Drought & Dollars

Drought grasshoper Dollars

In many & many a section last week from Northern Texas to Canada, from the Catskills to the Rockies, young farmers had to ask their fathers when there had been a drought to beat the one of June 1933. Answer: 1930. Nevertheless in Indiana there were cracks in the earth an inch wide. Motorists in Grundy County, Illinois, saw chinch bugs in ribbons 100 ft. wide in the roads. The bugs were eating their way from field to field. North Dakota's drought brought out a destructive swarm of grass- hoppers. In Southwest Kansas fiery winds blew so much shifting topsoil from the fields that snow plows had to be used to clear the highways. The drought on top of a late spring and reduced plantings prompted experts to guess that the total yield for all five major U. S. grains now in the ground would be the smallest since 1903, 3.900,000,000 bu. as compared to last year's 5.300.000,000. Meanwhile on the Chicago Board of Trade last week drought destruction plus teetering currency plus the prospect of crop reduction next year flung wheat above the dollar mark for the first time in three years. Trading had to cease one noon so that bleary-eyed clerks could catch up with a hysterical boom in which 200,000,000 bu. of futures were turned over in a single session. But the Board of Trade's idea of wheat values carried no weight with the Agricultural Adjustment Administration, which announced as a part of its domestic allotment program a null processing tax on wheat, to be levied on manufacturers of wheat products beginning July 9 and to be passed on to those farmers who agree to reduce next year's output, if asked to do so. The Agricultural Adjustment Act provides that the tax should represent the difference between the current price of wheat and the average price for 1909-14. That average was 88-c-. In announcing the 30-c- tax, Acting Secretary of Agriculture Rexford Guy Tugwell had evidently taken for his "current'' figure the June 15 price of about 60-c-, thus indicating that the Administration considered last week's dollar wheat an abnormal level. The wheat processing tax raised the price of a 198 lb. barrel of flour $1.38. It would boost the nation's annual bread bill $150,000.000 if passed on to the consumer in toto. Such was the intention of the Iowa Bakers Association, which promptly announced that a one-pound nickel loaf of bread would henceforth cost 8-c-. Secretary of Agriculture Wallace, just back in Washington from his 4OO-acre Iowa corn farm, bridled angrily at the news. Repeatedly he had promised the country that his relief program would not unduly up food prices. President Roosevelt had made him a dictator over food prices under the Industrial Recovery Act. To the Iowa bakers he wired: "May I call your attention to the fact that the anti-trust laws are still in effect?. . . The recent advance of wheat plus the processing tax would increase your cost 1 1/3-c- a pound loaf. What is the justification of your proposed advance of 3-c-?" Cotton. Unannounced last week was the amount of or date for the incipient cotton processing tax. But hundreds of Department of Agriculture agents' little cars were bumping over hard red clay or chugging through gumbo to line up Southern farmers who would agree to plow under or refrain from picking 25% of the current cotton crop. More than 20,000 volunteers were ready to destroy 10,000,000 acres of cotton before frost. ''Everything is going fine so far," said Secretary Wallace. In return for reducing his production, John Cotton Grower could take his pick of two Government offers. He could get from $6 to $12 "rent" for each acre destroyed, depending on the amount of cotton the acre normally yielded. In addition, he would be given a free option at 6-c- a Ib. on a pro-rated amount of Government-owned cotton which he might sell at a profit next year. If John Cotton Grower was entirely devoid of speculative instinct, he could forego the option plan and take a flat $7-to-$20 "benefit" for curtailing his crop, depending on the land's previous yield. Meantime, on the New York Exchange. King Cotton bounced to a two-year high when May futures passed 11-c- per bl.

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