The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1928-01-21
Canada's Export Bounty
(St. Paul Dispatch)

Those who have been opposing the export
bounty and other similar types OF farm legls-
laton on the grounds of feasibility should con.
slider the economics of the less-than-cost rail
rates on grain for export now in effect on thcl
Canadian National railway. AS Senator Brook
hart Of Iowa has been arguing for many years,
and Senator Capper of Kansas now more recent
|ly the practical effect of these rates is to give
the Canadian wheat grower a higher price tor
his wheat than would otherwise be the case,
and a higher price, moreover, than applies not
only on wheat shipped in export but on all his
crop.
The price farmer gets for his wheat at Chi
cago or Winnipeg, with some variations caused
by local trading conditions, is the price it will
bring in Liverpool less the cost OF transporta..
ton there. The basic price at all termina!
markets in America is determined on the world
market BY an inflexible natural law Of trade
and barter, farmer with a crop OF which ne
must export a part gets price for all ne raises
equal to that he is forced to accept for the sur
plus he sells abroad. This is true because
there are no bidders at higher price. Neces-
sarily, therefore, the price at terminal markets
varies roughly with the difference in that
of transportation.
Railroad rates on export wheat in Canada are
generally lower than in the United States, the
difference running 10 cents and more bushel.
But last September the rate for export wheat
from certain Western Canadian points to Mon
treal and Quebec was cut from 81 cents bushel
to Is cents by the governmentally owned Can
adian National railroad. This is frank SUBJ
sidy to the Canadian wheat grower. The farm
er there is being given his transportation at less
than cost Any deficits in the treasury OF the
national railway are made up from taxation.
It is q case Of placing burden either on the
taxpayer or on the shippers of other classes
Of goods to provide the wheat farmer with
cheap transportation.
But it is more than mere subsidy, for If it
were that and nothing more, then the farmer
would profit only on his grain shipped in export.
AS matter Of fact, this less-than-cost freight
rate is an export bounty, of identically the same
The only difference is that whereas under the
plan suggested in America the bounty would
be paid in the customs house, with funds fur
nished by the farmers themselves, IN Canada i
is paid in the freight house with money fur
nished by the taxpayer or other shippers. The
effect would be just the same IN both cases
In Canada it permits the bidders tor export
wheat to offer higher price for the grain than
otherwise, and the price the Canadian farmer
greater. # bounty were paid to American
lexporters at the customs house, or elsewhere
J the result would be the same, and in degree
governed by the amount Of the bounty.
The much discussed McNary- Haugen plan
, despite it, greater completely and broader
/ Scope, does not differ in principle from an ex
, lport bounty. It provides for the purchase q
than normal export price, sale ct loss abroad
! and then remuneration by government agency
for the loss, which = nothing more or less thar
: Ian export bounty. The effect would be to raisl
: 1.-The price Of the whole crop Of the American
! farmer.