The Nonpartisan Leader Newspaper, August 12, 1918, Page 5

Nation Must Pool Farm: Implements Neither Taxation of Excess Profits or Price-Fixing Will Save the Farmer From Machinery Profits Washington Bureau, Nonpartisan League ROFITEERING in_ pig iron and steel is the chief excuse for the doubling and trebling of the cost of your farm implements,~ your wire fencing, and your iron tanks and power eqlupment These imple- ments and equipment will cost you just as much, or perhaps more, in 1919 as they did this season. That is the statement that the farm- er gets when he applies to the office of farm equipment control, in the United States department of agricul- ture, for the facts on the extortionate prices which he now must pay. Take it or leave it—the mowing machine and the hay-loader and the disc cultivator will not come down in price. E President leson called upon the department of agriculture, in a procla- mation May- 14 of the present year, to regulate the farm implement busi- ness, and to stop all profiteering in it. The office of farm equipment control, headed by Junius Cook, is now trying to discover the profiteering. It prom- ises to punish the individual profiteering manu- facturer or dealer by putting him out of business. Just what percentage of profits, above the rate of profit customary before the war, will be considered punishable has not, been determined. ALMOST HELPLESS BEFORE GREEDY PROFITEERS But one thing Cook has discovered at the outset: the cost of pig iron to the small manufacturer has advanced from $12 to $14 a ton for the period end- ing in 1914 to about $30 a ton today. Coal, coke, steel rods, lumber, labor—everything that enters into the production of machmety in the smaller plants—has advanced sharply in cost. Some of the small plants appear to be making a very slight profit. The American Harvester company, on the other hand, having its own supply of pig iron, is able to make a big profit. The federal trade com- mission and the office of farm equipment control are trying to discover how much, and how it can be returned to the farmer. “The outstanding revelation which accompanies the work of cost-findmg,” says the recent report of the federal trade commission, “is the heavy profit made by the low-cost concern under a govemmentaP fixed price for the whole country.” If the government fixes prices on farm imple- ments, based on the profiteering price of pig iron, lumber, etec., just high enough to enable the small manufacturer to stay in business, the big manu- facturer who has avoided these high costs will be taking millions in surplus profits. THE QUANDARY OF PRICE-FIXING “In the case of basic metals, as in steel,” says the report on profiteering, “when the government an- nounced a fixed price it was made so high that it would insure and stimulate production. *This has resulted in giving a wide range of profits. Under the device of cost-plus-a-margm—of—proflt these profits are necessarily great in the case of the low- cost mills. Thus while the market ‘was prevented from running away, as it - would have done undoubt- _ edly if it had not been regulated by a fixed price, the stronger factors in. the ‘industry are further strengthened in their position and enriched by prof- its which are without precedent.” So with: coal, which enters into thé cost of pro- ducing farm xmplements The proflteenng report says: “Due to the fact that in a given field there is a very wide range in the cost of coal produced in that field, it follows that certain low-cost producers have made very large margms under the system of governmental fixed prices for the field. The bulk. of the productlon, of course, enjoys the large margin,.” The federal trade commission concludes from its study. of the. margins of . profit made in iron and steel, in.¢oal and in flour, by the low-cost producers, .that the fixed price system has produced: “an eco- .- nomic sltuatwn fraught with hardship to the con- suming public,” and which will gradually enable the big low-cost concerns to absorb their smaller com- petxtors It is’ a iailure msofar as keepmg down “any profit at all. The high cost of harvesting machinery is felt just as much in Maryland, where this picture was taken, as it is in the West. Here is shown a binder at work on the farm of the Maryland Agricultural college, near Washington, D. C. the cost of living is concerned, and it is a breeder of private monopoly. It all comes down to a simple proposition: the government can not prevent the American Har- ‘vester company, the United States Steel corpora- tion and the biggest coal companies from making huge profits under a fixed-price arrangement, so long as it permits the smaller concerns to make It can tax away a part of these war profits from the big concerns, but that does not directly help the farmer who is buying farm implements. THE ONLY WAY IN WHICH HE CAN BE HELPED IS TO GET HIS MACHINERY AT A PRICE WHICH REPRESENTS