The Wolf Point herald. (Wolf Point, Mont.) 1913-1940, 1923-12-27
presented by the Agricultural Elk.
port Corporation League.)
The Situation

The Situation
The widespread agricultural de-
preston that has affected all bust
ness unfavorable is due to the fact
that with few exceptions, prices for
the main crops have dropped since
the wal to a level far below that on
which operating costs, and other com
modities, still stand. In this brief
explanation of a feasible plan to re-
store the purchasing power of farm
commodities, it will be assumed that
the ratio that existed between the
price of farm commodities, and the
general price level for the five years
prior to the war (1909-1913) was
THE normal one. On that assump-
ton, it is evident that re-establish-
ment of the pre-war ratio, either by
raising farm prices to the general
level, or bringing the general level
down to farm prices, is desirable for
agriculture and all interests direct
ly affected by it.
While the plan set forth here af-
fects all farm commodities, it will
be considered mainly in it's effect ON
wheat.
During the war, all prices, wheat
included, went to new high levels.
There was a great expansion in the
acreage under the highest operating
costs we have ever known. Unfa-
vorable natural conditions through
out the northwest led to sub-normal
production and THE farmers went
deeply in debt at a time when the
debt represented extremely high
costs.
The after-war condition has been
abnormal and destructive of agrlcul-
tual prosperity. for while prices for
wheat. beef. hogs and other main
crops have dropped nearly back If
not quite. to pre-war prices, the gen
eral price level has remained high.
In other words. the purchasing power
of a bushel of wheat or a hundred
hounds of pork has shrunk so dis
a~sterously in comparison with that
Of pre-war years that the business
of farming is no longer safe. This
is particularly true Of regions where
wheat is the main crop.
This condition is due to certain
factors: Industry, under pro-
tective tariff, operated on a high do
nestle price level compared with
19O9-1913. 2-Labor has been able
to keep wages above the pre-war
level by the protective tariff which
enabled employing industrials to pay
on a high scale; by restrictive
MIGRATION laws; by organization.
3.-Agricultural products, with
the execution of a few. are on q
world basis of price rather than a.
domestic basis, because of the lack
of effective, workable protection.
Index Figures
The common instrument for COM
paring prices between groups OF
commodities and between years IS
the so-called "index finger" In this
study. the Department. of Labor IN
dex fngers are used. Their use can
best be explained by an Illustration
The period of five years before the
war. 19O9-1913, is taken for the
base. The general price level for
commodities. and the price OF each
commodity, is fixed at the figure 100
for that period, indicating what may
be termed the pre-war or normal re-
lationship between prices.
Compared with 100 for the pre-
war figure, then, the Department OF
Labor calculates that the general
wholesale price of all commodities
for the first nine months OF 1875
January to September, inclusive
has averaged 1916. showing that n
~geoeral price level is over 60 per
cen higher than normal. Producers
of farm commodities would be salts
fed. then. if their prices also stand
at 60 per cent above the pre-war
levels. since that means that the pur-
chasing power of what they have
GROWN remains about what it was be-
fore the war. i
AS a matter of fact, agricultural
nrices have not kept this relationship
but have fallen completely out OF
line. This can be illustrated easily
in the case of wheat, comparing the
actual average price per bushel OF
No. 1 Northern Spring Wheat and
No. 2 Hard Winter Wheat at Chicago
for each month Of the year 1928,
with what the same bushel of wheat
should have sold for if it had the
same relationship with other prices
that wheat held before the a
In January, 1928, No. 1 Northern
Spring and No. 2 Red Winter wheat
averaged $1.23 Chicago. 1t should
have brought $1.74, or 81 cents
more. if it had held its pre-war re-
relationship with the general price
level.
I'm February No. 1 Northern Spring
and No. 2 Red Winter wheat averag-
cd s 80. Chicago. 1t should have
brought S1.75 or As cents more, if
Che nre-war price or ratio had been