The Washington herald., 1920-02-29
Must Deuelop agriculture or Face
Necessity Of importing FoodstujJ,
Hoouer Warns Engineers in Speech

4
Its moral strength. Industry's real
market Is with the farmer by the
constant increase of his standard of
living. We want our exports to
grow I'm exchange for commodities
we need from abroad. but we want
them tc grow In tune with our social
and political interests and to do SO
they must grow in step with agri-
culture.
Therefore, when we sit down to
consider our reconstruction policies
from the war--when we sit down
to plan the future development Of
our country our first thought
should be of the state Of our agri-
cultural industry. For the last
three months have been a member
OF the industrial commission at
Washington, endeavoring to fnd
some solution for the conflicts and
social wrongs that have grown up
ip our Industrial community. Great
as is the, need for constructive
thought with regard to it's weak
nesses, the need for similar thought
and similar activity is still greater
with regard TO agriculture.
should Make Farming Attractive.
The prime problem is to make the
AGRICULTURAL industry economically
attractive so that 1t draws Into Its
service it's full proportion of Amer
lean life, so that IL can keep pace
With industry in its rapid develop
ment. When we come to the consid-
GRAFTON of practical measures we
soon arrive at two primary facts.
The first is, tha farmers main pro-
duction must tind it's market either
in the great Industrial centers along
the Atlantic seaboard or, alternat-
lively, In export to Europe.
In either case. the prices In nor
NAL times are made primarily oy
competition with the other great
sources OF the worlds food supply.
His prices are thus only remotely
regulated by the cost OF production.
Strict economists will argue that IL
the prices are Improbable to the
farmer IL will ultimately correct
itself by diminished production ana
consequent general rise in the world
level of prices. Amongst the COM
plex flow of economic forces today,
these results come very slowly and
in the meantime the actual result
Is mainly q decrease in the stand
ard OF the farmers living. For the
advance on the demand.
Farmers Are Underpnid.
He cannot decrease his produc-
ton to meet such contingencies
with the facility of organized in
dustry. Whatever the economic
argument may be, the outstanding
fact is for all practical purposes the
farmers level of prices is made by
the world prices of food as inter
preted at the point of delivery, and
during wide periods of time he II
underpsid. On the whole he has
not been underpaid during the war.
but recently the tide has begun to
turn against him.
The second great fact that would
be developed in inquiry is that the
American farmer receives a less
proportion of the consumers pur-
chase price for his product than
the farmer of most other civilized
countries. That is, the margin be-
tween the farmer and the consumer
Is the widest in the world. This
margin comes partly out of the
consumer, but predominantly out of
the farmer, for. as l have said, the
prices to the consumer in the great
food commodities in normal times
are fixed by world forces. If we
assume the basis OF price is not to
be remedied the line of practical
remedy to the farmer lies in de-
creasing the cost of placing his
products into the hands of the
consumer. Every cent that We
can decrease this cost contributes
to the consumer. but even more
largely to the farmer.
Three Predominating Weaknesses.
II we analyze the weaknesses of
our system of distribution, we can,
for purposes of discussion. divide
it into three phases: Their trans
portation, their manufacture in
preparation for the consumer. and
the agencies of distribution.
Our transportation has been un-
der continuous discussion for forty
years with ever tightening regula-
tions. / believe the great majority
4, of our people are opposed to ma
tionalization. Nevertheless, l doubt
whether there is anyone in the
United States who is not completely
seized with the necessity of rigor-
Gus regulation.
We are about to return the rail-
ways to private ownership under
generous terms. and, as l have said
elsewhere, private ownership is
now on it's final trial. The proprie-
tors have now to demonstrate their
initiative. that they can maintain a
right relation to their employees /:
that they can maintain their ad-
ministrative efficiency: that they
can keep out Of national and local
politics: that thcy can conduct these
operations in the sense of complete
service to the community. If it
shalt fail in this latter respect. our
people in reaction will probably be
prepared to sacrifice something of
It's ideals in other directions. for
the supreme test of efficiency is
human service.
Explains Car Shortage.
I wish to point out one weakness
in our present railway situation as
bearing upon the farmer. Every
one knows of the annual shortage
Of cars during the crop moving sea-
son. Few people. however, appre-
ciate that this shortage of cars
often amounts to a structure in the
free flow of commodities from the
farmer to the consumer. The result
is that the farmer in order to sell
his produce, often unknown to him
self. makes a sacrifice in price in
local glut. The consumer is COM
PEELED at the other end to pay an
increased price for foodstuffs due
to teh shortage in movemnt.
In proof of this. on one occasion
study was made under my admin
istration into the effect of car
shortage in the transportation OF
potatoes. and we could demonstrate
by chart and figure that the margin