EXHIBIT C.-European quotations as a percent of United States quotations

EXHIBIT D.-Comparison of foreign and United States prices

[Two 2,500-KVA hydraulic generators; two 2,500-KVA transformers; two 150-KVA transformers] MAYURAKSAI, W. BENGAL, INDIA, 1952

82.5 105

74

75

THREE 9,000-KVA HYDRAULIC GENERATORS-TUNGABHADA, MADRAS, INDIA, 1952

TWO 10,000-KW UNIT POWER PLANTS-CANDIOTA POWERPLANT, STATE OF

RIO GRANDE, BRAZIL, 1952

98

109

174

109

123

146

101

EXHIBIT D.-Comparison of foreign and United States prices-Continued TWO 25,000-KVA GENERATORS AND TRANSFORMERS, CANASTRA, BRAZIL, 1952

"Schneider" (French).

ONE 30,000-KW TURBO GENERATOR-TACOA STATION, VENEZUELA, 1953

United States company.

100 | Brown Boveri (Swiss)..
70 Siemens (German)...

Alsthom (French)..

43 Oerlikon (Swiss)...

THREE 9,333-KVA TRANSFORMERS-SAN BARTOLO, MEXICO

50,000-KVA

96

GENERATOR-IXTAPANTANGO, THIRD UNIT, MEXICO, 1950

100 Oerlikon (Swiss).

107 Elin (Austrian).

100 Brown Boveri (Swiss)..

THREE 42,800-KW GENERATORS-MIGUEL ALEMAN STATION SEPTEMBER 1953; HYDRO

United States company.

Alsthom (French)

Brown Boveri (Swiss).

Brown Boveri (Italian).

DEVELOPMENT, MEXICO

100 Brown Boveri (German).

70 Oerlikon (Swiss)..

69 Siemens (German).

70 (No British bids tabulated.)

TWO 30,000-KVA HYDRAULIC GENERATORS-CIPRESES, CHILE, 1949

10,000-KVA HYDRAULIC GENERATORS-LAXARVIEKJUN, ICELAND, 1950

United States company.

100 | Brown Boveri (Swiss)...

12-500-KW GENERATOR AND SPARE PARTS: SWITCHGEAR-WU-LAI, TAIWAN, 1952

99

100 07

FOOD SUBSIDIES IN THE UNITED KINGDOM

The purpose of this section is to examine the extent to which foreign governments subsidize low wages through maintaining artificially low costs of food for their workers. The time available has not allowed a detailed study of every country. Attention at this time is, therefore, concentrated upon food subsidies in the United Kingdom where the cost of subsidies in the postwar years has been a higher percent of total expenditures than in the other European countries with which this project is concerned. Other countries which have used price subsidies extensively, are the Netherlands, 10 Sweden, and Switzerland. France and Belgium have also made limited use of subsidies on certain basic foods.11 Moreover, the report cannot be considered complete without some comparison with the use of subsidies in the United States.

See United Nations, Statistical Yearbook, 1952 (New York: 1952), pp. 465-473.

G. M. Verrijn Stuart, "Economic Policy in the Netherlands," Lloyds Bank Review (January 1953)

37-44.

"U. S. Bureau of Labor Statistics, Wage Trends and Wage Policies, Bulletin No. 934 (1948).

KINDS OF SUBSIDIES

The food subsidies in the United Kingdom are administered by the Ministry of Food and the Agricultural Departments. They are designed to keep down the cost of food to the consumer, to improve nutrition, or to improve agricultural methods. (See table 1.) The "cost-of-living" subsidies make up the greatest part of the food subsidies. In 1950-51, the "cost-of-living" subsidies comprised 86 percent of all food subsidies.12 By 1952-53, subsidies had been reduced, and those designed to curb the rise in living costs accounted for only 66 percent of the total.

PURPOSE OF THE FOOD SUBSIDIES

The food subsidies undertook to provide important foods to consumers at low prices in order to hold down the retail price index and prevent a rise in wage demands. The various measures to prevent inflation and growing pressure for higher wages were continued after the war, not only to stabilize the domestic economy, but also to keep down the costs of goods for export. It should be noted that the purpose of the British subsidies is to reduce the price of food to the consumer in contrast with the agricultural subsidies in the United States which raise the price of agricultural products to the consumer.

Item

TABLE 1.-Estimated food subsidies, United Kingdom, 1952-53

£ Million

297.4

220.9

22.0

41.3

13. 3

22.2

25.6

39.8

20.0

2.1

13.0

4. 5

10.2

6.9

46.5

30.0

34.2

9.7

11.0

1.8

6.3

5.4

331.6

Source: "Food Subsidies, 1952-53," Ministry of Food Bulletin, No. 693 (March 14, 1953), p. 18

The food subsidies, however, were only one of the anti-inflationary measures. The expansion of exports required both that the demand for goods at home should not keep exportable goods in the domestic market and that the costs of these goods be kept down in order to compete abroad. The food subsidies were helpful only in the latter purpose-that of keeping wage costs down. An accompanying program of taxation was required to absorb the funds in the domestic market that otherwise might be used to bid for the export goods.13

Another purpose of the subsidies has been the encouragement of agricultural production at home. The assistance to agriculture reduces the amount of foreign exchange that must be used for importing food. In 1950-51, about two-thirds of the food subsidies were paid on food produced at home, although about 60 percent of the ration requirements were imported.14 The net effect on the balance of pay

13 "Subsidies in Perspective," "Cheap Food," the Economist (Mar. 8, 1952), p. 572.

