Pullman herald. [volume] (Pullman, W.T. [Wash.]) 1888-1989, 1921-02-25
WHEAT SITUATION AT
HOME AND ABROAD
Continued from last week.

l. The fact aud psychology OF
falling prices Many raw material.
have descended in prices; rubber
copper jute, cotton. silk, wool and
hides WAR prices must go. The
psychology of price reduction in au.
tomobiles and silk shirts extends 10
the wheat fields. Since deflation
must occur. the mob instinct tends to
force reduction in prices of all com
modities whether plentiful or scarce.
Prices of corn and oats have fallen
more than other materials wheat
not as much If in driving down the
cost of living we discourage wheat
planting, we may pay for it later in
a higher price for bread If the ag-
ricultural classes receive this year
for their produce 5,000,0000OO less
than last year. the consequent con-
traction in their purchasing power
viii exert a heavy influence upon ur-
ban industries
,. Scarcity of credit The farm
er is a borrower Loans are by GUS
tom supposed to be paid when the
crops are marketable Normally the
farmer sold his grain and paid his
loans as soon after the harvest as
practicable. The national treasury is
urging defIaton and retrenchment.
The central banks urge liquidation
on the country banks, The tendency
is to press the grower to sell, even
in the face of falling prices. To hold
wheat, growers need enlargement as
well as extension Of credit. In the
international sense also, scarcity Of
credit depresses price. Buying ma
tons with low credit display feeble
competition in purchase If our
wheat could be sold on credit, the
price would rise buoyantly. It
would be cheaper for Italy to Duy
American wheat at 81 a bushel on
credit for 20 years, at eight per cent
Interest than To buy cash wheat at
81 with the Ira worth four cents.
The influence of the credit sales of
the United States during the past two
years in maintaining stability in
prices will only be fully appreciated
after we have had a years expert
ence in marketing our exportable sur
pluses on commercial basis. Credit
extended to the farmer to enable him
to hold wheat means little until he
finds the ultimate buyer Credit to
the wheat buyer in Europe would be
much more effective than credit to
the wheat grower Last year the
United States, the United Kingdom.
France, Italy, Scandinavia. Holland.
switzerland, and the Argentine Re-
luhlc sold foodstuffs on credit to the
nations Of Central Europe The
writer does not favor extension OF
governmental credits to the nations
OF Europe for purposes of reconstruc-
ton. for the one valid reason at least
that under present circumstances the
resources thus acquired would be
employed largely for political pro-
grams rather than for industrial re-
construction But no one can refuse
to consider a governmental credit of
sMaa dimensions to alleviate famine
According to the observations of the
writer, the food resources of Central
Europe are so low that death will
cram millions before the next crop.
unless the British Empire and the
united States supply some grain on
credit. This will merely be rene
uuon OF the circumstances of last
year. Ii we have to sell 10000 900
bushels of wheat on credit to Central
Europe, in one way or another the
sooner this is recognized and pro-
grammed the better for the consum-
ef IN Central Europe and the produc-
er IN the United States. Bonds Of
European governments are being sold
IN considerable volume in this conn
try, but the proceeds seem in large
part to be destined for use in the bor-
rowing countries rather than for the
purchase of wheat in the United
States. Europe has little gold, Sc
cIrlties or goods to export When
she offers notes for wheat. that does