Official Solution of Wheat Farmer’s Problem By HENRY C. WALLACE. • Secretary of Agricultare. The wheat industry of the United States Is in a period of serious de pression. A great many farmers have already lost their farms or other property and the financial condition of others is critical. This condition of things lias resulted from the decline In wheat prices, the relatively high level maintained K in the prices of other commodities and services, and also from the mal adjustments which exist in the Wheat industry itself. Present low prices are caused by the large world supply of wheat, for which there is not an effective demand at higher price levels. The total world crop outside of Russia is estimated at 3,400.000,000 bushels, which exceeds the production of lust year by 300,000,000 bushels and the prewar average by '00,000,000, ex ' eluding Russia. Both importing and exporting countries whose produc tion fell during the war are resum ing rapidly the position they pre viously held as wheat producers. Moreover, the evidence indicates that competition in wheat production will Increase very materially. Russia Is gradually restoring her agriculture and is already exporting some bread grains. Argentina, Austialia and especially Canada are selling abroad large amounts of wheat and will in all probability continue to ex pand their wheat exports. These countries enjoy material advantages over the United States in the pro ' ductlon of wheat. So long as the United States produces a surplus, the prices of American wheat will be determined largely in the mar kets of the world and American farmers as exporters of wheat must be prepared to meet the keen com petition of foreign producers for these markets. Farmers’ Costs Too High. Although wheat prices have drop ped to pre-war levels, prices of manufactured commodities and of services remain high. The costs which enter into the production and marketing of wheat are so high that, at present prices for wheat, ihe farmer can not continue to pay them and remain in business. Tuxes machinery, wages, freight.rates, and prices of food and clothing are out of proportion to the price of wheat and the earnings of tlur wheat funn el*.' Too Much Depend* on Wheat. A number of factors within tht wheat industry itself also have con tributed to the present wheat crisis l«ands on which wheat cannot un der present economic conditions be grown profitably have been brought into cultivation in some regions This fact coupled with the depend ence placed upon wheat as a cash crop accounts for the lueses of some farmers. .Furthermore, high prices and the appeal for larger food sup plies during the war induced many farmers to expand unduly their farm operation* and to Incur lia bilities which since the break in wheat prices they have been unable to carry. The financial distress which has come as a result of these various causes is conaiderably ag gravated by losses which are due to inefficient farm management. Many farmer* are growing and marketing wheat* which do not fulfil! the highest market require ment* and consequently fail to yie»d maximum net returns. On gome farms, furthermore, exces sive emphasis on wheat carries with it an unsatisfactory seasonal distribution of farm lnlwr with re sulting heavy expenditure* for hired help. The financial difficulties of many, In short, would be re duced if their farm business were operated along more efficient lines. Self Help for Farmers. It is important to bear in mind tliat the solution of present agri cultural difficulties depend* quite as imiMi upon the efforts of farm ora themselves u* upon any govern ment action. There are fundamental and far-reaching adjustment* in production and uiurketlnjr which fanner* themselves mu»t make a* a part of a longtime program. A survey of the situation indicates that well-considered action In a number of direction* will bring wheat farmer* a substantial men Mil re of relief. A large number of wheat produc er» arc on the verge of bankruptcy. Many of them are, no doubt, beyond the point where further credit ex tension* would benefit them. On the other hand, a larger number can and should be saved by the renewal of loons or by additional credit on reasonable term*. Where a large volume of credit exists and the mortgage statu* of the farm per mlt*. outstanding short time loan* should be funded into long term mortgage loans at lower rated of Interest. In this connection full ad vantage should be taken of the fa* cjltHeM afforded under the Federal Farm Loan act. Moreover, the new credit facilities provided in the fed eral intermediate credit banks should be utilised to reduce the cost of personal credit to the farmer. In this bankers should lend a willing hand even where such action does