The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1894-03-01
WHEAT AND OTHER VALUES,

The decline in wheat and the stubborn
refusal of the markets 10 respond to bull
movements are leading to serious ques-
tionings. What is the natural value OF a
pound of wheat? The fluctuations in the
value of money since the middle ages have
been so wide tina political economists gen.
orally take wheat as the most reliable
standard of value; must it be so regarded?
And if so, what will be the effect of the
present depression if it lasts?
Before the repeal of the corn laws in
England the Importation of foreign wheat
was forbidden by law until the price rose
10 so shillings quarter. or twopence a
pound, or So so bushel in our money.
That price was reached in 1912, when the
English crop failed, though. at the time.
the price in New York was oftener below
than above 81 % bushel. For the sixty
years beginning with 1926 and ending with
1885, the New York price seldom fell below
81 bushel, and during the war initiation
1t rose above IS. An average price for
the sixty years was about 81 80, which was
probably over 81 bushel on the farm, or
lie cents pound. If wheat was the true
standard of value, the value of other CON-
modities between 1925 and 1885 was predi-
Gated upon its being worth that sum.
But after 1885 change took place.
Wheat fell steadily, with occasional reac-
tions and boosts carried by corners, until,
after a gradual shrinkage extending over
nine years. it is selling in New York at
81 to g. cents, less than half the average
Of the sixty years prior to 1885. The de-
cline cannot be regarded as a depression
due to bountiful crops. 1t has been con-
tinuous. Each rally has been followed by
fall 10 a lower depth. We have had in
the past nine years every variety Of wheat
harvest from prOfuse to a scanty yield.
England and France have also raised large
and short crops alternately. But whether
the crop was large or small, here as there.
the course of the wheat market has been
the same-dowD. down, down.
In the past forty years the wheat crop of
the United States has swelled from 100,
100000 to 100000 bushels. But in the
past nine years the increase has not been
large. The worlds wheat crop is abou;
9, 200, 600. 900 bushels. aud 1t was not much
less in 1885. The amount required for
consumption is about the same as then.
No new countries with large consumptIve
capacity have been added within a decade
to the mercantile world One of two
things, either tile price of wheat was IN
naturally high in the period 1S25-1SS5 OF
il has been unnaturally low in the period
1885-1S94. Ii it was unnaturally high then
and if wheat is, as has always been as
sumed, true standard Of value, then
goods and labor have also been selling
above their true value in money.
Those who study the times by the light
of such works as Tooke's History of
Prices" are embarrassed by factors which
he did not have to consider. The market
value of all commodities has been revolu-
tionized by modern trans ortaiion facili-
ties. Before 1915 producers purveyed for
limited market in their own neighbor-
| hood. Now their market includes the
whole civilized world. The wheat-grower
of the San Joaquin Valley supplies bread
TO breakfast tables on the Bosphorus and
the Hoang 10. He has access to markets
which were closed 10 the wheat-grower of
the Genesee Valley, New YORK; but on the
other hand, he has to compete in every
market with all the producers Of the
world. More satisfactory Information can
be obtained in Cairnes' latest work,
though be does not carry out his deduc-
llons 10 tuolI luoAoIduIo cOHcluSlOD, WHICH
is that the normal standard of value is
labor. Taking that rule as guide, we
find that the natural price of a bushel of
wheat is the value OF the labor employed
to produce it. plus rent and interest, and
of course the labor TO be valued is the
cheapest labor employed in the business
in the case of wheat. the labor of the In
dian ryot and the Russian moujk. The
conclusion is unpleasant, but it appears to
be unavoidable.