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Docaiabor II, l94^i llsOG A.M
Eoat Wing, White House

The Director (Presiding)
Mr. Bull (Acting Secretary of the Treasury)
Mr. Vdckard
Mr. Jonos
fctiss Porkins
Mr. Smith
Mr. Eccles
Mr. Hondorson
Mr, D^vis

Mr. McNutt
Mr. Green
Mr. Patton

Mr. Plondan


discussion of the principles which should underlie sub-

sidies was poatponud to L future mooting, subsidies being discussod only
in connection with tho proposed dairy products program.
Mr. l/iokard pointed out that, with roBpect to agricultural commoaitias, a contiidorcbl'a body &f opinion ar.iong the potential boneficiarias
of subsidies — the farmers — is


Novortholess, he statod, support

prices :,d.equato to secure needed 'production frill require either subsidies or
higher retail price coilings.
ia no other

Mr. Uickurd


the opinion thr,t there

alternative if tho noca;/3ary quantities of critical agricultural

conmiodities are to bo producod.

Yot 7 he asseited, the Congrats is still

strongly predisposed against subsidiesf

It nay

be possible to reduce the

amount of money required for subsidies by instituting economies in the
processing and distribution of fai-m comiiodit-ios. This v/ould, in many cases, alter th'3 accepted aysboi.u; of distribution and
Bidox v;itri cynGideiabxe opposition.

would therefore

Henco, Mr. Wickard cautioned against

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expecting too much relief in the distributive economies.
The dairy situation, Mr. Wickaid pointed out, vividly illustrates
the convergence of all th.030 issues.
The Department of Agriculture has set a production goal of 122
billion pounds. This? Mr. Wickard bcliovoa, is the r i s dubious of all
of tho Department1& goals, largely on account
ago in dairy farming.

of the critical labor short-

The Department will attempt to meet this godl by an

intensive production drive in each county, undertaking to find what farmers
wiil need in order to handle additional COWS and produce additional quantities of miik.

The Department vdll also, for the first time, offer stable

year round support prices, so that fanners

will be able to knov; just what

price they can expect to get for their products at

any time m

the year.

In general, prices to both famer and consumer will remain at October levels,

with come necessity for adjustment in certain special areas. There will,
however, be one nation-wide exception —
between y2u

and ( - million*

a subsidy on cheese which will cost

The Doportaent) according to Mr. Wickard,

has also taken StapS to Stop the slaughter of dairy cattle in certain localities by offers to dairy cows at fair prices for resale to other
The War Manpower Commission has also directed deferment of essential dairy workersj and

the procurement agencies have ordered government

contractors not to hiro such workers*

The Department of Agriculture, in

cooperation with tho War Manpower Commission, has also instituted a program
for the recruitment, training mid transfer of farmers frosa unproductive areas,
thus making thorn available to supply the shortage of labor in more productive

dairy centers. Even these measures, howaver, will not be sufficient to


relieve the manpower shortage; and Mr. Wickard expressed the opinion that

it will bo necessary to recruit .vomun for this type of v/ork.
One additional problem, Mr. Wickard stated, is the maintenance of
an adequate supply of fluid milk, particularly in those ureas where population has suddenly and recently increased, 01 in those areas from which supplies have 'oeon drained off "into such localities.

In liuch areas, increases

in tho price of fluid milk are necessary to secure adequate- supplies; end
- if either subsidies or increasea in retail prices are to be avoided, it
vrill be necuusury to effect substantial economies in milk distribution,
through the standardization of bottles, the zoning of deliveries, and increase of stora sales.
ana Chicago.

Tnis problem is especially difficult in Now York

A subsidy is alrecdy in effect for the llew York area, but

should be eliminated if it is possible to institute sufficient economies.
The Director emphatically expressed the opinion that such economies must be instituted quickly, in view of the strong opposition to subsidies upon the part of Congress, and requested the help of Mr. Green in
securing the hslp of organized labor.
U.T. lieiiuerscn pointed out that

the practices of both labor and

management in the dairy industry are deeply involved, and that these practices have g o / i up through years because of

the necesbit}' of developing

strong collectivj bargaining relationships between \;orkerj and powerful
nation-wide dairy corporations.
i ! . l ' c c r stated that, as part of the dairy program, cheese
vr . i i a a
,/iil be rationed along with uuats. On
necessity for

the other hand, there will be no

the nationwide rationing of milk.

In certain areas where

tho population has increased faster than supply, local rationing may be





Perkins inquired whether i t would not be possible to carry

out an educational progrufiij discouraging loiUc consuraption upon the part cf

able-bodied adults, especially in viev; of the fact that milk consumption has
boon encouraged in the past by advertising and other educational methods.
Hi . Wickard replied that such a program had failed to reduce the consumption
of meaty to any substantial degree, ana expressed scepticism as to the possibility of using 'voluntary- methods to reduce consumption.
for. Patton pointed out that butter has much less nutritive value
than hiiik and cheaso, and ha inquired as to what measures are being

taken to

convert dairy resources away from butter production. Mr. Wickard replied
that this is tho c/urposo of tho cheese subsidy, but pointed out that th:.
limited ch3<3oci-:.iaking facilities reduce

tho extent to which conversion can

be induced,fcfcr.Patton also emphabiZtJd

the necessity of

some measures to

guarantee the minimum levels of Bubsibtotico to those persons who, in case of
rationing, would hot have sufficient purchasing power to utilize their portion
of tho rationed corjiiodity.
There followed a general discussion as bo the point system of
rationing, and other related problems.
lur. Green stated'that a reviev/ of the proposed program had convinced
him that it would be desirable to institute subsidies for milk. Other members of tho Board emphasized th«i difficulty of securing Congressional approval,

Mr. Green stated that, since milk is essential to the maintenance of

health ..i efficiency, subsidies vroulci be especially desirable

as an alterna-

tive to price increases.
kir. Flanders stated that, in his opinion, there were other alternatives.

If arrangements uro made, he stated, to preserve the necessary mini-

mum supply of uonixrt/er on the dairy farms; if sufficient labor-saving machinery

ifi l i c e dvailablo to tho farmer; and if tho most officiant methods of proicd
duction and distribution J T J used, it f/ill bj possible to secure tho necessary

v/ithuut increasing uric33 to consumers or without largo subsidies.
I ! . jPatton seated that tho prCbl^l wau not simply one of subsidies,

but of furnishing adoqvuito, funds to- finance the expansion of production,
particularly on the family-typo farm,

ffa haTtt, ho stated spont billions of

clollora jfroia oho public Treasury to finance

tho axponsion of industrial

i:.cilitio:j, but havo made only the most inoffectivu efforts to provide
adequate resources for modium and small farmors to expand their productive
capacity, thoreby utilizing to the fullest degree our agricultural manpower. '
Ivti1. jPlaudora cgraad that mothodn of incroaeing tho efficiency of
existing -.i^'ricultural rnanpov/sr should be given greater consideration.
Kr; Smith and Mr. Henderson both urged

that, at a meeting of the

Board in the n^ar future, there should be a discussion of the general prin- •
ciples which would govern tho use of subsidies in wartime.
The mooting adjourned at 1:25 to meet again on Tuesday, December
22, at 11:00 A. 0.


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