Herbert Hoover: The Man and His Work

by Vernon L. Kellogg

APPENDIX I

STATEMENT GIVEN TO THE PRESS BY U. S. FOOD ADMINISTRATOR HOOVER ON NOVEMBER 12, 1918 (THE DAY AFTER THE ARMISTICE BEGAN), CONCERNING THE RESULTS OF FIFTEEN MONTHS OF FOOD ADMINISTRATION

With the war effectually over we enter a new economic era, and its immediate effect on prices is difficult to anticipate. The maintenance of the embargo will prevent depletion of our stocks by hungry Europe to any point below our necessities, and anyone who contemplates speculation in food against the needs of these people can well be warned of the prompt action of the government. The prices of some food commodities may increase, but others will decrease, because with liberated shipping accumulated stocks in the Southern hemisphere and the Far East will be available. The demands upon the United States will change in character but not in volume.

The course of food prices in the United States during the last fifteen months is of interest. In general, for the first twelve months of the Food Administration the prices to the farmer increased, but decreased to the consumer by the elimination of profiteering and speculation. Due to increases in wages, transportation, etc., the prices have been increasing during the last four months.

The currents which affect food prices in the United States are much less controlled than in the other countries at war. The powers of the Food Administration in these matters extend:

First, to the control of profits by manufacturers, wholesalers and dealers, and the control of speculation in foodstuffs. They do not extend to the control of the great majority of retailers, to public eating places, or the farmer, except so far as this can be accomplished on a voluntary basis.

Second, the controlled buying for the Allied civil populations and armies, the neutrals and the American army and navy, dominates the market in certain commodities at all times, and in other commodities part of the time. In these cases it is possible to effect, in coöperation with producers and manufacturers, a certain amount of stability in price. I have never favored attempts to fix maximum prices by law; the uni

versal history of these devices in Europe has been that they worked against the true interests of both producer and consumer.

The course of prices during the first year of the Food Administration, that is, practically the period ending July 1,1918, is clearly shown by the price indexes of the Department of Agriculture and the Department of Labor. Taking 1913 prices as the basis, the average prices of farm produce for the three months ending July 1, 1917, were, according to the Department of Agriculture's price index, 115 per cent more than the average of 1913 prices, and according to the Department of Labor index, it was 91 per cent over 1913 prices. The two departments use somewhat different bases of calculation. The average of farmers' prices one year later—that is, the three months ending July 1,1918, was, according to the Department of Agriculture indexes, 127 per cent over the 1913 basis and, according to the Department of Labor index, was 114 per cent over the 1913 average. Thus farm prices increased 12 per cent on the Department of Agriculture calculations and 23 per cent upon the Department of Labor basis.