Conversation 068-002

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We'll go around and say hello to everybody here.

You want to take pictures all of you as we do this?

All right.

How far are you?

Yes, how are you?

All right.

Looks like you're trying to block again.

That's right.

You probably have people who subscribe to Vogue.

All right, you got them all.

One group shot.

Oh, are you going to come and just come around the back with me?

What is this?

A group show.

Sure, sure.

Why don't you take a look over this way.

I think you can all have a group shot of us.

I'm very happy to have the chance to meet all of you.

The refreshments will be better than we have .

Thank you very much.

Great job.

And over a period of time, we've been having meetings with the editors of business magazines in general, and of course, there are so many special interests that are involved.

For example, a few days ago last week, we had a very large committee here covering all of

All of them specialized in this sort of place.

And actually, I mean, she was in the capitals and et cetera, et cetera.

But I suggested that one of the things that the event was to be, was to bring in the top foreign editors, because we represent a constituency in this very important country.

on in Washington.

And Washington is a state that's affected by the sanctions in the Great Leap.

So our purpose is not to give any hot news.

We don't have any at this point.

But we want you to feel that the mission is important because of Washington, which we have.

direct communication with the White House, with the Secretary of Agriculture, people on the White House staff, and others who can be helpful for a client as long as, of course, they're willing to come.

So that's the purpose of our year today.

And I would simply add that

We have been putting perhaps considerably more emphasis on the farm community at a time when the numbers of farmers are considerably less.

You've all written, we've seen written in the national press comments to the effect that the farm constituency is not as important in the country as it used to be.

That's true in numbers.

On the other hand,

As far as the contribution of American agriculture to the strength of this country is concerned, it has never been more important than it is today.

Let me start with one proposition that may have occurred to all of you before.

But it needs to be repeated, and in particular it needs to be repeated in areas where people in American agriculture can read about it and be proud of it.

We have a very desperate balance payment problem today.

The balance payment problem is not a new one.

It's one that's been growing over the past few years.

I don't mean to say that it started with the previous administration.

In fact, it started long before that.

And perhaps 10, 12, 15 years ago, the situation, the competitive position of the United States industry in the world has begun to erupt.

Our trade balance has not been in denizen during this period of time.

It has not been in denizen.

primarily because of American agriculture.

Now, in order to get that thing in its proper perspective, let me tell you about where I think we are today and where we were.

My first time in this county was in 1993 as a vice president.

At that time, I was sitting across the table from that chair.

That's the vice president.

We call that the hot seat.

And Vice President Eisenhower sat here.

But at that time, we could sit here and win the insurance of the United States without any question.

It was the strongest nation in the world.

Our nuclear superiority was in Congress.

And also, the United States at that time was an economic superpower in the world beyond any comprehension.

By that I mean that we had about 7% of the world's people in 1953 producing 50% of the world's goods.

And if you recall, we used to talk about the dollar gap in that problem, that period of time, how are the Europeans going to get the dollar and so forth.

Japan was a mini-power.

Japan, as I pointed out in Kansas City a few days, was producing 5 million tons of steel in 1950, and today it produces 100 million in two years.

It passes the United States in steel.

In those days, just 18 years ago, we bought a radio, and we'd like you to be an American radio.

Today, 95% of all the transistors in the U.S., and most radios in the United States, over 90% are made in Japan.

This doesn't mean they're Japanese.

They're bad people.

We just think they're highly humanity.

And they've just beaten our hands off in this field.

Automobiles, we still make the most and drive the most and the rest of them too.

I can name also a number of where on the industrial side where we still have a very substantial advantage.

But as we look at the world today, we find that the American favorable balance of trade has been going down and down.

So the last three months, you will note that we have exported more than that.

We have imported more than we have exported.

Now, the reasons for that, some of them are simple.

One is that the United States economy now is expanding, growing as it moves upward.

whereas most of the economies of major industrial nations abroad are in a less dynamic state.

And when an economy is growing, it tends to attract imports from an economy that is in a less dynamic upward course.

Those situations change, and that could change, of course.

We hope not that ours will continue to grow, but theirs might also continue to grow.

Another problem, of course, is that insofar as our trade is that

Many of the items where, as I've already indicated, where we had some kind of superiority before, those no longer exist.

Now we've got agriculture items all the way around the back of the fundamental point.

In American agriculture,

We have an enormous advantage over the rest of the world.

It is a major factor in our still even being in the ballgame in the trade area.

If we didn't have American agriculture with its high productivity, the highest productivity in the world, America at the present time would be facing not simply a serious situation in its balance of trade, but a

One that would be fatal.

That's just where we stand.

Now, at a recent meeting of businessmen in this room in America, we were talking about productivity.

An interesting point was made by a top businessman who was sitting over in that chair.

I think he was proud of him.

