position as we come closer to the decontrol period, or it could be. allocated to make up a deficit some place else.

Senator BRICKER. Who would determine that, and how would it be determined?

Mr. MARSHALL. The determination, the recommendation on that, is made by the sugar committee of the International Emergency Food Council. However, any recommendation determined there is not effective as it relates to any of our sugar until we, the United States · Government, agree to it. That is, the Council is merely a recommending body and cannot make any distribution of that sugar, any allocation of the sugar, until it is agreed upon by the Government.

In this case it would be difficult to make that type of determination. until right at the end of the year, until we know all of the crop is in. Senator BRICKER. We receive no particular benefit then, if your program is carried out by an increased production in this country.

Mr. MARSHALL. Yes; we would receive this very definite benefitthat it would go into our stock at the end of the year to give us a better distribution in the early part of next year.

Senator FLANDERS. What is the legal basis for this world allocation?

Mr. MARSHALL. Well, the legal basis for the allocation itself is the War Powers Act. That is a basis to permit the United States to adopt measures to make an allocation effective.

As I have said before, the international body, the International Emergency Food Council, does not allocate the sugar; it recommends. Each individual government does the allocating. The United States. allocates-if it accepts that recommendation, it allocates in accordance with it. Our allocation powers are derived from the Second War Powers Act.

Of course, in our case, the distribution of the sugar that we have anything to do with is the Cuban sugar, which has been purchased by the Commodity Credit Corporation on behalf of all of the governments that have normally drawn sugar from Cuba, and that are parties to this international sugar distribution arrangement. That is merely a contractual arrangement to permit one body to buy the entire crop, rather than several governments in there bidding against each other.

Senator BRICKER. How does the distribution of this allocation compare with the consumption, prewar, among the various nations that are parties to the allocating formula?

Mr. MARSHALL. The allocation here gives the United States, the United Kingdom, and Canada, if the latter countries also get the 200,000 tons of undesignated sugar which is a larger part of their total than our 200,000 from undesignated sources-if they get that, it gives us the same per capita consumption, on the raw basis about 93 pounds, as compared with 103 pounds prewar. The other countries are, roughly, the same prewar. The United Kingdom show something over 103 as the normal consumption. That is roughly 90 percent of the prewar. The countries of Europe, most of them that are drawing sugar from this pool, if they get their undesignated sugar, will have about 75 per-

cent of prewar; that is, 75 percent of their prewar per capita consumption. Their per capita consumption prewar was much lower than ours, ranging from 25 up to 75 pounds in most cases, except Sweden and Denmark, perhaps, which were a litttle higher, and they produce all of their sugar, or substantially all of it.

Senator BRICKER. You say there is no quota in effect now. was taken off at the beginning of the war?

Mr. MARSHALL. Yes, sir.

That

Senator BRICKER. How do you account for the fact that about half of the refiners in the Middle West in the beet-sugar field went out of business in the war?

Mr. MARSHALL. That was, sir, because the production of sugar beets fell off for some of the reasons that I have mentioned earlier, and perhaps others.

The scarcity of labor and the difficulty of obtaining labor during the war period, and sugar beets do require a very substantial amount of labor, the fear on the part of the farmers that they would not be able to obtain the labor to thin and harvest their crops, the attractiveness of some of the other crops that were needed during the war period, and some perhaps that were not. Some of the particular competitive crops in large volume are potatoes and beans. There are numerous truck and vegetable crops.

Senator BBICKER. Did the refusal and the failure of the OPA to fix a price at the proper time have anything to do with it, in your judgment?

Mr. MARSHALL. Well, sir, if by that you mean would a higher price have brought forth

Senator BRICKER. No; any price fixed at a proper time.

Mr. MARSHALL. So far as I know, no, sir.

Senator BRICKER. You do not think so?

Mr. MARSHALL. That would not have been an important factor.
Senator BRICKER. You did not follow that?

