NFO-102 (AV10509): US Farm Report: Embezzlement

I want to talk about the greatest embezzlement that the world has ever known or maybe I should say that the world has ever experienced because I doubt if the world knows about it this is the topic for today [music] welcome to us farm report brought to you in the interest of agriculture rural business and the welfare of our nation by members of the national farmers organization in this listening area we're glad to have this opportunity to present to you top leaders in the voice of agriculture today our special guests are Arnold Paulson rural businessman from granite Falls Minnesota who heads the Minnesota business and industrial promotion agency and W. W. Butch Swai, national director of NFO research and public information mr. Paulson what is this greatest embezzlement that the world has ever experienced you speak about what's the greatest embezzlement that the world has ever experienced as the embezzlement of agriculture the embezzlement that's taken place right here in the United States during the past 15 years eight years under the Republican administration seven years under the Democrats and it's been a continual embezzlement increasing in intensity- intensity every year the embezzlement I'm referring to is the 421 billion dollars that the American farmers have been underpaid since 1950 now the American people have seemed quite content with the low price food that they've been buying at the grocery stores in the supermarkets at the expense of the American farmer but I'd like to translate this to the cost to the American consumer into our national economy because for every dollar that we've underpaid the American farmer for the past 15 years the national economy has lost seven times this amount or a total of 2 trillion 947 billion dollars as what we have embezzled from ourselves because of our failure to understand agricultural economics I'd like to translate this to business and industry anyone that will take the time to analyze the records of the economy of the United States obtain a copy of the president's economic report is transmitted to the members of Congress 1966 and analyzed this for yourself every dollar that we pay as a nation for the resources that are consumed by the American public every year as this dollar travels through the arteries of our national economy it actually generates five dollars of national income every dollar that we pay the American farmer as this dollar travels through the arteries of our economy generates seven dollars of national income the one thing that I'd like to point out today is that the profits of all of the business and industries throughout the nation can be no greater than the price that we pay for the resources that we as a nation consume but let's put it another way the profits that are earned by every business and industry throughout the United States each and every given year is the price that we pay for the raw products that starts our economic cycle I can prove this by taking the records of the United States government we find that 80 percent of the total national income is operating costs for wages and interests and other factors and the 20 percent of our total national income is the profit that's earned by all of the business segments of our economy for transportation the retail trade the manufacturing profits and so forth so as we take 80 percent of the five dollars that's created by the price we pay for the natural resources 80 percent of the five dollars is four dollars or operating costs 20 percent of the national income amounts to one dollar or the one dollar that we originally paid for the Reed sources in the beginning to operate and maintain our economy so as we analyze this thing the American people have been living in fool's paradise thinking that we can get by without paying for our food bill because as a result of this fantastic underpayment to agriculture 421 billion dollars the national economy has lost two trillion 947 billion dollars we have covered this up by the fantastic and injection of credit to keep our economy moving and to sustain itself until today now think of this this figure is staggering until today the total debt in the United States public and private amounts to one trillion four hundred and fifty billion seven hundred million dollars this is what we have embezzled from our future because of our failure to understand agricultural economics who's going to pay for it certainly not you or me Butch because our days are already numbered we've spent the most of our life so this we have passed on for our children and our grandchildren to inherit they are the ones that will pay for the foolish mistakes that we as adults have made during the past 15 years we have embezzled it from ourselves because of our failure to take time to analyze the fantastic impact that agriculture has on our national economy why agriculture because agriculture is the beginning of the cycle agriculture is where we create 71% of all of the new wealth that's necessary to keep and sustain our national economy think of it which 421 billion dollars the American farmers have been underpaid in 15 years how long did you tell me that it would operating at the present level or the level that we have been to pay this that off if all of the profit that we earned was applied to it without anything taking out for living or anything else well let's put it this way butch if we took every penny of profit that every corporation in America has earned since 1950 through 1965 without paying any corporation taxes or taking any money off for reserves to expand or anything else if we applied the entire profits of every corporation in America they couldn't even pay off their own debt this is how fantastic it is and I don't think the American people realized the danger