Monday, Apr. 06, 1931
Incubus Upon Incubus
When Alexander Legge was Federal Farm Board chairman, he used to stage what he called "Legge shows" throughout the wheat-growing midWest. If at these performances any farmers expected to see chorus girls, hear jazz tunes, guffaw at wisecracks, they were disappointed. It was not that kind of show. Instead Chairman Legge would mount a bare platform and make a speech. His constant theme: Cut wheat acreage by 20%. But when the farmers got home at night, they were more likely to remember Mr. Legge's clenched fists, his red, sweating face, his "hells," and "damns" than his plain-as-a-pikestaff argument that, with world prices down, U. S. wheat production (850,000,000 bu.) must, to be profitable, be cut down toward domestic consumption (650,000,000 bu.).
Last week the Department of Agriculture announced the results of the "Legge shows." Preliminary estimates of the 1931 wheat crop showed:
Winter acreage reduction 1%
Spring acreage reduction 14%
Total crop reduction 3%
Total crop 832.000,000 bu.
Surplus 182,000,000 bu.
Through two planting seasons the Farm Board has campaigned against the surplus incubus, not only by Legge shows but by circulars to farmers, advertisements in the rural Press, harangues over the radio. Last week James Clifton Stone, new chairman of the Federal Farm Board, made his first excursion to the midWest to continue the "Legge shows," shout again the gospel of crop reduction. He addressed wheat co-operatives in Hutchinson, Kan. and Enid, Okla. As best he could he reiterated Mr. Legge's arguments, used the same threats, the same prayers.
On the stump Mr. Legge had been dramatically aggressive on future wheat plantings because the new Board had no precedents to bother about. Over his head hung no 275.000,000 bu. (the Board's July 1 figure) of wheat "stabilized" on Government funds. He was almost a free agent.
Chairman Stone, on the other hand, was handicapped by a mass of economic policy which had not worked out well. He felt it necessary to defend the Board's past. He justified its price-pegging as an emergency operation which averted "an incalculable economic catastrophe." He reiterated explanations of the Board's announcement fortnight ago that it would not peg prices on the 1931 wheat crop (TIME, March 30). He said that what the Board did with its enormous wheat holdings depended largely on how much the farmers reduced planting. He hammered away at the intangibles of co-operative action and orderly marketing.
For over a year the Farm Board had cushioned U. S. wheat growers against the thudding decline of world prices. Now it could not, would not, play shock-absorber any longer. The experiment had been too expensive. Wheat men would have to cure the fundamental evil of overproduction for themselves. But Chairman Stone found it hard to make them see a difference between last year's "emergency" of 75-c- wheat which put the Farm Board into stabilizing and last week's "nonemergency" of 60-c- wheat which the Board would not buy.
With another surplus in sight, Chairman Stone's biggest problem is what to do with the Government's 275,000,000 bu. holdings. This "stabilized" wheat will not soon sell abroad, where an already glutted market provoked last week's International Grain Conference at Rome.* Storage on this wheat costs about $50,000,000 (18-c- per bu. per annum), and the storage space it occupies will be needed for the 1931 crop. Idaho's Senator Borah proposes shipping it to the hungry Chinese (who do not know how to eat wheat) or burning it all up (Argentina was last week discussing corn for fuel, as during the War).
Other politicians in Washington had, as always, plenty of suggestions. Senate Leader Watson dusted off the old Equalization Fee, famed export scheme of the 1928 campaign. The blunt proposal of Pennsylvania's Senator Reed, expressing the conviction of conservative eastern Republicans that the Board's price-fixing has been a futile costly mistake, was to abolish the Board at once and liquidate its holdings. Said he: "The Government can't artificially manufacture Prosperity for agriculture or any other industry."
Nothing so exasperates farmers and their friends as to hear a friend of the manufacturers and their Tariff talk scornfully about Government-nurtured Prosperity. A howl of protest went up in Washington against Senator Reed's suggestion. Charles Collins Teague, the Farm Board's vice chairman, declared that $289,050,019 of the Board's $500,000,000 revolving fund was out on amply secured loans to co-operatives and "a large part, if not all, the money loaned will be returned to the Treasury." Oregon's Senator McNary, declaring Senator Reed's proposal "absurd," harked back to the Board's fundamental purpose:
"It is leading the way in co-operative marketing, loaning vast sums of money on adequate security. That is promoting the major factor in any farm relief program which is orderly marketing."
President Hoover, back from the Caribbean, decided to let the Farm Board go its own way without inteference from him.
*Last year at this time the U. S. was exporting nearly 1,000,000 bu. of wheat per week. Its weekly exports now average 175,000 bu.
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