not Increase their Immediate profits. The constructive country banker will readily see that in tbe long run such action benefits him as well os the farmer. Expert Financing Needed. To meet successfully foreign competition in some markets In which exchange rates and oppor tunltles for exchange of commo dities favor purchases of wheat from other sources, easy credits on American purchase* may be neces sary. The War Finance corpora tion should m»ke special effort to finance the exportation of wheat in line with the joint resolution of congress, January, 1921. reviving the activities of that corporation. The wheat surplus may be le duced materially by increasing do mestic consumption. The per cap ita consumption of wheat flour and bread has been lessened by the war time campaign to pave food coupled with the high prices fur bread which have since been maintained. A reduction in the price to coasiim era by narrowing the margin be tween wheat flour and bread would, no doubt, increase the consumption, and a return by publit eating houses and dining cars to the cup tern of serving bread free with or ders would contribute to*the same •end. Furthermore. at present price* wheat can be economically substituted for corn as livestock f***d In many iwiits of the country, and it* use for this purpose may h* ftn * sed to advantage. lawn Freight Rales. \imrican freight rates, which are still 4'. per cent and more above those of 1913. have not been ad justed to meet the decline in farm prices, whereas Canadian rates are now practically back to their pie war level. To inert the emergency a reduction of at least 2’% per cent in inu estate rates on wheat and wheat products originating in the distressed wheat areas would be helpful, these rale* to remain offeo live until wheat prices ahull have more nearly reached a parity with the ptices of other commodities or until a readjustment ha* been made m all freight rates. In order to tie termine a proper basis for this ad justment, the Interstate t'onrunerce t'onimission to a .-pecini coniinis sion composed of representatives of railroads and shippers, and created for that purr *s* should review without delay the entire structure of interstate railroad rates and should make or submit recommen dations for adjustments which will return adequate revenues to the railroads and as well afford Borne relief in the way of reducing the cost of transporting agricultural products. Cut in Taxes Imperative. Farm taxes In many sections 'of the country have become a serious burden, especially in regions where farmers are in financial distress, and a downward revision is essen tial. The partial substitution of taxes based on Income for the pres ent property taxes would provide a measure of relief. Further shining of the cost of good roads to those who make most one of them, through taxes on gasoline and motor vehicles, offers still another means of a more just distribution of the tas burden. Developed Output Needed. < lurnged market conditions necee :ate important readjustments in crops As foreign outlets for American wheat become more re strict cd, the production of wheat should be gradually placed on a domestic basis, and the wheat nrpr age should be reduced as fast as profitable alternatives can be found. Adjustments in agricultural pro duction should be made in accord ance with differences in regional and farm conditions In some of the wheat territory some shift from wheat to corn probably will be prof itable. Oats for local consumption might be substituted tor wheat to a slight extent. With present prices flax will be a profitable alternative on suitable land for a small portion of the wheat acre age In the northwest. Since the prices of dairy products have con tinued relatively strong, further emphasis should be placed on dairy ing and the production of feed crops. This increase in diversity ef crops and livestock will in gen eral result In better organization of the farm business and also help to stabilise the farm income. A safer tj^e of farming taunt be developed for the semiarld regions, latnds which are unsuHed to fleM crops should Ire dropped from culti vation and revert to grass land. Some forage crops and livestock should be grown on every dryland farm. Reserves of feed, livestock, poultry and capital should be car ried from year to year to tide over periods of crop failure, and the farm business should be so organ ised as to secure the maximum re turns per man. Kach fanner should carefully re view the possibilities which lie be fore him. Undoubtedly diversiflea lien will result, from careful thought on this subject, in many of the states where the surplus wheat acreage is found. On the other- hand, in those regions where wheal is grown as part of a diversi