New Britain herald., 1919-09-02
SPECULATION IS
 CAUSE OF +. (. OF l.
Continued from First Page)
Worldwide Speculation.


 This years speculations, MT. Hoover said, are due in my opinion chiefly to the belief of food merchants end manufacturers that when the blockade was removed there would be an enormous demand for fOodStuttS and other comm odities in central and eastern Europe. This speculation was not due to any important shortage at present of actual supply. This specu- la tive fever, which was not confined to foods, was greatly stimulated by the long delay in the removal of the blockade until the peace treaty was signed at Versailles. There is plenty of evidence that this was true of food stuffs in glutted ports in northern Eu- rope where only neutrals have the means to buy
 Responding to an inquiry as to how food speculation could be checked in America, Mir. Hoover replied:
 Prices May EaII.
 Attorney General Palmer is on the right track when he cndeaVOrs to break down speculation and seeks to secure powers never possessed by for mer administrations to enable him to accomplish this step. The situation is one that well may cause anxiety also from another point of view. We are now coming into "a flood of production of fodstuffs in the nrthern hemisphere and will again have a great surplus in the United States. If, in the mean time Europe has not found credits to purchase the coming winters supplies we are likely to have d gut and prices may fall below the cost of production to American farmers.
 !, ;rl, not due to oVer-eXports to Europe from the United States during the past year. That can be demonstrated by the fact that we enter a new harvest with larger stocks of previous years production than at this time last year. In fact the stocks of many cOmmodi- ties are the largest we ever had in storage at this season Y ct prices are very much higher. If we are to ac- count for the high price level on the basis of oNer-eNpOrts, We should Have to find a depletion of our national StOckS."
 Mir, Hoover pointed out that the problems involved in the speculative wave were very difficult to deal with, because it was world wide and not confined to the United States.
 The law of supply and demand" he continued, lis not working nor mally and probably will not for an- other year. While prospective food supplies for the next F months are about equal to the apparent need, un- stable political situations. a recurring shortage of shipping, a shortage of credit and a combination of either buyers or sellers will tend to create speculative waves and may inf1ate prices to a point uncomfortable to the consumer, orc, in the reverse situation. uncomfortable to the farmer.
 We will have a large surplus next year and must have a prosperous farming community if we are to have the world fed in the future and main tain stability thome and abroad. It is my own view that the situation would not have been so acute if the blockade had been removed soon after the armistiCe was signed, as it was urged by the United States govern ment. The speCulator would have had illusions destroyed last winter instead of now. It could also have been pos sible 10 have prevented great specula- tOn had We retained an mbargO on exports and thus kept the world s speculators puzzled as to the govern- ment'S action. The rise in foodstufTs on the other hand, took place only after the control of exports had been removed. On the other hand, the general demand of the public made it impossible to continue the control of exports as that control naturally re- tards the completion of normal eco- homie life.'