The Nonpartisan Leader Newspaper, August 23, 1920, Page 6

- v Farmers in the Shadow of a New Perll Resumption of Future Trading Threatens Heavy Losses to. Northwestern Producers, Gram Brokers Admit s]AMBLING in wheat in the pits of Min- mneapolis, Chicago, New York-and Lon- ‘don, coupled with the mabllxty,_of the railroads under present private own- ership inefficiency to move the crops in time, will cost the Northwest farm- ers many millions of dollars in loss, according to public admission made by grain brokers at a recent convention in aneapohs Prlces to farmers are tumbling, On July 1, through a vote of grain brokers taken at a conference in Chicago, gamblmg in wheat, 'po- litely called “future buying” in the pits, was re- sumed, and already London reports it to be the sig- nal for foreign interests to jump into the market to buy heavily for future delivery. The brokers - stated their fears that these future orders wonld swamp the railroads. and that the latter would 'be unable to complete delivery before expiration of contracts The brokers are going to take full advantage of the transportation tieup. The /farmers, as usual, will thave to bear the loss. Because of uncertainty of prompt delivery, F. B. Wells, vice president.of F. H. Peavey & Co.. told a gathering of elevator men a few days ago in aneapolls, the buyers would operate on a larger margin of: profit. In other words ' they won’t. take any .chances on the possibility of losing their usual fat commission. So all the farmers will be paid a lower price for their wheat, and the railroads will be blamed by the 'brokers As the result of future trading a new low price mark for wheat was established, and on the last of .July the price ranged around $2.29 a bushel on the Minneapolis cash market, and $2.33 at Chicago. A market report of July 27 tells the story: “Trade in wheat futures broadened out a bit and with all. cash markets displaying a sharply weaker tone prices dropped to new low levels. Buyers for Ger- many, France and Italy are reported to have taken . as much as 750,000 bushels on the break.” By August 2 December wheat had fallen to $2.11 Foodstuffs Stalled BY W. G. ROYLANCE (Of the Bank of North Dakota) ROP reports from all sources indicate that, notwithstanding decreased acre- farms will at least ‘equal that of last year. It is estimated that the total world production:of staple foods will be approximately sufficient to prevent extreme suf- fering anywhere, if the food produced can be prop- erly distributed. But there appears to be little ground, for hope that the problem of distribution can be solved in time to prevent an enormous amount of distress. That European transportation systems should be age, the total production on American at Chicago and Minneapolis May. North Dakota’s new termlnal elevator, now under Wheat was $3.20/ last " ‘construction ‘at Grand Forks, if completed in time, as expected, will aid much in taking care of the fall crop this year in the face of a transportation tieup. Thomas Sanderson, miller at the North-Dakota Agricultural 'school, in-his June bulletin, disproves the claim of the Northwestern Miller that resump- -tion of future trading is for the benefit of the public and not as profitable for the grain trade as “open” ‘buying. The Northwestern Miller is régarded as the mouthpiece ‘of ‘the aneapohs Chamber ‘of Commerce. The ‘Northwestern Miller editorial begins: ‘,.fo .a curious anomaly' the fundamental needs of the re- establishment of trading in wheat futures now be- ing considered by the grain’ exchanges is the pro- tection of “the public interest rather than that of - ‘those directly concerned in the handling of grain and. its products . GRAIN TRADE PROFITS WILL BE GREATER ‘Why, Mr. Sanderson asks, did the grain ex- changes work -so hard to brmg back future trad- ing in wheat if it is'not for their ‘interest, but is ~ ‘only for the interest of the public? . “What used to be known, not without reason, as gambling:in wheat on boards of trade is'to be re- stored as an economic necessity,” says the: Millex. ~This admits that wheat futures are gambling; “Five years ago,” continues the Miller editorial, “had any one declared that this great industry could operate without futures for its protéction, he would - haye been held:ignorant. and foolish, yet the past year has shown not only that such opera'mln is pos- sible but that profits to members of the grain trade, the milling industry and the machinery of flour and feed trade distribution has: been much’ greater than when futures were being traded in.” The Millel states plainly that profits to the gram ' trade were hlgher w1thout future tradmg, yet in the May 12 Northwestern Mlller the statement is made in an editorial: “The fact is, of course, that flour was considerably higher three years ago than it is today.” According to the Northwestern Miller on May 5, 1917, before future trading!was stopped, the price of wheat including No. 1 and No. 2 northern, .was $2.88%, and the price ‘of flour was $16.75 for first patent: and $13.90 for first clear, and feed about $40 per ton, leaving a difference of $4.40 be- ~tween the cost of wheat:(the higher grades) and . the value of the mill products per barrel of flour, or 98 cents per bushel of wheat. ; - The editorial in the Northwestern: Mlllor for May 12,1920, nges $14.80.as the price for first patent and -.