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7 October 8, 19U* aonorata« FroA L* Crawford, uouae of Representativee, Washington, D. C. My door Congree«mon Crawfordt Thi« will acknowledge youre of October 5 with which you enclocad o copy of the Committee print for October 2 reepeetlng the price—control bill* Tbe excerpt fro« the record contain« o eerie« of questions which you beve po««d and to wbioh you would like «orne answers. These questions, for the oost pert, ore framed in technical language and I have, therefore, asked Dr. Goldenwelser to consider the* end preporo such repllee ss ho thinks ore fessibio* I sight ssy in passio«« however, that I, ayeelf, believe that s reasonable rate of return 1s necessary in order to preoorve initiative under our competitive «yates, «hat 1 do aslntain» bowover» lo that susb s reaeonable rote is not neooosarlly a natural rote. Thus, the present extremely low rate on «hort-ters fund« is sot raesonable, ovon though ease say claim it is natural under the present condition of the aonoy market* I maintain that It is both unreesonmble and artificial or unnatural. It has been brought about by the inordinate exoeme of bask reserve«, which in turn ha« boee brought about by o combination of factors, many of which ore the result of political action rather then of the inter-play of free economic forcea. I might miso odd that» while on unreasonably loir return on investments tends to cut doss enterprise in s particular field« the shift of esaltai from that field to other fields does not alway« take place. For instance, during periods of very low farm income o farmer cannot liquidate his esaltai and move to other fi aide, lie goes on producing st an unreasons hie rets of return and frequently ot o serious loss, until smeh time as the si tustion improves» whist cJA times doss sot occur until the Government» through benefits is the msy of »mrlffo or dlreet subsidies» brings the roté of return up to o reaeonable level* It ssems obvious to ma that the maintenance of such o reasonable level in the rote of return on inveotmemt in varieos segiento of our economy is dependent more upon political ostión than upon the intar-play of natural forces* Very truly yours» ite LC:owb M* S* Seolee» Chalrmam
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