It is estimated that the value of the crops for this harvest year may reach $13,000,000,000, which is an increase of over $3,000,000,000 in three years.  It compares with $7,100,000,000 in 1913, and if we make deduction from the figures of 1924 for the comparatively decreased value of the dollar, the yield this year still exceeds 1913 in purchasing power by over $1,000,000,000, and in this interval there has been no increase in the number of farmers.  Mostly by his own effort the farmer has decreased the cost of production.  A marked increase in the price of his products and some decrease in the price of his supplies has brought him about to a parity with the rest of the Nation.  The crop area of this season is estimated at 370,000,000 acres, which is a decline of 3,000,000 acres from last year, and 6,000,000 acres from 1919.  This has been a normal and natural application of economic laws, which has placed agriculture on a foundation which is undeniably sound and beginning to be satisfactory.

A decrease in the world supply of wheat has resulted in a very large increase in the price of that commodity.  The position of all agricultural products indicates a better balanced supply, but we can not yet conclude that agriculture is recovered from the effects of the war period or that it is permanently on a prosperous basis.  The cattle industry has not yet recovered and in some sections has been suffering from dry weather.  Every effort must be made both by Government activity and by private agencies to restore and maintain agriculture to a complete normal relationship with other industries.

It was on account of past depression, and in spite of present more encouraging conditions, that I have assembled an Agricultural Conference made up of those who are representative of this great industry in both its operating and economic sides.  Everyone knows that the great need of the farmers is markets.  The country is not suffering on the side of production.  Almost the entire difficulty is on the side of distribution.  This reaches back, of course, to unit costs and diversification, and many allied subjects.  It is exceedingly intricate, for our domestic and foreign trade, transportation and banking, and in fact our entire economic system, are closely related to it.  In time for action at this session, I hope to report to the Congress such legislative remedies as the conference may recommend.  An appropriation should be made to defray their necessary expenses.

MUSCLE SHOALS

The production of nitrogen for plant food in peace and explosives in war is more and more important.  It is one of the chief sustaining elements of life.  It is estimated that soil exhaustion each year is represented by about 9,000,000 tons and replenishment by 5,450,000 tons.  The deficit of 3,550,000 tons is reported to represent the impairment of 118,000,000 acres of farm lands each year.