ÆäÀÌÁö À̹ÌÁö
PDF
ePub

pork. It seems strange to have an insistent demand for the continuation of ceilings at the very time that another department of the Government is buying pork in substantial quantities to prevent the market going below the 90 percent of parity to which all basic commodities are entitled to price support. It would appear that the administration is riding in both directions at the same time so far as pork is concerned.

PRICE CONTROLS ON A NUISANCE BASIS

We want to call attention to a situation in North Dakota where the administration of OPS has degenerated to a strictly nuisance basis. There is only one central livestock market in that State, located at West Fargo, which is a posted market under the superivsion of the Packers and Stockyards Administration. Last August the Packers and Stockyards Administration approved an increase in the fee for brand inspection at that point from 12 cents to 15 cents per head. There are quite a number of smaller auction markets throughout the State, some of which are large enough and eligible to being posted by the Packers and Stockyards Administration, but they have not been posted because of the lack of funds to service additional posted markets. They remain, therefore, under the supervison of a State brand commission and this commission has granted the same increase from 12 cents to 15 cents per head. The OPS in that State has brought suit against the North Dakota Stockmen's Association, which is in charge of the brand inspection work at all markets in the State, and also against the State brand commission citing it for the increase of 3 cents per head without the permission of OPS.

It seems ridiculous that the OPS, representing the Federal Government, should permit the increase made by another agency of the Federal Government but at the same time attempt to take jurisdiction and deny the increase being made by a State agency on markets not presumed to be operating in interstate commerce under the jurisdiction of the Packers and Stockyards Act.

There is ho possible way in which this 3 cents increase in charges could be passed on to the consumer. It must be paid by the shippers who do not fix the price of their own commodity but who must of necessity accept the market price, whatever it may be.

SECTION 104

At the annual convention in January the American National Cattlemen's Association also adopted the following resolution:

"Whereas section 104 of the Defense Production Act of 1951 is designed to protect the domestic production of dairy products and fats and oils against damaging imports; therefore be it

"Resolved, That we urge retention of this provision if the control legislation is extended."

The need for the protection afforded by section 104 is quite obvious when it is considered that tallow prices have declined from about 17 cents a year ago to less than 6 cents now. We do not believe the interests of the producers of one commodity should be sacrificed to stimulate foreign trade for the producers of some other commodity. We believe American industry should be protected from damage due to imports.

SUSPENSION OF CONTROLS

A good deal of publicity has been given to the fact that OPS has not decontrolled but temporarily suspended from control certain items. Included among

these are cattle hides and kip skins. It is commonly assumed that this is a major step toward decontrol but the facts appear to show otherwise. In the first place, when price controls were first established on hides the power to control both exports and domestic allocations was likewise invoked. Through the unwise and inequitable working of this policy, hides were allowed to pile up in this country and the market became demoralized. The next step was to lower the ceiling down to approximately the new level of prices. Now, it is stated in the suspension order that price controls on hides will remain in suspension unless the price gets back to 80 percent of the lowered ceilings when controls again would to into force. Of what possible advantage is suspension of ceilings under these conditions?

In the case of beef, temporary suspension would not work at all. In order to maintain ceilings on the different grades of beef, it is necessary that ail beef sold shall be graded. The present grading staff of some 600 men is conceded to be

the most efficient that has ever functioned in that capacity, but this staff cannot be disbanded and put back in business every few weeks without possible fluctuations of the beef market. The only satisfactory solution of the beef price control business is to decontrol and everything points to the wisdom and necessity of doing that very thing.

LACK OF WAGE CONTROL

Title IV of the Defense Production Act covers stabilization of prices and wages. In view of the fact that wage controls seem to have been practically abandoned in recent weeks, with the Wage Stabilization Board and the President himself using their efforts to push wages up, it is only fair that the attempt at price stabilization should likewise be abandoned. The 26-cent award to the steel unions made by the Wage Stabilization Board with the backing of the President was far beyond the fondest dreams of the steel union itself. It is mere pretense to try to say that this 26-cent advance comes within the pattern of the stabilization policy of the Government.

It should not be forgotten that an election is in the offing and the country just simply will not stand for misinterpretation and abuse of the Defense Production Act in this fashion. If Congress will not correct the inequities being promulgated by OPS and the Wage Stabilization Board, then it will be up to the voters to do the job.

PRICES DOWN-COSTS UP

The attached tables, marked "Exhibit A" and "Exhibit B," show the prices of retail and wholesale cuts of meat and of live animals at Chicago by months since June 1951. You will note that the price of beef cattle, Choice grade, as shown by exhibit A has stayed fairly constant, that there has been a sharp decline in the price of lamb at retail and likewise in pork at retail. Exhibit B shows the retail and wholesale prices of meat and prices of live animals at Chicago by months starting with June 1951 to date. This table again shows that the Choice grades of steers have declined only slightly from the ceiling prices put into effect last spring, but that when you get to the lower grades, particularly Utility steers and Commercial, Utility, and Cutter and Canner Cows, the drop is much greater. This table also reflects the sharp drop in the prices of barrows and gilts and in the price of Choice and Prime lambs.

At the same time that these declines have been registered in live animals and dressed meat prices, there has been a steady increase in the price of practically every single item of farm and ranch service and expense, with the administration itself helping to push wage costs up. The cost of producing meat and other foods may be higher this year than ever, perhaps 5 or 6 percent higher, says the Department of Agriculture. Wages may climb another 5 to 10 percent; fees are expected to stay high; real-estate taxes may be up 3 to 4 percent; machinery, buildings, and fences are expected to stay where they are; fertilizer may go up 4 to 5 percent.