fied system of farming, it may be more profit able than any alterra live crop. !w-lf-Sufficient Farming. In the present critical situation it is very essential that wheat farmers adopt methods which re duce production costs and conserve toe cash income. This may be ac complished by avoiding out of-pock et cost, by growing on the farm in so -far as possible the feed supplies for the stock and provisions foi the family, a policy which is made more urgent by the increase in freight rates and the high cost of processing and retail distribution by utilizing to the fullest possible stent the available labor supply and the farm equipment through a well-balanced diversification of tops and a better distribution of labor throughout the year. b> keep.ng land of low production in grass and other crops demanding but little labor or eipense. and by devoting labor and capital to such • rops and livestock enterprises as promise to give the greatest profits Grew Keller Quality. Improvement in the quality of wheat produced will materially in ci ease profits in the wheat Indus 'ry. t'ertain classes of milling wheats are in special demand and aliould be substituted for less de sirable wheat wherever conditions are favorable. Moreover, heavy and unnecessary losses are incurred by farmers in producing and market ing dirty and low-grade wheat. The production and marketing of dock age is expensive. Wheat should te ■ leaned before sowring and market ing. care shot-id be exercised In its storage, and such seed selection and farm practices in growing and harvesting should be adopted as will result in the best market Slades of wheat. Prices paid at terminal markets ’ eflect quite accurately the varia lions in quality of wheat: prices paid at country points frequently do not. Farmers must know the quality and grade of their wheat in order intelligently to bargain for the best market price. Wheats of high . gluten content usually command .premiums at terminal markets. While the federal grades for wheat through subclass speci cations indicate broadly the gluten content, the only practicable meth o to restore the proper ratio* either by increasing the prices of farm products or by reducing the price? of commodities. The prices of farm equipmeny food, « lothing end bu.ldmg mate lials, as w~H as farm wag*«. are influenced by the costs of mining, transportation and m .nufa* turmc and by the ability to adjust produc tion to that limit- of supply wri* m can Iv sold m the domestic market *t a price to yield o prof.t. One of t ie largest element* the production cost of manufactured products as well as in transporta tion cos? is ?he wages of labor Wages have remained high sime the war. The Immigration and Adamson laws, together with t‘.c policies of organized labor, bav - been potent factors n main ?: ir ^ wage scales. On liie other hand the domestic market for the produ* »s of the Tnanufacturing industr. s rrakes it possible for them to - or. t.nue production at a profit ev. w ith bigl. wa«*K for industrial l&fcr L’nder these cond tions organised in dustry can maintain high pi ices in the domestic market and dump ~ pluses in forc:gn r.iarkets at lew prices. Fanners' Right to Convideraiion The question may he raise i whether protection to labor and in dustry shall he withdrawn n ord*.' i hat the inflow of foreign labor and manufactured products may re duce the prices of lh* prod :;e which farmers buy to the level of farm products or whether some bet ter remedy should be (Ng [be % better and more practical a'te.n.. live may be to try to improve p* • t» of farm products of which we li*ve an exportable surplus and wbi-h aie. therefore, unduly depressed Abundance of work at good wage* gives assurance of good demand f< - farm products, but Justice teqai--* •hat the farmer be helped wo far . « possible and proper to secure tively good wages for his labor in deed, industry and labor can r • hope long to enjoy a diapmpo; • tionately high price level for th. , - products for the simple reason that farmers constitute about *<> per i-ent of the purchasers of s,: i products and if the farm-.s il.f v to buy is materially lessened fer any length of time l>oth tec.-. -t.v and labor suffer through lessened demand aud pii«-es will be f«» • i lower Co-operation among t*-- - as - been suggest'd i« a m«.iti tainlng the end -ought. V u operation is to be encouraged a- * of the best nevus of imp' a re marketing methods ami >»d ■ : marketing coots, as well :«* ..t proving the quality of far pi.d ucts. It does no: appear po-si > u d certainly not within a short p> of time to organise the p > « of the great staples of A met u i agrlotilture so rffwthx!y as to gi\« them that control over supply w ia mcsmrt mlwbr'is'li i at t ence poAat