$10 80" the price for first clear and feed $60. :This * brings the value ‘of the mill produ(;ts from four and one-half bushels to $15.82, and in the Market Rec- ‘ord, published in aneapolxs, the price for wheat on May 8, 1920, was $3.20 per bushel, including No. 2 red spring and all grades above, or $14 40 for four and one-half bushels. This ledaves a difference of -$1.42 between the cost of the wheat and the value of ‘the mill products per. barrel, or 32 cents per bushel of wheat, or taking the price in‘the market columns of the Northwestem Miller on May 5, 1920, the! mill products from four and one-half - bushels were selling for $15.97, leaving a difference of $1.39, or 31 cents per bushel ‘between cost of wheat and ‘gelling price of four and ‘one-half bushels of wheat (the reqmrement for making a barrel of flour). This shows that nine days before future trading of wheat was, discontinued in 1918 the grain trade made 67 cents more. per bushel of wheat than they made " just before future trading was resumed recently. On May 12, 1917, two days before future trading was dxscontmued thls had decreased to 51 cents per bushel. An’ examination of the market reports for that part o 1917 ‘when futures were in efféct shows that ‘the. grain ‘trade’ made a greater profit. per bushel of wheat than was the case ‘while future tradmg was prohibited. Mlght not this be one of . the reasons why the gram ‘exchanges have taken *such active steps.to. have future tradmg returned" Whrle Mllllons Starve Expert Shows quantxtles of graln sold by the farmers last. De- superwr to that possessed by ‘any’ other country" cember still remain in the terminal elevators of .- Allowing that the railroads have to solve many dif- Minneapolis.. Meanwhile 25,000,000 homes ‘in the United States should be laymg in next winter’s supply of coal, but they are'not able to do so be- cause the cars’'can not be furmshed for the ship- ment of the coal. : : “'Whatis the cause of 'this breakdown in:that transportation system which was once lauded as in a state of demoralization is nothing more than'' . | was to be expected. Slow recovery, with a returm: ¢ to a condition of pre-war efficiency at the end of 10 = or even 20 years, is the very best that European : But itiis a countries could reasonably hope for. serious commentary upon our own industrial sys- tem that, though this country did not feel in any direct way the ravages of the Great ‘war, our rail- roads are now in scarcely better shape than 'those of some of the countries which sustained the actual shock of battle. With the 1920 crop piling up in the farmers” bins and in. the local elevators, there i still'a considerable portion of the 1919 crop wait- ing to be moved. Recently 50 grain elevators in. Kansas were able to obtain only a ‘ddily consign- ment of seven cars, when 50 cars a day were needed. Kansas has approxlmately 35,000,000 bushels of " To last year’s wheat in farm bms and ‘elevators. move this grain would require about 480 cars per day for 60 days. 'Meanwhile Kansas has begun a __harvest of another 100,000,000-bushel wheat Crop, which will reqmre an addltlonal 80,000 cars. . 'The situation is no better elsewl.ere This spring, cabbage and potato growers of the Rio Grande val- ley in Texas saw their crop rot on the ground he- cause there were no cars in which to ship it, thus sustaining a loss of at least~$1 000 000. Enprmous Opemtmp a tractor of the “dr _than the-tractor itself. The “drum’’ driving wheel has a dual advantage.” It crushes all the - brush ahead of the plow, as well - as stabnhzing the tractor ' introduced under federal management. treme demands of the ‘railroad interests; ~_ing to their representations the car shortage is' due ~to the failure of the govemment to keep up the. ‘farmer is plowing = through underbrush lugher : ficult, problems directly and natutally ‘due to war operatlons, we are unable to escape the conviction that the sifuation is in large part due to deliberate sabotage o1 the part of railroad interests; to coms - pel especlally ‘favorable treatment by the federal government and to discredit pubhc ‘ownership. The " railroads have already secured, in guarantees and govemment loans, aid and concessions which would “have raised a storm of resentment if they had been ‘. extended say to worklngmen or to farmers.’ Yet the raflWa*y interests are not satisfied. So far they _have done little or nothmg to bring order out of ‘the chaos in which they eclaim the roads were left - by—government operation. ,Instead they have made confusion ‘worse confounded by réturning to the old ‘condition ‘of separate ‘operation of the different lines, thus throwing overboard the chief economy Apparently /thig is in part due to a lack of mtellxgent foresight, and in part to a real or 'mistaken self-interest that “will not yield to the. demands ‘of a better public serv:ce, but there is good ‘reason to. belxeve that it 8 largely a part of g deliberate plan to force the mterstate commerce commission to grant Xhe :3:- ccord- eqmpmént "during the period of control. But it is _very -apparent that since the return to private management not nearly ‘the same “efficiency "has - been "obtained " from exxstmg equxpment as. under - federal operation. = There'is even much evidence “tending to show that « cars are sidetracked or junked, ‘with the deliberate intent:to aggravate the situa-’ tion, 8o as to force the hand ‘of the mterstate com- ‘merce commission. Now it is a rTeport’ of 500 “freight cars rusting i in a Pennsylvania yard, ‘though - experts declare that practically all are fit for serv- ;(;eb In this case a farmers’ organization offered . uy ’ e entlre lot, bnt /the owners refused to :