The Ward County independent. [volume] (Minot, Ward County, N.D.) 1902-1965, 1915-11-25
WHAT GOVERNS THE
PRICE OF WHEAT?
IOWA FARMER WRITES INTER
ESTING ARTlCLE-SAYS PRICE
is GOVERNED BY SUPPLY AND
DEMAND AT DOMINATE MAR
KET, LIVERPOOL.


KET, LIVERPOOL.
Turin, Iowa, Nov. 10, 1915.
To the Editor Of Independent,
.. Minot, N. D.
Dear Editor:
I have read with interest the very
able discussion in your paper on
"What Governs the Price Of Wheat"
As I attended the rate hearing before
the Interstate Commerce Commission,
last winter, where, during the cross
examination of one of the main wit
nesses, Mr.. Boyd, by Commissioner
Thorne, valuable lot of testimony on
this very subject was brought out;
perhaps review of what was said on
that occasion would be interesting
here.
Mr.. Thorne was endeavoring to To-
cate the dominant wheat market of the
world, so as to show that any increase
in the freight would come directly out
of the pockets of the grower. The
counsel for the railroads were claim
ing that it made no difference to
shipper because the consumer paid the
freight anyway. The discussion SIM
nnered down to that one point; where
was the dominate market. From the
testimony of Mr. Boyd, who was an ex
pert on traffic, and had been in the
employ of the grain exchange Of Chi
cago for many years, it appears that
as far as we are concerned in the
northwestern grain producing terri
tory, the dominate market changes
according to conditions, which may be
merely local. Your correspondent
cites times when the Winnipeg mar
ket was higher than Duluth or Mime
: apolis. Due to some really local con-
dition. wheat could get to the worlds
market cheaper from Winnipeg than
from the American markets. This con-
dition was only temporary as it chang
ed soon. Mr.. Boyd told Of similar in
stances when conditions had caused
Omaha or Kansas City to become tenn
porarily the dominate market for corn,
or the place where it was the most in
demand.
AS a matter of clear, economic reas-
oninp. it must be conceded that some
place on earth there must be place
where the most Of the time wheat
could be collected, and distributed to
those who want and need wheat,
cheaper than any other. After half q
day of discussion and cross examlna-
ton by Mr.. Thorne, Mr.. Boyd reluc-
taptly admitted, that for the larger
part of the time Liverpool, Eng, was
this one point on earth. Here COM
mission merchants and spectators
keep in touch with the conditions of
the wheat fields of the world and de-
eide what they think wheat will be
worth in the future. They also keep
in touch with the visible supply or
what is in transportation, or in stor-
age, and an estimate of what is IN
the hands of the growers. They also
keen in touch with what demand there
is coming in from different parts Of
the world and the conditions at this
point is really what determine the
price of wheat the world over: The
price of wheat is determined by the
price at this dominate market. less the
cost of transportation, and other incl
dentals.
There are many things that can tenn,
porarily hinder the free uninterrupted
flow of this cereal to this great
worlds dominate market, such as wet
weather stopping threshing in Dako-
ia and not in Canada for while. The
Canadian market would fill up while
the market in Minneapolis would nat
urally exhaust itself and the price
would rise until such conditions right
ed themselves, and it was during just
/. such times that Mr.. Boyd contended
that Minneapolis would become the
dominate market. Of course these
conditions prevailed only part of the
time and Mr.. Thorne made him admit
that for the larger part of the time
the dominate market was not in these
temporary centers, but in the world S
greatest distributing center, Liver
pool. Again deducting from this ar.
pument It appears that the price OF
Wheat is regulated or controlled Dy
the supplv and demand at the doml-
nate market.
It makes no difference how many
men guess on the future Of what the
wheat market will be. Experience has
shown the folly of trying to influence
or corner the wheat market. 1T has
i been shown by the experience OF
wrecked SPECTATORS that no financial
agency is strong enough to buy up and
control the supply of wheat OF the
world for any great length OF time.
Even where the price raised for a
short time, the speculator was unable
to sell at a profit before the supply
that he had collected was forced onto
the market, and the price came crash
ing down again. 1t is very much ike
damming a river. The water that was
collected would eventually overflow
the dam and wash it away. All this
talk about some secret set Of men in
the grain exchange setting the price
Of wheat is all buncomb. Any scheme
] to increase the price to the consumer
must Law in decreasing the expense
from the field to the dominate market.
There is no doubt that spectators
taking advantage of the flood Of wheat
( that comes in at threshing time, and
the consequent low price, buy and
store wheat for future delivery and in
that way make money; but the natural
effect would be to really steady the