Increased Tariff Must Come Promptly if It Is
to Be Most Effective—It Is Up to
Congress to Act
Today tlie American wheat mar
ket Is approximately on a domestic
• basis. This Is due chiefly to the
tariff onwr heat Imports, which
keeps out the great bulk of
wheat from Canada. As a result,
ihq American wheat farmer is re
ceiving In the domestic markets
from 13 cents to 15 cents per bushel
more than he would receive were he
compelled to face the competition
of the world surplus.
The tariff on wheat is now 30
cents a bushel. It has saved the
American farmer from starvation
prices, but it is not yet adequate.
Hill Now Before Congress,
t .'ongressmun William Williamson
of the Third South Dakota district
lias introduced a bill providing for
a tariff of 50 cents a bushel. This
bill should be passed at once. There
are those in congress who argue
that to open the tariff bill for the
lienefit of the farmer will precipi
tate a general discussion of *11 tariff
schedules and bring forth a flood of
amendments to other sections.
Surely the senators and congress
men from the middlewest, the great
wheat growing section of the coun
try, are strong enough to control
the situation.
Farmer Hardest Hit.
The i c'st of the country is pros
perous, only the farmer suffers
from inadequate tariff protection. Is
not the intej-est of the millions of
farmers worthy of courageous con
duct? The tariff can be Increased
tm wheat, if the spirit of congress
is willing. It is for the purpose
»>f upholding the hands of middle
western congressmen and senators
i hat The Omaha Bee is publishing
this special edition. The Bee is pub
lishod at the center of the great
wheat producing section of the coun
try and die publisher of this news
paper feel it a duty, first to outline
an adequate and proper remedy for
tin# problems of tha farn^er. and,
cecond put our best efforts behind
those measures necessary to put it
into effect. ,
President Coolidge, upon the ad
vice of Secretary Wallace of the
Department of Agriculture, has
callejJ upon the tariff coipiqisslon to
investigate the wheat tariff and to
report to him the Increase necessary
to meet the situation. He will then
act under the flexible section of the
tariff law and direct a modification
accordingly.
This will take time. The inquiry
by the commission will consume
weeks, and even when the report is
ready, 80 days Jr.-ust elapse before
the president's proclamation can be
put into effect.
In the meantime millions of bush
els of Canadian wheat are stored
in the elevators at Fort William,
ready to take advantage of lower
water freight rates to reach the
American market. And millions of
bushels of American wheat must
sell at depressed prices because of
lliis competition.
Chief Hope Is Congress.
It is up to congress to act. The
increase in the tariff can be put
into effect in two weeks if congress
will get busy. The president will
sign it.
In 1920-21 impprtations of Ca
nadian wheat amounted to 60.000,
000 bushels. There was no tariff on
wheat at that time and prices at
Winnipeg were on a level with and
sometimes above prices at Minne
apolis. After the adoption of the
30-cent tariff in the emergency bill
in May, 1921, Minneapolis prices
were 25 to 30 cents above Winni
peg. This tariff differential in favor
of the American wheat farmer fell
in 1922 to around 6 cents.
While the tariff was effective to
a considerable degree there were
still about 20,000,000 bushels Im
ported from Canada in 1923.
Differentials to Be Met.
Attention Is called to the map on
another page, illustrating the ad
vantage the Canadian farmer *has
over the American in reaching the
milling centers on the Great I^akes
and at Minneapolis. This advantage
can only be overcome by the adop
tion of the 50-cent tariff.
It will be of interest to lead the
findings of Secretary Wallace on
the effects of the tariff on wheat:
“The tariff has been effective In
protecting the spring wheat fanner.
In Liverpool, Canadian spring wheat
ordinarily sells at a small premium
over American spring wheat. On
the other hand a comparison of
prices for comparable grades of
spring wheat In American and Ca
nadian markets which have prac
tically the same transportation rates
to Liverpool shows a margin In fa
vor of American prices which can
only be explained as an influence of
the tariff.
“The Minneapolis price of No. 1
northern spring In the period from
1909 to 1913, when a 25-cent tariff
was In force, ranged In general from
5 to 10 cents above Winnipeg No.
