Evening star., 1926-10-09

The Government, through rural
credit banks, has planned to advance
| fund Of $30.00O,000 with which to
| stabilize the cotton market. Cotton
| is overproduced this season. as we'll
as last year, and the surplus has
| beared prices to such an extent that
it means ruin to many a cotton raiser.
unless something can be done to
stimulate the market. 1t is proposed
| to accomplish that end by storing
from 1000, 900 to 100000 bales Of the
estimated total of 16.000,00 bales, and
thereby withdrawing that surplus
supply from sale to eQuallZe supply
and demand.
The slump in market prices has
amounted to 4 cents pound WITHIN
| the last two months--a loss on the
crop amounting to $320.000. .000-so
enormous a loss that it would take
many disasters like the Florida hur-
/, ricane to equal it, financially. Yet
it has come upon the country with
out noise or smoke. A year ago, cot
! ton was quoted at 24.20 cents; today
| 1t Is worth only IL cents-a shrink
age exceeding a billion dollars.
X X X X
The usual cheap advice to the farm
ers to give more attention to the law
of supply and demand. and not to pro-
duce more than their markets will
consume, may now reappear in all
directions, for advice is so easy. But
the application of the platitude to
practical farming is not so simple.
Just how q planter was to know at
seeding time that the world was going
| to be oversupplied at harvest time
| may be simple to the critic In the
city. but q bit vague to the horny
listed man behind the plow.
In short, such looking into the
future and lifting the veil of Natures
uncertainties is human impos-
sibility. All farming, therefore, re.
mains a gamble on what Nature Will
do to the crop and what human en-
six months hence. To know, simply
can't be done.
Yet that is the futile basis of SO
per cent of farming operations-a
guess as to the future in Nature and
! human demands. And farmers COM
plain when the Government does not
| undertake to solve their problems,
assume their risks, without assuming
dictatorial control over their acts.
| There has been bitterness In some
localities over the refusal of the
Government to guarantee prices or to
become selling manager for agricul'
ture.
| There has been no recent en-
thusiasm among the grain producers
over any proposal that the Govern
ment should take over the cotton at
a fixed price and market it at what
| ever the world demand would pay.
charging the loss to the general tax
payer.
The Government does now act as a
prudent banker might, in advancing
a loan which will finance the cost of
storage of the surplus and hold 1t a
year, or longer, according to condi'
tions, but the speculative risk Of pos.
sible loss remains with the producers
or marketers of the total crop.
It is the usual practice in mer-
| chandising for a bank to loan funds
to the merchant, with which to carry
| over surplus stock, or to buy goods
| in advance of the demand season, but
never, in sound banking, does the
banker assume the risk of spoilage or
| of shrinking of values. He requires a
margin between loan and security.
That risk remains with the dealer
as 1t does in the case Of farm products,
with the producer.
| X \ X \
! There is a school of economists, or
at least of orators, teaching the So
| cialistic theory that the Government
Is out Of sympathy with farmers un-
less 1t takes over their commercial.
speculative risks, guarantees that they
/ will always receive a profit above
cost of production. and contending
that when the market Is glutted the
| Government should store their prod
ucts at the cost of general taxation.
Offsetting that doctrine Of leaning
upon a socialistic Government, there