Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1920-05-06
GovERN1rENT N BUSINESS.

4 s-
One Of the disturbing features in
the grain situation. especially rs It;
applies to wheat, is that purchasing
for European needs is almost ex-
ciusively In theyhands Of governments.
On this point a circular just issued
by the Federal Grain corporation says:
Foreign buying at present is. dis
rectiy or Indirectly. the act of gov
with their large resources.
This government buying is forced.
first by ,their bread subsidies and
therefore the necessity of passing
purchases through their national
treasures: second. because private
agencies, crippled by war. cannot cars
ry at high values sufficient stock and
sufficient flow for assurance of the
bread requirements of their people.
Formerly, current prices were the
meeting point Of differing individual
opinions, at home and abroad, affect
cd daily by world crop progress or
better approximation of world con-.
sumption. Today, the decision Of pur-
chase and prices oaid rests in a few
officials, and it is measurably true
that these officials, with or without
concerted action, can influence the
price level for America.
Moreover, their policies arc not
governed by usual commercial prac-
tce. Present purchases, confined TO
wheat becauseS of desire for home
employment, ignore flour, and our
mills suffer a completely artificial
handicap. This reflects into under
production Of mill-feed for our dairy
industries. A wheat price, advanced
in this manner under export buying
OF wheat only, lacks even the cushion
of current flour market protection
against too rapid a fall should foreign
buying for any reason discontinue.
Private opinion may or may not be
confident as to world wheat needs and
prices therefrom resulting. but credits
have never rested on the opinion of
traders, but on the security of hedges
which minimize losses in price flux-
nations. Wide and rapid fluctuations
~ ~ NC CApSSlcu, udIQEdl.
~, from fluctuations in overseas ex-
change, unusual ocean freights, the
limitations of credits, outside of, theI
artificial influence Of the views Of
foreign government officials"
Heretofore the purchase of wheat
has been made by, private agencies,
and the transactions have been gov
erned by existing needs, calculated on
a commercial basis. The conditions
governing were open to the observa-
tons of all. There was full knowledge
of weather and crop conditions all
over the world. Close track was kept
OF stores of grain on hand in every !,
country, and the needs of each coun-
try could very accurately be fore
cast. When a surplus existed it was
certain that that surplus would be Of
fered for sale. When the facts indi-
Gated certain import needs it was GER
tain that the country interested would
be in the market for grain with which
to meet the needs. Price, in spite of
local fluctuations and certain specu-
lative manipulations, was in q very real
A>~A
sense a matter Of supply and demand.
But goyernments are not bound by
commercial considerations. ror some
political reason, or for the purpose of
influencing certain industrial or other
domestic conditions only remotely re-
lated to the supply and price of wheat,
a government without notice enters
the market and makes large purchas-
es, orr withdraws from the market
and refrains from making the pur-
chases which the normal requirements
demand. h result is an artificial]y
stimulated or depressed market, due
TO no natural causes. but to the de-
cision of a few individuals which may
be made arbitrarily and mistakenly.
That element Of uncertainty must
exist whenever governments take upon
themselves the function, Of business
agents for their people. The moral
OF our recent experience il that she
more government dips into the ordi-
nary work of commercial business til.
worse it muddles things.