The Nezperce herald. (Nezperce, Idaho) 1900-1957, 1924-10-23
THE SPILLMAN PLAN
How Noted Economist Would Bring
Better Price for American
wheat.

sulting specialist in the Bureau Of
Economics of the U. s. Department
of Agriculture, recently addressed q
large audience at Nezperce, he made
reference to plan he was working
out for the betterment and satbiliz-
ing of prices for American wheat. He
stated that hs would later give this
plan TO the press, and here II Is in
detail. 1t is certainly worthy the
careful perusal and study of every
farmer and citizen interested in wheat
production:
The price Of any product tends TO
fluetuate above and below the cost Of
production. 1t is variation in supply
and demand that causes the flucta-
tion. Any increase in production
tends to reduce the price. A decrease
in production tends to increase the
price
In the case of world commodity
like wheat, the price tends to fluctu
ate about the average world cost Of
production. If the price goes much
below that level 1t will reduce produc
ion in those regions in which thu
cost of production il highest and this
win tend to bring prices back to NOR
NAL. If prices go much above the
normal production win very quickly
increase and thus tend to bring prices
back to normal.
We have an illustration of this right
now. just at present the price Of
wheat is up little, and because 1t is
up, this years wheat average in AT.
gentina is 8 per cent larger than last
year Is, and our intentions-to.p plant re-
port, issued in August this year, indi-
Gates that in this country the amount
of fall wheat to besown is l.2 per
cent greater than was sown last year.
There are some exceptions to the
rules stated above. We have three Of
them in this country. They are cot
ton, corn and wool. 1t Is worth while
to inquire why they do not behave
like wheat and all other farm pro.
duets. BY 1912 we had reached what
appears TO be the limit of our corn
acreage. Apparently we can not make
any material further increase In the
acreage of this crop. We had larger
acreage in 1919 than we have had
since except one year when lot Of
winter wheat froze out, thus leaving
much vacant land for corn in the
spring. For this reason a rise In the
price of corn does not cause ma
terial increase in the production Of
corn. 1t is possible, therefore, for the
price of corn to stay materially above
the cost of production without greatly
corn acreage. As result
of this situation the price of corn has
doubled since 1912. There is every
reason to believe that these high
prices for corn are permanent. Corn
prices this fall are considerably high
er because of the danger of short
crop this year. If we have good
crop next year the price win undoubt
edly fall considerably, but unless we
have another great panic corn win not
be cheap enough to burn for fuel
again in our time.
The situation with cotton and wool
is somewhat similar. can not take
the space here to go into them in de-
tail.
In view of the fact that we ordi-
narily produce some 20O,0O0,0O0 bush
els of wheat more than we need, the
price of wheat in this country is de-
'termined by. the price we can get
for our surplus in the world market.
The point want to raise is this: Is
it necessary that this exportable sur
plus should control the price Of the
wheat produced and consumed in this
countryf
Economists tell US very properly
that economic law $ just as inexor-
able as the law of gravity. We can
not change any one of them. But
want to call attention to the fact that
because we understand the law of
gravity we can take advantage of it
and make it work for us, as we do
when we harness stream and make
IL turn water wheel.
We are now beginning to under
stand economic law, too, and see
no reason why we should not make
economic law work for us.
A big manufacturer, such, for in
stance, as the international Harvester
company, sometimes finds itself with
a good big surplus Of its products on
hand, and not infrequently it markets
that surplus in foreign country at
price considerable less below the
prices charged in this country without
demoralizing the market in this coun-
try. We have positive proof, there
fore, that il is not absolutely neces
sary for the exportable surplus to con
troll the price at home.
Continued on page 81