Evening star., 1935-09-03
TOBACCO PRICE
FIXED BY A. A. A.
Maryland Growers Will Re-
ceive 1871 Cents Per Pound
for 1886 Crop.

An increase of nearly s500,000 in
annual returns to growers OF the
Southern Maryland tobacco crop. be-
ginning with the crop year 1885,
seemed probable today as the Agricul-
tural Adjustment Administration set
1871 cents a pound as the parity price
for this commodity for which the ad-
justment should aim.
This figure was submitted by the
administration today at opening OF
hearings called preparatory to draw
ing up an adjustment contract for the
crop years 1886 to 1899 on four types
of tobacco-burley, Maryland, fire
cured and dark air cured.
The A. A. A. memoranda established
parity. or fair exchange. values for all
four types well in advance OF the
yearly average market return. The
computed fair exchange value for bur-
ley is IT'S cents. for fire cured, 10.7
cents, and for dark air cured. 8.8
cents.
Average Price 1876 Cents.
Average price for the 25,487,5l5
pounds of Maryland tobacco sold in
the Baltimore market during the II
months ended July l was 1886 cents.
Average price during the calendar
year, 1884, was l4.99 cents.
E. M. Shulman, lawyer from the
Office of the solicitor of the Depart
ment of Agriculture, defined fair ex-
change value as the price which will
give agricultural commodities the
purchasing power they had during the
base period, which, for tobacco, is
the decade from 1919 to 1929.
The hearing was packed with grow
ers, chiefly from Kentucky and Ten
nessee, interested in the hurley pro-
gram, as well as professors from all
parts of the country.
No Need for Price Boost.
No similar increase in the con-
sumers' price need follow the raising
the market return of the growers
the A. A. A. insisted, declaring in
its memorandum:
The cost at farm prices Of the
above kinds of leaf tobacco consti-
tutes a very small portion of the retail
price Of the product. Even larg:
changes in the farm price of tobacco
have not been reflected in correspond
ing changes in the retail price of the
product.
IF the prices for the above kinds
Of tobacco are maintained at or neal
the fair exchange value it is probable
that the retail prices Of tobacco prod
ucts would be little, if any, different
than would be the case at farm prices
for tobacco materially below the fair
exchange value"
The memorandum did note that
experts of American tobaccos are
limited by the domestic price rise.
Crop Moves to Market.
The 1884 Southern Maryland cror
at the end of June began to move
to market. The tobacco is raised in
Prince Georges, Charles, Calvert, ST
Marys, Frederick, Anne Arundel and
Montgomery Counties by 700 growers
who for their 1888 crop. the first
produced under the A. A. A, received
S35,911.03 in benefit payments.
The extent of overproductior
through the 1882 crop, before the ad-
justment program was put into effect
was attested in the adjustment ad-
ministration's statement to the hear
ing:
Each year from 1929 to 1882 more
Maryland tobacco was produced thar
could be used in consumption and ex.
port. Stocks at the beginning of the
1884 marketing year were twice thai
of normal stocks"
Eighty-flve per cent of the Mary
land tobacco crop is domestically
consumed and used in cigarette
manufacture. An estimate made ir
early June figured the 1884 cror
would bring an average of 18 cents 6
pound, q tenth Of cent below the
parity price set by the A. A. A.
The August figure was well above
that, lowering around % cents, but
the normal slump taken by the mar.
ket in the late and early months oi
each year is expected now to bring
the average well below even 18 cents