1 northern. Under a reduced tariff
of 10 cents per bushel, prices at the
two imrkets from 1913 to 1916 were
practically on a level. From 1916
to 1920. controlled prices and other
conditions Incident to the war
destroyed normal price relation
ships.
When Tariff Was Off.
“With the release of government
control. Winnipeg prices in the lat
ter part of 1920, when no tariff was
in effect, rose to a level with, and at
limes somewhat above, Minneapolis.
After the emergency tariff went Into
effect, in May, 1921, however, Win
nipeg fell to around 25 to 3(h cents
below Minneapolis, remaining near
that level for the balance of the
year. The difference narrowed early
in 1922, and the Canudian market
since that time has fluctuated from
6 cents above to 22 cents below
Minneapolis.
“Winter wheat prices appear to
be less affected by the tariff. Amer
ican winter wheat at Kansas City
is usually above Canadian spring
wheat from October to May or June,
and below during the summer
months, when the bulk of the Amer
ican crop is moving to market. Un
der the 25-cent tariff existing before
the war the average monthly mar
gins In the two periods practically
offset one another in amount, but
under the 10-eent duty in force from
1913-1917 Winnipeg prices averaged
from 5 to 7 cents above Kansas City.
Under our postwar tariffs Winni
peg prices from June, 1921, to Sep
tember, 1923, averaged 6 cents
above Kansas City, but this average
in favor of Canadian wheat has
been due to the high margins that
obtained during the summers of 1921
and 1922. Kansas City hard Winter
wheat prices have averaged 3 cents
above Winnipeg during the last 13
months, and In the month of Octo
ber averaged 14 cents above Win
nipeg.
“The beneficial influence of the
tariff is also Illustrated by compar
ing prices of wheat in Liverpool
with prices in producing countries
plus cost of transportation to Liver
pool. Prices of Canadian wheat in
IJverpool averaged for the year
1922, 10 cents, and for nine months
of 1923, 6\ cents above Winnpeg
prices plus freight on the basis of
an all-rail rate to seaboard.
Tariff Raised Prices.
“During the month of October,
1922, they averaged as high as 80
cents per bushel above Winnipeg
plus freight. IJverpool prjees of
American hard winter wheat, on the
other hand, averaged during 1922
only 2 cents more than Kansas City
plus freight, and during the early
months of the year were consider
ably below. In January, 1923, Liv
erpool again'dropped below Kansas
City plus freight, and has averaged
from 1 cent to 2 cents under dur
ing the first nine months of the
year. American hard spring wheat,
on the other hand, as shown by the
limited data obtainable, has sold in
Liverpool during the first half of
1923 at prices ranging from 3 to 15 ■
cents below Minneapolis plus freight
(all-rail). The average for the first
four months, in fabt. was about 13
cents below. Kven No. 1 Manitoba
which usually sells above No. 7
northern in Liverpool was below
No. 1 northern hard spring at Min
neapolis plus freight. These figures
show that, on a IJverpool basis.
Overhead Costs Bear
Heavily on Farmers
lTactirally all coals which enter
Into the production of wheat are
considerably higher than before the
war. Average monthly farm wages
for the United States on July lr
1923, were SO per cent above the
1913 level. Day wages at harvest
i Lme had increased even more. In
Kansas the day wage in harvest
was 82 per cent above 1913. This
fact is of special Importance In
commercial wheat-producing regions
where the bulk of the harvest labor
Is supplied by day hands. Interest
charges which farmers must pay
have increased wilh the accumula
tion of debts. Wholesale prices of
tuc more common farm implements
were this season from 45 to 59 per
cent higher than in 1913, and re
tail prices were considerably high
er. Threshing rates in various sec-.
♦ ions of the wheat territory ranged
this fall from 7 to 15 cents per
bushel, or 50 per cent tnore than in
1913.
The burden of tuxes in msny re
gions has become excessive. Taxes
cn farm lands in Kansas increased
171 per cent between 1913 and 1921,
In South Dakota, 129, and in the
eastern 20 counties of Washington,
137 per cent. With the exception
of South Dakota, taxes in these
slates have continued upward since
the war.
