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*(cL. MINUTES OF BOARD MEETING Docaiabor II, l94^i llsOG A.M Eoat Wing, White House Prescffiti 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 General 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 hostile. 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 oxpreafiod 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, nic.rkt.diy alter th'3 accepted aysboi.u; of distribution and Bidox v;itri cynGideiabxe opposition. would therefore Henco, Mr. Wickard cautioned against - 1 - 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 ,ot 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, -^r with come necessity for adjustment in certain special areas. There will, however, be one nation-wide exception — between y2u and ( - million* r3 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 purcna.se dairy cows at fair prices for resale to other farmors* 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 «v dairy centers. Even these measures, howaver, will not be sufficient to A 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 rvr 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 necessary. t''.i ^^ C fclias 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, but Mr. Green stated that, since milk is essential to the maintenance of health ..i efficiency, subsidies vroulci be especially desirable .ld 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 products v/ithuut increasing uric33 to consumers or without largo subsidies. I ! . jPatton seated that tho prCbl^l wau not simply one of subsidies, :r 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. 4 - 5-
