Difficult Situations

On July 31, carry-over of U. S. cotton was 11,656,000 bales, an almost three-fold increase over a year ago. Since U. S. cotton consumption and exports last year totaled 11,432,000 bales, only 556,000 more than the estimated 1938-39 crop, prospects for a sizable reduction of this tremendous carry-over are dim indeed. Last week, cotton prices tumbled to 8.20-c- a lb., making loans mandatory under the Agricultural Adjustment Act of 1938, and Secretary of Agriculture Wallace singled out cotton as "perhaps the most difficult single situation with which we are faced."

Scarcely less acute was the wheat problem, for which Secretary Wallace is seeking a partial solution in a subsidy scheme under which he hopes to export 100,000,000 bu., about one-fourth the present U. S. surplus. To dump only 26,000,000 bu. abroad in 1934, the U. S. spent $6,500,000. However ingeniously conceived, a similar program now would not only add a neat expense item to AAA's bulging budget but would almost certainly bring a squawk from Secretary of State Hull, champion of reciprocal trade treaties. In addition, subsidized U. S. wheat would have to compete in the world market against wheat subsidized this year by Canada, Poland and Rumania --with other overproducers expected to follow suit.

Whether or not this year's surplus problems can be solved, the AAA last week fixed 1939 benefit payments at 26-to-30-c- a bu., 14-18-c- above the 1938 rate, for U. S. wheat farmers who reduce their acreage 31%. Otherwise, next year's crop-control program is substantially the same as this year's. Total amount earmarked for 1939 benefit payments: $712,000,000.

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