Further illustration of the finan
clal distress of farmers In various
parts of the west is found in the
accumulation of delinquent farm
taxes. Tax payments In some sec
tions are in arrears from one to four
years. In some of the wheat-grow
lug ureas of Kansas, for example,
delinquent ta?es since 1917 have
Increased in volume several hundred
per cent.
It should be observed that a sub
stantlal part of public funds Is ex
pended for local improvement pur
poses, such as roads, and that from
80 to 90 per cent of such taxes in
Kansas and South Dakota, for ex
ample, are levied by local govern
ment units. The remedy for high
taxes In some regions, therefore,
rests In large measure with farm
ers themselves. No doubt the ready
market for tax-exempt securities
also accounts in part for some of
the ill-advised expenditures In local
improvsments.
%
Selling Price of Bread Gan
Absorb Higher Wheat Prices
• The retail price ol bread in cir.es
has not fallen with the price of
wheat and flour.” Secretary Wal
lace reports to llie president. "A
pound loaf of bread in Minneapolis
which cost ft.3 cents in 1913-14, cost
9 cents in 1922-23, whereas a barrel
of flour which cost $4.43 in 1913
14 cost $6.89 in 1922-23. Allowing
280 loaves of bread to the barrel of
flour, the margin between the price
of the flour and that of the bread
produced from it increased from
$10.40 to $18.30.
“The retail price of it lti ounce
loaf of bread iq Washington. D. C-,
increased from 6.43 cents In Sep
tember, 1913. to 9 cents in Septem
her, 1923. This advance in bread
prices has not benefited the farm
or. The portion received in 1913 by
the wheat grower for the wheat
equivalent of flour used in baking
the Washington loaf was about one
fifth of the retail price of bread; In
1923 it amounts to less than one
sixth. While the wheat grower's
portion of the retail price of bread
has increased during this period,
less than one-third of a cent, the
margins above have increased a
total of 3 1-4 cents.”
The ratio of the price of wheat
to the selling price of bread and
the costs of Intermediate steps Is
shown in the accompanying chart,
prepared by the Dejiartmenl of
Agriculture. It proves conclusively
I hat adequate prices for wheat can
be paid to the farmer without in
creasing the price of bread to ihe
consumer.
Drift to Cities.
The movement of population from
tlie country to the city is signifi
cant. In 1922 there was a net shift
of 1,120,000 persons from farms to
city, or about 3.6 per cent of the
rural agricultural population at the
beginning of the year. This city
ward movement is a result of at
tractive urban wages, on the one
hand, and inadequate returns in
agriculture on the other. From o
survey of vacant farmhouses it ap
pears that- the percentage of all
inhabitable farmhouses not occupied
in the United States Increased from
4.7 per coni in 1920 to 7 3 per cent
in 1922.
DISTRIBUTION OF THE RETAIL PRICE OP A 1-POUND LOAF OF BREAD
IN WASHINGTON. D. C.
RETAILERS' MARGIN
Lobar. Dahrary, 5fora AAamtmnmnca. Cradtt.- *
Profit ar Lata,
, 1913 , 1923
(t 7 Cants) $ (9 CO Carta)
1
-X.
BAKERS’ MARGIN
Aforu fme turma.’Oa/teary one/ Sa/hrq - . . .«
Adnr nisrrotton, P/ont AAomtancr.ca.
Profit ar Los*\
<9 OJ Cant*) (j ga Car**)
materials other than flour
A0dad bit LoAar in mokmq breco -
CO SO Cants) ft.99 Coats)
TRANSPORTATION MARGIN
Cos t to Baker for brmqmq four from
A* r nedpehs to Woshmgtor. U C
(0 * * Carts) %C i9Car*sj
MILLING MARGIN ON FLOUR
(0 09 Cants) 1C an Car *9)
rAt»©H*r CHAPGTS 0* r^OoP •** *«CAT#'
from C't*o'or to S/.r-t ro/u>h* [
(O I' Cents) O.tfCrrtm) J
IlCV#TOR KIAPG1W O’- pLf H IM WMCAT » , .