He admitted, he said, he said, when we look at growth and productivity in the United States,

The lease, first naming the areas where we've had the lease progress is government.

The bigger government gets, the less productive it becomes.

And so we're trying to do something like that by reorganization, apprenticeship, etc., etc., etc.

Although that's probably an insoluble problem to be five-handed with.

The second area, although we've been working, the second area where productivity is a problem is in an industry like steel.

Here, wages go up, prices go up, and as a result, more foreign steel comes in.

And until a great industry like that faces up to the fact that they cannot continue to pay more for their labor and ask more for their prices and still be competitive, we have to realize that it's going to mean a reduction in the number of people that will have jobs in that industry.

But he then went on to say,

that the greatest increases of productivity over the past 20 years of any industry in America in agriculture, by far, by leaps and bounds.

So what we find here is that when we talk about our surplus, of course, they're sort of down now for reasons that we're well aware, but nevertheless, when we talk about our surplus, when we talk about our prime problem, we have to realize that the problem exists

because of these enormous increases in productivity.

People leave the farms because not so many are feeded.

The number of, I mean, an American farmer can produce more per man hour, infinitely more than his competitor in any place in the world, or than the British farmer, or the French farmer, or the German farmer, and of course the Russian farmer needs to save the game.

Uh, so the product, the very, the, the interest of the product in the department, and of course this has to do not only with the farmers and individuals, it has to do with marketing, it has to do with its equipment, it has to do with research, all of those things that we have to handle.

This has created part, to a great extent, the farming problem.

It has also created for us, thank God, uh, the, the, the, uh,

the great advantage that America has in agriculture as far as the rest of the world is concerned.

It's interesting to note that at the present time, for example, there is upsurge in American industry for quotas, for restrictions against foreign imports.

In fact, the major domestic lobby left

for a free of trade policy is American agriculture.

Why is that?

The reason is that American agriculture can compete

Now, I say all this because I think the country needs to hear, and I say this as well as the group of my members especially, I think your readers need to hear, be reassured.

You've got to realize that we've just got to realize that we're very fortunate that this time in our history, American agriculture has been made a whipping boy because of high support prices and food prices and all of that.

American agriculture is...

is really the wonder of the world in terms of increases in productivity and provides, needless to say, the point that Secretary Hardin often makes and always reminds me to make.

If we talk about the high prices of our groceries and so forth, we want to realize that the American housewife or homemaker pays a smaller percentage per income

or food than anybody in any comparable nation in the world.

And so whatever the price, man of course eats better.

So all of these things are on the plus side with regard to what agriculture has done.

Now having said all that,

That basically is the reason why I believe any administration, whether Republican or Democrat, any president who occupies this chair, regardless of how big the number is, and I still think that Floyd McLeod is significant,

It ripples off far beyond those who happen to be out there on farm.

But regardless of the number, it is essential that this enormous asset that we have in an agriculture community

with increasing productivity, it's essential that we have programs that will keep it strong, keep it healthy, keep it productive, and that will see that the farmer gets a fair share of both his increasing productivity and the nation's increasing prosperity.

That's a nice

I've said it many times, others have said it many times, and if you look at parity prices, if you look at hog prices today, to name two, others are better.

Soybeans, I understand, are doing very well.

And I think cattle prices are reasonably good.

I can't control all of these because they do fluctuate.

But nevertheless, when you look at farm income, farm income has moved up some this year.

We do have a problem that confronts all of American history, and that is the

The cost-price squeeze, that squeeze is due to labor costs, equipment costs, all the rest.

And that's why farmers and the farm community are enormously, have an enormous stake in anti-inflationary policies.

And here, while there may be arguments, there's no question about the need for it.

So I was going to conclude my remarks at this point by saying that, quite candidly, one, that I visit the farming, the farming communities of America.

I've been in Alabama.

I've been in Oklahoma.

I was in Iowa the other day.

I was in Iowa.

There's not so much of a farmer there.

I will be going out to the

to Illinois and to their state fair.

The reason is not simply a political reason, it's just a political year.

The reason is, and a major reason is, to first remind rural America that it is not forgotten, that it is very important

to remind the rest of America of rural American support, to focus the eyes of the nation on the productivity of our farm community, to build public support for programs, and they are very ambitious programs that we have in terms of high revenue sharing and other areas for the revitalization work.

I do this because as I see it, whatever the numbers may be as compared to what they used to be, whatever the political clock may be compared to what it used to be, this industry is absolutely indispensable to

America is maintaining its competitive position in the world at this critical time.

The rest of American industry is going to have to get more competitive.

All that agriculture has to do is to continue to be as competitive as it is, and we'll do darn well.

And that's about where it stands at this time.

And I must say that I've been very pleased with the reactions.

We had this salute to Agriculture Day.

I've made a number of statements in this field, and I think that we are beginning to turn public spending and the rest of the time on this whole business.

