A New Kettle of Fish

When the price of wheat went below $1 a bushel and the price of other farm produce, comparatively, almost as low, then remarkable things happened to the farmers and the farming industry.

The first of these was hard times. Everybody who has read a political speech in the last nine months knows that more mortgages have been foreclosed in some parts of the country than there is land. Hard times hurt. But others came with hard times that will last long after these hard times are forgotten. One was a remarkable system of credit facilities for agricultural regions. Another was a great impulse towards diversified farming and more scientific methods. Another was a boost for cooperative marketing. Another was a farm bloc, then an insurgent bloc, and finally a third ticket in politics. Another was the cry that the railways are overcapitalized and freight rates need reducing.

Within a few days sudden changes, the development of events, have cast a new and important light on several of these phases of the farm problem.

Co-operative Marketing. The boldest step toward cooperative marketing that has yet been taken was made by five of the largest grain elevator companies of the Middle West.* They banded themselves together into a great unit, the Grain Marketing Company, with capital stock of $51,000,000. Not more than $26,000,000 of this will be outstanding at one time, however. First, to the public is to be sold $25,000,000 of preferred stock. Then gradually an equal amount of preferred stock and a million dollars' worth of common stock are to be sold to bona fide grain-growers. As the farmers buy preferred stock, just so rapidly will the preferred stock of the general public be retired. Executive officers of the companies agree to continue in their present posts for five years The Board of Directors is to consist two-thirds of farmers. The plan will go into operation as soon as the general public has subscribed the first $4,000,000 of preferred stock.

There are a great many "if's" about the success of the proposal:

If the public will subscribe the original $25,000,000,

If the poor farmers can find $25,000,000 in their overall pockets worn full of many holes during lean years,

If the farmers can learn in five years to manage such a gigantic enterprise successfully,

If anyone can run the elevator business profitably -(it is hinted that the reason the grain elevator companies are so willing to sell out is that they have been losing money),

Then the farmers may make something out of this great scheme. One advantage will be on their side: they will have a virtual monopoly and moreover cannot be prosecuted for it under the Sherman Anti-Trust Act because farm organizations are expressly excluded from its provisions by a later law, the Capper-Volstead Act.

Political Revolt. The insurgent-farmer move in politics will undoubtedly be affected by the uptrend which wheat and corn prices have taken in recent weeks. September wheat went up to about $1.25 a bushel. The Department of Agriculture reports from 11 countries which last year produced 64% of the world's wheat, showed an estimate of 15% below last year's production. This, if it comes to pass, means improved prices. It means more money in the pockets of our farmers. It is a worse blow to the LaFollette ticket than any political maneuver which could be engineered by Republicans or Democrats. It vindicates those members of the Administration who said: "We will give you farmers what financially sound relief can be given through better credit. The law of supply and demand will eventually give you real relief -and no other law can."

Freight Rates. The farmers' demand for lower freight rates, which was the one direct and easy way they could see of saving themselves money, will also be affected by higher prices. With economic pressure lessening, it is only logical that the demand should grow less insistent. More directly important in its bearing is the attitude which the Interstate Commerce Commission has taken on account of increased grain prices. The Commission had been considering whether freight rates were not too high in relation to the value of farm products hauled. Prices having risen, the Commission decided that freight rates need not be reduced. This was good news, if not for the farmers, at least for the hundreds of thousands of owners of railway securities,

* The five companies are Armour Grain Co., Rosenbaum Grain Corp., J. C. Schaffer & Co., Rosenbaum Bros, (all of Chicago), and the Davis-Noland-Merrill Grain Co. (of Kansas City). It is possible that the Bartlett-Frazier Co. (of Chicago) may enter the arrangement later.