Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-28
FARM BOARD SAVED.
.COLLAPS|NG CREDIT
Business Magazine Believes
Federal Agency Was Boon
to Farmers.
speeial Dispatch % The star

special Dispatch toThe star.
NEW YORK. October "a review
Of the record OF the Federal Farm Board
Is presented in the November issue of
Fortune. the business magazine, which
lists many diSappointmentS, but credits
1t with two important achievements
which have heretofore received COM
paratively little public attention:
/. In two years the Farm Board has
put the cooperative stamp on greater
commodity tonnage than the co-opera-
tves alone were able TO accumulate In
their 65 years Of troubled existence.
T. Its wheat Sterilization activities
in the Winter of I930-31 averted what
threatened to be q major collapse in
agricultural credit-a collapse which
carried with it the definite prospect Of
a national panic.
Against these two successes Fortune
weighs the reverses the Farm Board
has met It estimates its losses in
grain sterilization at $500, 900 900, de-
nounceS its use of public funds for
operations which 1t shrouds with less
openness than the minimum required Of
any corporation listed on the New York
Stock Exchange. deplores the breath Of
scandal that has touched the opera
tons Of its subordinates, declares that
many Of its employees seem overpaid.
Farmers Position.
Although Fortune finds the position
OF the farmer worse today than when
the board was organized, it believes
that the board is guided by a thorough
knowledge of farms, farm finances,
farm products and farm co-operatives,
and that an extremely active intelii-
gence Is directing its activities. The
Vraa &NaM - kMM
business and industrial mind TO realize
that under these circumstances the
board must have some objective. how
ever remote; some plan, however III
founded future events may eventually
prove 1t.
One Of the interesting parts Of the
review is its attempt to put itself in
the position Of the board when it met
to consider the immediate agricultural
crisis on the night of November Is,
1930-the night when the decision was
reached to pay the price Of American
wheat at 70 cents q bushel In the face
Of a certain and drastic decline In the
world price.
wheat that day was selling at $685.
cents a bushel. A group of banks in
Kentucky and a group of banks in
Arkansas had Just closed their doors.
All over the wheat belt co-operatives
which owned money not only TO the
Farm Board but also to their local
bankers (for It must always be remem-
bered that co-operatives exhausted To-
cal credit before appealing to the Farm
Board) had pledged their wheat as
their security. and the value or the
commodity collateral was daily shrink
ing.
"The Farm Board was meeting with
the definite knowledge that loans COW
cred by 10000, 900 bushels Of wheat
would be called If wheat declined an
other few cents q bushel 1t was con-
ceivable that q continued recession in
wheat prices would totally undermine
the already tottering structure of rural
credit. The issue was larger even than
that of the survival of the co-operatives
which the board had worked 30 hard to
establish, and to whose continued ex-
istence it was so definitely committed.
The Farm Board members saw before
them the possibility of major collapse
IN agricultural credit--a collapse which
carried with it the definite prospect OF
national panic. Here was certainly
an emergency and here were certainly
the men whose duty it was to meet it.
RENDER that not Mr.. Legge nor Mr..
Stone nor Mr. Hyde nor any other Farm
Board member was debating or should
have been debating the question OF
whether the Government ought to have
gone into the grain business. The
wolf was in the flock, and it was up
to the nine shepherds to take some
steps.
$50. some time before the sun came
up on Washington'S extensive assert
ment of public buildings, the gentlemen
Of the Farm Board had decided that to
permit the United States price of wheat
- l2lI d. s@1e4 1ur
declining world price, meant calamity,
and that the full power (and the last
dollarD of the Farm Board must be ex-
erted that calamity might be fore
stalled.
Pegging wheat Price.
$50 to George Sparks Minor, in Chi
cago, head of the Grain Sterilization
Corporation, went the order to buy
wheat, and on the 18th of November
Mr.. Minor went into the wheat pit and
offered 70 cents a bushel for December
wheat. Promptly there flowed over him
wheat in torrents and In floods and In
landslides, but Mr.. Minor, with his
back to the wall of the United States
Treasury, stood his ground, and for two
weeks bought more than $1,000, 600
worth of wheat per day. Before the
first onslaught had subsidized Mr.. Minor
had collected about &c, 000, 900 bushels
Of wheat. And throughout the next
i've months Mr.. Minor met every sell
ing wave with future purchases at the
pegged price. Through the dull VIM
I er of 1880 and the gloomy Spring of
b o31 the price of grain in Chicago held
"a to IS cents above the price of wheat
IIt winnipeg and in the other exchanges
Of the world.
AVS an instance of manipulatiye
legeu 1emain, the Farm Board accom-
plishA lent was sufficiently extraordinary.
To kx ep the wheat price in Chicago
higher than the wheat prices through
put the world was precisely as remark
able (sN d as contrary to natural law
as it No uld be to make in a tumbler
full of WA ter one section of the water
level rise. and remain higher than the
rest. EvtAv farmer who sold bushel
Of wheat "a tween November, 1890, and
May, 1881, lFot for it at least IS cents
more than d would have received ex-
cept for the Farm Boards action, and
as Mr.. Minor certainly did not buy all
the wheat Il "a was sold during this
period, the UIA ed States farmer prob
ably made mor,e, on the transaction than
the United Status Treasury has lost on
It. And the d.A aster that threatened
In November was averted."