Well, here's the farmer out there getting these huge subsidies, and the poor housewives pay the bill.

The other second point is that we say thank God, we have got a very strong, productive American agriculture.

That's the point that we see.

And it's my right to say that.

But now, you might have some questions on it.

More than that, you may have some thoughts as to what we can do to be more effective in this field.

And you've also, I know, I've heard me address myself to a very bad thing.

It's not new.

I developed it early in 1967, carried it out through the 1968 campaign, and been trying to implement it now.

And that is the revitalization of what I call the heart of American America.

The reversing of the flow of people away from what is rural America to urban America.

in the interest of the whole nation.

You just can't continue to pour billions of people into New York.

I was just there yesterday in the places just among us in the Nets.

And it's an interesting city, but it's... You could say that about virtually every city.

And you go outside into southern Iowa,

flew over that magnificent countryside.

I remember when I was over in Tulsa the rest of my life.

I was on the part of Dakota that saw that.

Those are very good places to live.

Those are very good people.

I don't mean they're bad people in cities.

They're good and bad people in cities and good and bad people in the country.

But the environment, that's the word everybody uses these days, the environment of not the farm as such,

But the smaller towns, the smaller cities, rural America and so forth, is a darn healthy.

It's just good that it's there.

And there's a sense of pride, and there's a religious faith, and there's a deep, deep...

which is needed in this nation at this point.

And this is another reason why I think that by our programs and having a mix of industry and agriculture through plowing and funds

in terms of rural rehabilitation, and I won't leave you with all the details.

I can cover those tonight.

I think this is very much in the national interest.

It isn't just a case of let's do something that will help the farmers to get their boats.

The country needs it.

I think that's the point that we need to say.

The country needs the revitalization of rural America.

It isn't that we're doing it simply because the farmer's got his hand out and says, look, what are you going to do with me?

I simply said that the country needs not only the farmer's production, but they need also the character and the strength that rural America can give to the whole national consciousness.

Thank you.

Mr. President.

Yes, sir.

You touched on a point that concerns farmers in my area.

This is Minnesota, I'm in South Dakota.

And after I got the telegram, I talked to one or two of my phones.

And the number one question that they brought up, the number one concern, is inflation.

What it's doing to them, the fact that they, because of the strikes and the higher wages,

are paying more for their inputs.

They can't pass it on.

This cost price squeeze is digging in.

But almost everyone I talk to, colleges or farmers or extension people, could say inflation is the number one.

Let me ask you, in terms of inflation, the problem is not primary farm later.

It's primarily equipment and all the other, right?

Right, right, right.

They're very bitter at organized labor and the strikes.

But they aren't organized, are they?

You don't have much organized labor in the farm.

Not, no.

Right.

Labor, labor, labor.

And I could see why they were a certain way.

This kept coming up.

I'm certainly angry about the railroad structure.

Yeah, it's not transportation.

But it did for that.

Yes.

The steelhead grease would build it on.

Sure.

I'm just wondering if you would all agree that the problem of inflation is the major one you run across in your bottom line.

I mean, what would you say is the major one?

At least it's a major one in every one of your areas.

That's what you run across.

It's very strong in this regard.

They're fed up right to here with these wage increases.

We have one of the best of 70 to 60, 50-50, for example, speed or con charges.

It's ridiculous increases in wages.

What was it?

$0.60, $0.50, $0.50, $0.50 a year contract.

This is very disturbing because our company is developing someone in the book business.

And it's American, it hurts me to see our, we're sending business now to Italy.

So I hate to do that.

But what else do we have to do?

If you're sending up the cost of prices.

It's a primary wage cost.

Yes.

Is there a lot, is there a high wage?

Yes, there is.

This is the offset plastics, car offset plastics.

There's quite a lot of things.

And this is just very difficult to do.

But you have to.

We've done it in Japan.

Yeah.

And here in Boston.

I had a young hog farmer in southern Minnesota come here.

He's about 35.

He said, I started farming here, people.

I guess we figured out what we needed for an adequate income, but we didn't figure on inflation.

We tried to keep up with that, but who could have guessed that the cost of repairing the tractor would increase by $12 an hour?

A friend of mine, because this is about the manufacturing, his figure was probably about $1,000.

Oh, I see.

That's a terrible thing.

Yeah.

Oh, God.

That probably wasn't a good job either.

No.

A friend of mine, a part of a friend of mine, put out pretty well a day before yesterday, he went to look at a huge pickup truck, and he figured it was going to take $3,000 worth of corn to pay for a huge truck.

And...

How much?

$3,000 was for a car and a dollar was what you pay for a used pickup, a two-year-old pickup truck.

Of course, everybody's pulling a camper or a trailer and everything else once a used pickup truck.

In our state of California, the costs are pretty high.

I know.

To be a van, that's about a billion dollars invested.

