Evening star., 1933-12-31
HEARTEN|NC GAINS
IN PRICES HELP
Definite Improvement Cited
by President of Farm
Chemical Firm.
BY HORACE BOWKER,
President, the American Agricultural
Chemical Co


The year 1888 has seen a definite i'm
provement in agriculture. Farm prices
have turned upward, and the long
downward trend of farm income has
at last been reversed Gross farm in
come for 1888 is estimated at six and
one-third billions, a rs per cent in
crease over 1882. Farm prices have
shown substantial improvement, aver
aging II per cent of pre-war on No
vember IS, as compared with 54 year
ago and with the low point of 49 in
an increase Of Is per cent in period
Of nine months Were the eyes Of the
Nation focused solely upon economic
recovery, this fact would undoubtedly
have aided greatly in accelerating the
upward trend in general business
In what now appears to have been
a premature burst of speed. the farm
price index rose to 76 in July, as COM
pared with 64 in June The inevitable
recession was followed by slow. steady
recovery, which is indicative of a bet
ter basic position in the principal farm
crops.
The problems of agriculture are prin-
cipally two: First, low prices, which at
times have barely covered production
costs Of even the most efficient pro-
duoers; and, secondly, the disparity be-
tween prices received by the farmer
and prices paid by him for the things
he buys.
PAYMENTS Also Help.
Higher crop prices. as indicated by
the IS per cent increase in the farm
price index, have brought a definite
measure of relief TO hard-pressed
agriculture: and this does not repre-
sent the entire gain in farm income.
since benefit payments made to farm
ers for taking land out Of production
are not included in these farm price
indices. Up to December 10 actual
cash payments of sll5,000,000 had been
made TO farmers in the first seven
months operation of the agricultural
adjustment act. This total was paid
directly to wheat, cotton and tobacco
farmers. in return for acreage reduc-
tion contracts
No figures are available at this time
as to the amount of money advanced
to cotton and corn-hog farmers on
the crops which they have sealed II
warehouses as security for loans. 1t
now appears, however, that che Gov
ernment will be called upon to advance
only a part of the funds provided for
this purpose, as price improvement Is
encoura ging private agencies and local
bankers to lend more freely on such
collateral.
Summing up the agricultural operat-
ing statement for the year. we find an
in fa
in excess of Sl,000,000,000 of which
about 10 per cent is accounted for by
Government cash benefits for acreage
reduction. On the expense side of the
income account, the 1888 crop yea
will show exceptionally low production
costs Pressure to reduce local taxes
has also resulted in substa ntial i'm
provement in that phase of the farm
er'S overhead expenses. Machinery Tor
the adjustment Of farm mortgage IN
debtedness-which. as matter of fact,
has never been disproportionate! ~
heavy-is now operative. with the result
that this phase of the farmers burden
has for the most part likewise been
provided foT.
AS a result, sentiment in the prin-
cipal farming areas is probably better
today than at any time in the last
three years. Retail and mail order
sales reflect the improving situation,
and, in spite of vehement political ex-
pressions on agicultureS behalf, the
farmer is today in much better frame
of mind, as indeed he has definite
reason to be.
Held Conservative.
The thinking farmer, and in my ex-
perience he is in the majority, realizes
that in the face of this improvement
he has much to lose and little if any,
measures. Most farmers are conserva-
tive using that term in its truly con-
structive sense they realize that print
ing-press imitation would be apt to
raise the prices of the things they buy
just as rapidly as the prices Of the
crops they sell This point of view
probably accounts for the more tenn
perate recent utterances OF the ex-
treme inflationiSts.
Reverting now to the second major
problem of agriculture, the disparity in
the purchasing power of farm crops,
We find that on November Is the price
of things bought by farmers was III
per cent of pre-war, as compared to
II per cent for prices received for their
crops. Thus, the ratio of prices paid
40 in February Between February and
November. there has been 25 per cent
improvement in the farmers relative
purchasing power.
There still is long way to go to
reach theoretical parity OF 100 per
cent for this ratio, and as compared
with July some ground has been lost.
But it cannot be emphasized too strong
ly that monetary problems have no re-
lationship to the relative purchasing
power of farm crops, all of the en-
phasis placed upon so-called imitation
airy measures advanced in the interest
of agriculture has solely to do with
prices received by the farmer for his
crops. The farmer has nothing to gain
from extreme imitation, which would
not improve the relative position of the
farmer.
This problem of the disparity In
farm purchasing power is one Of the
most stubborn with which the nation
has to deal 1t has been several
decades in the making, and it Is un-
reasonable to expect an immediate solu-
ton. Frankness and candor in explain
ing this to the farmer are imperative.
Now that We are embarked upon far
reaching program of crop curtailment.
it is necessary, regardless of ones views
of the economics of that experiment, to
give it complete support and co-opera-
ton. But it should be pointed out at
every opportunity that unsound infla-
tinary measures will only confuse the
situation and prevent us from obtain
ing a conclusive result.
Foreign Markets Needed.
Meanwhile TIE farmers best interests
will be served by putting the maximum
amount of ingenuity and energy into
the task of reopening foreign markets
for American crops. High tariffs and
drastic trade regulations continue TO
exert an adverse influence. While try
ing to reopen old markets let us try to
find others. Academic discussion of a
policy of self-containment is waste
of time, for we have by no means dem
onstrated that We can effectually cur
tail production in the presence Of
rising price level.
As estimates now stand, the acreage
k-l L..