that lies ahead unless we wake up and challenge the thinking of our leaders in both political parties because they themselves do not realize butch what is happening to the greatest economy that the world has ever known what's happened over the years folks that they have underpaid agriculture under the pretense law under the theory that agriculture prices had to be reduced a little more each year and this is a fallacy because the records of the United States prove that each dollar of gross farm income generates seven dollars of national income now when you take all raw materials as Arnold pointed out it's a five to one ratio but over the years they have operated under the theory that if they pay a little less for food it'll have more money to buy other things but it doesn't work this way this is where they've been asleep at the switch or mixed up in their thinking or call it whatever you will this is where they've been wrong and before and times gone by we've challenged others to prove that we are wrong we have offered to meet with these people anywhere anywhere in the United States we have some of the top economists of the nation that does research work for us and as one of them pointed out Dr. Leon Kazling economic advisor under the late Harry Truman he says under the present system the flying blind without a plan and I certainly would be the first to agree with them when you are absolutely but house they've done this over the years they've rigged the parity or the major stick and Arnold let's discuss parity here for just a minute you're a little better versed on it than I am will flash it on the camera here and discuss it a little bit there what is parity and why do we talk about parity and NFO we like to talk about the cost of production plus a reasonable profit because most certainly they haven't never rigged that scale till they've rigged this out of business like they have on parity well butch rather than use my own words and my own interpretation I'd like to use this copy the farmers worst five years which has just recently been released 1961 through 1965 and I'd like to use the interpretation of a member of the Department of Agriculture who just this past week resigned Frank M Lou Rux who was the general sales manager the United States Department of Government or agriculture in the foreign agricultural service and here is his definition of parity what is parity parity is the farmers yardstick it is set up by the Congress of the United States it is not a fixed figure in dollars and cents now the legal definition is long and technical but essentially parity is that price for farm products which will give the farmer the same purchasing power from the return on each unit of its products as in a reasonable past base period the base period is one where those relationships are considered normal parity follows the free market it goes down as the price the farmers purchasing power goes down it goes up only after farmers costs goes up therefore for the farmer to receive full parity for his products this means simply that he retains his relative economic position full parity only gives the farmer a fair price nothing more nothing less but why is parity so important many wonder why this concern over parity of income for the farmer organized labor is protected by wage contracts business is protected by business contracts the utilities are protected by an assured income based on a certain return on capital invested subject only to public regulatory bodies the farmer alone of all large segments of the economy have no predetermined price protection except as the government offers price support on some commodity and unlike other segments the farmer to date has no business forum in which to negotiate his prices the price issue comes up only after the farmer has invested his work and therefore must dispose of his product it is for this reason that the parity concept setting up what is considered to be a fair price has been determined by the Congress in the interest of all America parity of income is no set price guarantee it is only the income a farmer should get for his products based on the prices that he must pay now butch I want to re-emphasize this one thing parity is set up by the Congress of the United States and I'd like to extend this challenge here are now to every congressman that's listening to this program Mr. Congressman and Mr. Senator when are you going to assume your responsibility is representing farmers and start using a honest yardstick in measuring farm parity instead of the crooked yardstick that's been being used how long or how can we intend or expect to ever give the American farmer a hundred percent of parity or honest parity or full parity of income as long as we use a yardstick that only measures 18 inches it's high time that we correct the parity formula and substitute it with an honest parity now what am I talking about I say we're using a false parity base and the members of Congress of the United States are responsible for this I want to point it out very clearly the original base of parity that we were using in this country was based on the years 1910 through 1914 this is what we called the base period of 100 this period was changed after the war we use the three years 1947, 48, and 49 as our base period of a hundred now why did we pick these three years it's because all of the commodity prices and wages we're in almost exact balance with the period of 1910 and 1914 the base period they use 1947, 1948, and 49 every segment of our economy was an almost exact balance with the other segments during this period of time the American farmer was receiving fair and honest parity in relationship to labor the profits of corporations and business and so forth but what happened Congress or I should say the Council of Economic Advisers