The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1921-01-28
The Worlds Wheat Problem
BY WILLIAM r. sANsoRN

BY WILLIAM r. sANsoRN
| Because Great Britain has long been
the banker for all Europe, on account
OF her financial prominence, and also
because the bulk of the worlds inter-
! national freight is carried in British
ships, we have been told for genera
tons that Liverpool fixes the price
of wheat for the world"
This Is not even approximately true.
what is true is this: Liverpool is the
greatest OF European export wheat
| markets, but there are others, nota-
Oily ROTTERDAM, Antwerp, Hamburg
and Geneva, all important Continental
markets. British traders, however,
cover the Continent and Great Britain
has broader financial control of the
sources of raw material than has any
other nation, also the ships and the
men to handle it, and this explains her
gigantic commercial operations.
| NOW what is raw material? "Ex-
port wheat is simply the surplus of
the principal wheat growing countries,
the great bulk of which ultimately
finds its way to Liverpool in British
vessels. and after supplying British
needs the balance is parceled out to
best advantage by English grain mer-
chants. At this point Liverpool does
| Tx the price on her surplus importa-
! tons, that-Price depending on the
supplies in, and needs of, the markets
TO which she may trans-ship or the
| ability OF the traders who come to her
for grain to supply their wants else
where. England makes a price to hold
| her market. Whenever that is, for any
reason, thought to be worth while and
this not only as to grain but also as
to the entire marketings of this great
commercial nation-entering into
world competition, wherever English
| supremacy may be challenged or in
danger.
Worlds Surplus Sets Price,
| 1t must be remembered that the hun
dreds of vessel loads of grain on pass
age" are a constant source Of supply.
| Moreover much of this grain is on
consignment and not under contract.
The bulk of such loadings reach the
/ Mersey docks at Liverpool are sold
on bids or are held subject to cables
from the owners in India, Australia,
Argentina or Canada, and in pre-war
| days this supply was augmented by re-
ceipts from Daunbian and Black Sea
ports, Russia then being a large ex-
porter of wheat.
! The amount of wheat ION passage"
varies according to season and de-
mand, but seldom falls as low as 35,-
100000 and often exceeds 100000
bushels. Let us suppose that there
are 100000 bushels headed for Liv
erpoOl and the Continent today, the
bulk of it on consignment. Suppose
Spain, Greece or Italy advances their
bids for wheat. What happens? Own
ers in India, Australia, England Can
! through their representatives, by
cable. and then Immediately divert a
cargo or cargoes to the port where
sold, the ship captain being instructed
my wireless.
1t will be seen then that the
worlds availab BILE surplus is the great
est factor in setting the price of wheat.
We say "availa BILE surplus" because
that alone counts. Russia had two
crops of wheat on hand after the har-
vest of 1914 and on the breaking out
of the war, Roumania was also one OF
the granaries of Europe and will be
again, but has raised scant crops and
has had but little wheat TO spare
since 1914, this being true of all the
Daunbian country since the harvest of
1918. 1t follows then that it is the
available" grain which figures impor-
family and not what the world may
have grown but cannto move into con-
sumption, as in war days with con-
tending armies, submarines and sea
raiders in action.
I Wheat a World Crop.
| Wheat is a world crop. No single
country, let alone any single city. can
make the price on any world crop.
Those who need will buy in the cheap
est and not in the dearest market.
Time was when Russia exported 49,
100000 to 20O,000,O00 bushels of wheat
annually. The war shut off that vast
| supply and the rest of the wheat pro
ducing world buckled down to supply
that lost production and presently
more than made it good. But even
so the people of Europe actually need
every bushel of our wheat, and all
that Canada and Argentina can spare
Of their last crops. But Europe lacks
both cash and credits. She has so far
been unable to sell us sufficient goods
to establish such credits and in cOnse-
| Quence her exchange rates are on
ruinouS basis. Europe owes Ameri-
can and Canadian concerns billions of
dollars, aside from the loans extended
directly by the two governments.
Private enterprise is loaded to the wa
ter line. There is limit to the
amount of credit American concerns.
either bankers or exporters, can eX
tend, regardless OF how their interests
are secured.
A Peculiar Situation.
After loading up on wheat at COM
paratively high prices. During last
spring and up to mid July. Great Brit
ain dropped almost entirely out OF the
| American market. 1t is said that, in
the meanwhile, England has bought a
lot of Indian and Australian wheat for
less money than she would have been
compelled to have paid during last fall