"Compelling Circumstances"

"I am surprised," said harassed Secretary of Agriculture Henry A. Wallace last week, "that some people would say we are back to 1932. . . ." Then, after repeating the complaint that some newspapers were "creating a wrong impression," he issued a batch of figures to show how U. S. farmers are faring under the new AAA: estimated 1938 farm income (including Government largess) is $7,500,000,000, down 12.7% from 1937--but 74% above 1932.

Few days later, Henry Wallace set out for Ste. Anne-de-Bellevue, Que., supposedly to detail a highly publicized wheat subsidy plan before an international agriculture conference. But the economists heard nothing the London Wheat Conference had not heard six weeks before: 1) to keep its "fair" share of the world agricultural business, the U. S. is prepared to take "aggressive action"; 2) the world would be a whole lot better if every nation had a crop-control program. Export subsidies Secretary Wallace blithely dismissed as a "type of economic warfare," which may be justified "in certain emergencies" under "exceptional and compelling circumstances."

Meanwhile, with no explanation except that it was following the Canadian subsidy program, AAA started Federal Surplus Commodities Corp. on a wheat-buying spree. FSCC will buy 100,000,000 bu. around prevailing prices (62-c-), dump it abroad for whatever it will bring. Estimated cost: $25,000,000. Although Chicago prices shot up 3-c- a bu. as short holders ran for cover, likely ultimate effect of the dumping program will be to depress already-depressed world prices.

Destiny of the exported wheat is still undetermined, though presumably it will be sold in China, Great Britain, The Netherlands. Likewise uncertain is the method of making the program jibe with Secretary of State Hull's reciprocal trade agreements. Asked at his press conference about Henry Wallace's statement that differences between the two departments had been ironed out, Cordell Hull replied curtly: "I think comment from one Cabinet member is sufficient. . . ."

Wheat made the most news last week, but the Government was busy on many another troubled sector on the agricultural front:

P: Cotton loans were fixed on an 8.3-c- base, near the minimum permitted under the law; Commodity Credit Corp. set aside $100,000,000 to finance the lending.

P: Loans on the 1937 corn crop were upped from 50 to 57-c- a bu.

P: Commodity Credit Corp. said it would lend California prune growers 1 1/2-c- a lb. on their surpluses--$8,745,000 all together.

P: AAA lent $7,250,000 to Dairy Products Marketing Association to buy and store 25,000,000 lb. of surplus butter. Few days later a sharp break in butter futures to 22 3/4-c-, lowest in four years, pointed up the seriousness of the situation.

P: Secretary Wallace signed a Federal-State milk marketing agreement which 39,000 dairymen had approved 6-to-1. Thus the world's largest milk market (6,500,000 qt. a day), New York, became the 22nd district to get such a plan. Marketing Specialist Erskine Harmon was appointed Federal administrator to police the New York industry and maintain the established minimum price paid to farmers (base: $2.45 a cwt.). In drafting the New York program, designed to settle the longtime controversy between farmers and milk distributors in New York City's milk-shed, everyone but distributors (Borden, Sheffield and 698 others) had a voice; prices these distributors must pay farmers are 100% higher under the agreement.

Last week the U. S. Government did the following for and to U. S. Business:

P: Began field work for the Monopoly Investigating Committee. Armed with subpoenas which they were instructed not to use unless necessary, SEC agents started looking into insurance investment practices (TIME, July 25), and Department of Justice agents delved into a study of patents. Two pronouncements this year by President Roosevelt, plus recommendations by Solicitor General Jackson and ex-Assistant Secretary of State Berle, indicate that the 100-year-old patent laws are due for an overhauling--if evidence confirms such suspicions as that big corporations suppress patents to block new products.

P: Jumped on the malt and veneer container industries. The Federal Trade Commission issued complaints against the United States Maltsters Assn., American Veneer Package Assn. Inc., Eastern Package Assn., Southern Package Assn. Inc., Northeastern Package Assn., Midwest Package Assn., and the members of each. Charge: price-fixing in the two industries to create monopolies.

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