And they've come to the conclusion that over 15 years that they've been financing manuals and other work that's been going down, they're not doing it in favor.

So their problem is the cost of supervising the loans.

And they're putting a lot of their loans on computers.

It'll be a situation where a computer will wipe the guy out of business.

It'll be a very inhuman thing.

It'll just, yeah, I don't want to be in the computer.

And when we talk about going down to 600,000 farms, we thought we were going to scramble around with each other and wonder who's going to survive.

service, 600,000 farms and what kind of paper we're going to have to have.

Some of us will be eliminated by this.

How do you expect to get that big 600,000?

I know I came out of the bank and said, we're there now because we haven't counted it.

We're applying our assets.

It's 597,000.

Is that right?

597,000 plus one is the current economic research service.

I know.

The states by state figures indicate a problem.

If you add the upper half of three, you get about 850,000.

Don't tell the politicians that.

There's actually 5 million people and 20 million others to depend upon and so forth.

That's the way to do it.

The consensus that's coming out, Mr. President, is burn it.

I'd like to touch on another subject I brought up with rural development.

In our state, I can't see any action really being taken except for meeting meetings with the federal agencies.

except for the Barnard's Home Administration, where they're out building low-cost housing and water districts and doing some real specific work.

But I'd like to see them get all the money that Congress votes for them.

That's one thing I'd plug for.

But is there anything that the executive branch can do to

to really get some action going and revitalizing rural America, as you mentioned.

Well, there certainly is.

I'll tell you here, and I don't mean to try to pass the buck, but we've got all that stuff in the Congress, and with a 27% increase in the amounts.

and our rural programs.

And we just can't get them to come through on it.

John, can you spend a minute on that thought?

Well, the main thing at work is getting revenue sharing and special revenue sharing piece through.

It's a real clockwork, a real impact when we get that through.

And I think you're going to get it.

The point is, because this is one that is quite popular.

Now, there's a billion one in that, and that's 178 million.

Now, that's a lot of money, but I guess if you look at it in a bigger way, it isn't just what happens in the rural revenue-sharing packages.

It's the release of the other packages that go with it that essentially boil down to a position that the governors and the legislators are going to be making their own decisions on the priorities of how to spend the money.

And we went through it, frankly, a long,

traffic committee study on rural development.

We came up with a lot of kind of old ideas that a lot of people have been through before.

We looked at banks, you know, rural development banks and things like that.

And especially from the extensive data we have, you can kind of see where the action is.

You can kind of see what town, in the out-migration context, are continuing to grow anyway.

We don't really know why, a lot of times.

But it's a fact of life.

That is a question, a political question, by and large.

Who's going to tell who regrows?

And that is a, you know, it just kind of shows the ridiculousness of anybody in Washington answering that question.

and the need to make these decisions out there.

So it's a... Let me ask you to do this.

I know that most of these stalls have probably seen it before, but get the night for that, for the dinner at Blair House.

Get the chart where it shows where this money is and where it's going to go and some of that.

Let's give them some chapter and verse so that they can have it.

Because even though you do see it in the boiler flip, I know, if you're like me, I've got to see it again.

And get it very simple.

You understand, John?

It's the very simplest of what we...

what these programs can mean, because some of it out there, there are only some highlights.

I had a lot of material that was not used.

But don't get too much.

And just where you can highlight what it's really going to mean.

I really believe, but let me answer the question.

We're gassed for the money.

We'll get out of the system as the Congress appropriates.

And we intend to have these damn committees.

I couldn't agree more.

They produce nothing at all.

They sit down and say, well, we're going to revitalize rural America.

And nothing happens.

The town's not okay.

And then it gets less population.

You lose a congresswoman like they did in Iowa.

But on this revenue sharing, I worry about being on this sympathetic state administration tag.

Then what do we do about that?

We've got a man running for governor that says that our agricultural extension service could be abolished.

Let me say that.

One thing I want you to all understand, you know, in our government reorganizations, we're concerned about the fact that we're going to abolish the Department of Agriculture and Rural Extension Service.

There are many arms of government, believe me, that are obsolete and shouldn't be abolished, but one of the best is the Extension Service.

I mean, I speak as an old Californian.

My uncle had worked at Riverside Extension.

You know, that experiment station out of Riverside just a million years.

And it's really a great operation.

And it's a great operation in the world.

You know, we've got the Extension Service helping people.

I agree with what Cordell said.

People in the country, if they've heard about rural development at all, and some of them haven't, but the leaders have, and they're pretty much up to here with it.

There have been too many false starts.

too many grants, too many studies, too many beginnings that never went anywhere.

And even extension services having

trouble in getting a turnout when they had a meeting on this.

Because they're not getting, because they do not have a pro, in other words, they do not have a project and the money to do it.

We need a statewide direction on this thing.

I want some follow-up on this.