(0 05 Centt) O C Cents) j
WHEAT GROWERS’PORTION
FOR FLOUR IN WHEAT •
fm Cants) *7 C ( ' *
'At- qjnt tf ante* rqq-j^a fc ~ •• t i> <1 'S
os*«r.« o0 j'*ot ■»©n eA t'toa
-Based on bread formulae for tbe years 1913 and idllfl
X #
hard red spring wheat prices have
been high throughout 1823, and in
dicate roughly the extent (o which
the tariff haa ralaed prices of thia
wheat above world levels. It also ap
pears that prices of hard winter
wheat in the Kansas City market at
times are favorably influenced by
the tariff.
"The present tariff has not pre
vented the Importation of Canadian
wheat for domestic consumption.
Our total Imports of Canudkn wheat
from May, 1921, when the emer
gency tariff went Into effect, to June
30. 1923, amounted to 32.567, <94
bushels, of which 22,642,059 bushels
were Imported In 1922. Forty-seven
per cent of this waa milled in bond
and exported as flour. Drawback
was paid on only 4.638 bushels. The
balance was consumed In the I'nited
.States."
Average Cost of
Wheat, $1.23 Bushel
In 1922 the average com of pro
ducing wheat as reported on 2.417
farms in the Pnited States was SI.23
per bushel. The cost of production
showed considerable variation as be
tween geographical divisions. The
net cost, including land rent, varied
front an average of $0.98 per bushel .
in the spring wheat states of Min
nesota, North and South Dakota,
and Montana to an average of $1.38
for the state* of New York. Penn
sylvania, Maryland, Virginia, and
West Virginia.
In all of these regions many farm
ers produced wheat at a loss. It
should be remembered, however,
that this doe# not represent an ac
tual cash loss, since a substantial
part of the total cost of production
does not involve a cash outlay. In
cost accounting, costs include
charges for the labor ef the farmer
and his family and for the nee of
land, and If the price received for
wheat is sufficient to cover these
costa the farmer receives going
wages for his time and interest on
capital Invested.
The cost of producing wheat
varies widely between individuals ,
as between regions. The average
cost for the total production, as
shown by some investigations, cov
ers the cost of a little more ihun
half of the crop, and a wheat price
which only equals this cost will not
permanently maintain the industry.
To place wheat growing on a stable
basis, the price for wheat must be
sufficiently high to yield satisfac
tory returns on the' bulk of the pro
duction. This price wheat farmers
have not received during the last
several years.
Omaha Bakrrs Urge
Higher Wheat Priees
The bread linkers of Omaha favor
a substantia! Increase In the price of
wheat. At a recent meeting of link
ers at the Omaha Chamber of Com
merce. Mr. P. P. Petersen of Pet
ersen A Pignu Flaking company,
said:
"I do not lieliev* that a material
increase in the price puid to the
farmer for wheat would increase the
coat of bread to the consuming pub
lie."
Mr. Fred Plate of the .Fay Burns
Flaking company joined Mr. Peter
sen in calling attention to the de
creased consumption of wheat bread
snd other wheat products and a
statement was issued by the bakers
ttrglVig a larger use of the ‘'staff of
life." The statement In part fol
lows:
"A greatly increased home con
sumption of wheat through pre
n«rcd wheat products such as
bread would be of tremendous ad
vantage to the American fmmer
and to all of the American peo
ple.
"An increased price fur wheat will
increase the purchasing power of
the farmer In ilirect proportion to
that Increase. The farmers wIM
then lie able to buy bread from ths
bakers.
"Today the fanners ate buying
only onetblrd as much bread hsked
bv Omaha bakers as they bought In
1920 and 1921.
"It Is safe to predict ih.it III*
farmer will lc paid n higher pries
fur Ills wheat and that with this
Increase In his revenue lie will
furnish a better market* fm bread
baked from wheat flour. This In
creased volume of bakery business
will probably lower the overhead
• nd operating costs of linking bread
so ihut the price of bread may rs
main stable even though flour
m ices Inct ense