CONCLUSION

Everything we have mentioned and many other factors which could be mentioned indicate that the need, if there ever was need, for price controls on live animals and meats has disappeared and that in view of the action being taken on wages with the administration's blessing, fair play demands that the same treatment be accorded our industry as is being given to labor.

Under these circumstances, we urge that titles IV and V of the Defense Production Act, as amended, be not renewed if there is extension of any part of the act on June 30, 1952.

EXHIBIT A.-Retail and wholesale prices of meat and prices of live animals at Chicago, by months, June 1951 to date

[blocks in formation]

EXHIBIT B.-Retail and wholesale prices of meat and prices of live animals at Chicago, by months, June 1951 to date

[blocks in formation]

DEFENSE PRODUCTION ACT AMENDMENTS OF 1952

MONDAY, MAY 19, 1952

HOUSE OF REPRESENTATIVES,

COMMITTEE ON BANKING AND CURRENCY,

Washington, D. C.

The committee met at 10 o'clock a. m., pursuant to adjournment, the Honorable Brent Spence, chairman of the committee, presiding.

Present: Chairman Spence (presiding), Messrs. Brown, Patman, Rains, O'Brien, Bolling, Burton, Fugate, Barrett, Hays, Wolcott, Talle, Cole, Hull, Nicholson, and Betts.

The CHAIRMAN. The committee will be in order.

We will resume the hearings on the Defense Production Act.
The clerk will call the first witness.

The CLERK. The first witness is Mr. Adin M. Downer, representing the Veterans of Foreign Wars.

STATEMENT OF ADIN M. DOWNER, DIRECTOR, NATIONAL LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS

Mr. DOWNER. My name is Adin M. Downer, representing the Veterans of Foreign Wars. I am grateful for the opportunity to appear before your committee as the spokesman for the Veterans of Foreign Wars.

The CHAIRMAN. We are always glad to have the views of the Veterans of Foreign Wars. They are entitled to be heard.

Mr. DOWNER. Thank you, sir.

The last National Encampment of the Veterans of Foreign Wars held in New York City, August 26-31, 1951, adopted a resolution favoring the continuance of price and wage controls. Conditions have changed since that time and I am unwilling to assume that action taken in the light of former conditions would be reaffirmed under the conditions now existing. I shall, therefore, confine my remarks to the provisions of this bill which relate to credit restrictions as they affect the veterans' home loan program.

The Servicemen's Readjustment Act of 1944 recognized the hardship that would be imposed upon returning veterans of World War II if they were not given legislative assistance in the acquisition of new homes. The assistance given the veteran home hunter under this act has proved socially sound and has proven surprisingly sound from the business or financial aspect. This is attested by the fact that the delinquency rate in VA-direct loans is less than half the delinquency rate of home loans held by large private investors. The claims paid on VA-guaranteed loans is less than one-half of 1 percent. This remarkable payment record by our Nation's veterans evidences

their responsibility and the soundness of making homes available to them without a down-payment requirement.

In view of this experience, we can see no reason for the provisions of section 104(d) of this bill, which would eliminate that part of the Defense Production Act which sets certain down-payment limits for housing guaranteed by the Veterans' Administration pursuant to the Servicemen's Readjustment Act. The result of eliminating this proviso would be to restore to the Federal Reserve Board and the Housing and Home Finance Agency discretionary authority with respect to down payments on VA-guaranteed homes.

You will recall that the original Defense Production Act gave these agencies discretionary authority to set minimum down payments and required that veterans preference accorded veterans under then existing law be preserved. However, the credit restrictions as subsequently promulgated violated this mandate of the Congress. You will recall the testimony before this committee less than 1 year ago during the course of which we submitted statistical evidence, which has never been contradicted, and that the veterans, particularly those who were unable to purchase homes above $12,000 were bearing the major brunt of the credit restriction program.

This committee and the Congress agreed with the Veterans of Foreign Wars on this point, and as a result a proviso was inserted in section 605, placing a limit upon the percentage of the minimum down payment which could be required for VA-guaranteed home loans. These were specifically not more than 4 percent on homes the sales price of which did not exceed $7,000; not more than 6 percent where the price did not exceed $10,000, and not more than 8 percent where the price did not exceed $12,000. This sufficiently lowered the required down payments to bring homes within the reach of many low- and middle-income veterans.

Conditions have materially improved since September 1, 1951, the date of relaxation of the credit restrictions as above described. This is evidenced by many factors, including the recent action of the Federal Reserve Board in suspending regulation W. Consequently, we are at a loss to understand why any consideration should be given at this time to increasing the restrictions applicable to the veterans' home loan program. The last National Encampment of the Veterans of Foreign Wars of the United States, held in New York City, August 26-31, 1951, adopted a resolution urging the Congress to abolish all credit restrictions on the purchase of new and used homes by veterans. We believe that changed conditions justify the Congress in taking such action at this time. In no other way can the assistance Congress intended to give home hunting veterans under the Servicemen's Readjustment Act be reinstated.

That concludes my statement, Mr. Chairman.

The CHAIRMAN. Are there any questions?

Mr. RAINS. Mr. Chairman.

The CHAIRMAN. Mr. Rains.

Mr. RAINS. What you are talking about is the removal of what we know as regulation X; is that right?

Mr. DOWNER. Yes, sir.

Mr. RAINS. Did you see a statement the other day-I believe it was by Mr. Foley-well, I will say that the statement seemed to point toward agreement with your statement in this matter.

« ÀÌÀü°è¼Ó »