I don't want any more of this crap of this, you know, all these big plans and so forth.

What have we got in the way of that?

Can we get some chapter and verse ready for tonight?

Yes, I think we can, because there is a good story to tell.

And I must say, I don't like, I don't want to be in the position of saying, well, it's the Congress, because we've got to get them to go, too.

I couldn't agree more.

People sit out there in those towns, and they say, well, when's it going to happen?

So everybody gets together in a meeting, and then nothing happens for five years, and by that time, we can't pay the mortgage.

Mr. President, would you comment on the country town that you build, and particularly Phil Campbell's testimony on it, compared to your revolutionary proposal?

The bill is going to be at the minute.

TEMO will be there.

That's the question we're asking.

Before we leave, let him cover his technical part.

But I was going to say, with regard to the inflation problem,

We are keenly aware of it.

I don't say it in terms of how to deal with it.

You've got to go from one extreme to another.

There's something that I know that you would want.

You would certainly not want on a permanent basis.

If we talk about something like permanent wage and price controls with the huge bureaucracy necessary to enforce it, that is something you can't, that you do not want.

Because what's going to happen is it has no effect.

It will affect not only business and labor, but agriculture and it affects

Having been an OPA many years ago, before the war, or just before I went into service, to have that kind of a straitjacket put on the American economy would be a great tragedy.

It was not all good for a while.

Now we're going to keep those wages down.

We're going to keep the prices down and all the rest.

But those decisions being made by 50,000 or 60,000 bureaucrats in Washington on a permanent basis, in my opinion, is the attraction for this country now.

What can we do in between?

First, what we are presently doing and what we are going to continue to do, what we are going to do in decades from now, is about individual wage settlements where the government can exercise influence

We can talk to labor and management and to make them aware of the enormous states you're involved.

On September 21st, we have the Productivity Commission.

This is the Blue Ribbon Commission of the top business and labor leaders of this country, including Democrats.

They have been being told the past year.

We are now coming to the moment, however, when we have to lay down, they have to consider directly the problem of whether on a voluntary basis, big business and big labor will speak to this problem.

We have had some success already in construction.

Construction trade settlements last year were 18%.

We've got a construction later group together and we've been working very hard with them.

This morning I got a report from Chiefs of Secretary Volpe.

His transportation form used to be in the House of Business and the construction

wage increases are now down to 80%.

That's progress.

That's still pretty high, but if you consider, remember some of you, anybody here from Kansas City, remember that settlement out there?

You know what they're paying common laborers in Florida at the present time, which is a really great thing, and they just

You wonder why we take the jobs we take, but nevertheless.

But also, we are, a number of suggestions have been made with regard to setting up a wage price board and all the rest.

But today we have to remember the reason that I did not move on as simply as this.

We don't want to fill the baby up with the bad ones.

This is a strong, productive economic system.

It has a problem.

It has a problem with inflation, which grew out of, as much as anything else, it always happened, go through a war, a huge spending, at a very low unemployment in that period.

We had 66, 67.

and carry over to 69.

Labor, therefore, is able to ask for more because the shortage is able to get more, and then you've got to cool it off.

Now, for example, to look at the unemployment,

The unemployment at the present time is less than 6%.

You can say online school is about 5%, 5-8%.

Okay.

If you look at unemployment in this country today, we have to realize that it would be

a little over 4% of the 2 million men who were in the armed forces and in the peace plans at the time we came into office were still there.

And by reason of winding down the wall, what we have done is we have added 2 million people to those seeking jobs.

Most people said, well, was it better then when you had 4.3 on employment when we came into office?

And it is now 5.8.

And the answer is, our goal, and this is something that all of us assume, is full employment or high employment in peak times, something this country has not achieved since World War II in the aftermath.

The only time, or the only time we even came close to 4% unemployment were two Eisenhower years, 55, 56.

55 was 4.3, 56 was 4.1.

Take the 60s for example.

The average of unemployment in the 60s in 1961, 1962, 1963, the first three years of the 60s was 6%.

And then came the Korean War and unemployment, I mean, the Vietnamese War and unemployment came down.

It continued down to 69.

70, as we cooled off the economy, as we cooled off the inflation, we found the

the unemployment actually goes up.

But we are confident that the economy is moving up, and it is.

We've got $50 billion and $52 billion in the first six months and years.

We are confident it will continue to move up, that the unemployment will go down.

So I think the key point that I want to make is this, that in January 1969, we came into office, we were losing 350 a week in Vietnam.

This week, I think the average now is between 10 and 15.

And before long, it'll be none.

And I think any farmer, businessman, or the rest will say it isn't worth it.

That is the cost of it.

We can have prosperity with peace.

And we can have, and this is the other part of it, we've got to have it without the supercharged inflation.

All inflation is running.

Some progress has been made, not enough.

But the CPI, Consumer Price Index, for 19th century was running at approximately 5.5.

