The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1842-04-12

This presents remarkable results. In 1899 the imports
into England were the largest, and prices averaged the
highest, and yet but a small proportion was sent from
the United States. The reason for that small export is
within the memory of our readers. During the three
months from February to May, 1889, the stocks of -four
in this city were very large, and at the same time Eng
lish orders for large amounts were here limited at
So a So so. At the same moment, the millers limited
their sales at So 90, and, by procuring accommodation
from the country banks, cent down funds 10 take up
their paper here in the hands of the commission houses
In order to hold on TO the -four. After q few months
elapsed the English demand subsidized, and most of that
Hour held at SO 90 was subsequently, sold at So co.. The
pernicious influence of the banks destroyed the market,
and eventually eDtailed a loss upon the parties. This
influence was the cause of the small exports in 1889, and
consequently of the low prices of 1870 Had the banks
been entirely broken down in 1888, as they were in lS4O,
probably in 1889 100000 bushels additional would
have been exported. This would have reduced the
stock, and have made prices rule higher in 1910, without
much checking the export Of that year. Adrawing eft
Of 5000 900 or 1000 600 bushels in one year will raise the
value Of the whole production to a considerable extent.
For instance, the whole production Of wheat in ls4o was
81 100000 bushels, according to the census. II we est.
nate this at 81 per bushel all around, when the supply is
just equal to the demand, it will be wsrth $4,000 900. II
the supply is 100000 bushels more than the demand the
price will fall, say to ninety cents, allowing the curren-
Cy u Temdln btcuuy. ME u u VI %, W "
in tho value. II, on the contrary, q foreign demand
springs up and takes oil 5000, 900 bushels, the price may
rise even to 50 90 per bushel, because there will be a
home demand for 600, 900 bushe els that cannot be salts.
fed without a re. import or a reduction Of consumption to
that extent, which can be effected only through high
prices. We may es.im ate that the price will raise to an
average Of 81 %, on the whole production. The export
ofthe 100000 bushels will then make a gross difference
to the farmers Of $40, 600 900, or three times the value of
the quantity exported. Now the operation of the banks
ofNew York, in the spring of 1889, directly produced a
loss to this extent. They directly prevented the sale of
a largo amount Of wheat in that year. The result was,
that the surplus left over in that year produced the ex.
treme low prices Of the succeeding year, 1910. The diff.
ference in the average value Of the two years was the
enormous sum Of 81 l2i per barrel. making a difference
on the production of,hat year Of $42, 500 900! against the
farmers. This is borne out by the fact, that notw it'll.
standing the low prices of all other articles during lsll,
-four has ruled higher by 81 50 per barrel than during
1910, making a difference in favor Of the farmers Of
$26, 2Os, 600, a direct consequence Of the large exports Of
ls4O. These are facts and figures which every farmer
knows to be true by the result of his own sales.
Now, what is The operation Of protect on ? Precisely
that of the banks as here described. If produce in this
country is low, and foreign goods, at fair prices, are
taken in exchange, the direct advantage of getting GER.
tain goods less than they can be made at home is but a
small part Of it. The effective demand from abroad, by
taking off the surplus, improves the aggregate value of
the. whole production Of the article purchased by the
foreigners, to an extent many times greater that the value
given by them in exchange for that surplus. For instance:
in our article of Saturday we showed that this country
took of England, in 1910, 5000: tons Of iron, valued at
about $500 600, in exchange for the wheat we sold her.
Now the rise in the value of the gross production Of
grain in this country, caused by drawing offthe surplus
in exchange for that iron, was, as we have seen, $685.
aOO. 600. or six times the value of the iron. This is the
great benefit Of free trade. Itnot only enables the inhabi.
tants Of each country to obtain that of which they are
in want at low prices, but the purchase GIFT in exchange
for that of which they have a surerabandance increases
the value of that which remains to an.enormous extent.
This advantage is that Of which the manufacturers seek
to deprive the great agricultural interests of this coun.
try, and which they call being Independent of foreign |
countries" The empire of China has carried this Gin.
dependence to perfection, but common sense fails to
discover that she is wiser or better, or that her people
are happier for the operation.