Mr. JOHNSTON. I do not know what the exact figures are, but it is. appreciable.

Senator SCHOEPPEL. We do not do it by roll-backs.

Mr. JOHNSTON. The farmers are not the only ones that have been rolled back. We have rolled back a lot of other items not in the

farm field.

Senator SCHOEPPEL. But when we take a look at the record of their increases, they are not going to be hurt anything like these 6,000,000 farmers in proportionate percentages.

Mr. JOHNSTON. If you occupied my office a few days and listened to the businessmen coming in and saying they are being ruined, I am sure you would agree others are being hurt, too. In many of these fields, in the business field, we are taking the price freeze of January and rolling back from there. Meat prices we have only rolled back to the January 26 level. We have not rolled them back beyond that. We are only rolling beef back now to when prices were frozen on January 26 but, in manufacturing commodities, we are taking the January 26 level and rolling back from there.

Senator SCHOEPPEL. Which was a very high level,

Mr. JOHNSTON. Sure it was high, and so is meat high, Senator; truthfully, you know that.

Senator SCHOEPPEL. It takes you a year to even think in terms of putting it on the table, and manufactured product you can do in 60 days, if you have an efficient plant.

Mr. JOHNSTON. Senator, there are certain machines, and that is. what the machine industry is complaining about, that take 2 or 3. years to make, and we are holding them to the price of a year or more ago, certain types of presses, turbines, that take 2 or 3 years to make. You do not turn out all manufactured goods in 60 to 90 days any more than you turn a finished beef.

Senator BRICKER. You mentioned the public-utility situation, many of them uncontrolled. Mr. Gibson I think promised us a list of those. Do you have a list of the uncontrolled utilities in the country?

The CHAIRMAN. Would you ask Mr. Gibson to send them down. I know he intends to do it. He told us he would.

Mr. WHITEHAIR. The last governmental report and survey came from the Federal Power Commission in 1948, and there has been no survey made on utilities and common carriers since that time. We have that material here.

The CHAIRMAN. How many are there, how many States are there where they are not controlled?

Mr. WHITEHAIR. They vary so, Senator, it is impossible to answer that question, from trucks in certain areas, utility plants in other areas. It depends largely on the regulatory bodies within the 48 States. The CHAIRMAN. Do you have that report with you?

Mr. WHITEHAIR. I do; yes.

The CHAIRMAN. Without objection, that will be made a part of the record of these hearings.

(The report referred to will be found on p. 571.)

Senator MOODY. I would like to point out it is perfectly true that the standard of living in the United States has been rising, happily ; I am sure you agree.

Senator SCHOEPPEL. I am for it.

83762-51-pt. 1——36

Senator MOODY. I might point out that the income of the farm community, also happily, has been up more than a hundred percent since 1941. The figures here show that in 1941 the monthly average income of the farmer was $981,000,000, and in March of 1951 it was $2,056,000,000, so I just want to point out that all segments of the community have been sharing in this increased prosperity.

Senator SCHOEPPEL. Let me say to the Senator from Michigan that he take it from 1947 to 1950. Farm income in 1947, $30 billion, in 1944, $21 billion, and in 1950, $28 billion.

Senator MOODY. I thought the base on wages was the decade base, and I wanted to take the same base on farmers.

Senator SCHOEPPEL. We took the ratio of percentages in there, but it looks changed to me, from 1947 to 1950 the farm income in billions has been down, and we are only in 1951 now.

Mr. JOHNSTON. The farm income this year will probably be in the neighborhood of $15 to $16 billion.

Senator SCHOEPPEL. I hope you are correct.

Mr. JOHNSTON. We hope we are, too.

Senator SCHOEPPEL. Without too many roll-backs we might get there.

Senator MOODY. I might point out to the Senator that our system is increasing production and increasing standards of living in both the country and the city, it seems to me. I hope you agree with that.

Senator SCHOEPPEL. It is as it should be, and do not for a moment think that I have not been up front pushing for it. I have lived on these farms, and I know what that means. I am for it. They have got some more steps to go up, and I do not want them thrown across the railroad tracks.

Senator MooDY. Neither do I.

Mr. JOHNSTON. To take up this next chart, earnings of production workers in manufacturing industries. You will notice they started out at a base of 100 in 1950. You will notice how they went up before Korea, up more rapidly since, and leveled off since the freeze. The same is true with average hourly earnings which have leveled off since the freeze.