Mr. MARSHALL. Yes; I followed that. I do not see that it was an important factor.

Senator BRICKER. You do not know anything about the negotiations between the State Department and Agriculture and OPA here in Washington, then, in their effort to get the price fixed and determined in time to get the crops planted, do you?

Mr. MARSHALL. Well, I am sure I must, because I have been around here. I am not sure that I know the particular discussions that you are referring to.

Senator BRICKER. Was not the refusal of the Department and OPA to properly give to the farmers—the State Department and Agriculture-a price at a proper time the real reason for the cut in the acreage of sugar and the loss of the refineries in the Middle West?

Mr. MARSHALL. I do not think so, sir.

Senator BRICKER. That is your opinion?

Mr. MARSHALL. Yes, sir.

Senator FLANDERS. I wonder if you would be willing to look into the crystal ball for a minute or two. This resolution terminates allocation and price control as of March 31 of next year, or earlier if conditions seem to warrant.

Have you any expectation that world production will improve to an extent where you would recommend releasing these controls and allocations a year from now? Is there any way of looking into the future?

Mr. MARSHALL. Well, it is very difficult, sir, but there is every expectation that the production of sugar in Europe will be increased very considerably this year over last year and the year before. It should increase enough to reduce the demands of those countries on the Cuban supply considerably. That production will be brought in and will be processed roughly during the same period that our beet crop will be processed from October to January.

This resolution proposes that, in effect, the Secretary of Agriculture review the sugar supply, the prospective sugar supply situation from time to time, with the view to removing the controls as soon as such supply conditions permit.

I am sure that the Department of Agriculture-insofar as I know, everyone in the Government that has anything to do with sugar controls wants to remove them just as soon as possible. If the supply outlook is such before next March that they can be removed, we will be very happy to remove them.

Senator BRICKER. What will be the effect on price if they were removed entirely now?

Mr. MARSHALL. As of today?

Senator BRICKER. Yes, sir.

Mr. MARSHALL. I am sure you can get a variety of guesses. We think, because of the disparity between the amount of sugar that will be available for use, 6,800,000 tons, and 8,000,000 or 8,500,000 tons that could be expected to be taken in this year to replenish the stocks that are low and to provide normal consumption, and perhaps above normal consumption that people would take under present income conditions, that for a time the price of sugar might easily be multiplied by two, three, or four, that it might go to 20, 30, 40 cents for refined sugar.

It perhaps would not remain for a long period at that level, depending upon what happened to the world supplies, how much other countries would be willing to give up for our high price and do without the sugar themselves. We have no basis for estimating that until it is tried out.

However, it does seem reasonable to expect that we would go through the same sort of inflationary and speculative process that occurred when prices were taken off after the last war.

Senator BRICKER. What about the acreage planted in this country, both in sugar beets and cane, as compared to last year? Do you have any figures on that?

Mr. MARSHALL. Yes, sir. The planted acreage of sugar beets last year was 930,000 acres. We expect and hope that that acreage this year will be over a million. Our goal is 1,069,000 acres.

The acreage of continental sugar cane last year was. The figure

on this table is not legible.

Senator FLANDERS. It has not been censored, has it?

Mr. MARSHALL. No, sir. It was 310,000 acres.
Senator BRICKER. This last year?

Mr. MARSHALL. Yes, sir. The goal this year is 327,000 acres. Senator BRICKER. What methods are you using to get those goalsjust by encouragement, advertisement, promotion? By agricultural agents, and so forth?

Mr. MARSHALL. Up until this year in both the cane and the beet areas, we have done it by giving all of the help that the Department could give in acquiring labor to take care of the crops.

Senator BRICKER. That is the imported labor?

Mr. MARSHALL. Through the labor program authorized by the Congress.

Senator BRICKER. That is just not much more than carrying on the program previous to the war. They always came in in the beet sugar field; did they not?