And at this point, the first six months of this year, the consumer price index dropped to 3.9.

That is some progress.

Yet when you look at a steel settlement, when you look at any one monthly figure, when you look at any individual industries, industries, et cetera, there are areas that cause us very great concern.

I just want you to know first, I am concerned about the wage price push.

I am concerned about it because it is inflationary.

I'm also concerned about it because except for agriculture and a few other industries, the United States is going to price itself out of the world market and we will become a second-rate, second-class economic power world.

So we either got to face up to this and start competing with the rest of the world or the Japanese, the 300 people who live in Western Europe who are just as capable as we are, they're the same kind of people, that's where most of us came from.

The Russians needless to say, and even the Chinese, who are among the most creative and dynamic people in the world, once we start trading with them, are just going to beat our pants off.

So Americans have got to get, frankly, the days when we can say, well, we're number one.

And we know our methods are so much better.

Our productivity is so much better.

We're so much better at the way of managing things that we don't need to worry about the rest of these people around the world because they can't compete with us.

That was the case when President Eisenhower sat in his chair in 1953.

It is not the case today.

The Europeans, particularly the Germans,

are already recognized in a number of markets and have said a lot if they can do what they want.

The Japanese are an agent and the potential for the rest of the world is very, very significant.

Now, this is something that, I come back to the proposition, you representing the farm community, you could look at with some assurance

There's no way that you can see foreign agriculture really developing the way we are, because basically, the very things that we talk about, what the Russians do,

and what the Chinese do with regard to our just as work.

It isn't just a question of our having better land and better climate and all the rest.

It's the fact that while we all know agriculture isn't as free and as reliable to be, it is the fact that our agriculture system is one that by its very nature is dynamic and becomes more codemptive.

And we do more and more with less and less people and at less and less cost.

And that's why we're going to continue to lead the world in agriculture, in my opinion.

But in these other fields, if the wage, price, fire, and less continues, and labor continues to ask for more while doing less, then we're going to be very serious farmers.

So we're addressing it in the Productivity Commission.

We're also going to address it in terms of seeing what can be done to deal with it short of, and I emphasize this, short of imposing on the economy permanent wage and price controls.

There is another point of view.

In fairness, I've got to send it out.

It's the point of view.

It's really represented by the chief advisor for the

For many of those on the Democratic side in the Congress, although many of them would be .

I was going to have no part in this government.

I didn't.

testified last week, honestly believe that the United States should have a completely controlled economy.

There are many who believe that the farm should be completely controlled.

I don't believe it.

But the real trick in our system is to find a way to control the excesses

without going that extra part, that extra business that passes on the American free enterprise system so much control that it stifles the initiative, it stifles the

creative activities that have brought us where we are with the progress.

So I'm not trying to doubt your question.

I'm seriously concerned about it.

I'm trying to find, and we are voting at the highest level ever to deal with the situation, a voluntary standpoint, using persuasive powers in the presidency.

That may not be enough, and we have to find out what more can we do.

But I also, in all honesty, have to say that I have very great affinity toward the scheme, whether that's agriculture or business.

to go so far as to have government make the decisions from Washington.

We're just not that smart.

That's the point.

And don't put too much confidence in government bureaucrats.

I'm with you there.

We did a small survey in our April issue in regard to the current farm programs.

And the response showed a real appreciation, I think, for the relaxation of acres and planting controls.

The farmer is free to make his own decision.

On the other side, I think the thing reflected that there is some concern among farmers in regard to farm programs, and they are

not really, to some extent, the benefit of the farmer in trying to keep a strong agricultural economy, but rather there are times when they're promoting the cheap food policy, or they're used in terms of, well, we promote the idea of saying, wow, look, what we've done for the American consumer, we've provided all this low-cost, high-quality food.

Then the farmer says, yes, that's great, I'd have a pat on the back.

But what I think is impossible, you see, is that economy gets tighter and there's a cost for asking.

So I think on these two poles, I think you say that there's a positive and a negative side.

As a matter of fact, when you think of a food stamp, I was certainly quite surprised.

You know, as I'm sure you're aware, since we've come in,

The number of food stamps is going from 3 million to 9 million.

Now, that's something else to have.

There are 9 million people in America who have had food stamps, 3 million who came in.

Now, on the one side, I mean, all of us are, of course, warm-hearted, generous, and the rest would say it's fine, we're not going to be hungry people.

The other side of that crime is the welfare problem.

Now, we've just got to think of them a lot harder than that, because when you look at this situation with regard to welfare and food stamps and so forth, when it becomes a way of life for people to say, well, it's making more, it's more, when it can become to too many individuals, it can be worth more not to work than to work.

This also saps the vitality of the economy.

It raises the costs.

Because we talk about costs, let's not forget taxes.

Let me mention one other thing that I have a very strong feeling about the type of economy we're in.

