Evening star., 1932-07-10
GRAIN CORPORATION
TO CLOSE BUSINESS
Cost of Operation Expected
to Be About $500, 900, 900.
Il. Gains Cited.
BY OWEN L. SCOTT.

Special Dispatch to The Star.
CHICAGO, July 9.-The Grain Stabili-
cation Corporation, Farm Board subsidi-
ary, approaches a wind-up bf the largest
Government market operation in recent
history, with a prospective cost to the
taxpayer of approximately 100000, 900.
For that sum, the Farm Board points
out, the Nation purchased protection
against panic that on two occasions
threatened to bankrupt agriculture, ana
In addition has provided 85, 600, 600 nusn-
els of wheat for processing and dlstri-
button to needy individuals and starving
live stock.
2S.OOO. 900 Bushels Remain.
Out of total Sterilization Corporation
purchases Of grain, amounting TO 32s,
100000 bushels, only 28,000000 bushels
of cash wheat remain today. The cor
poration also holds some futures, but
the total is not large.
This is equivalent to less than three
weeks average consumption OF wheat
in the United States, and 1t Is, tnere-
fore obvious that stabilization stocks
are not now in any sense an important
market factor" Geroge S. Minor presl-
dent of the corporation, explains.
And at this time no new stabnization
or1Arations are in sight, although the
relief bill pending in Congress contains,
at the instance of the administrator
prsvsion 1or 1unus tnat might pe utli-
lied in such operationS If another COL
lapse impended.
From the time that the Federal Farm
Board announced late in 1929 tnat
wheat prices were too low at SI.Io
bushel and that it would enter the mar
ket to stabilize existing values uhIil
,T1ne. 1881. when the Sterilization Cor
rorstion bought its last cash wheat in
order to prevent collapse of the market,
2 total of S270, ,000, 600 was expended in
the operation. The average purchase
price was 81 cents buShel.
Heavy Foreign Sales.
Carving charges since that time have
added to the cost. There have been
heavy foreign sales of wheat at prices
much under the S2-cent average OF
purchases. On the basis OF prices ex-
listing last November the Farm Board
estimated that the loss faced by the
Sterilization Corporation would be
$102 900, 900.
Since that time Congress has appor-
toned IS. 900. 900 bushels of the corpora
ton wheat to the Red Cross without
making provision for payment to the
Farm Board subsidiary. This wheat
also is having to be carried in storage
at a sizeable cost, pending its milling
and distribution, so that the taxpayer,
in the end, will have contributed sub
stantial sums to protect the wheat
market.
In its first operation the Stabiliza-
ton Corporation purchased 60,000,000
bushels of wheat at S1.18 a bushel
That was late in 1929 and early in 1880.
This effort finally was unsuccessful and
the Government withdrew, only to re-
turn to the market during tie closing
months of 1880 to peg the May delivery
at from 81 to 81 12 cents.
Prices Above Level.
BY this action prices were held 10 to
Is cents above the world level, but the
cost was too great and the corporation
withdrew, only to return to the market
In June, 1881, when huge purchases
were made to prevent complete price
collapse
Now there is no artificial support in
the wheat market. The Farmers Ma
tional Grain Corporation, cooperative
subsidiary of the Farm Board, is en-
gagged in handling grain on a large
scale on a cooperative basis but its
market operations are not speculative.
(Copyright, 1927