sooner or later the failure of stabilization operations would give the cooperative movement a blow from the effects of which it would take decades to recover. Some of the predictions are even now coming true. References are frequently made by men in different walks of life, including farmers, that "stabilization and cooperative marketing have failed." To many people they mean one and the same thing. The National Cooperative Milk Producers Federation, representing 44 cooperatives and over 300,000 members, went on record as follows: "Because of the grave dangers to cooperative marketing associations involved in both of these bills, we hereby clearly, emphatically, and completely disassociate ourselves from all of the provisions of these bills that require cooperative marketing associations to own, control, and manage the stabilization corporations, and voice our hope that no cooperative marketing association will engage in an experiment involving so great a risk." The Oregon Cooperative Council recognizes the stabilization provisions as a defect in the act and further agrees that if stabilization operations are to be continued, the Government itself should assume the burden of owning, controlling, and operating such corporations. being itself responsible for success or failure. 10. The council takes the position that Congress should not again jeopardize the cooperative movement by saddling upon it any other untried or questionable surplus control plans that it may develop. 11. Cooperative associations viewed with alarm the power given by Congress to the President to transfer to the Farm Board by Executive order any branch, bureau, service, division, commission, or board in the executive branch of the Government. When, by such order the division of cooperative marketing was so transferred, the disappointment of cooperatives was plainly indicated. It is generally recognized that the work of this transferred division has been seriously crippled, and that the transfer also crippled the United States Department of Agriculture and the State agricultural colleges that looked to the division of cooperative marketing for unbiased and understanding help in all the problems of cooperation. Unless the Farm Board can and will render to the cooperative movement the kinds and types of service previously rendered by the division of cooperative marketing, the Oregon Cooperative Council recommends its retransfer out of Farm Board control. 12. The Oregon Cooperative Council has no quarrel with the trade as business competitors. The council's program has neither contemplated putting reputable private concerns out of business nor endeavoring to obtain monopoly control of farm products. At the same time it should be understood that the council will oppose any program on the part of the trade to put reputable cooperatives out of business or cripple the cooperative movement. The council will oppose efforts to repeal the agricultural marketing act unless something satisfactory to cooperative marketing is offered in its place. It will, however, consider any proposed amendments that, in the opinion of the council would make the act more satisfactory or that would assure a more dependable administration. In considering any proposals for agricultural legislation at the next session of Congress the council proposes to make its decisions in accordance with its opinion as to the benefit that may accrue to agriculture in general and cooperative marketing in particular. It is willing to subscribe to the statement that amendments to the act should be made by men and organizations that are known to be experienced and are generally recognized to be dependable leaders and true friends of the cooperative movement. NOTE. The council realizes that this statement, which is too long for some purposes and too short for others, will be subjected to criticism, especially by those who feel that they must support existing legislation, "right or wrong,' and by those who have had relatively little experience in cooperative marketing. The council is also aware of the political, financial, and other reasons that prompt the actions and propaganda of the organized groups fighting for and against the act and the board. The council, however, has a responsibility to those it represents directly or indirectly, and to those who have confidence in its policies and actions. To these and others this statement is intended to show the opinion, attitude, and policy of the council, which is composed of 33 cooperatives in Oregon, representing 20,000 farmers, and in addition 7 other agencies and institutions furthering cooperative marketing, including general state-wide farm organizations, and educational, financial, and service organizations. I also submit a letter from Mr. G. Albers, president of the Albers Bros. Milling Co., Seattle, Wash. Hon. CHAS. L. MCNARY, Salem, Oreg. ALBERS BROS. MILLING CO., MY DEAR SENATOR: Knowing that you receive considerably more mail than you can attend to when Congress is in session, I am taking the opportunity of addressing you at this time. The matter I wish to call to your attention is with reference to the Farm Board. All of the harm that has been done by the farm-relief measure will probably never be known, and the sooner the Government withdraws from the wheat business, the better it will be for all concerned. You are no doubt thoroughly familiar with this subject, and there is no need for me to go into great detail. However, I should like to bring a few vital points concerning it to your attention. Many reputable business firms who have been in the grain business for 25 to 50 years and even longer have been forced to the wall without benefit to anyone, even including the farmer himself: I am satisfied that the majority of farmers are opposed to this measure, which it seems was sponsored by only a few radicals who led Congress to believe that great benefit would result to the American farmer. However, the only thing that has been accomplished so far is the useless spending of Government funds and an enormous loss to the farmers themselves, especially those in the Pacific Northwest. Take last winter for example: The stabilization corporation fixed the price of wheat in Chicago at 81 cents, and little later fixed the price in Seattle and Portland at 68 cents, or a difference of 13 cents per bushel. I claim that wheat on the Pacific coast, that is, in the markets of Seattle and Portland, is of equal value to wheat in Chicago, as freight rates to points of consumption are about the same, and at no time before the Government interfered had wheat sold on the Pacific coast at more than 3 cents under Chicago. To-day Seattle wheat is 82 cents over Chicago, and figuring the 80,000,000 bushels of wheat claimed in the Northwestern States at 13 cents per bushel, would mean a little better than $10,000,000 taken directly out of the farmers' pockets unjustly, and I believe that if Congress wishes to spend three or four million dollars for farm relief, the farmers of the Pacific Northwest are certainly entitled to their share, as $10,000,000 is the small amount they lost directly due to the Farm Board's activities. The grain business in the United States is handled on a closer margin of profit to the middleman than any other business I know; many millions of bushels being handled for less than a cent a bushel. It is also true that millions of bushels of wheat have been exported without a cent of profit to the dealer or exporter, and why, the Government should single out a business of this kind on which to experiment is difficult to understand. If the grain handled netted a large profit to the grain dealer, there would be some excuse for Government interference, but as above stated, I believe there is no other business that is handled on such a small margin of profit. You have no doubt noticed that the stabilization corporation has also gone into the coffee business and is trading wheat for coffee, so that the so-called relief measure not only extended to the agricultural products of the United States, but to foreign products as well. I feel that this measure should be repealed at once, and the sooner we get back to common-sense business methods the sooner the present depression will come to an end, and I trust that you will do some real constructive work in Congress this coming session, which will benefit all rather than a comparatively small number. I shall be glad to get your reaction on this subject. G. ALBERS. I ask the reporter to include in the record a letter written by Mr. George Clinton Baer, of Pendleton, