Evening star. [volume] (Washington, D.C.) 1854-1972, 1924-04-13
DRASTIC REMEDY URGED
] TO CURE ILLS OF FARMER
McNary-Haugen Bill Likely to Pass Tn.
less Some Other Way Is Found
to SuccOr Wheat Growers.

of capital provided from the United
States Treasury, supplemented with
authority to borrow. The purpose
would be to maintain whesS at a fair
price compared with the price of other
commodities. a fair" price for wheat
would be a price which had the same
relation to the prices OF other COM
modities that wheat averaged hav-
ing to other commodities during the
ten years prior to the war. 1t is
estimated that that price for wheat
today would be $3.50 bushel What
the price of wheat would continue to
be would be determined by monthly
computation based on Department of
Labor statistics, but for the purpose
of illustration it will be assumed that
it held steadily at $3.50 bushel.
Whenever the price of wheat fell
below $3.50 bushel the export cor
poration would go into the market as
a buyer and by buying would main
tain wheat at the prescribed price.
theoretically, it would have to buy
only the exportable surplus, as do
mestic consumers would have to pay
the government price in order to sup
ply their requirements. They would
have to do this because the Presi-
dent. by proclamation, would fix the
tariff duty on wheat high enough so
that import wheat could not be sold
below the government price.
How 1t Would Work Out.
a.sur,;nr +ba croo figures and the
world price used above, the export
corporation would buy 150,000,000
bushels of wheat at $3.50 a bushel,
which 1t would have to sell on the
world market at 81 a bushel, netting
a loss of SIS, 900, 900, plus the costs OF
operation. The McNary-Haugen bill
undertakes to provide that every man
who grows and sells a bushel OF
wheat shall bear a proportionate
share of that loss. regardless of
whether his wheat entered into ex-
port or was consumed at home. In
other words. the entire crop of $50
000, 900 bushels should participate in
the export loss, because the entire
crop would have profited by the ar
tifcial price maintained.
In order to accomplish this an esti-
mate would be made in advance as to
what the probable export losses and
operating costs for the year would
be- To make figuring easy, it will be
assumed that the estimated export
loss is s75.000,000 and the estimated
cost of operations, with a margin for
safety, is $4,000 900, a total of $50
900 900. On a crop of $50. 100000 this
would represent a reduction of 10
cents a bushel below the established
price of $3.50. In order to distribute
this reduction, with every purchase Of
wheat, whether by the export cor
poration or by a private buyer, pay
ment would be made $1.40 in cash and
10 cents in a special script" to be
provided for that purpose. The script
would be placed on sale at all post
offices, and a seller who refused to
accept it for his wheat would be liable
to civil damages If, when all the
wheat had been marketed and the
books balanced, it was found that the
export losses and operating costs had
amounted to the full estimate of
SIS, 200, 900, the script would be worth
less. If, on the contrary, the losses
and costs had been only s42,5OO,o 900,
the corporation would redeem the
script at fifty cents on the dollar of
its face value. The script would be
transferable and redeemable to
bearer.
Applies to Other Crops.
Such. stripped to the bone of bare
fact, is the McNary- Haugen plan. The
bill makes the same procedure apply
to corn, cotton, live stock and other
farm products, but every one knows
it is intended primarily to meet the
situation of the wheat farmers. When
each emergency" of low prices had
been met and overcome, the money
drawn from the Treasury would be
returned, to be drawn out again when
another emergency" arose. 1t is pro-
vided that the law shall remain in
force for a period of five years only.
That the measure is paternalistic in
the extreme, its most earnest propo-
nents will hardly deny. That 1t would
establish a precedent which might be
applied to steel, copper or any line of
production is asserted, but over this
proponents of the bill refuse to
worry. That artificial price fixing by
governmental decree has been tried
repeatedly since the Emperor Diocle-
tian coEceived the notion sixteen CEN
turtles ago, and that it always has
broken down is admitted, but back
ers of the McNary- Haugen bill be-
lieve that this time they have found
likely to be speculation tn the pro-
posed script is conceded, but that it
will operate as currency imitation is
denied. So that must remain a mat
ter of opinion. Arbitrary mainte-
nance of a ratio of pricces is de-
nounced as a social and economic
evil, but the distressed wheat farm
ers are not worrying about social
and economic evils. To the COM
plant that it would be govern
mental interference with business for
the benefit Of class it is answered
that the government already has
done that very thing in the case of
the protective tariff for industry and
the fair return" rate fixing pow
ers of the Interstate Commerce Com
mission.
When all the arguments against
the measure have been marshaled and
set forth in their most terrifying
aspects, the wheat growers come back
with this one vitality pertinent ques-
ton: If this is not the way to relieve
us of our distriss, how can we be re-
lieved? If that question cannot be