Pr. Off.

Year of publication:: 1928

Collection:: Economics Books

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Volume

Identifikator:: 1831934884

URN:: urn:nbn:de:zbw-retromon-232132

Document type:: Volume

Title:: Agricultural relief

Volume count:: Pt. 6

Place of publication:: Washington

Publisher:: Gov. Pr. Off.

Year of publication:: 1928

Scope:: III S., S. 429 - 520

Digitisation:: 2022

Collection:: Economics Books

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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, 86160—28—8ER E. PT 8—— 173

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