NFO-84 (AV10490) US Farm Report: How Your Community Gets Its Money

welcome to the u.s. farm report presented by members of the national farmers organization nfo presents how your community gets its money with today's special guests ww-would Swain nfo national promotional director and Arnold Paulson's rural business man from Granite Falls Minnesota who heads Minnesota business and industrial promotional agency family farm agriculture the grass roots of America thank you for this opportunity to visit with you a few moments today I have with my guest Arnold paulsen who heads up the Minnesota business and promotional industrial agency and worked long and hard to work out the problem of how communities get their money that they can do to better their position in our economy and what it would take to help solve this problem that we're in and I know some time a dole aren't all we had you on the previous program and you explained a little bit of how your community gets its money and we've had numerous requests to go in and do it a little bit more detail to point out a little bit better and a little clearer how this is happening and how this comes about and why new industry won't solve our problem out here in rural America would you want to cover this just for a little bit and then I've got a couple of three more questions I'd like to ask you well thank you very much which maybe we can start off by using an illustration or telling how I became involved or concerned about the problem of Agriculture a few years ago I was running a survey on my own community to find out for myself exactly what effect the basic industrial payroll in our community had on the per capita income of the people living in our community now this is a very easy experiment for every community to work out butch because all you have to do is take the total basic payroll of every industry in your community and divided by the number of people living in your community and you will arrive at the potential per capita income of the community providing all of these dollars are spent within the community now I will have to admit that there is also a dollar turnover factor on this money but nevertheless this will give the average community an idea of how much potential per capita income they can receive from the industry within their community now I mentioned the word basic industry basic industry means an industry that is manufacturing a product or a service within the community but they export this product outside the community in exchange for dollars which are brought back into the community to buy the other goods and services that the people of the community must export from other areas now I was amazed to find that if our community was going to live exclusively on the per capita income from basic industry we could only earn approximately four hundred dollars a year per person do you mean this is in your community right in the town yes this is in our community now our community has been very successful in attracting new industry the last few years and I would say butch that we have as much industry as any community our size in the state of Minnesota or at least on a per capita basis and yet we could only earn four hundred dollars a year per year per person plus the dollar turnover providing every one of these dollars were spent within the community now using four people per family as an average it means that we could only earn approximately sixteen hundred dollars a year now this is not sufficient for the people of any community to buy the goods and services that they need to live so we wanted to find out where the rest of the money come from and after searching every nook and corner within the community we finally had to turn to agriculture to find out what effect farm income had on the per capita income of the people and it was amazing to discover when we take just the gross income of the farmers living on our mail route and the reason we have to combine this survey to the farmers living on our on our own local mayor out is so that we don't take some of the potential per capita income away from neighboring communities we discovered even with the underpayment of Agriculture today that agriculture contributes four times as much as all as our is all of our basic industry combined the farm income contributed sixteen hundred dollars per person or approximately sixteen hundred sixty four hundred dollars a year per family and this is when I became aware butch that agriculture is the key to prosperity for all of the rural community and that we cannot afford to under pay agriculture because agriculture is the well that creates or produces the wealth for every community to earn the new income to buy the goods and services that the people within these communities must have in order to live but I would like to trace off for the people very briefly on the blackboard how these communities actually get their money and I think it's very interesting we've done this once before but there's been so many requests for a repeat that I don't think it will hurt Butch and I would like to start this illustration up by drawing a square which I say represents all of the large commercial banks throughout America now on one of our other broadcasts we referred to the point that today one percent of the banks in this country control fifty percent of all of the deposits or all of the assets that are controlled by the banking industry now these are all of the large commercial banks and our large metropolitan areas this other diagram represents the segments of our national economy starting out on the very lowest level our smallest rural community and as we progress through our economy we must include all of the schools and our churches and County government our state governments and so forth but as we move down to the line we come to the three large factors in our economy the manufacturers the processors and labor all very important segments in our national economy but you will notice that this economy is incomplete it can't possibly function because in order for the manufacturers and processors to employ labor in their plants they must have resources with which to work and so we must add the vast resources