Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1920-02-18
WHEAT. PRICE GUARANTEE.

alton which has been introduced by
senator Gronna was understood, from
his own statements, to include a pro-
vision for the immediate termination
OF the price guarantee under which
we are now working. In his open let
ter to the farmers of the northwest,
and in statements which he has made
in other ways relating to his bill. Mr..
Gronna denounced the whole method
which mas been employed by the gov
eminent in dealing with wheat prices.
He declared in substance tina the
guarantee had operated to lower the
price Of wheat rather than to raise
it, and it was 9. fair inference that
he intended to abolish In element
which he considered SO damaging to
the interests of the farmer. K
However, Mr.. Gronna now explains
that he does not intend to discard the
guarantee, but merely to abolish the
United States grain corporation. The
grain corporation was created as an
instrument whereby the price guaran-,
tet could be made effective. 1t was.
obvious that the mere fiat OF the gov
eminent would not maintain the price
Of wheat at the guaranteed figure.
The only thing which will maintain
a given price is the readiness Of some
body to buy at that price. Therefore,
when the government guaranteed
that a certain price should be main
tanned, it was necessary for it to pro-
vide machinery whereby that guaran-
tee could be made effective. For this
purpose the grain corporation vas
created and endowed with authority
to buy and sell wheat. II the sener-
al market conditions were such that
the price could not otherwise be main
tanned. the corporation was to buy
all offerings at that price, and. if nee
essary, to sell At a loss. A billion
dollar appropriation was provided
for hat purpose.
During nearly all of the time, II not
quite all Of the time, since the law
was first passed, the price of wheat
in the general market has been high
er than the guaranteed price. 1t does
not follow that the guarantee was in
effective. 1t is certain that without
it there would have been great ,fluc-
tuations, and there is excellent reason
to believe that tho price would ON
many occasions have dropped consid-
erabfy below the guaranteed figure.
Az it was fluctuations could not 20
below that price.
Mr.. Gronna, it appears, proposes to
retain the guarantee, which he main
tains has been useless, but to abolish
the grain corporation. In order to
maintain the guarantee he proposes
that ~porchases shall be made, when
necessary, by the secretary OF asrieul-
ture.
|. If the plan has n merit at all, it
is too late to apply It. The Euaran-
tee and the grain, corporation will ex-
pire by limitation Juns A.. After
that date wheat will take its place
with other commodities and the price
will be governed entirely by general
market conditions. 1t win take some
time, even IL congress is favorable to
the new proposal, to get the necessary
bill through the two houses. and past
the possibility Of = presidential veto.
Then it will take time to wind up the
affairs Of the corporation. That cam
not be done in a day. At the very
most it would be impossible for the
new order TO be in force for more
than a few weeks, for We need moi ex-
pect that the government guarantee
will under any circumstances be ex-
tended beyond the life Of the present
law. Hence it appears that the en-
actment Of new Law on the subject
at this time would be merely confus-
ing, without accomplishing anything.