THE GOVERNMENT: Two-Price Plan

A young man named Francis R. Wilcox last week sailed from Manhattan for Europe to do something about the prime paradox of U. S. farming—that farmers are poor because they produce so much. Vice President of Federal Surplus Commodities Corp., Francis Wilcox is one of Secretary of Agriculture Henry Agard Wallace’s export experts.

His mission was to find a market abroad for excess citrus fruits and other crops, particularly wheat (of which the Government announced it would sell 100,000,000 bushels abroad by July, has thus far succeeded in selling only 39,000,000). Few people either here or in Europe would thank him for his trouble, because sales at whatever price he could get might depress both domestic and international farm prices.

What Francis Wilcox hoped to do abroad, Henry Wallace hoped to do right at home. About six weeks ago Secretary Wallace first promulgated his domestic “two-price plan.” It amounts to dumping surpluses at home instead of abroad— buying excess commodities from farmers at market price, then selling them at cut prices to needy U. S. citizens, with the Government footing the loss.

Specifically, he proposed to have some of the 1,600,000 bales of cotton which the Government holds as collateral for loans to producers processed into dry goods and sold at prices far below the retail market. The system, if it worked, would provide cheap cotton goods for the poor, employment for cotton workers, an outlet for surplus stocks.

Retailers, like the National Retail Dry Goods Association, were horrified. Might not the cut price become a yardstick for all dry goods? How would the Government decide who was to get goods cheaply, who expensively?

Last weelt the Department of Agriculture set out to find answers for these questions. Picking cotton mattresses as a medium for experiment, Assistant Secretary Harry Brown invited cotton producers, manufacturers, distributors to discuss the possibility of applying the two-price plan at home.

Last week the U. S. Government also did the following for and to U. S. Business :

> Played both sides against the middle of the utilities issue. In the spirit of the newly proclaimed honeymoon (TIME, Nov. 7), RFC Chairman Jesse Jones said that he would have $250,000,000 available for “national defense” utility expansion loans. More in the old spirit of New Deal v. private utilities were four incidents of the week: 1) PWA agreed to lend an additional $3,279,000 for a municipal distributing system in Chattanooga (Commonwealth & Southern territory); 2) for $1,600,000, TVA and 22 cities bought West Tennessee Power & Light Co.’s distributing facilities; 3) in Collier’s, Secretary of the Interior Harold Ickes predicted the doom of privately owned utilities if they continued their “blind and headstrong course”; 4) the Department of Justice filed an antitrust suit against Columbia Gas & Electric Corp., accusing that big holding company of “conspiring to monopolize” the natural gas industry in Ohio, Michigan, Kentucky and West Virginia.

> Cracked down on the wood-cased lead pencil industry. The Federal Trade Commission issued a complaint against Lead Pencil Assn. Inc., President William A. McDermid and 13 member companies which account for more than 90% of U. S. production, charged them with price fixing, unlawfully restricting, monopolizing and eliminating competition after a 1935-36 price war.

>Considered extending its jurisdiction over private truckers. Early next year the Interstate Commerce Commission will investigate safety conditions and working hours of drivers of interstate trucking fleets like those owned by Standard Oil of N. J. and Bell Telephone Co. “If need therefore is found,” ICC then will issue regulations for private fleets as it already has for public carriers, in accord with the Motor Carrier Act of 1935.

>Recommended minimum wages for steel companies accepting Government contracts of $10,000 or more. Hearings on the matter were started last July by the Public Contracts Board of the Department of Labor. Last week the Board recommended minima of 62½¢ an hour in the East and West, 45¢ in twelve Southern States. Subject to approval by Secretary of Labor Perkins, the recommendations are a blow to small independent steel companies, a blessing to Labor which estimated that 75,000 men would get raises.