Property taxes.

Property taxes are genius to lie.

Property taxes are regressive.

Our whole revenue sharing program, general revenue sharing program,

It is enacted.

We'll provide funds which could be used by mayors, governors, etc.

to reduce property taxes.

But beyond that, I'm having a study made of the whole tax system to see how we can provide some relief on the property tax front.

One example in that respect, many of you live in areas where there are many older people.

I know, for example, a population in Iowa and some of the parts that just particularly gets older than the younger people you've got.

And I met with a lot of older people and retired people often.

in Chicago where you've seen things.

These are retired people, not the very poor, but retired teachers.

You know the thing, they get the most as property taxes.

And that's why they're out there.

They live in there.

They buy the little houses, you know, and they live in the rent.

And so they vote more and more for education and school bonds and all the rest.

And the taxes go up.

You know, those bills, that isn't like the easy ones, you know.

It's taken out of your checks and so forth and so on.

They're painless ones.

They get it twice a year, and they get to the point of driven right out of their houses.

So the property tax thing is another thing that we have addressed ourselves indirectly to through general revenue sharing.

But then I've asked the Secretary of the Treasury to make recommendations about what other steps could be taken to relieve the burden of the property tax.

That would, of course, require a new approach at the federal level, because the state is just going to still need to know your properties all the time.

Yes, I wanted to comment first.

I feel pleased to hear you say what you said about the advantage that American agriculture has in the foreign markets.

We do, we look at it as a disadvantage that all the prices are low prices, but you turn it around and those low prices make it very competitive.

Question.

I know you're torn in many ways in foreign policy, but is there some chance that we can use such things as Okinawa or our soldiers in Japan and Europe to put pressure on Japan, particularly, and Western Europe to open up?

Japan has, what, 25% tariff on beef.

We, uh, beef production in this country, uh, we're sitting very low.

They want to drink, they want to eat that Kobe beef.

That's too expensive for Americans to eat.

And on top of that, they've got a very tight pull-up on beef.

A very small amount, but they will allow their share on the 25%.

It's preposterous.

Alright, let me, uh, let me talk about trade a moment.

We are going to adopt.

We are adopting.

If you read Secretary Connors, get him all a copy of Connors' speech in Munich.

The business community read it, and I bet you a lot of the farm editors were quoting it in the story.

But I want the rest of you to see it, because it was a textual speech made to a bunch of international banners.

But he and I talked about it before he made it.

We just talked about it.

Let me say it.

And we are now moving from the posture of, you know, when we had the dollar gap, now it's the other way around, becoming even stricter.

And now the Japanese, the Europeans, the Europeans have some very, very tough restrictions against us.

And with the British going into the common market, it'll get worse, because, you know, that'll put off another market that we've got.

And we've had some good hard talks with the British about that.

But as far as we're concerned, trade is a two-way street.

And it's no longer the situation where the United States is trying to reduce its barriers, not have any non-tariff barriers.

And that's the real thing.

This is just these 25% of the housing.

But they've got other ways, you know, to cut you off.

They have hard deals and so forth.

We are going to see, we're going to do everything we can with the industrialized free nations to see that it's quid pro quo right down the line.

And we will market some back and carry.

The other point I should make is this.

Now, this I would prefer you would just stay on your own because it is not something that should be built up too much.

There is, of course, a vast potential market in the communist world.

There's a vast potential market in, for example, China and in Russia and so forth.

You know what the problem has been with regard to British and this has been the American bottom scene.

I knock that off really catching unions for it.

Nevertheless, it's just silly to have a 50% American problems provision.

And that is going to open some things up on the China thing.

If you want to write quite honestly, what you should really try to say is the first step in education.

As far as China is concerned, mainly China, however, it doesn't mean that instantly, immediately, this year, next year, there's going to be 800 billion hungry Chinese buying hundreds of thousands of tons of American things.

That isn't going to happen.

But looking down the road, looking down the road, you can see the possibilities, because they are ever-doubting.

It will eventually certainly involve products which they can sell.

Like what?

You don't have any trade with them.

What?

Like what?

Let's Chinese trade.

Look at me back and say, well, at the present time, nothing.

Nothing of significance that we can see.

You see, because the Chinese are, while they're moving ahead in a nuclear way, in terms of their present industrial capacity, China, man and China, they have to make and produce less than Japan.

that 100 million Japanese have a greater production than mainland China.

And when I'm speaking of securities, Chinese are Chinese.

They're good businessmen.

They're good operators.

And even with that system, they inevitably are going to develop the industries and so forth, which will enable them to have some

something that they had sold to us and that we can buy from them.

But I think that some, of course, who saw the transaction said, well, that immediately opens a whole new vista for a great, expanded trade.

That is not true.

It's not yet true in Eastern Europe, although our trade is growing there.

