The San Francisco call., 1898-01-13

How did it come that the action of the board early in February was in spired by the filing with them of relatively few applications for grain sacks in numbers ranging from 10000 to 100, 900? Had their design been deter mined on quietly in advance and in formation about it as quietly imparted to the persons to be favored? It would seem so. Calcutta sacks were drug at s4 D, and s4 S71a, June and July de- livery, when the board resolved to sell sacks in any amount within single application for a million: the order to be filled whenever it suited the apph- cant. In short order, or to put 1t more specifically within fifteen days, 2,OOo,- 900 sacks were contracted TOT sale at $4 75 These sacks, ware housed at San Quentin, remained undisturbed until summer, when the market got active. If this swift trans action, by which the revolving fund would have been abundantly reim- bursed, was of the slightest benefit to the small farmer, it could not help him further to increase the price on the sacks already sold and on the sup ply remaining to be disposed of. Yet the board, after having thus reduced it's store by 100000 sacks, raised the price to s5 per hundred, and sold an- other million and a quarter, also for future delivery.
 Then the situation, so far as the board had any pretext for worriment over the surplus product, was modi- fled. They were entitled to feel con- tent with themselves, and in beatific state of mind, so far as was con- cerned any fear lest they be burdened with surplusage. Did they then re- adjust the price of sacks approximately to the cost of the output, and give the small farmers a chance to get in at the eleventh hour on the ground floor? Not at all. On the contrary, after the surplus was exhausted. or af ter it had been pledged for delivery, they once more jolted the price up, this time to s 40 a hundred. A little fig uring at this point will be entertaining as well as enlightening. The 10 per cent deposit required on the 1000, 900 applications amounted to s9500, and on the 1,250 900, s7250, making the total con- tract deposit S16,750 For this sum Gl IlOlltN llt DOdIu Hldue d WdI6tlOuSt transfer of the grain-bag surplus of the San Quentin mills. Before final payment was made on the purchases, and six weeks after the plan was in- cepted, at a time when the board had nothing but future product to calcu- late on, they oyerstepped the law to swell the price to consumers to $5 40 per hundred sacks.
 To the intending purchasers the warehouse stock was thus made to rep resent the following watered profit On 2,0000 900 sacks the price was ad- vanced by the resolution of March 13 65 cents per hundred, or S13,000. The 1,250,000 sacks sold after the resolution of February 20 fixing the price at s per hundred, were made by the March resolution referred to, more valuable by 40 cents per 100, or a total of S5000. It will be noted that the total of the increased appraisement thus artificially contrived was SIS, 900. Now mark the comparisoni Only 300 was paid for this aggregate bargain, so that the watered profit on the future delivery sacks was made to cover the 10 per cent deposit guaranteeing delivery, and leave a margin of $500. That is to say, the prices advanced by the board were advanced on stock still in the State warehouse, and the total increase of value represented by this advance more than reimbursed the applicants the 10 per cent paid the State to initiate the purchases.
 On what ground this proceeding can be commended it would take special ;-t i The reports from the mill show that the actual cost of production at the l time the 5.40 rate was fixed was in 1 reality 4.24. It is specifically provided l by law that the board shall at no i time fix a rate in excess of l cent a sack above the cost of production. | Therefore, here is a plain violation of i law, unwarranted by any emergency or excuse of ignorance. When the board had no more surplus sacks to 1 sell and were dealing merely with the simple problem of the present output
 they not only went to the full legal limit in readjusting the price, but be- yond it.
 In summing up the evil effects of the course pursued, the thousand and one small farmers in the last analysis l were the SufrererS, TOT 10 them the
 sacks handled in carload lots by mid dlemen at s475 and 5 pel hundred were advanced to s5 40 with the local freight rate added while the inferior Calcutta sack' were given approximately the sam' rate The tremendous swing tn
 middlemen enjoy in dealing with Sar i Quentin sacks is indicated by the fac
 that Calcuttas and San Quentins ar,
 quoted side by side on the Produce
 Exchange.
 review of the quotations of las
 year will demonstrate not only tn
 sympathetic movement in the prices O
 the foreign and domestic products, bu
 a systematic one. In February, whel
 the prison board fixed their price a
 s4 D, Calcuttas were quoted similarly
 February 20, when San Quentins wer : raised to $5, Calcuttas registered tn
 same. March 20, the date of the $5 4 . advance by the board. Calcuttas wen
 up to S5 25 for June and July delivery ] Here is an object lesson in price mani ], pulation. Three days before the las