of our national economy and here we must include all of these oils all of the minerals chemicals and so forth that constitute the resources that are consumed by our national economy but we must also include agriculture which is by far the largest industry in the United States agriculture actually represents 71% of all of the resources that are consumed by the entire economy each and every year and this is why agriculture is the most important factor in our national economy now how does your community obtain its well here we're living in a small rural community way at the end of our economy how do we get the dollars out of the big commercial banks in our large industrial centers up to hometown USA there's only one way that these dollars are going to come to your community and that's through the manufacturers and the processors who need these resources who must have them the process in their plant in order to employ labor so what's the manufacturers and the processors who go to the large commercial banks and draw out dollars and come out into the rural areas and exchange dollars for agricultural commodities and other natural resources but here's what's been happening in our economy now for the past 15 years it actually started back in 1950 or 51 the manufacturers and processors and I'm not blaming them entirely for this that you but they have only been drawing out approximately 70 cents on the dollar as an average for the past 15 years in payment for the commodities that they use but now when they bring the resources back to their plants they now have the necessary items to employ labor and they draw more dollars out paying wages to labor and the cycle begins and the labor dollars are spent in the large cities but you'll notice that they trickle back to the source from which they originated but we still have this other major section of the economy that is still dormant that is until the people the farmers and the people who obtain wealth income from the resources that they produce come into the stores in our small towns and cities and spend their income dollars and as these dollars start flowing through the economy then it brings the goods and services manufactured in the big city out into the rural areas so that we have a continual flow of wealth but here is what's been happening for 14 years in this in this country the 70 cents on the dollar that's been paid to agriculture has not been adequate for the American farmers to pay his operating cost to pay his gas and oil and tires and rubber and divide the fertilizers and all of the other essentials that he must have to run and operate his farm so to cover up the shortage of income the farmers have been forced to go around through the back door and a substitute credit in lieu of the shortage of in earned income and these farmers are paying all away from 6 to 36 percent interest borrowing their own money which rightfully should have been theirs depending on how bad they get fleeced on the interest or the finance charges but if this isn't all butch in addition to borrowing their own money to keep the economy going they have to mortgage everything that they've earned during their entire life life times putting it up as collateral in order to borrow their own money back and they take these Varro dollars back and they come into the stores and the rural communities and they spend them and as a rural businessmen we make just as much profit off of the borrowed dollars as we do off of the earn dollars but here's what's happening butch and this is why our economy is in trouble is because this has been going on for such a long period of time injecting credit into the economy to keep the thing going that now the nation is running out of credit and you will notice on that that we can fast approach a point of no return let's assume that tomorrow Fair Farm prices were restored to agriculture so that the full dollar started to flow through the economy this doesn't mean that these farmers would be able to spend that dollars because now the dollars will have to start flowing back the other way to pay off the loan and this is why we can very easily reach a point of no return if we wait too long to correct this situation then we will head into an economic disaster that's unavoidable and even the restoration of fair farm income cannot hit it off so I hope that I have been able to explain to you people how essential the payment or the income that's received by the people who produce natural resources is till the economic growth of our entire economy and as long as these dollars are flowing freely and as long as the producers of natural resources are getting equity of income their fair share it shuts off the credit spending and then we have $3 flowing through the economy and this is what we mean by earned income instead of debt fuel income and every time the farmer has to pay more money in interest it takes dollars away from purchasing power and those dollars accumulate into the hands of fewer and fewer people and this is the situation where we find ourselves today where does your community get its money it must come from agriculture agriculture is the magnet that draws the big city dollars out to your community and it's the farmers that bring them into the town and to support the payment or brings in the dollars that are necessary for all of the people living within the community to earn an income when Farm dollars are short change it means there's a shortage of flow of income it means that all of the people living in the rural communities then must either resort the credit order use up their savings dollars after the savings dollars are gone and after their credits used up but then the only thing we can do is to reduce our standard of living instead of buying Chevrolet's we buy volkswagen instead of eating steak weed hamburger and this is exactly what's been happening in rural America we have been lowering our standard of living we have not been keeping pace because the wealth is not there which I hope I have explained this thoroughly I think there's one thing that you failed to explain good enough that when the farmer spends less and less dollars that he receives that then the full-on town doesn't