ÆäÀÌÁö À̹ÌÁö
PDF
ePub

corn are fixed at a relationship favorable to hogs, management can only expand hog production in response to this fixed price until suddenly the country runs low on feed.

Prices may be attractive for the product at the time they are frozen, but they don't stay that way. Along comes a short crop or a changing need, and the old ceiling is no longer the right one. Changes are not made in time; it takes an administrator a long time to make up his mind that the ceiling is wrong, and still longer to correct it.

It looks like some manufacturers are being guaranteed a reasonable profit. One only has to look at the corn-hog ratio to show that the hog producer is a long way from any guaranty in profit. If we are going to have to suffer the handicaps of ceilings, then we should be protected by floors. Just recently Mr. Brannan started buying pork after a long winter of a sluggish hog market that was operating far under the ceiling price for pork.

Now, at a time when pork is about to take its seasonal price rise, we finally get help in the buying of pork for school lunches, only to help create probably more disturbance in the market.

To me, it is like locking the barn after the hog has been stolen. I hope that the Democrats use this as campaign material this fall. If they do, every hog farmer in the United States will remember the price of pork last winter.

I might say that I voted for almost as many Democrats as I have Republicans in my life, and I have a good many Democratic friends back home who feel the same way about it.

Meat is a perishable product, and there must be a lot of fluctuation in the disposition of it in an orderly fashion.

In the meat business we have plenty of proof to show that any time. a meat product has started pushing ceilings, controls lost their effectiveness and has only stimulated tie-in sales, upgrading, short weighing, and false billing, with the result that the long-time legitimate operator is gradually squeezed out of business. This was shown when ceilings were put on cattle. This kind of operation has never been of any benefit to the housewife.

One of the silliest statements coming out of OPS is as follows:

It is anticipated, in view of the large size of the present hog population, that in future months hog prices will decline substantially below current price levels. Consideration will be given to the question of whether to issue revised wholesale pork ceilings more accurately reflecting the condition in the live-hog market if the anticipated decline in live-hog prices occurs. These revised prices would, of course, be subject to automatic adjustment upward to the parity level to permit packers to pay parity prices when the market price of live hogs starts to climb.

The only benefit I could have seen out of this would have been for creating jobs for quite a few defeated politicians within the ranks of the OPS. Certainly the folly on this kind of thinking needs no further explanation.

The OPS waved a red flag in front of meat retailers before ceiling prices were placed upon pork. Prices rose in order to establish a favorable ceiling. This winter and spring I have seen No. 1 bacon, wholesaling at 43 cents, selling in stores at 69 cents. A 26-cent mark-up is more than the producer makes on the whole hog this winter. In defense of the retailer, with the mass of regulations he must cope with, I would not blame him for locking up shop and going fishing.

I would like to quote from Prof. Don Paarlberg, of Purdue University, as follows:

First, that the real problem is maximum production of the appropriate goods and services, not inflation control. The beneficial effects of inflation have been much underrated, in my opinion, and the unfavorable effects much exaggerated.

Secondly, if a price freeze really comes-and what we've had now is not a real freeze but merely a cool spell-then we become a Nation of lawbreakers, wheedlers, scroungers, and special pleaders. I am not saying that direct controls will not work; I am merely saying that the cost of making them work might well be greater than the questionable benefits derived therefrom and greater than a free people would long tolerate.

Thirdly, if inflation control is desired, there are better ways of accomplishing this objective than price freezes; namely, heavy taxation and credit control. We need not burn down the house to roast the pig.

There is an intriguing phrase called "The point of no return." An aviator starts out on a mission with a certain supply of gasoline, and after a time may reach a point where he doesn't have enough gasoline to return to the base. This is the point of no return. Every flyer thinks carefully before he passes that point.

There can be, I think, a point of no return in economic affairs. We may start off on some mission not too well conceived, and bumble about, issuing directives, patching the leaks, and patching the patches until we pass the point of no return. Affairs then have gone so far from equilibrium and the shock of return would be so great that we lack whatever it takes to slough off the controls.

If we should pass the point of no return after a full appraisal of the advantages and disadvantages of our new position as compared with our old base, then we need have no grief. I believe in democracy and have immense faith in the soundness of informed public opinion.

But, if we embark on some program after considering only the short-run implications and then find ourselves hedged about with unsuspected evils so that we wish to return to our base but can't, that is a different matter. I feel strongly the need for economists to tell the public what's inside this handsome package labeled "direct controls." My guess is that, if we went in for a full system of price controls and stayed with it for 10 years, we would have passed the point of no return. Price freedom is the key to all other economic freedoms.

