Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-04-15


Canadian farmers. The net result
of the Canadian system is that last
wear S153 was returned per bushel
to the Canadian farmer, who went
into the pool, as compared with $l.35,
which the American farmer secured
operating also under a protective
tariff
The exact operation of the new
plan will, of course, undergo many
changes before a final draft of a bill
is ready, but generally speaking, the
idea is to set up the sterilization
boards for each crop, which boards
or corporations would be subsidiaries
of the cooperation organizations. The
assumption is that the co-operatives
would control the largest part of the
crop. The sterilization board would
step in as a central selling agency.
and being privately owned, it could
decide for itself at what price it would
buy in the surplus. Its decision
would be based on statistical surveys,
and the Governments information
machinery would be at its disposal.
Would Have Saved Cotton.
The plan is not to buy the crop at
an expected top price, but simply at a
figure conservatiyely estimated to be
a maximum of what the producer
ought to get. Thus, while cotton sold
at an average of "a cents for a few
years, and then suddenly the bottom
dropped out of the market, the cotton
farmers began selling at II cents,
when everybody here knew that the
crop was worth at least is cents ii
the farmers could organize themselves
sufficiently to hold on.
In other words, had the stabilize.
ton board been in existence the farm.
ers' surplus would have been bought
in at 16 cents, which would have had
a psychological effect on the price stu
alton at once.
The whole plan might have been
put into effect heretofore in the United
States If any of the cooperative pools
had controlled q ma ority of the crop,
as the wheat pool does in Canada. To
correct this weakness the administra-
ton plan in effect supports the CO.
operative movement by giving the
sterilization boards a line of credit
that will make membership in a co.
operative organization attractive.
Thus the cotton co-operatiyes control
only about 10 per cent Of the crop.
The sterilization board in buying
cotton would really be purchasing
from the independents and if any
profit accrued to the sterilization cor.
poration by purchasing at a low price
from the Independents and selling it
later at a higher price, that profit
would be returned to the members of
the cooperative organization. who
own in entirety the stock Of the stabi.
llzatl0n corporation.
Errors Provided For.
II the sterilization corporation
should over buy, it would in turn call
on its profits of a preceding year to
make up for it's possible error in judg-
ment. But the sterilization board
would have on it bankers who 1t is
reasoned would hardly buy a crop at
price which they knew very well
/. could not be approached later on in
the final sale. In other words, the
sterilization corporation would do
what its name implies-stabilize-
that the panicky farmer would not
dump his product on the market at
sacrifice price, but :woBld be enabled
10 get price that would commensur.
ate with what the value Of the crop
really was. based on accurate data as
10 world production.
Administration officials recognize
that no plan would be an absolute
guarantee against oyerprOduction and
that there is no legislative way by
Which farmer can be compelled TO
limit his acreage, but if he becomes
member Of a cooperative organiza.
ton ne readily sees the danger OF
forcing large surplus to be carried
over, Tor that surplus would affect