make as much as he's entitled to make and he too has to go in debt and this has gone all along the line and finally it goes clear on up to the top and this puts the money back into the hands of a few as Kefauver said our late senator Kefauver said not too long before he died in 63 that in a few hands and we have just a matter of a few years to solve this problem or just a few we will control all of America and I think that this point should be brought out some rural communities and I'm talking about rural communities I'm talking about an entire county some of them run surveys to find out I know of one that paid $2,000 for such a survey and you know what they found out that they only received into their community in 1964 only 42 percent of what they should have received what they're entitled to receive forty-two percent and I would say this that all over America in the communities of five thousand and under are living on less than the 50 cent dollar or half of what they entitled again and this folks someday will lead to a complete entire collapse of our system and there's no need for this because we can get together set a fair farm price set it in balance with cost of production which will be based on labor and interest cost in other words put the farmers labor price put a price on his labor up in balance with the rest of society this can all be averted final and I know that you understand this probably better than anybody else in America and you might tell them who really adopted this plan to bring this all about so the money would be cornered back into the hands of a few well a lot of people butch are not aware of the fact that this is a planned program that's taking place this isn't something that's happening by accident I have in my hands here a program that's called an adaptive program for agriculture which has been published and presented by the committee for Economic Development a group of 200 businessmen educators and key people bankers throughout the United States now most people are surprised when they discover that this program was developed in 1962 a five-year program for agriculture but this is what the president of united states was referring to in 1964 in the State of the Union message when he said that two and 1/2 million farmers must look elsewhere for a source of income I would encourage everybody to go to their local library wherever possible to get a copy and to read of the plan to completely eradicate rural America and the thing is that this program has been stepped up because Butch and I was in Washington of just a few days ago and met with some very key people down there that are working very seriously and dedicated on this rural problem they told us that we're no longer talking in terms of moving 10 million farm people out Americans now we're talking in terms of moving 44 million people out into the metropolitan areas they're no longer talking in terms of communities of 5,000 population or 2,500 population now we're dealing with the communities of 25,000 people the big problem the big challenge to the metropolitan areas is what are they going to do with 44 million people migrating to their communities people who are untrainable because of age and the cost factors now they're becoming very much concerned as a aid to one of the congressman from New York asked the question what can we do with all of these two people moving into the metropolitan areas will they be able to provide the schools in the classrooms and the churches and the hospital facilities in the new residential development and who's going to pay the cost not the poverty-stricken people who are moving in but the people who are living there the people are who holding jobs and this is why some people say that the Great Society program must be completely reversed and that this rural America that must be rebuilt and then we must encourage people to live in the rural areas and rebuild the rural community but yet the only way that this can be done is if we restore the wealth and the income to rural America and that must be done through agriculture but here's the thing as rural America erodes and as rural America surrenders itself by default because of the apathy and the complacency of the rural people then what will happen to the economy of the large metropolitan areas they will disintegrate and go down the same road to disaster because they will be back they will be saddled with a fantastic role of supporting millions and millions and millions of unemployed people and what our national economy is heading for a very serious disaster unless the people wake up very soon and discover where we're headed what do you think I think this is absolutely right Arnold I know that you had a little booklet there that you covered up a while ago that when our nation was first founded it was set up by our forefathers on an American system American economic system and this is what's really wrong they're trying to change our economic system that was set up by our forefathers the system that was able to start America out here as this very small nation and just a very limited number of people who set up a sound economic policy that by the year of 1929 before the other big crash came along which was brought on by international financier that wasn't quite satisfied with the situation and an injected this credit theory into America but by 1929 this we were 6% of the people the world here in America by this time through using our American economic system we had created half of the entire wealth of the whole world think of it this is right half of the wealth of the whole world half of the dollars more than half of the automobiles the entire world and things of this nature a standard of living was never heard of before in any of these other countries but some of the people in the world weren't satisfied with this and they've got this thing about through manipulation of the whole system they tried to bring us down and the same process is going on why don't you touch a little bit on this little booklet that we have available Arnold our American heritage that lays this whole thing out our economic system as it should be as it was laid out by the Constitution of the United States