are really the guilty ones because they changed this in 1962 they changed the formula and they're now using the years 1957, 58, and 59 as a base period of 100 but as we an analyzed agricultural commodity prices in 1957 through 59 the American farmer was only receiving approximately 70 to 71 percent of true parity but they called it a hundred why I don't know evidently they thought the American farmer wouldn't know any better but as we analyzed the parity in today and you'll hear your own congressman and your senator say that the American farmers only receiving around 80 to 81 percent of parity what he is saying in reality is the American farmer is only receiving approximately 80 percent of crooked parity because if we analyze this on the basis of true parity the American farmer today is not receiving eighty percent but he is receiving 70 percent of crooked parity in other words the American farmer is being underpaid he's receiving only fifty four point seven percent of his rightful share of the national income now we can project this a little farther butch by turning to page 43 of the book that we were referring to and why don't you go ahead and show the comparison again you will notice there folks by the first bar back there in 1933 through 1940 the parity at that time this was the Depression years or right at the beginning of the depression by 1940 it was partly over but the parity at that time was the farmers were receiving was eighty-one percent then if you'll move on up another period 1946 through 52 after the war when as Arnold pointed out 1947, 48, 49 was when it was an exact parity but when you figure the whole years through their 1946 through 1952 the farmers were receiving slightly above parity for this full period or a hundred and seven percent now in 1953 through 1960 they had began at this time I will you left out part of the rig parity they began to decide that the farmer could live off of his fat that in the 1947 they began to add in some hidden figures in there that covered up or stretched the farm income a little bit so that later on that the farmer could be this parity could be rigged downward this was a this was a rigged deal by any sense of imagination but they still received under this particular thing eighty four and five ten percent of parity but this was rigged down so it was a roughly twenty percent under what they should have been receiving and then when it was you spoke of the period there when it was rigged again when they adopted automatically the period 1957, 58, 59 as the new parity formula without even saying a word to Congress about it under this scale it's roughly farmer received last year roughly half that that thing would been figured out on honest parity put your mark young man your pointer at fifty percent or just a little above fifty percent about 55 percent Arnold tells me here this is where it would be if you were still using an honest parity so how can you expect to keep a sound economy when you cheat agriculture out of one dollar of gross income you're cheating the rest of the nation out of seven dollars of national income or earned income for the rest of the nation how can you expect not to run out of money at some day and not to run out of credit the night not have tight money as some of the economists point out we've been in the period as far as agriculture is concerned a period of profitless prosperity profitless prosperity think about that one for a little bit and it goes ahead to say that this is sort of a spinning your wheel and this is what's happened to agriculture we've spun a wheel so much we've shortchange the rest of the economy of this trade turn of the farm dollar to the extent that now the whole nation is running out of money and credit we're doing this to the whole world because as we alter the economy of the United States or if we should cause it to collapse as France says the United States now and you just as well face it folks here's what France thinks of the United States French view of the United States at the US is a great country alright immensely powerful once one trouble is that it's heading for insolvency or more crudely bankruptcy this is what the rest of the world are not necessarily all in the world this is taken right from the US News and World Report a recent addition this is what France probably the most sound economy in the world today because they're smart enough to trade in their dollar claims for gold our gold is flowing out of this country and it's in the tills of other countries of the world right now if I have my figures right we have about twenty eight billion dollars worth of dollar claims against our gold supply of which we have roughly four billion dollars in free gold and Arnold I think you're right when you say that's the worst embezzlement the world has ever known because it's bringing on the insolvency of our country we have time to correct it yet what if it isn't corrected and think about it this way we have a nice map of the world here behind this world if you'll take a look here I want to show you where we stand the world today you see the whole world here United States in the middle it should be because it is the center of the food producing we're the breadbasket of the whole world there's only three regions out of all this vast area that can feed itself you have the little area of New Zealand and you can see that that can't produce much food you have Australia that can produce a little more than they eat and you have North America from the Mexican border on north and you know that much of the climate in Canada is far too cold to raise anything so this leaves the United States to more or less feed the world now how are we going to feed the world at world prices or to continue to embezzle the money from the American farmer to take the money out of our