U.S. Aid Affects Dominion Markets

Northern Advocate, 20 November 1941, Page 8

U.S. Aid Affects Dominion Markets

The Washington correspondent of the “Sydney Morning Herald” wrote as follows in a recent issue of the paper: The increasingly important part that shipments of foodstuffs to Great Britain are destined to play in America's lease-lend programme of war aid is only now becoming apparent. While the Dominions are well aware that this will seriously diminish the quantities of foodstuffs that Great Britain might otherwise take from them, the problem of shipping and shipping distances is such that there is no practical alternative. The principal reasons for America's desire to make food a leading item under lease-lend are:— (1) To benefit American farmers. (2) The need to dispose of surpluses. (3) The presence of readily available stocks of foodstuffs which, unlike guns, aeroplanes, and munitions, do not have to wait for factory construction or long-delayed tooling periods for mass production. The problem for the Dominions is recognised to be an exceptionally difficult one. Australia and Canada, for instance, are primary producers which even in normal, and certainly in these abnormal, times require overseas markets for these products to assure the maintenance of their internal economy. What will Australian and Canadian agriculturists do if the United States is going to take their markets in Great Britain? But more than that, the Dominions need constantly to augment their London exchange reserves to meet longstanding recurrent obligations to the Mother Country, and to pay war costs. This, moreover, all ties in with the dollar exchange position. The amount of dollar exchange which Great Britain can make available to the Dominions is linked to the size of Britain’s sterling obligations to them. The whole thing cuts many ways, and is presenting both Dominion and British officials in Londan and Washington with one of the most puzzling problems of financing the war.

llovv Lease-Lend Operates Of course, the over-all operation of the lease-lend programme is designed to lighten that problem. Generally speaking, lease-lend operates in the following manner: All Empire dollar exchange in America is pooled, into it going' the proceeds of sales in the United States of, say, Australia’s wool, South Africa’s gold, Canada's aluminium and nickel, and Great Britain’s manufactured goods. As bill for Empire purchases of war materials 'in this country are presented by the manufacturers, these are paid from the pool. This, however, only too frequently runs dry, and it is then that advances are made by the United States Treasury from the lease-lend appropriations to meet these commitments. There are other ways in which lease-lend operates, such as’ the direct allotment of guns, aeroplanes, etc., by the War and Navy Departments to Great Britain, but the first outlined method is the principal one. It can be deduced that while priorities to the Empire are determined, for the most part, by the measuring stick of the contribution that any priority grant offers to the essential war effort, none the less, to the degree that the Dominions lack proceeds from overseas sales wherewith to keep the dollar exchange contributions more nearly in line with their needs of war and other materials will the latitude they have in making the purchases be restricted. Altogether, it is a circular position, with each section of the circle limiting the readiness with which the whole can be maintained. And the reduction of Dominion foodstuff shipments to Great Britain is an important section.

Flew of Food Up to the end of August last, only 110,606,000 dollars’ worth of foodstuffs was transferred to the Allies under the American lease-lend arrangements. But this was more than a third of the total of all transfers, including war material. Mr. Claude R. Wickard (United States Secretary of Agriculture) has '.nnounced, moreover, that before June 30, 1942, the United States j expects to supply Great Britain with [ 1,000,000,000 dollars’ worth of comestibles. J In a series of regional agricultural j defence conferences just ended, Mr. | Wickard outlined plans for making j next year’s agricultural production in America the greatest in all history. He said that 1941 was the second successive year of record farm production in the United States, but that 1942 must produce even more of certain vital foods, in order that America's and Britain's growing food needs may be satisfied. The United States Government is committed to supply between now and June, 1942, under the terms of the Lease-Lend Act, huge quantities of dairy, pork, and poultry products. It is estimated that among Britain’s needs will be cheese, evaporated milk, and dry skim milk, requiring the processing of about 5,000,000,000 pounds of milk. Also, she will need 1,500,000.000 pounds of lard—the produce of some 9,000,000 hogs. In addition, about 500,000,000 dozen eggs will be required, the output of over 50,000,000 hens. Besides, 18,000,000 pounds of poultry meat is envisaged. It is interesting to note, too, that an immense effor# will be entailed in carrying out this programme—-an effort which, but for shipping problems, could be better applied where America’s contribution could not be duplicated by the Dominions.

“The total farm production provided for in these goals is the largest ever turned out by American agriculture,” Mi\ Wickard said. “This is done in the face of the knowledge that labour may be short in many sections,' fertiliser may be scarce, and farm machinery may be hard to get.” Stabilising Products In referring to the labour shortage in farm areas, he stated that he had consulted the Selective Service Administrator on this matter last .Spring, with the result that “in most instances the military Selective Service Boards have seen the wisdom of deferring young men who work on farms.” Many of the farmers who have examined the secretary’s proposals are worried about next year’s income, and the effect of the attempt to stabilise farm products prices, which is to accompany the increased foodstuffs production plans. In this connection, Mr. Wickard has explained: “The national farm programme in general is being managed to safeguard the farmer’s income from next year's production. He can increase his production for next year without risking his security for the future. A new act of .Congress, which became effective on July 1 this year, directs that whenever the Secretary of Agriculture, during the emergency, finds it necessary to encourage expansion in the production of any non-basic commodity, he shall issue a public notice, and then, within the limits of available funds, conduct the farm programme so as to support a farm price for the commodity of not less than 85 per cent, of parity (based on the 1910-1914 farm prices). Farmers Protected “Under this new legislation, I have already given public notice covering until December 31, 1942, hogs, eggs, evaporated milk, cheese and chickens. Subject to the availability of funds for price support, I shall amend the notice to cover other commodities, if it becomes necessary to give special encouragement to the expansion of production of such commodities. “This legislation gives farmers more protection against price collapse than they have ever had before. If and when Congress acts favourably on the President’s request for additional lease-lend funds, 1,000,000,090 dollars will be available for the purchase of food. This will ensure the support of prices of products for which increased production is requested. The American people, as represented by the Congress. will see to it that farmers are not penalised for contributing freely and fully to the defence effort.” Lack of general shipping, a dearth of refrigeration space, the long shipping distances between Great Britain and the Dominions, with the exception of Canada, as well as perhaps the not unnatural desire of the United States to give its farmers even if only an adventitious benefit from lease-lend are responsible for the conditions indicated above. In this instance, too, the tangent of forces, while clearly not the most desirable, seems nevertheless an inevitable one.