and by the people that found in America touch on that just a little bit Arnold well butch I think that this little pamphlet is one of the greatest booklets that's ever been printed it's called our American heritage and the author is Carl Wilkens an economist from Washington DC he calls it a summary of the economy of the United States from 1787 through 1961 he says under the Constitution of the United States we have the right to elect those who determine the policies of government which affect our economic welfare to be well-informed every citizen every individual should read this vital message now this book is a veil that booklet is available for fifty cents which includes the postage and if you'll write to Butch flame at Corning Iowa or to Arnold Paulson Granite Falls Minnesota we will be very happy to send you a copy all of the proceeds of this goes to mr. Wilkins into the National Foundation for economic stability who are trying to promote a strong and stable economy in this country by all means I'd like to see this in the hands of every high school student every college student in America because this is the answer to solving our national economic problem now as long as we're on the subject book but there's another report that has just been recently released it's called the national economy is out of balance by Professor John Forbes dr. John dr. George John Forbes of Illinois actually dr. Forbes conducted this survey or this research originally in an effort to find out whether or not the things that we have been saying are true and just look at the fantastic amount of work that he's gone through and the conclusion to his report he says read and much you people are wrong we asked him how he figures that he says that the situation is worse than we say it is now this is a report that is priceless this is the original transcript if anyone's interested right to either Butch Swaim at Corning Iowa or to Arnold Paul's from the Granite Falls Minnesota in order a copy they're not cheap they sell for five dollars but it's one of the greatest $5 investments you could ever want to make because he points out specifically where we're headed if we don't restore a well-balanced economy to our country and he verifies the fact that the only way that we can restore a balanced economy is through agriculture because agriculture is the key to our national economy he also verifies the economic thinking of Carl wolf Canoe says that every farm dollar generates $7 of national income almost doubles any other segment of the economy and he goes into it and he proves that automatically and the source of his a source of reference that he has used is the economic report of the president of the United States the only record that we can use because this contains all of the statistics of every segment of our economy and what we would like to do is extend the challenge to every American to every mathematician every auditor is to take a copy of the economic report of the Predators present in the United States and run a balance sheet on it something that too few people have ever done and find out for yourself the condition of our national economy because if we don't do it now when there's time to save the economy and to make the necessary Corrections there will only be one alternative and that will be a depression which can be six times as severe as the one we had in 1929 Arnold I'd like to invite the people to get a copy of the 1965 president's economic report and check on page 203 and look that's one column their net interest how much interest or money was left over for the lending institutions because it's the key and that's really happened in America because anyone with a 5th grade education can prove to himself by looking at that one column what really happened to our economy as farm prices went down farmers were shortchanged the nation had to borrow more and more money in order to keep the economy going and according to this report this net interest column went up from five and a half billion dollars in 1950 to twenty six and eight tenths billion dollars the 1964 nearly five times as much but the strange thing was that for 20 years prior to this it averaged right around the five billion dollar mark it didn't change very much and when the balance the economy's in balance we earned the income we don't have to have existing credit and the whole thing operates and balance people have job opportunities and a chance to work and earn money instead of borrowing money to keep it going well butch after our visit to Washington just recently I am convinced more and more that's the only way we're going to solve this farm problem is that the farmers will solve it themselves by joining hands with one another and demanding a fair price at the market place and I think probably one of the most encouraging things that has happened is when the grains the national grains in the national farmers organization joined hands in the United efforts to help solve this problem and in conclusion of this program I would like to ask each and every farmer that's listening to this program to join hands of the national farmers organizations and solve this problem the only way and that's through the restoration of Fair Farm prices at the marketplace and those businessmen who are listening in today if you're wondering what's happening to the economy of your community or your business the problem is the price that's being paid to agriculture because this is where your community gets its new wealth and encourage the farmers in your area to fight and work together to help save not only agriculture but the community in which you live thank you very much the US farm report was brought to you by members of the national farmers organization the nfo with interests and purposes of maintaining America's agricultural welfare which benefits the national economy has brought to you how your community gets its money with WW Butch Swain nfo a national promotional director and Arnold Falls and rural businessman from Granite Falls Minnesota for more information on the NF o attend meetings in your area or contact the national farmers organization corning iowa family farm agriculture the grassroots of america