Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1891-08-18
The Riss In Prices Of Gratis.


This striking change in the market
and the altered tone OF the markets il
thus commented On by the New York
Tribune:
Prices are booming, wheat having
risen over eight cents. within forty-eight
hours. while rye has eornered itself.
Anxieties about money are greatly al
layed by growing confidence that
European demands for American bread
.tuffs will bring hther in short lime
all the gold that is needed. Accordingly
the demand for commercial paper has
improved and the loan markets show
greater confidence. These changes re-
suit in great measure, from a single act
Of the Russian Government. namely, the
prohibition of the exports Of rye. 1t is
commonly inferred that an enormous
increase In the demand for American
wheat must follow, because the people
10 Europe who have consumed about
&c, 600, 600 bushels OF rye from Russia
will be compelled to buy their grain
elsewhere.
IL Ia the custom of spectators to
assume that the requirements OF Ger
many, Of France, or Of any other coun-
try In Europe, are strictly proportional
to population and that the quantity OF
grain required will be the same whether
prices are unusually high or unusually
low.
1t Is possible that the differences so
commonly drawn from the action Of the
Russian Government may be found In
part erroneous. There Is no reason to
douSt that the European demand for
American wheat will be this year far in
rxcess OF the ordinary demand There is
no reason to doubt that Europe will be
compelled to pay large sums for bread
stufis purchased from this country. But
while this is true, it is possible that
there may be exaggeration in the
estimates of the quantity required,
and consequently in the estimates
regarding the probable price Of grain.
It must first be remembered that the
European crop has not yet been har
vested In all OF the countries, so that the
actual result Of the years industry can
not yet be accurately known. Attentive
examination Of the various reports by
the most competent experts in Europe
shows that they vary from each other
by many million bushels in their allow
ance for the yield for different countries.
The weather from this time until the COM
pletion of the harvest will have some
thing to do with the final outcome. The
demand for grain from this country may
yet be considerably diminished by
favorable weather in portions Of Europe
where the harvest has not been COM
pleted. But another and much more
important possibility Of error results
from the assumption that the quantity
required in any country Is the same
whether prices are high or low. 1t /.
not long since speculation at Chicago
and elsewhere caused an artificial advance
in the price of wheat and flour at New
York so that the bakers advanced the
price OF bread. At once it was noticed
that the consumption was materially
diminished. The bakers complained that
a large part OF their trade fell off and
this in the largest city in the New World
where wages are higher than in any
country In Europe and where the eondi-
ton of the laboring people is altogether
more prosperous. Unquestionably a
similar advance in the price of grain OF
of bread in any European country will
materially affect the quantity OF wheat
consumed To what extent the con
sumption may be diminished withou
general starvation or suffering cannot b.
material decrease is possible, and il
event of high prices is probable. Al
ready the prices of grain in mos
European markets have advanced so IA
that the consumption is likely to b.
considerably diminished. But it mus
not be forgotten that moderate De
crease in the quantity of wheat and ry'
consumed would mean an importan
change in the quantity required from
this country. 1t is commonly assumed
that the consumption Of wheat ii
many European countries is full,
double the consumption in tn
United States in proportion to tn
population. Obviously. this is beeaus
the people of this country are able to es
more meat, and are in the habit of con
sumiug more of other kinds of food. bu
If bread should become unusually dea
in Europe, life would be sustained upoi
much smaller consumption per capit'
than has usually been allowed in Stats
| teal estimates.
IL is not wise for those who contro
the operations of the Farmers Alliance
or for the SPECTATORS ia American
Boards of Trade, to reckon too Target,
upon an unchanged consumption Of grail
by the people of Europe. Before thi
crop year closes We may discover tina
Europe can supply its needs withou
famine or starvation, and yet withou
using IS much grain within huudre,