13 C. R. Ross, "The Food Subsidies and the Budget," Bulletin of the Oxford University Institute Statistics, XIV, No. 3 (March 1952), pp. 79-80.

14 "Subsidies in Perspective, Cheap Food," op. cit., p. 85.

ments of the subsidies to agriculture will depend in part on whether factors are diverted to agriculture which could be used more efficiently in the production of export goods.

THE AMOUNT OF THE FOOD SUBSIDIES

The annual cost of the food subsidies rose from 1939 to 1949 and then turned downward. The following are the sums spent each year, 1939-53, by the Government for food subsidies (in millions of £ for years ending March 31):15

In the fiscal year 1948-49, the food subsidies amounted to 13 percent of the total expenditures of the Central Government, but by 1952-53 the cost of the food subsidies had declined to 6 percent of the total.16

Table 2 shows the importance in the aggregate of the food subsidies to total personal expenditures for food and to total personal expenditures for all purposes from 1946 through 1951. The food subsidies, as a percent of personal expenditures were:17

The food subsidies were highest in 1948, both in amount and in relation to total personal expenditure.18 The cost of the food subsidies in 1948 was £496 million which was 22 percent of total expenditures for food and 6 percent of total personal expenditures. Since 1948, the food subsidies have declined both in amount and in relative importance. Although the aggregate figures cannot be interpreted as showing the importance of the subsidies in the factory worker's budget, rationing and progressive taxation have kept the variation among economic classes below what might otherwise have been expected.

A survey by the Ministry of Food of family expenditures for food showed that, in 1950, the subsidies accounted for one-fifth of the food expenditures of factory workers' families. (See table 3.) More than one-half of their expenditures for food was for subsidized items. The table shows further that the percent of expenditure on subsidized foods decreases as family income increases.

Another survey of total expenditures of 41 working-class families in 1949 found that 42.4 percent of household expenditures were for food. 19 If this percentage is applied to the information regarding factory workers' expenditures for food in table 3, the conclusion can be drawn that total family expenditure for factory workers would have been about 8 percent greater in the absence of the food subsidies.

The amounts for the years 1939-40 are from Ross, op. cit., p. 78; for the years 1948-52 from United Nations Statistical Yearbook, 1952 (New York: 1952), p. 473; and for 1952-53 from "Food Subsidies, 1952-53," Ministry of Food Bulletin, No. 693 (March 14, 1953), p. 18.

Based on data from United Nations, Statistical Yearbook, 1952 (New York: 1952), p. 473.

17 Calculated from data on table 2.

The totals for food subsidies in table 2 are for calendar years and, therefore, differ from those given earlier for fiscal years. There also may be some difference in the inclusion of agricultural subsidies.

T. Schulz, "Family Expenditure in 1949, Part I," Bulletin of the Oxford University Institute of Statistics, XIII (April 1951), 133.

TABLE 2.-Total personal expenditures for food and rent, food subsidies and housing subsidies, United Kingdom, 1946-51

1 Excludes the cost of milk and welfare foods schemes and the cost of food rationing. Sources: Personal Expenditures at Current Market Prices, pp. 27-28. Subsidies, p. 44. Current Grants to Persons from Public Authorities, p. 45. Central Statistical Office, National Income and Expenditure, 1946-1951 (London: H. M. Stationery Office, 1952).

TABLE 3.-Average weekly expenditure, per head of household, on the main subsidized foods, 1950, by income class

NOTE.-The main subsidized foods are butter, margarine, rationed cooking fat, sugar, tea, bacon liquid milk, eggs in shell, rationed cheese, flour, bread, potatoes, and rationed fresh meat. Source: Adapted from Great Britain, Ministry of Food, Domestic Food Consumption and Expenditure, 1950 (London: H. M. Stationery Office, 1952) p. 48.

The same survey of food expenditures in 1950 by the Ministry of Food showed that the food subsidies were of greater value to families with children. (See table 4.) Families with 3 or fewer children gained 1 d. per week per head more from the subsidies than families with 4 or more children. When the subsidies are expressed as a percent of total food expenditure, however, the percent which the subsidies represent of total food expenditures increases with the number of children. The subsidies represented one-fourth of the total amount spent for food eaten at home by families with three children.

Table 5 shows the average value of the food subsidies for a family of four as a percent of the average wages of a manufacturing worker. The data in the table are limited in their usefulness by the fact that the value of the subsidies is an average calculated by dividing the total cost of the subsidies by the population and that only 1 wage earner is assumed for the family. The declining importance of the food subsidies over the past 6 years is apparent. The drop in the value of subsidies to a family of four from 13 percent of average wages in 1948 to only 4 percent in 1953 is the result both of a reduction in the amount of the subsidies and of the rise in the average wage rate.