This shows the changes in basic wage rates and price affected. The average increase in cents per hour in the first quarter of 1950 was praetically negligible, much more in the second quarter, increased again in the third quarter, and higher in the fourth, and the number of employees affected was greater in each quarter.

The CHAIRMAN. You have no changes recommended as to that? Mr. JOHNSTON. No, sir.

Next in these charts is this on showing prices paid and received by farmers and the parity ratio. You will notice before Korea, that the prices received, starting here at about 237, went up slightly before Korea, then went up precipitously, until the Chinese intervention, and then here they are at about 318, slightly down since the wage and price freeze.

The CHAIRMAN. Is that dollar income, or how do you figure that? Is that the total dollar income, or the price per pound?

Mr. JOHNSTON. It is the index of prices received on all agricultural commodities.

The CHAIRMAN. What commodities were they?

Mr. JOHNSTON. All commodities, all that are in the index.

The CHAIRMAN. You have your parity ratio. I was curious to know if it was the major crops on which parity is based, or if it took in oranges and limes.

Mr. JOHNSTON. It includes everything, oranges and limes.

The CHAIRMAN. That is per pound, or per bushel, or however, you price it?

Mr. JOHNSTON. That is right.

The CHAIRMAN. Of course one reason for the increase, as you know, has been the shortage of various crops this year.

Mr. JOHNSTON. That is true.

The CHAIRMAN. Unfortunately the Department of Agricultural again estimates a shortage in wheat. They estimate another shortage in the corn crop, total production, so the price has been up not mainly because of Korea, but because of the shortage in the crop. I want the record to show that.

Mr. JOHNSTON. The important fact of this chart is that the prices the farmer paid relatively were higher than the prices he received in 1950, but that trend reversed

Senator BRICKER. Are they showing any stabilization?

Mr. JOHNSTON. Yes; they are, but today the prices the farmer receives are relatively much higher than the prices he pays.

The CHAIRMAN. Mr. Johnston, that is absolutely right, and I know some things are much too high. I am not here to say they are not, but again the shortages on the farm have made it impossible for the farmer to have as much to sell. His total dollar income is not as great as the price per pound or price per bushel, and that is the sad part about it. That is all I was trying to make clear.

Mr. JOHNSTON. There is no question about that.

Senator SCHOEPPEL. Mr. Johnston, I note your last line there, parity ratio.

Mr. JOHNSTON. Yes, sir.

Senator SCHOEPPEL. You will note it is on the down slide, not too drastic, but it is starting down. We do not know how far that is going to be projected. Now, in all fairness to those segments of our economy involved in that, are you going to let that continue to slide on down, or do you think it ought to be leveled off on some kind of practical ceiling basis without, say, setting parity at a seasonal level and letting it slide back on down?

Mr. JOHNSTON. Parity depends of course on the prices-the farmer's prices for things he buys. The parity ratio shows the relationship between those costs and the prices of the things he sells.

Senator SCHOEPPEL. If we freeze it now, the freezing of parity? Mr. JOHNSTON. We are not freezing it. I do not like that word "freeze" in connection with our proposal on parity.

Senator SCHOEPPEL. But that is what is advocated here. I do not like it, either.

Mr. JOHNSTON. I would like to call it stability of parity for individual crops for one crop season each; if you call it stability, yes-if we can get stability in parity by getting stability on the prices the farmer pays for things at the same time the farmer gets a good price for his product, he is much better off and the parity ratio would reflect that.

Senator BRICKER. There is one thing about this I do not understand, parity ratio is going down, and parity ratio is determined upon prices

bid to the farmer in a selective area. How do you get parity ratio going down with prices paid by the farmer going up in the same period?

Mr. JOHNSTON. Mr. Johnson will answer that.

Mr. JOHNSON. The parity ratio is simply a reflection of the relationship between these two lines, and when the prices he received went down a little bit, the prices he paid continued up, then the ratio itself went down. The fact that this goes down reflects a less favorable position.

Mr. JOHNSTON. This next, I think, is a significant chart. This is corporate profits before and after taxes by quarters.

The CHAIRMAN. Let me ask a question. We have a meeting here at 2:30 with Mr. DiSalle. It was suggested by Senator Bricker that we have an executive session about the question of these commodities to be subsidized.

Would you not want to talk to Mr. Johnston at a later date?
Senator BRICKER. It is not necessary to do it today.

