, 1923-10-16
Here Are the Facts

Arguments that the tariff ON wheat does not
help the American farmer are being riddled by
the daily wheat market reports showing prices
paid in this country and in Canada
American wheat growers, ever since tho emer-
gency tariff Of May, 1921, have received more
for their grain than Canadian growers. Today
wheat in Minneapolis is quoted at twenty cents
a bushel more than wheat in Winnipeg. There
have been days recently when the difference was
even greater.
These facts show there is something wrong
with the free trade internationalist argument
thst the tariff does not affect American wheat
prices SO long as this country has a surplus of
wheat for export. 1t is maintained by opponents
of the tariff that Liverpool makes the price for
both American and Canadian grain, and that n
tariff between the United States and Canada
cannot affect the final price since both the
American and Canadian wheat SURPRISES lose
their identity and reach n price parity in the
world market.
This is theory. What is the fact? It Is that
Liverpool does not determine wheat prices in
this country If the United States has a protec-
tive tariff on wheat. If Liverpool were the final
arbiter of wheat prices they would be the same
today in the United States as in Canada, Just as
they were under the free trade provisions of the
Underwood tariff.
A glance at the record will be instructive. In
1920, when wheat and wheat products from Can
ada were admitted into the United States duty
free, wheat was higher in Winnipeg than in
Minneapolis and Duluth. This was largely due to
the fact that Canadian exchange was at a dis
count. Actually, in terms of American money,
prices in the two countries were approximately
on the same level. But when the emergency tar
1ff went into effect in May, 1921, the position
of the American and the Canadian markets was
reversed. Within thirty days the Minneapolis
price had climbed above the Winnipeg price, and
although the general price trend was downward
for the rest of the year, the decline was much
greater in Canada than in the United States. By
December, 1921, Minneapolis wheat was worth
S1.S1, against $1.05 in Winnipeg.
Similar conditions followed the harvesting of
the 1922 crop. On October 9, 1922, No. 1 northern
wheat in Duluth was worth $1.10; in Winnipeg
81 cents. On December 2, the Duluth price was
$2S and the Winnipeg price $1.0S-a spread of
20 cents III favor of the American market. 1t
should be noted that Winnipeg wheat prices are
based on grain in store at Fort william. So far
as shipping facilities and length of haul are
concerned, Fort William and Duluth are stu.
ated identical1y. Winnipeg and Duluth wheat
prices are therefore strictly comparable. In the
closing months of 1922, Canadian wheat was sell.
ing at a heavy discount under American wheat,
although If it could have been laid down in
American markets it would have commanded a
premium because of its superior quality.
When 1923 opened, there was a difference of
from five to six cents in favor of Minneapolis
wheat compared with Winnipeg wheat. After
the new Canadian crop came in, the price in
Winnipeg dropped substantially below the price
in the neighboring American markets. On Au-
gust 6, the future quotation at Minneapolis was
fourteen cents over the Winnipeg price. During
September the Minneapolis price ranged seven
teen to twenty cents over the Winnipeg price.
This meant that American growers getting the
benefit of the Minneapolis price on that date
were receiving for their wheat almost the
amount of the duty moro than the Canadian
grower could obtain.
How the tariff produces this effect is not diff
ficult to see. If millers could get Canadian hard
wheat without paying a duty, their competition
for the American supply would be lessened and
the price correspondingly weakened. There is
another obvious effect of the tariff. Canada
ships most of its wheat to Europe by way of the
Great Lakes. When the lakes freeze up in De-
cember, the movement is blocked. But for the
tariff, the grain would be diverted to the United
States, where it would inevitably exercise a de.
pressing effect on prices. There is always a
price slump in Canada after lake navigation
closes. A corresponding slump could not be avert.
ed in this country were our markets open to the
Canadian wheat supply.