total economy and keep on going we're six percent of the people the world but using our American system by 1929 we had created roughly half of the dollar wealth of the whole world but then they begin to talk us into this world deal this world price and they're talking the price down all the time they're wanting to make us believe that we should feed the world at world prices now how in the world can we Perry American prices for manufactured goods feed the world at the so-called world price level and stay in business it simply can't be done Butch I'd like to inject one thought right here and this is my own analysis as I analyze agricultural prices over the past 15 years why our agricultural commodity prices at the low level where they're at I think it's because of the tremendous pressure that's being applied butch from the special interest groups because as I analyze the price that the American farmers being paid it's almost in constant balance with the price of gold at $35 an ounce this is the majoring stick that we're using for world trade this is the price that other countries are receiving for their commodities for their copper and zinc and and tin and rubber and so forth now the one thing that the United States can produce efficiently and in abundance is food the things that we need from other countries are the other hard resources the resources I mentioned copper zinc tin and so forth rubber so how are we going to acquire these resources at a relatively low price by exchanging low price food the one thing that we can produce an abundance all at the expense of the American farmer the expense of rural America Butch I think one thing that we should emphasize before we go off the air in the last few minutes is this there are two bills that are coming up in Congress one is introduced by Senator McGovern and the other by Senator Mondale of Minnesota and I think that everyone should support these two senators to see that their bills get passed would you like to highlight McGovern's bill for one moment you go ahead on McGovern bill I'll touch on Mondale's well what they're trying to do and I don't think we have time to cover them both for butch we're almost out of time but senator Mondale now is introducing a bill that's going to force Congress to break down the dollar payments that goes to agriculture in other words the American consumers been led to believe that the United States government is supporting or financing a bunch of lazy and inefficient farmers by subsidizing them to the amount of seven billion dollars a year what senator Mondale wants to do is break this down and show where every dollar is going and how much of this the American farmer is actually receiving the American farmer is only receiving about 2.6 billion of this or roughly one-third the rest of it's going to finance forestry the protection of our forests and and and many other programs where all of the Americans are receiving benefits I'd like to encourage everyone listening to this program to write to your Congressman your senator regardless of who he might be and to support not only the McGovern bill senator McGovern from South Dakota but also senator Mondale's bill from Minnesota get your letters written today because they need your support Arnold getting back to this thing of feeding the world let's look at the example we've got a about a couple of minutes left let's look at the example of England what England did was to bleed its colonies from its natural resources at less than cost of production to those people that producing them the same thing has been happening to America we've been bleeding the United States ourselves of our natural resources at less than cost of production to the American farmer we're bleeding ourselves into bankruptcy through this method because we're shortchanging the rest of the economy seven dollars for every dollar that we under pay gross dollar that we under pay agriculture how foolish can we get how much longer will it go on it remains to be seen we know that it happened to England we know that it happened to the Roman Empire we know they did exactly the same thing several years ago and I say this are we ahead of them or are we behind them because we're doing the same thing how are we gonna solve this thing butch we're going to solve this thing by banding the farmers together rural America banding it together to demand a price for our natural resources based on cost of production plus a reasonable profit and this in itself is a very simple matter as soon as they wake up and begin to work together Arnold I agree Butch merchants the bankers the ministers and everybody in rural America has a bigger stake in this and the farmers themselves especially the young folks because they're going to be saddled with these debts it's going to have to be paid we have time to do it now but one year from now two years from now maybe too late the time remains to be seen Arnold why don't you give them a quick one there well I'll tell you folks time's our worst enemy and time is running out both here on this program and for our national economy and if we don't restore farm prices to balance with wages and interest the American farmer gets his fair share of the national income our entire economic system is going to crumble Thank You. [music] US farm report has been brought to you as a public service in the interest of agriculture rural business and the well-being of our nation u.s. farm report is presented as today's special guests Arnold Paulson head of the Minnesota business and industrial promotion agency of Granite Falls Minnesota and WW Butch Swaim national director of NFO research and public information members of the national farmers organization invite you to tune in again next week for more facts on agriculture the economic keystone of America [music]