The CHAIRMAN. We will have a meeting at Mr. Johnston's convenience in the future.

Mr. JOHNSTON. You call me at any time, and I will be delighted to come down and talk to you.

Senator MOODY. I do have to leave, and I want to compliment Mr. Johnston on his usual superb job.

Mr. JOHNSTON. Thank you, Senator Moody.

Corporate profits held steady after taxes in 1949, as you will notice. Taxes were also relatively steady. In 1950, corporate profits in the first quarter were about the same as they were in the second quarter of 1949, then they went up in the next quarter of 1950, the second quarter. The third quarter they were higher yet, and in the fourth quarter of 1950 I believe they hit an all-time high, and this shows the amount of taxes taken.

Now, this bar for the first quarter in 1951 is significant, because it shows corporate profit after taxes considerably higher than they were in the first quarter of 1950, even after the excess-profits tax, and so forth. They are, as I remember the figures, approximately 30 percent higher than they were in 1950.

The CHAIRMAN. Of course this committee has no legislation concerning this. That is a tax matter for the Finance Committee to handle.

Mr. JOHNSTON. At the same time this shows a tremendous increase on tax take on corporations in the first quarter, a tremendous take. Now this next chart shows Government obligations, and expenditures for national defense. You will notice-

The CHAIRMAN. You do not have a table showing the national defense and all Government agencies so that we can compare them, do you? Federal Government obligations and expenditures for national defense-you do not have the other expenditures of the Government? Mr. JOHNSTON. No, sir; this is just on national defense. You will notice the expenditures in 1950 were less than obligations, and only about $12 billion altogether. Then we show it by quarters in 1951. In the first quarter the expenditures were much less than the obligations; in the second quarter, also less; in the third quarter-you will note it is a steady line upward in the fiscal year 1951. These are the

estimates for 1951. For the whole year 1951, we anticipate spending in the neighborhood of 22 or 23 billion dollars for armament.

The CHAIRMAN. You say "armament." Do you include AEC in there?

Mr. JOHNSTON. Yes.

The CHAIRMAN. Do you include stockpiling?

Mr. JOHNSTON. Yes. You will notice in the year 1952

Senator BRICKER. Is there anything included in there in the aid to European countries for armament?

Mr. JOHNSTON. Yes; the whole program is included. The $5 billion is included.

The CHAIRMAN. That takes in everything, then?

Mr. JOHNSTON. That is right.

For the fiscal year 1951, you will see, it is about $50,000,000,000, appreciably over this fiscal year.

This chart shows personal income as compared to available consumer goods and services. You will notice that personal income has gone up and will continue to go up appreciably; I do not try to follow this through. You can follow it on your own charts. This is the future in 1951. We have to project it to what we think it will be, but we are projecting it only for the rest of 1951. Taxes we have projected, disposable income after taxes, and this is for consumer goods and services. You will notice they have gone up appreciably but will level off now. In other words, there will not be more consumer goods and services, although there will be this vast additional income.

I told you earlier there will be an increase in income in the neighborhood of $37 billion that will have to be made up in taxes, savings, and so on, for we won't get additional production of civilian goods, to soak it up.

Senator BRICKER. One question at this point, Mr. Johnston.

Did I understand you in the beginning to say that in the 1,256 pending cases that management and labor had agreed on wage increases which pierced the 10-percent wage increase formula?

Mr. JOHNSTON. Yes, sir; there are more than that now. I think there are about 1,500 cases before the Stabilization Board in which management and labor have agreed on a settlement in excess of the wage formula.

Senator BRICKER. That was the thing that prompted my question to you a moment ago about the tripartite board.

Mr. JOHNSTON. That finishes the chart presentation.

The CHAIRMAN. Mr. Johnston, I do not believe I have any further questions.

Mr. JOHNSTON. Mr. Chairman, if I might read into the record our idea in the Economic Stabilization Agency of what the amendment on parity does-it is my opinion this amendment does not freeze parity prices or in any manner interfere with the full operation of the parity concept. Its only purpose is to permit a ceiling price to remain stable throughout the marketing season rather than be subject to a monthly fluctuation. The advantage is purely an administrative one to enable OPS to have posted dollar-and-cents ceiling prices which would not have to be changed on a monthly basis every time parity fluctuated. However, as parity escalates upward the full rise would be permitted in setting the ceiling for a subsequent marketing season. This is the same technique now employed by the