Mr. MARSHALL. That is right. They would not have come in during the war years. Up to this time we have had guarantee programs for both the cane and beet areas, assuring the farmers, even though the price ceilings were at the then current levels, they would be guaranteed a certain amount above the ceilings by the Government.

A program of that nature is in effect this year for the beet area, and was put into effect last fall in time to affect the early plantings of beets beginning in California in the fall for this year's harvest.

Senator BRICKER. That is in the nature of a subsidy.

Mr. MARSHALL. It was a guarantee on the part of the Government that the growers would get a certain average minimum return for their beets, a national average of $14.50 per ton for beets of average quality.

Senator BRICKER. Would the market support that?

Mr. MARSHALL. The market at that time when the program was announced did not by a considerable margin, and the purpose of it was to assure them that they would get more than the market then reflected.

Since that time the ceiling price has been increased to the point that now it exactly meets that guarantee, and in view of that no further guarantee has been extended to the continental areas. The Hawaiian and Puerto Rican areas have agreements and our purchase contract is being worked out in the case of Puerto Rico to give them the same payment for their sugar as is paid to Cuba under the purchase contract which we have that ties the price of sugar to a cost of food and cost of living index in this country. They will be paid a usual differential over the price of Cuban sugar.

Senator BRICKER. Then you have the power under this resolution to do that?

Mr. MARSHALL. This resolution?

Senator BRICKER. To continue that adjustment.

Mr. MARSHALL. This resolution does not affect that.

Senator FLANDERS. Any other questions?

Senator BRICKER. I would like to ask one more question.

By your system of allocation at the present time, that is among users in the country, established users and those who desire to enter into this new ones that might use sugar-what provisions have you made to make it possible for people to enter into the business anew? Senator FLANDERS. Does that come under the OPA?

Mr. MARSHALL. The OPA could much better answer that.

Senator BRICKER. They could better answer that than you could? Mr. MARSHALL. Yes.

One additional statement that I would like to elaborate on that I made earlier about the action of the President in establishing the Office of Temporary Controls. That having been done to establish an office for the purpose of liquidating temporary functions of this kind, we naturally prefer that it be done in that way, because we think it makes good sense to do it in that way, and not at this late date to have to transfer ration and price-control programs to a new agency involving a lot of shifts in personnel, and a splitting up of personnel which are performig functions on sugar, as well as on rents and housing and some other items.

Also in addition to that-the job of splitting up personnel-there would be a job of training new personnel to do this type of work at a very late date. For that reason we have made the statement that we much prefer, strongly prefer, that this function be left where it is for purposes of liquidation.

However, we realize that the Congress is working on this legislation, and we will do whatever the law provides. We express a very strong preference for retaining the temporary office.

Senator BRICKER. I think you must realize that there is a pretty good demand that OPA be abolished at the earliest time. The public has more confidence in the Department of Agriculture than the ОРА.

Senator FLANDERS I think now is a good time to bring on OPA.
Senator MAYBANK. Let me ask one question.

I notice you mention the increases in here in connection with the household users as well as commercial users. I have read in the paper what the increases are.

Would you put that in the record?

Mr. MARSHALL. There was a press announcement yesterday afternoon which stated that beginning April 1, the household user of sugar would be increased, and that part of the announcement had previously been made also.

It was announced they would receive a 10-pound stamp, and the announcement yesterday indicated that another 10-pound stamp could be made available on July 1.

Senator FLANDERS. That announcement will go into the record. (The announcement referred to is as follows:)

DEPARTMENT OF AGRICULTURE

OFFICE OF TEMPORARY CONTROLS, OFFICE OF PRICE ADMINISTRATION

(For immediate release: Wednesday, February 26, 1947)

The United States Department of Agriculture and the Office of Price Administration today announced increased sugar allocations and upward changes in rationing levels.

The Department of Agriculture announced that the second quarter (April 1June 30, 1947) civilian sugar allocation will be 1,740,000 short tons, raw value. This is 355,000 tons greater than the second quarter allocation in 1946.