Perth Amboy evening news., 1923-08-15
CHEAP WHEAT, IT'S CAUSE
AND EFFECT TOLD OF
Daily Letter by Frederic j. HaskiD

WASHINGTON, Aug. 15-Govern-
ment economists and students of af-
fairs at Washington have been
searching for the underlying cause
Of the decided slump in the stock
market and many of them believe it
to be the low price of wheat.
Nearly half of the population of
the United States is made up of
farmers, a large percentage of whom
raise wheat. The price of wheat
has been down around seventy and
eighty cents a bushel. This is de-
clared to be below the actual cost
of production. The inevitable result
is that the wheat-growing farmer
will not only have no surplus profits
with which to repay his bank loans
and make purchases but will be in
the hole.
This means that his purchasing
power in the markets of the u
try will be limited very largely to
new loans and new loans are becom-
ing increasingly difficult for the
farmer to procure because already
he is over-burdened with dept and
his credit is therefore impaired.
The men who run the stock mar
ket fix, in open dealing the prices of
commodities which. in turn, govern
the prices of the stocks and bonds
based on those commodities or the
services of handling. transportation,
merchandising, ETC., allied with them.
Realizing hat the underlying pur-
chasing power of the country will be
weak because of the low price Of
wheat. the stock market has placed
a lower valuation on the securities.
Meanwhile, the Government, the
farm organizations and the farmers
themselves are engaged in attempt
ing to discover the for the low
wheat price and to devise means of
remedying the situation. The caus-
es discovered are various.
Two main facts stand out: the
production of wheat is or the in
crease, while consumption has de-
creased.
1t is not easy to lay a finger upon
the causes of so intangible a move
ment but some seemingly funda-
mental considerations may be noted.
War Effect on Consumption
During the war, four million AM
orleans and many additional millions
of other nationalities were enrolled
in the armies. Experts planned food
rations for these men. They were
based on scientific data and adjusted
to give precisely the right amount OF
untriment, properly balanced. Sol
diers witness the fact that in most of
the armies, no more food was given
a soldier in a day than he was &C
customed to consume at a single
meal in civilian life. Yet the armies
were uniformly moreN healthy than
the men had been in civilian life.
To insure adequate food supplies
for troops, civilian consumption dur
ing the war was cut down by Gov
eminent regulation. Following the
lArmistice, vast regions of the world
were subjected to conditions APP
preaching famine. They were forced
by circumstances to curtail their
food consumption.
The conclusion seems to be that
perhaps subconsciously, the millions
of men in the armies and the mil
lions in the civilian populations came
to realize that they had beer con
suming more food than was neces'
sary to sustain life properly. They
retained their habits of curtailet
food consumption, diverting some o.
the money they previously had ex
pended for food to other uses.
/. Figures compiled by the American
Institute of Meat Packers SHOW
that, despite the natural increase II
population, meat consumption in tn
United States is no greater than
was five on six years ago. From nv
: to ten millions more are living on tn
same quantity of food. No figure
{ have been compiled on the reduction
of pei capita wheat consumption blu
the impression is general that con
sumption has fallen off.
These facts warn the American
farmer as we'll as the farmer o
every land hat he must readjust hi
whole conception of the volume O
= food products a given number o
people will consume Agriculture
experts have reached the conclusio
/, that not in this generation will tn
natural irtrease in poYuls ton ovei
take the supplies of wheat and tina,
Therefore, there is no event in sigh
which will increase the price, bring
ing relief to the farmer.
e On the production side the fact
to be considered are these: under tn
t stimulus Of the war, farmers a
over the world worked under hig
pressure and patriotic impulse. 2