Evening star., 1929-04-21
BY WILLIAM HARD.

The export debenture" Is at this
week end the talk-topic of the town.
1t even makes some progress in COM
petition with Mrs. Gam. Some people
claimed to understand the ultimate
consequences Of Mrs. Gam. Fewer are
willing to picture the ultimate conse-
uuences of the export debenture"; and
many are heard to complain that it
seems rather unfair Of the farmers,
after obliging Washington last year to
try to understand the equalization
fee," TO come along this year with the
even sitter mental exercise OF the
export debenture."
1t is said that this may be farm re-
lief, but that 1t Is no relief to the
mental strain of the National Capital
All, nevertheless, are struggling with
1t and are getting hourly bulletins. as
1t were, from National Grange circles
and from the circles of the administra-
ton.
The National Grange oficially denies
that the export debenture" is Sub
sidy" The tariff on wheat is AZ cents
a bushel. The exporter Of a bushel
Of wheat will get an export debenture"
of 81 cents. He probably Is not himself
engaged in importing. let us say, Scotch
tweeds. He, accordingly, sells his Tex
port debenture" to a broker. This
broker, residing perhaps in a seacoast
city where the exports are large, but
where the imports are small puts the
export debenture" into the mails and
sends 1t to perhaps Baltimore or New
York. There it is bought by another
broker who presumably is in close touch
with importing business groups.
This second broker resells 1t to a
third broker or perhaps succeeds in
selling 1t to an importer who Is in the
act OF importing something. The i'm
porter takes 1t to the cuStomhouse
where he is awaiting the ship which
Is bringing him his consignment Of
Scotch tweeds or German canaries or
Czechoslovakian chinaware. He pays
the duty on the consignment: and, as
part of the payment, he hands to the
customhouse officers the export de-
benture" which he has bought from the
broker.
1t Is worth II cents at the custom
house. The importer bought 1t for less.
II he had not been able to buy 1t for
less he would not have bought 1t at all.
Instead Of buying it he would simply
have paid the customhouse 2l cents
out Of his own pocket. 1t Is clear, there
fore, that he bought 1t from the broker
for less than its face value Of 21 cents;
and 1t Is also clear that the broker
bought 1t from the preceding broker
for still less; because otherwise he could
have made no profit upon it. Follow
ing this chain of sales and purchases
Of the export debenture" backward,
1t Is clear again that the original ex-
porter of the bushel of wheat must have
sold the export .debenture" to his
broker for less than 81 cents by o
certain distinct margin.
In other words, the export deben-
ture," though it has q face value of
81 cents, can never have been worth 81
cents to the original exporter and, there
fore, never could have justified the
original exporter In adding the whole
81 cents to his bid on the purchase Of
the bushel Of wheat from the farmer.
The farmer, 1t is beyond dispute, can
never get the whole of the 81 cents.
A considerable part Of 1t will have TO
70 necessarily to the maintenance of
the charges and profits Of the export
debenture" brokerage market.
It is also beyond doubt, 1t Is pointed
out here on all hands, that the "ex
port debenture" of 81 cents on bushel
of wheat will convey fewer and fewer
cents to the farmer as the plan goes
farther and farther into operation. This
Is because the plan will stimulate ex-
ports into the foreign world. That re-
suit Is so thoroughly admitted by the
promoters of the plan that in their
first bill for it they provided that the
plan should be stopped and discarded If
and when the increase of exports rose
to be as much as is per cent.
The increase of exports, however, will
naturally depress the world price.
Thereupon the exporter. facing a lower
price abroad, will be obliged to offer
lower price on export wheat at home,
and the number of cents going to the
value Of the export debenture" will
again get diminished.
It is calculated here by optimists
that the farmer at the end of O few
years might be getting 16 or II Of the
81 cents, and it is calculated by pessi-
mists that he might be getting only 10.
The export debenture," nevertheless,
bearing on its face the figures "2l," will
always be worth 21 cents at any Gus
tomhouse In payment of import duties.
When, therefore, the importer presents
| 1t at q customhouse.. he is able to
hand 1t in as q complete substitute for
accordingly loses 81 cents in revenue
even If the farmer has gained only II
cents or 10 cents in income.
It Is thereupon claimed In some quar-
ters that we have here triple subsidy
| One part goes to the farmer to raise
his income, one part goes to the bro
| kerage houses to maintain their actiyi-
ties and the importers, and one part
| goes to the foreign world to give it
cheaper wheat.
| Against this view the National
| Grange takes resolute stand. IT
maintains that the export debenture'
Is not q subsidy in any way. It admits
that the export dcbenture" viii d.
minish the amount Of money going Into
the Governments Treasury. II 0Wells