Evening journal., 1919-02-06
U.S.. MUST OFFER
CREDIT TO ALLIES
F o o d Administration S
Grain Chief Says Powers
Lack Cash
TO BUY THE
SURPLUS WHEAT

WASHINGTON. Feb. 6.--Is the Unitet
States is to sell its surplus wheat :,
the allies this year the TRANSACTION
must be on a credit basis, Juliu;
Barnes, head of the food admln.st a,
tion's grain corporation, told the Hous.
Agricultural Committee at the hearing:
on legislation to provide a method for
carrying out the governments guas-
anteed price Of s226 a bushel for the
1919 wheat crop.
The allies have not the financial ahil-
ity TO pay cash for the wheat, it was
explained, and the United States Gov
ernment will have TO extend further
credits. At present the Treasury has
no power to make loans to the allies
after peace is declared. although Con-
gress is cons dering treasury reques;
for permission TO extend the unused
portion. about Si5o0,000,0 900, Of credits
already authorized for war loans to
allies for peAce-time. purchases in this
country.
In this connection, Representative
Young. Of Texas, commented that he
understood Great Britain was going to
South America for grain. because Ar
gentina was lending money to finance
the deals. Mr.. Barnes told the COM
rnittee that the allies had agreed to sU--
render their resale option on i00-
100000 bushels Of wheat contracted for
in this country and would take the
grain, the treasury having advanced
s200OO0.000 to finance the transaction.
Talks of scraps OF Paper"
Representative Mclaughlin Of Miehi-
gam declared that for all the loans
made the allies, the United States had
only "sccraps Of paper, l. 0. Us, signed
by their representatives in Washington,
instead of the bonds which the law pro-
vided, should be given as collateral"
Representative Young, of North Dakota,
said prope ly executed notes had been
given for the loans and that no secre-
tary Of the Treasury would have ac-
oepted anything less.
Mr.. Barnes, in concluding his testi-
mony here, recommended that Congress
appropriate si.000000,000 TO finance the
marketing of the new crop and give
the President broad powers over the
export of wheat and trading In this
country. He said 1t was necessary to
protect the millers against loss or
there would be a dangerously low level
Of -four available as the period Of gov
ernment guarantee drew TO close on
June 1, 1920.
The witness declared that except for
aid by the Treasury in the last year
there might have been a 'debacle" in
the wheat guarantee, because the law
the guarantee did not give
the means Of making 1t effective. He
said money advanced by the Treasury
to foreign governments for the pur-
chase Of grain gave the corporation
working capital necessary to market
the crop, which it could not obtain in |
any other way, having no borrowing !
power The si50,000,000 capital Of the
he said, will be returned 1
TO the Treasury with ordinary inter- |
est when the organization is dissolved, /
and 1t is possible that much of the ST. I
J00, 10000 asked to finance the new /
crop will be returned.
Testif1es.
Chairman Lever assured a delegation
Of producers sent by the State Of MIN
nesota that Congress undoubtedly
would guarantee the farmer a far
price for his wheat. while the chair
man also gave assurances to George s.
Ward, who said he spoke for 28.000
bakers who carry many thousand bar
-els Of flour that the baking trade
would be protected.
Hubert j. Horan, of Philadelphia, said
The flour trade was much exercised
over present conditions, because
sudden bs3ak in the wheat market
would mean bankruptcy TO dealers car
wing large stocks