It isn't yet true in the Soviet Union, although we just approved a $173.5 million deal to our foundry, the Connor River Project, which is also there.

But looking to the future,

It is going to be a very, it seems to be a significant opportunity.

So if I were looking ahead five years, ten years, you could see what the chances are.

But don't build it up in terms of what's going to happen next year.

That's the way I would look at it.

Mr. President, may I?

Sure.

You have commented upon keeping, maintaining the productivity, not alone for agriculture, but for all business, wholesale and retail, of those types of inputs that go into it.

And you are aware of the periodic droughts that we've been suffering in the Southern Great Plains, where we normally produce 40% of the day since we dropped 25% of the beef calves.

70% of the grain sorghum, 35 to 40% of the nation's cotton.

We've been suffering tremendously down there.

Some of that area has not produced a crop in two years.

New Mexico is still dry in total, two-thirds of Texas, one-fourth of Oklahoma.

And our long range weather forecasters indicate that this drought may continue intermittently for the next several years, probably peaking out in 1975.

So some of us have been advocating the use of our scientific know-how to normalize the weather by cow seed.

There are some differences of opinion as to the methods that might be used, such as some of them want to do it with airplanes, which are somewhat limited, and some of the rest of us want to do it with permanently faced ground generators.

But those things can be worked out.

There still, of course, are some people who have

considerable reservations about the propriety of doing it at all, but I am convinced that there is something to it, and we have a great deal of research by federal, state, and private institutions on the subject.

We are hoping that we can develop a project that will cover the entire southern Great Plains region for a period of several years to normalize, not to

I'm glad you brought this up, Doug, because it's one of very great interests.

as far as the policies and so forth.

Everybody's afraid of anything new.

We can't be afraid of it until you come to do some experiments.

You say, well, it'll rain too much, or it'll take away the rain, or it's going to go to the other state.

I know all those arguments.

But it seems to me the one thing that you've got to do is face the present, the hard fact of the present, yet it's in good.

So something's got to improve it.

So we've got to take a crack at it.

That's my view.

Now, another thing, I think, again, looking further down the road, I think we should know that we have initiated a, and this is what we've heard about for so many years, they had a program, the Bureau of Reclamation, kicking around for 20 years without much success.

But the field of desalinization

The United States, in terms of research, is ahead of the rest of the world.

In terms of applied research, it is behind.

In fact, the Germans and Japanese, among others, have built bigger applied research plants than we are.

We are correct in that.

because I don't mean necessarily to solve this problem and meet it in five years from now that the crust of a chemical you're going to have, you're going to find a way that's going to desalinate the sea water and then the whole problem is solved and the desert will bloom like the rose.

But we're making very significant progress.

And in this area, I think there is a ring of hope.

It's one of those areas that we will be working on in Texas.

Texas and California, we're putting major plans in California and Texas.

Another point that I think I should mention, too, that we have under consideration is, I know this is always raised by farmers I talk to, is frankly the

The gap between barn income and what the housewife pays

I've asked McCracken, he's done this before, too.

Is McCracken going to be able to sit with you?

All right.

I want him to talk about what I ordered him to do with regard to the supermarket prices in particular.

Supermarket prices and as compared with what the farmer's getting.

Now, we got after them on meat prices last year.

They probably didn't go up.

They got below where he knows no middleman in the supermarket.

Which I was just saying about putting a little more heat on the inflation alert on the shipping market.

The thing where he said a meat price is all over everything.

No, heat.

We're just going to, we're going to hack it.

Let me say, we're going to look into it.

We want to be unfair.

On the other hand, on the other hand, the people are entitled to know what the gap is.

And it seems to me that in some instances there is very...

pretty big gaps between, you read about the farmer, everything he's getting, and so forth, and then you see what the price is.

I know that this is, that you've got a lot of other problems.

You've got the problems with packaging, the problems with the things in between that all of you are aware of.

It's very hard to say, well, carrots,

Carrots only bring the farmer so much to the town, or a dozen or however they sell them now, a bunch.

And they have cost this much, and you all know that in between it requires a great deal that has to be added up.

But there are some areas where I think there are pieces in this field that we can't put, and I can speak to a toilet with the carrots on here in the night.

We feel that there's a little disadvantage to the farmer when a restaurant puts a tail on its

menu that says the price of steaks are 75 cents higher because of the high price of beef on the range, which happened a couple of years ago.

This is a gap in this information that our people are very concerned about.

I get a little tired of hearing that the housewife be willing to pay more.

She just understood the farmer's problems too.

I don't think she cares about the farmer's problems.

Yes, well, I am sorry I had to go ahead and do that.

Before you leave, I'd like to acknowledge all of you.

We're going to give you a good meal over there at the Blair House.

That's where, as a matter of fact, we have the engagement.

I'll tell you, that has been up through all my organizations.

I say also that the farmers that I talk to...