will think they are too high; others, too low. We believe, however, that the Nation is going to have to do some really serious planning to assure that level of activity at home-to say nothing of the things it will have to do in cooperation with other nations to insure a better world economy generally. The closest possible collaboration between private enterprise and the Government will be required, and Federal fiscal policy must be adapted to the needs of full employment.

After looking at some of the more optimistic possibilities, it might be worth while to note the possible plight of agriculture in the event of a severe post-war depression-a situation that could develop in the absence of appropriate policies to prevent it. Under this assumption, agriculture's condition would be sorry indeed. If the national income should fall to $55,000,000,000, and if 10 or 15,000,000 of our workers should be unemployed, agricultural prices could easily drop to half of parity and agricultural income could fall to 5 or 6 billion dollars.

In conclusion, we should like to point out that we have not attempted in this statement to deal with the differential effects of our assumptions on various types of farmers such as cotton growers, wheat growers, and so forth. These all have special characteristics. We are carrying our analyses as far as we can, and hope to be able to provide some more specific conclusions soon.

Now Mr. Smith will give you some idea as to what the Department is doing in its approach to the post-war problems and some of the activities that are under way in connection with post-war planning. The CHAIRMAN. Any questions?

Senator TAFT. I only want to ask one question: Is it at all feasible to buy and retire or lease and retire a large number of acres, say, plant them in trees to add to a substantial forestry program, taking the least valuable acres? Certainly through the Appalachian area, southeastern Ohio, there are a great many areas where a farmer cannot make a living.

Mr. ALLIN. Yes, and there is a concentration of folks in those

same areas.

Senator TAFT. I wondered whether you thought it was a practical thing.

Mr. ALLIN. It is practical if you find a place for the people you take out of those areas.

That is one of the difficulties we ran into in the depression when we tried to buy this land; the opportunities for these people elsewhere were very restricted.

My own observation of the time to do that is at the very time we are least likely to do it, that is, during a time of prosperity.

Mr. TAYLOR. I was in charge of five States in the submarginal land purchase. We looked into an area in southeastern Kentucky, and I believe we used W. P. A. to visit every family in the area. Eighty-five percent said yes, they would move out of there, they would sell their land. And they wouldn't move out of there at all. I mean when they faced the fact of where they would go they wouldn't sell that land at all.

Mr. ALLIN. They move today in times of greatest prosperity.1

1 Dr. Carl C. Taylor later submitted the following: "In my testimony concerning the movement of farm people and in Dr. Allin's testimony on the amount of land needed for farm production, neither of us gave consideration to the fact that there are approximately 600,000 farm families in the United States living either on land so poor or farms so small that they cannot make a decent living. There is, therefore, room and need for a considerable movement of farmers from these areas to areas of better land, considerable of which can be and should be made available either by irrigation or drainage.”

Senator TAFT. They move into Cincinnatti. I don't know how there are so many left.

The CHAIRMAN. All right, Mr. Smith.

STATEMENT OF RAYMOND C. SMITH, CHIEF PROGRAM ANALYST, BUREAU OF AGRICULTURAL ECONOMICS, AND CHAIRMAN OF THE DEPARTMENT'S INTERBUREAU COMMITTEE ON POSTWAR PROGRAMS, UNITED STATES DEPARTMENT OF AGRICULTURE

Mr. SMITH. Farm people are realizing that the Nation will face tremendous problems at the end of the war. They are showing an increasing concern about being prepared in advance to meet these problems.

The work of the Department of Agriculture on post-war problems is being carried on jointly by various agencies and bureaus, through interbureau committees and working groups, both in Washington and in the field. The Department and the land-grant colleges are cooperating closely in the work.

I should like to point out briefly the approach which we are taking in considering post-war problems. We look upon post-war planning in agriculture as a twofold job. On the one hand, agriculture, a part of a national and of world economy, has to plan, along with other groups, to bring about the kind of a national economy and the kind of international relations that we need. On the other hand, it has to plan for making adjustments in agriculture to meet whatever national and international situations may actually evolve.

