The Washington times., 1901-07-24
Crop Losses and Prices.

1t is entirely too early yet to make
anything like al. approximate estimate
of the extent to which the Western
crops have been injured by the drought.
There is no reason to doubt though,
that there Will be heavy shortage in
corn, oats, and hay. AS corn is the
most valuable of American crops and
hay is usually given the second place,
it is easy to see that the loss may have
serious effect upon general business
Already Spectators have taken advan-
tage of the situation and corn.
wheat. and oats have advanced,
while stocks, particularly railway
stocks, are considerably depressed.
These changes are as yet merely spec
ulative, for the visible supply of grain
is in no wise affected and will not be,
in any event for some time to come
But spectators are ever on the alert
for excuses to force fluctuations Ac-
cofdingiy, an anticipated scarcity is
used to send the cereals up. while the
probability of smaller crops to be mov-
ed is used to the disadvantage of the
railway stocks.
This situation naturally brings up the
question of what is generally termed
compensatory prices; that is to say.
prices sufficiently high to offset the loss
by diminution of quantity. The term
'compansa tory" is a misnomer, for no
rise of price consequent ,.pon a partial
destruction of the crops can, in any
proper sense be compensated for by
rise of price Some individuals may
keep even and others may make money
out of ii, but destruction OF vast
quantities of farm products is. of ne
cessity. just so much subtracted from
the real wealth Of the country. For
example. if farmer loses half of his
crop and the price doubles. we may
say that he keeps even; If specuia-
tor bulls the market he may good
deal more than keep eyen-he may
realize immense profits. But all of this
is at the expense of the country as
a whole. II a farmers crop is all or
nearly all destroyed. the advance of
price may be a positive injury to him.
for perchance he must buy for seed
or for household use; and in all such
cases. when the prices go up tie con-
sumer is injured with nothing in the
way of compensation.
1t has frequently occurred in this
country that smaller crops have stood
for more money than some larger ones.
but in such cases the larger nominal
value represents to a great extent the
higher prices which consumers have
had to pay. II is net possible for the
country to get rich through the de-
struction of considerable portion of
its real, substantial wealth.
1t seems likely that in the present
instance the rise of prices will be ac-
centuated by short crops abroad; but |
this also will probably be subject to !
some heavy offsets. Europe is not so
prosperous as 1t was last year and for !
several preceding ones. There is, in !
fact. a strong ebb in the business tide |
of the Old World, and If the crops are
below normal the condition may be in
tensified and Europe be very greatly |
crippled in purchasing power. This
would mean not merely lower prices |
for the cereals themselves than crop |
conditions would suggest, but lower |
prices for other things also. 1t is TO |
be hoped that reports of prospective |
losses are exaggerated. There are at |
this time many signs not altogether |
favorable hung out upon the worlds |
business horizon, and heavy crop losses /
will be almost certain to affect inju- |
riously the whole industrial and finan-
cial situation