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.

We

Mr. MARSHALL. I am sure you can get a variety of guesses. 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. sugar cane last year was

The acreage of continental

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?

The figure

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 OPA.

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 1– June 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.

This

This allocation is in accord with the recent IEFC recommendation that a total of 6,800,000 short tons of sugar, raw value, be allocated to this country for civilian and military uses and the usual minor shipments in 1947. United States allocation is 1,203,000 tons greater in 1947 than the 1946 allocation. of 5,597,000 tons.

At the same time, OPA announced the increased ration levels which the 1,740,000-ton allocation for the second quarter makes possible. The distribution of this quantity is being made on the assumption that the rationing program will be continued on essentially the present basis. Any major change in the program or significant reduction in the important sugar crops for 1947 below those now anticipated could require a reduction in allocations later in the year.

Although existing legislative authority for allocation and rationing of sugar expire March 31, 1947, unless extended by the Congress, early announcement of the supply of sugar expected to be available if rationing is extended is desirable to allow industrial users to plan their operations. In addition, OPA field offices must have sufficient time to process applications and issue ration checks to industrial users in advance of the second quarter. Under existing OPA regulations, these users may apply for their second quarter rations on or after March 10.

It was announced earlier by OPA that a ration stamp would become good for 10 pounds of sugar on April 1. Barring unpredictable disasters affecting production, today's allocation announcement will make it possible to make another 10-pound stamp good on July 1, it was stated. It is emphasized that such sugar is to cover both home canning and other home uses.

Other OPA ration plans are as follows:

1. Industrial users such as bakers, soft drink bottlers, and candy makers will have their rations increased April 1 from 60 to 75 percent of their base (usually 1941 use) plus "hardship" adjustments which OPA has previously announced for war industry users as explained in section 5 below. Preșerve manufacturers, who have been receiving 55 percent of their base (1944 use) will also be increased to 75 percent. No change will be made in allotments to pharmaceutical manufacturers. These allotments are already at 120 percent of base period use.

2. The percentage factor regulating the maximum allowances to manufacturers of bulk sweetened condensed milk will be increased from 100 percent to 110 percent of their base, effective March 1. This action is taken, OPA said, in recognition of, unusually early increases in milk production. The period of flush milk production usually continues until around the end of the second quarter. It was pointed out that no additional application need be filed by processors for March allotments, since applications already filed contain sufficient information. 3. Increased rations will be provided for hotels, restaurants, and other eating places when they apply for their May-June allotments. The increase will be consistent with other ration increases.

4. Procedures are being worked out for granting inventry adjustments, as previously announced, to retailers and wholesalers. Application forms to be filled out by retailers and wholesalers who wish to avail themselves of such adjustments will be mailed by OPA early in March. The forms also will be available at OPA branch offices. Applications may be filed immediately upon receipt of the forms. The exact amount of the adjustments to be granted will be announced later.

5. The allocation for the second quarter also provides sufficient sugar to permit the granting of hardship adjustments to industrial users who expanded their manufacturing facilities to supply the Army, Navy, and other so-called exempt agencies during the war, as previously announced by OPA. While adjustments will be made on an individual firm basis, it is anticipated that these adjustments will approximate 5 percent of the quarterly allotment to industrial users as a whole. Application forms on which these producers may apply for adjustments are now available at all OPA sugar branch offices.

Senator SPARKMAN. What does that represent as a net increase per person for the year?

Mr. MARSHALL. If that is carried out through the year, as expected, and if the supplies materialize to fill this 6,800,000 allocation, it

will be 35 pounds per person of direct sugar, compared to 25 pounds

last year.

The announced rate for the so-called percentage industrial users was 75, as compared with the recent 60 percent of 1941 use.

Senator MAYBANK. That is 15 percent?

Mr. MARSHALL. It is 15 points.

Senator MAYBANK. Out of 75 points?

Mr. MARSHALL. That is right; from the original 60 to 75. Senator MAYBANK. What about the canning program? The Department of Agriculture has always been so much interested in it, and down in my section there is a great deal of canning of fruits, as you know. What arrangements have been made about that?

Mr. MARSHALL. Well, as you know, last year the OPA made available 15 pounds of direct sugar to the household user, and a 10-pound stamp specifically designated for home canning, which made 25 pounds total.

That stamp was made available to everyone, and had to be made available to everyone under the limited organization they had under which they just could not work out a special home-canning program.

Since that is the way it worked out, they just did not designate a specific stamp for home canning this year, and are actually giving 10 pounds per capita more sugar under the schedule than last year, including the home-canning sugar in last year's announcement. Senator BRICKER. Whether they can or not?

Mr. MARSHALL. Yes.

Senator MAYBANK. Whether they can or not, they get the same amount of sugar.

Mr. MARSHALL. That is right.

Senator MAYBANK. You think that they carry out the program of canning stamps for the reason of insufficient funds or organization or what?

Senator FLANDERS. That is an OPA question.

Mr. MARSHALL. I think we would prefer that the OPA answer that. We have discussed it with them a great deal, and we have to agree that we cannot see any way without some tremendous organization for that which would be difficult to justify at this stage.

Senator MAYBANK. Can you not do it through the county agents? Mr. MARSHALL. That is a bare possibility, but I would like to request that you discuss that with the OPA.

Senator MAYBANK. It would be a possibility.

Mr. MARSHALL. It is a possibility.

Senator MAYBANK. Because you have a county agent everywhere where you need any canning.

Mr. MARSHALL. One of the problems you run into on that immediately is that a lot of people in the cities do canning, too, and it would be a tremendous job for the county agents to try to make sugar available to everyone that wanted to buy farm produce and do canning.

Senator BRICKER. How many of those coupons given in lieu of canning coupons were not actually redeemed or not used; do you know?

Mr. MARSHALL. I would not have any estimate.