If controls are removed and there is any increase in price, it must be attributed to two things: (1) Seasonal price rise. If controls are taken off by the 1st of July, the public should be informed that it is a season when meat prices are normally rising and that any similar rise should be explained and not used as propaganda medium for this continuance. See chart 2. (2) Any further rise in meat prices should be charged to controls that have been placed upon meats during the past which discouraged normal production.

In conclusion, there is nothing about the price of most things today outside of a few critical materials that would start to encourage the extending of controls. In fact, to pay our national debt we better be worrying about keeping prices somewhere near where they are because we can never pay off our national debt and arm against our aggressors on high-priced dollars.

Last, we can see no need for the wasting of manpower in operating an agency to do a job that the housewife has done for years and has been glad to do it and has never charged our country one red cent to do.

That is far cheaper than the one-quarter million dollars a day spent to operate the OPS which is not in the same race with the housewife when it comes to doing the same job. She can do a far better job of policing prices than anybody else. She has backed away from buying potatoes at seed-potato prices and is substituting other things for potatoes. She has done it with meat in the past when it became too high, and there is nothing that will bring the

price of meat or any commodity in line quicker than when she goes on a buying strike.

I thank you for the opportunity of being able to express these views, and I can assure you that you would have to hunt to find a hog man or any other kind of livestock man in any State who thinks any different than these views.

Mr. Chairman, if I may, I would like to submit the two charts appended to my statement for inclusion in the record.

Mr. BROWN (presiding). Without objection, that may be done. (The information appears on the following pages.)

Mr. BARRETT (presiding). The chairman advised me that we may be called to the floor very shortly, and we want to try to gage the time in order to give everyone a chance to at least get their remarks in the record.

Any questions?

Mr. TALLE. Mr. Chairman.

Mr. BARRETT. Dr. Talle.

Mr. TALLE. I want to say again that we are very happy to have you here. I know that you are fully capable of presenting the facts as they really are and you have done in your testimony.

Mr. BARRETT. If there are no further questions, you may stand aside. Thank you very much.

The clerk will call the next witness.

The CLERK. The next witness is Mr. L. Blaine Liljenquist, Western States Meat Packers Association, Inc.

STATEMENT OF L. BLAINE LILJENQUIST, ON BEHALF OF THE WESTERN STATES MEAT PACKERS ASSOCIATION, INC.

Mr. BARRETT. You may proceed as you wish, Mr. Liljenquist. Mr. LILJENQUIST. My name is L. Blaine Liljenquist, Washington representative of the Western States Meat Packers Association, Inc. The members of our association are independent meat packers and processors in the Rocky Mountain and Pacific Coast States. There are more than 400 companies in the association.

We appreciate this opportunity to appear before you to state our belief that price and wage controls are ineffectual, unworkable, and contrary to the interest of the people, and that title IV, containing the authority for price, wage, and rationing controls, should be deleted from the Defense Production Act of 1950.

The stated purpose of the Defense Production Act is to achieve all-out production of goods and to check inflation. With respect to the livestock and meat industry, it has been demonstrated that price controls disrupt the industry, hamper production, and fail to remedy the real causes of inflation.

Efforts to control prices are as old as recorded history. There is no case on record where they have succeeded for any length of time against inflationary factors. The code of Hammurabi, promulgated over 2000 B. C., fixed prices, wages, interest rates, and fees without success. Nation after nation has tried it and likewise failed.

Market at Lighter Weights---When Adequately Finished

Which Pork Chop Do You Prefer-Which Can We Sell the Most of?

[graphic][merged small][ocr errors][merged small][merged small][graphic][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small]

Study Chart on Back Cover for Differences of Fat at Different Weights.

[subsumed][subsumed][subsumed][merged small][merged small][graphic][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][merged small][subsumed][subsumed][subsumed][merged small][merged small][merged small][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed]

SOURCE: National Provisioner Daily Market Service. Prices are for Thursday, except for holidays.
LIVE HOG PRICES are those reported by the United States Department of Agriculture.
PORK PRODUCTS PRICES are an average of the following items: skinned hams, picnics, bellies, loins,
Boston butts and lard, weighted in relation to the proportion that each item makes up of the hog carcass.

prepared by American Meat Institute

« ÀÌÀü°è¼Ó »