Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-12-24

Washington, Dec. 22.-Ihe de-
partment Of commerce was adj
vised by cable today that a pro-
visional contract has been ar
arranged under which the Argen-
tine government will sen 100000
tons of wheat and 10000 head of
live cattle to Greece.-Associated
Press Dispatch.
THERE is a good deal Of meat
L in that little item Of news be-
sides the half million dollars worth
of cattle bought from the Argen-
tine farmers and the ten million
dollars worth Of wheat. The ships
that come from Greece to carry
that ten million bushels of wheat
and those ten thousand head of cat
tie to the Greeks will sail right
past our doors. 1t costs time and
money to make the longer voyage
whether by steam or sail. Why did
they not buy their wheat and cat
tie of us7 We have a surplus OF
both products and our prices on
them are very low. The sale OF
ten million bushels of our surplus
wheat for export to Greece would
have boosted wheat prices to the
farmers of Montana and the United
States. Why did the Greeks who
purchased this wheat go past us
for thousands of miles to buy in a
distant market? At first go off
the natural answer would be that
they got it cheaper in the Argen-
tine republic than they could buy
it in this republic, notwithstanding
the extra distance and increased
cost of transportation. But that
explanation will hardly stand in
vestigation when we consider that
the price of wheat is a world price,
distance and transportation costs
considered. The price of wheat in
all the producing countries Of the
world is practically the same if
we ignore exchange rates. And
therein lies the crux of the prob
lem. If Great Britain or Greece
buys wheat in Argentine rather
than in the United States and pays
for it in sterling exchange it will
cost them less pounds sterling
than it would if they bought in the
this country because sterling ex-
change is subject to a discount in
this country and it is worth par in
Argentine or better. The reason
for that again is that Argentine
buys more European goods than it
sells foodstuffs to Europe. Cut
ting through the heart of that
question it resolves itself into the
plain statement that Europe pre-
fers to buy in Argentine because
it can pay for Argentine food
stuffs with goods, and it has to pay
for our goods with gold and to get
that gold credit it must sell its
money at a discount.
In this wheat and beef transac-
ton undoubtedly Greece does not
pay in its own money, but in ster-
ling, which it has borrowed from
Great Britain. If exports and i'm
ports between two countries are
equal and their currency sound,
exchange will reach a common
level as it has between Canada and
the United States. The difference
Of exchange in reality reflects the
difference between the balance OF
trade between two countries. AS
we are buying little from foreign
countries and selling them a good
deal, the exchange rate is in our
favor so far as the most of the
world is concerned, and that makes
it more costly to buy from US thar
from nations that purchase more
from them, SO that they have cred.
its in those countries to pay fol-
what they buy there. A high ex'
change rate in our favor makes il
cheaper for US to buy abroad ano
dearer for them to buy Of us. Il
is not a good thing for the farmer
who has surplus food supplies tc
sell abroad. For that reason tariff
laws that prevent the possibility Of
foreigners selling any goods in oul
market hurts the farmer by limit.
ing his market abroad.
This accounts for our failure tc
sell tep million bushels Of whea'
to- Greece. But there is also
great demand for our surplu:
wheat and beef abroad which VIZ
cannot supply because the would,
be purchasers cannot get sterling
exchange or any other kind of cx
change on account Of lack Of
credit. The Greeks no doubt pait
with sterling borrowed from Lon
.- - A..k:1 ~~x