The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1906-08-19
WHEAT AND ECONOMICS

faction. Bankers have seen in the glow
ing reports from the fields the promise
of d liberal, demand for money: The
railroads congratulated themselves over
the enormous; tonnage awaiting them,
and everyone has felt that the north:
west is blesseds with plenty and all
must necessarily be benefited.
This is all true. A big crop means
prosperity, and plenty. There IS never
theless another consid eratien of which
little has been heard4-the effect of, low.
Ell: prices upon the farmer and the great
er> effect upon the purchasing power Of
the country: -. = =
It is impossible; to present for com:
parison any entirely satisfactory fig
ures covering the cost Of raising
bushel of wheat, not because such fig:
ures are not available, for statisticians
have compiled them, but because some
calculations take into account the value
of the labor Of the farmer at a fixed
figure per day, and others do not, some
estimate the labor value at one figure
and some at another, conditions rela-
tive to labor, and the amount Of work
necessary to raise a, crop differ, and the
price of land varies. For the purpose
OF illustrating the point herein involved
one might assume, without pretense at
infallibility, that it costs the north
west farmer 80 cents bushel to raise
wheat. Prices under 70 cents in Min
neapolis mean 60-cent wheat in the Da-
kotas. To the farmer used to high
prices it does not look very big, and, in
deed, it is not much money for wheat.
To realize in full how things have
shifted about in the past few years one
must remember the enhancement Of
land in the northwest. Sixty-cent
wheat means not only return per
bushel much less in money measure
ment than in the past few years, but
relative to capital in the business as
now represented by prices for farm
lands it is an income materially lower,
The purchasing power of a country is
Of prime importance-an, economic fact
recognized the world over. The money
measurement of the crop in our coun-
try is only made with a pretense to &C
curacy once a: year, in December, when
the government calculates the value by
the use Of an average price arrived at
by; careful and, Comprehensive inquiry.
When next the figures appear, if wheat
remains at the present price level it is
doubtful whether the money value that
the government9will be able to show in
the northwest will exceed by very much
the valuation in the past several years
when the crops have been lighter and
the price higher. Not for. moment is
it here commended that big crops are
not q good thing, nor would the false
economic argument that a small crop
s~h I,
entertained. The benefit of big crop
in the broader general way is unques.
tionable. It. Isl the purpose merely to
direct attention, to something that ap'
pears not to have been much thought of
in the past four years, during which
time wheat prices have ruled compare
lively high. '~..'---.- ~...~::.rs..-
If the farmer receives 60 cents fol-
j his wheat it gives himya certain pur
chasing power. IF it costs him 80 cents
to produce it his purchasing power il
= increased hundred per cent by an ad
vance Of so per cent in the selling price
and doubling the selling price treble:
his purchasing power. In year whe1
the crops are not large the farmer
usually receives compensation in some
gain in cash return, and in a year Of
big crops, when. everyone else is bene
J flied and the; farmer likewise, he mus
expect nevertheless, a return less il
proportion to his labor and investmen
than the increased yield might indicate
There seems no ether way for it. TIL
, farmer must stand the risks of bushes
, like any other business man. FL. -,
In the present situation there is en-
couragement insSthe{ thought that anti
cipations often does the worst and, re
; alization meanss better things. Whea
/ closed yesterday in Minneapolis a
!. 69%c for the September option. Thi
} does not represent a price due to &C
, tual pressure Of wheat, but to pressur
that is. to come. The market is dis
counting the big crop: - g -
At the present price. level it woul
- seem that wheat ought legitimately t
: be worth the money. The farmer mus
= get q fair return or he will not rails
9 wheat. It would be misfortune
5 therefore, for the northwest should tn
. price 20 too low, not only because
! would mean less money for the farme
a and lessened buying power, but be
/ cause the effect of extremely low price
q is usually shown in decreased acreage
i in seasons following. It is only a fe,
b years ago that after bad season ther
!, was not enough good wheat in th
q northwest to meet the demand, and th
:. Minneapolis mills were bringing i
u down from Canada. A great industr
' in the northwest is dependent ,upo
wheat for raw material rand it is esse1
: tial that there be a continued fair PR
! duction. II ~:
/, To work off the: surplus, we need no,
/. to sell about 4,000,o00 bushels a wee
0 either as wheat or -four. In past yeal
!, we have done such a business and "
!. will probably do it again. Europe
:. = slow to buy our products when thel
= appears to be. an abundance, but thel
: are already signs that an export bus
ness Of large proportions is coming, an
9 if we can do a fair total every wee]
n wheat is likely now to hold it's own s
s least, until first pressure Of the ne
o NOV ement is over.
Q G. E. Lewis, from Allen, New Yori
e The price of New York May whe,
4 should attract considerable northwe
Il hedging. 1T is the high-priced whe:
4 of the United States, and with 3 8,
it moderate stocks we do not look for Il
premium over December to hold AZ,