THE AVERAGE, INSTEAD OF THE HIGHEST POS- SIBLE, COST OF PRODUCTION OF THAT MACHINERY. ; GOVERNMENT SHOULD BUY ALL IMPLEMENTS If the department of agriculture is really to regulate the farm implement business, it must do exactly what the fuel administrator, Doctor Garfield, now believes must be done with coal. It must buy the entire output of farm machinery, at prices based in each plant on the cost of production in that plant. Then it must pool this output and sell it at an_ average price which will permit the govern- ment to come out even on the transaction. In other words, Uncle Sam must - take charge of the mar- keting of farm’' imple- ments, and if the Amer- ican Harvester company tries to block his program of furnishing the imple- ments at cost to the farm- er, the plants of that com- pany must be taken over. Nothing must be permitted to destroy the economic saving from low-cost pro- “duction. . The country _.ghould not permit this sav- " ing to be used any longer to build up private monop- oly, which in turn is hostile to democratic government. Let the government create a farm machinery pool. There is no other answer to the de- mand for regulation of pnces of farm machinery. - Z Let the government form an iron and steel production pool. There~is no other answer to for regulation of the price of coal for the making of steel and of steel prod- ucts and machinery. A DOSE OF SARCASM FOR HOUSTON The United States is in the midst of a complete commercial and econom- ic revolution. Down to the very sources of raw materials and of power, the people and the government are seeking “Why?” and “How Shall we?” Private monopoly has taken giant strides during the past three years. War profits taxation has not stopped, and will not stop, this trend. If dependent industries are to be safe, basic industries must one by one be made to serve all of the small indus- tries alike. Steel and coal must not come dearer to one implement manu- facturer than to another. Implement costs must be standardized. Meanwhile, if you feel worried over the high cost of reapers and drills and plows, get cheerful by reading the figures published by the secretary of agriculture in March, showing that your crops were buying more merchan- dise, per acre, in 1917, than at any time in the past 30 years. Thus, an average acre of wheat last year, according to Secretary Houston, would buy 173 per cent as much coal oil_as in 1909, and 106 per cent as much wire fence, and 107 per cent as many plows. The average acre of all crops in the United States, he figures out, brought 40 ‘per cent more plug tobacco in 1917 than in 1909. ‘What more do you want? If you are not satisfied with the profits of farm- ing, after reading that an average acre last year would buy 40 per cent more manure spreaders than nine years ago, then you are a kicker, just like the federal trade commission. If you are that sort of kicker, you will kick for government control of costs of production AT THE SOURCE, through pooling of low-cost and high- cost output at an average price to the consumer. Iowa Leaguers’ Wrath It is sometimes lamented that the chautauquas are dying out. One of the reasons bobbed up in : Humboldt, Iowa, recently. You perhaps know how merchants will pay vaudeville performers to mention special lines of ‘goods. The same- thing has been done in at least one chau- tauqua. Almost every per- former appearing with the Midland chautauqua troupe at- tacked the Nonpartisan league. Organized farmers of Hum- boldt county then wrote a let- ter to the Humboldt Independ- ent, which was fair enough to print it. Strickland Gillilan, a played-out humorist, was the first offender, with a nasty re- mark about -the farmers of North Dakota. “This was in very poor taste in a county where there are more than 700 patriotic Nonpartisans,” the Leaguers point out. A quartet then took a fall out of Minne- sota Leaguers. ernor of Iowa and is strug- gling desperately to keep in the limelight, put in his dig, saying: “Wait till the boys come home. They’ll attend to the League.” To this the farmers replied: “The idea seems to be that when our boys come home— boys who are sons of these be a sharp, quick struggle, in which the boys will bayonet the demand for regulation of . the cost of iron and steel for .the making of farm imple- ments. Let the goyernment form a’ coal production pool. ' There is no other answer to the demand - The Towa farmer who is operating this disc roller paid too much for his implements and his profit is cut just that much, The accompanying story explains ‘'what the remedy for farm machinery profiteering is. Read it and: wnte your congressman about 1';. : > their fathers. But we fancy that nething more will happen than that they will thank the farmers. for working steadi on, in the face of all mlsrep- resentation, to keep the allies fed and clothed 2 - \ A man named - Shaw, who. used to be gov-. loyal farmers—that there will*®