In broad terms, post-war planning in agriculture is directed toward bringing about an enduring world peace and with it the opportunity for freer exchange of products between nations and consequent rising standards of living in all nations. It is directed toward attaining a healthy and expanding national peacetime economy, and toward developing a better argiculture and a higher standard of living for farm people.

We believe that post-war planning in agriculture cannot be limited to planning for agriculture. The agricultural economy does not exist unto itself. It is an integral part of our total national economy, which in turn is an integral part of the world economy. Farmers have a real stake in world trade. They cannot neglect planning to bring about the kind of an enduring peace which will be conducive to freer and expanding world trade.

Neither can farmers afford to neglect to plan for a growing and expanding national economy. The only way farmers can be prosperous over any considerable period is for their customers to be prosperous and have the purchasing power to buy the kinds and quantities of food needed for nutritious diets and to buy needed fiber and forest products. Farmers, therefore, have a real stake in full employment in industry at home. In fact, since urban people make up most of the farmers' market, and since, through differentials in birth and death rates between farm and nonfarm areas, many farm youth need chances for jobs in cities, farmers have fully as great a stake in full urban employment at good wages as do most other groups.

This will readily explain agriculture's keen interest in such national problems as proper and speedy termination of war contracts, reconversion of industry to full peacetime production, disposition of surplus military supplies, and retraining and reemployment of returned veterans and war workers, as well as in more strictly agricultural problems. All of this is not to say that we believe that agriculture should not plan for agriculture itself. It is simply to say that an important part of the agricultural problem lies outside of agriculture, and that this portion must receive attention along with the rest of the problem.

Our unprecedented wartime production record, in both industry and agriculture, which bas provided good jobs at good wages for substantially all of our people who were able and willing to work, has demonstrated what the Nation can accomplish when it has the will for great achievement. It has convinced most people that we need not have a disastrous depression at the end of the war if the Nation-the people that make up the Nation-wills otherwise. Yet we recognize that we may have the worst depression in our history at some time following the end of the war unless vigorous positive steps are taken to prevent it. While we believe that depression is possible, we also believe that it is not inevitable, and that it can and must be prevented.

I should like to make one additional point, perhaps the most important one, concerning our approach in the Department of Agriculture to work on post-war problems. We recognize fully that in our democracy the matter of what we do and what we fail to do lies in the hands of the people. Their efforts and their decisions will determine whether or not the necessary steps are taken to avoid disaster in the years immediately following the close of the war. They will determine whether or not we take advantage of the opportunity to move forward to a better life for all of us in the longer-time future. The Department of Agriculture, therefore, feels a responsibility to study post-war problems and possible solutions, and to place all obtainable information that has a bearing upon these problems in the hands of those who will make these vital decisions, that is, in the hands of farm people and other citizens, their organized groups, and their elected representatives in Congress.

Work is now under way on many post-war problems in the Department of Agriculture. This work is done insofar as possible on the basis of specific assumptions, since it is impossible for anyone to predict with certainty just what the future course of events will be. It also involves constant analyses of the possible consequences_to agriculture of alternative national and international policies. Dr. Bushrod Allin, who has just preceded me, has given you some of the results from these analyses so far. Dr. Carl Taylor has carried the interpretation further in terms of opportunities for employing manpower on farms after the war.

Among the post-war problems which are receiving attention are the following:

1. Production adjustments in agriculture needed (a) during the demobilization period and (b) to bring about desirable production in the period following conversion from a war to a peacetime economy. Within an assumed over-all framework of full employment and high national income, adequate nutrition for the people, international

collaboration, and a high level of agricultural prices and income, an attempt is being made to indicate the pattern of crop and livestock production and the methods and techniques of production that should be followed, the amount of land that should be brought into or retired from production, the number and kind of farms that would be needed, and the work force that would be required. Comparison of this pattern with the present situation will indicate the adjustments that would be necessary by production-adjustment areas and for the Nation as a whole. We also expect to study this problem, basing our work on assumptions of less favorable conditions after the war. This item illustrates our method of using assumptions, which is equally applicable, although not spelled out in the items listed below.

Results from preliminary work indicate that there will be little need for many major production adjustments during the first year after the war ends in Europe.

