Evening star. [volume] (Washington, D.C.) 1854-1972, 1919-01-12

4 MERlCANS may as well become
~ reconciled to the fact that there
II is not visible today any prospect
of an early reduction in the cost
of foodstuffs. There will be varia
tons in the prices OF specific conmodities-
some will go down and others may go
UP, according to supply and demand-but
students of food economics do not look for
any reduction in the general price level
within a year, at the earliest.
The chief obstacle standing in the way
of cheaper food is the governments guar
antee to wheat growers of 500 a bushel
for the 1918 and 1919 crops. Wheat. to
large extent, is yardstick for determin.
ing the prices of foodstuffs in general. The
prices of other cereals, of beef, pork aud
mutton, and OF dairy and poultry products
go up and down with wheat-not under
any hard and fast rule and not without
exceptions, but with sufficient consistency
to make the fact almost determining
factor in trade.
HIS government guarantee of an
artihcially high price for wheat was
a war measure, the burden of which
the American people must bear regardless
of the ending of the war. Under stimulus
of the guarantee American farmers grew
more than o00,0O0000 bushels of wheat last
year. With all restrictions on consump-
ton in this country removed there still
is an exportable surplus of the 1918 crop
estimated at from 2750OO0O0 to 325,OOO.OOO
bushels.
And the wheat-importing nations of
Europe do not want any part of this ex-
portable American surplus. The artihcially
high price was guaranteed and the re-
sultant bumper crop grown primarily for
the nations associated in the war against
Germany and for friendly neutra1s. Had
the war continued they would have had
to have this American wheat to save them
from starvation. But with hostilities sus-
pended and shipping freed for non-war
uses the nations for which the high-priced
American wheat was grown are getting
cheaper wheat from Australia, from Argen-
tina and from India. They are unwilling
to recognize moral obligation to buy at
the higher price the wheat which would
have been their only salvation had the
war continued
VI7ERE the law Of supply and de-
w mand IN oper7tiQRsthis situation
vsssawotld result Il Is Immediate and
sharp break in the price st American
wheat. The surplus over home require
ments is so large that the price might we'll
go to 81 bushe1 or lower But the law
of supply and demand has been superseded
by the government guarantee of $40 a
bushel to the wheat grower. For the pur-
pose of unfolding the price, the govern
ment today has in the neighborhood of
$300,000,000 invested in wheat, and this in
vestment is likely to be doubled as the
wheat is shipped from the farms and the
surplus accumulates in elevators.
With the government, as the dominant
purchaser, sustaining the price of .wheat,
miilers are unable to make any reduction in
the price of -four, or in bran and middlings,
the by-products of milling which play so
important part in the feeding of dairy and
beef cattle and of poultry. Thus the high
price of wheat not only holds up the price
of -four, and, therefore, of bread, but it
keeps at high price level such important
food commodities as dressed beef, milk,
butter and cheese, eggs and table poultry.
y,
THE feeding of dairy and beef cattle
is complicated further by the closing
of breweries and distil1eries In the
past brewers and distillers' grains played
an important part in cattle feeding. With
these supplies now cut off, dairymen and
cattle feeders are left to depend almost
entirely for concentrates on the high
priced by-products of wheat milling. Cot
ton-seed meal and oil cake, ranking third
in Importance as cattle feeds, are scarce
and high in price.
Until there is a reduction in the price
of wheat, therefore, it is not logical to
expect any material reductions in the prices
of bread, beef, dairy or poultry products
There will be no reduction in the price of
wheat until June, 1920, if the government,
following its policy with the 1918 crop,
maintains the price on the crop to be
harvested next summer.
THE alternative is for the government
to permit the 1919 crop to be mar
L keted at the world price, whatever
that may be, and to pay to the wheat
grower out of the federal Treasury the