Evening star., 1931-12-27
GRA|A!! PRICE Crash
SET RECORD MARK
Wheat Decline. This Year
Established Low Figures
for 300 Years.
BY GEORGE SCHNACKEL.


CHICAGO, December 26 - Wheat
made world history during 1881 by 1
price collapse that toppled records run
ming back 800 years to Elizabethan
times
There is optimism now over the out
look for 1882, but this years crash car
rled with it whatever prosperity re-
manned in the grain belt of the United
States. 1t loosened a political revolt,
broke brave attempt at stabilization
by Farm Board agency, revived farmer
demands for legislative panaceas and
demonstrated again that the farmer can
be wrong.
Twenty -five-C Wheat.
When Generalization was at its worst,
in June and in October, producers were
paid as low as 25 cents a buShel for
their cash wheat, less than 20 cents for
corn, only slightly above 10 cents for
cats and in some instances could not
get bids on rye. On October 15 the
average farm price for wheat for the
entire country was only 36l cents a
bushel, compared with 656 a year ago.
The 83-year history of the Chicago
Board of Trade, center of the world
grain trade, previously had failed to
record happenings in the price struc-
ture o. commodities as sweeping as those
that occurred in 1881.
Farmers, officials of Government
agencies and grain traders. viewing the
situation. found many things to blame,
including:
Russia for dumping 100000 BUSH
els of wheat on already glutted world
markets.
United States Winter wheat farmers,
for failing to accept seriously Depart
ment of Agriculture advice to curtail
acreage in the Fall of 1880. resulting in
bumper 775, 900 000- bushel crop.
The Grain Sterilization Corporation,
Farm Board agency. for attempting arti-
t!cially to support the market, purchas-
ing a total Of 329000,000 bushels of
wheat in a vain attempt to halt the
Gecline.
Short sellers, for taking advantage of
adverse world conditions to press their
advantage for profit.
Foreign nations, for raising tariff
barriers against exporting nations,
causing further congestion in the
channels of trade.
Reasons for Optimism.
At the end of the year, looking ahead
at an approaching crop season, these
same observers thought that they saw
ground for a mild optimism. They
thought that the greatest weight of
liquidation already had been felt, and
pondered the following developments:
Virtual withdrawal of Russia from
the world export markets, owing to
poor quality wheat and domestic re-
quirementS.
A 16 per cent reduction in Winter
wheat acreage in our Southwest, with
o,11,
OF normal and with average conditions
harvest likely to be 100000. 600
bushels under last years crop
A return of free" conditions to the
grain futures market. with the Gov
ernment agencies definitely Withdrawn
from StabiliZing operations
increased consumption of wheat the
world over, owing to cheap prices.
a Southern Hemisphere crop lOO,-
100000 bushels below that of 1880.
The most spectacular development of
the year in grains grew from the Fed
eral Farm Board attempt, through it's
agencies, the Farmers National Grain
Corp. and the Grain Sterilization Corp.
to stem the tide of liquidation.
The Grain Sterilization Corp. had
entered the futures market of wheat
late in 1929, pulled out. and then re-
q
factor until June 1881, when the oper-
alton definitely was terminated.
Sterilization Deals.
James c. Stone, Farm Board chair
man, revealed in December to a con-
gressional committee on agriculture
that these market deals involved the
following:
Amounts in Millions of Bushels.
Total stabilization purchases ..... 329
Sales to June 80, 1881 ....... 70
On hand July ..............2 257
Foreign sales to Brazil, China,
Germany .................. 48
Domestic sales ............... 20
IoCai ':........... .............. So
On hand November l ...... 189
Prices in Millions of Dollars.
Total stabilizGtion cost . 27o
Investment valua of NovGmDer |
holdings, including storage and
iooS>o ..........., 30
Market value, November l ION
foHHioie loss .................. 102
Outlook for 1892,
At the moment traders are optimistic