Administration Aids Inflation: Props For Prices
THE PRESENT'status of the price level and of inflation can be stated broadly, if perhaps overtersely, in two -sentences.</br></br>Prices are crying to come down, many important commodities having already come down markedly. The Government in Washington strives almost desperately to prevent prices from coming down.</br></br>The contending forces are illustrated concretely by recent developments about rice, reported in a dispatch from Lake Charles, La.,-to the Wall Street Journal. The price or rice has been'declining sharply. Two years ago it was nearly 57 per 100-pound bag and as late as last June it was $5.50. Today the average price is estimated at about $4.50. Likelihood of a still lower price is suggested by the size of this year's crop, coupled with the fact that a large portion of last yearÛªs crop remains unsold.</br></br>In this situation the Department of Agriculture steps in to support the price by taking a large quantity off the market at an artificial support price fixed by the department at $5 per 100-pound bag. ÛÏThe Agriculture Department spokesmen are busily exhorting growers to hang onto their rice and put it under Federal price support loans__Û The extraordinary nature of these loans is stated simply: ÛÏBy putting their rice under price support, the growers can hardly lose. They get a Federally guaranteed bank loan at the $5 a bag rate. If the market price Ûª rises above that point before the end of next April, the farmers can take back their- rice and sell it.</br></br>If the price doesn't go over the $5 average, the growers can simply leave their rice under the loan and keep the money."