This is the year in which it is assumed that the greatest relief shipments of food will be made to Europe and that domestic demand will be even higher than now. As compared with 1943, the analysis indicates that total cropland may need to be increased by 2% percent; that there will be substantial increases in the acreages of sugar beets, tobacco, fresh vegetables, wheat, and sweetpotatoes; that there will be substantial decreases in the acreages of hemp and flaxseed; and that, with the exception of minor reductions in the acreage of other oil crops, the acreage of other crops and the production of livestock products will be essentially the same as in 1943.

I should like to emphasize the preliminary nature of this information and to point out that we are working on later years of the demobilization period, and for the years following the transition period. We expect to make progress reports on the results of this work from time to time.

2. Marketing and distribution during the demobilization period with some attention to longer-time problems.

This involves work on the integration of food requirements of the United States with estimates of world supply and allocations; readjustments in processing and marketing facilities and methods; disposition of wartime regulations concerning food distribution; the place, if any, of price and rationing controls during the transition period; methods of insuring better nutrition among underprivileged groups; marketing and price measures designed to guide production and distribution; programs to maintain farm prices and income; and programs of cooperation with other exporting nations.

3. Disposition of surplus land, supplies, and equipment used by military forces and war plants, including the use of chemical plants for manufacture of fertilizer after the war. Our work so far in reference to the disposition of surplus military land indicates that it would be desirable to transfer land suitable for farming to the Department of Agriculture for sale to qualified applicants in family-size units. Other problems of surplus disposal are under study.

Senator HAWKES. May I interrupt there for just a moment. I am woefully ignorant on this.

What do you call a family-size unit? What do you have in mind in talking of family-size unit?

Mr. SMITH. Well, as we think of a family-size farm we think of one which will vary considerably in acreage, depending on the type of

farming, but which will give reasonably full employment to the members of the farm family and require only a small amount of additional hired labor.

Senator HAWKES. It would vary in size according to the type of farm?

Mr. SMITH. Yes, sir.

Senator HAWKES. There is no standard size?

Mr. SMITH. No standard size.

Senator HAWKES. Thank you very much.

Mr. SMITH. 4. Opportunities for returned veterans and others on farms after the war. Dr. Taylor's testimony had a very direct bearing on this problem. As Dr. Allin and Dr. Taylor have both indicated, we are attempting to find out just what and where the opportunities are for veterans and others on farms. The most difficult aspect of this problem is that the conditions under which a large back-to-the-land movement is most likely to take place are the very conditions under which the requirements for manpower in agriculture would be the lowest. This indicates the great need for developing a basis for guiding those who go back to farming in such a way as to obviate disastrous effects upon them and upon other farmers.

5. Conservation and development of physical resources, including crop and pasture lands, range lands, forest lands, and water resources. Conservation has been a long-standing problem but the extra strain of war production on our physical resources has increased the necessity for conservation measures. Development of new resources will depend upon post-war production requirements. Plans are being developed to provide for acceleration in the application of conservation measures and for needed development work.

6. Nutrition. Our work so far shows that there are two aspects of the nutrition problem. On the one hand, improved nutrition is a problem of purchasing power. On the other, it is a problem of education. The high rate of rejections for military service traceable to dietary deficiencies is evidence of the seriousness of the problem. The relationships between this problem and the problems of agricultural production adjustments and marketing and distribution are, no doubt, quite evident to you, as is the relationship between nutrition and levels of industrial employment and purchasing power.

7. Other long-standing problems on which post-war action is being planned are those of rural health and sanitation, rural housing and equipment, rural electrification, social security for farm people, tenure, credit, agricultural-industrial relations, and the place of industries in rural areas. Without taking the time to go into detail, I will say that we believe that these problems are all important and deserving of our most careful attention.

8. Development of a shelf of works projects to be carried out in case the situation after the war calls for public action of this character. Works projects will be planned to accomplish many of the indicated improvements in the field of conservation and development of physical resources and farm-family living, wherever the situation after the war indicates the development of works projects to be the most appropriate method of providing worth-while improvements. The possibilities for furthering rural electrification, rural health facilities, such as hospitals, some phases of rural housing, and possible marketing facilities are being explored.

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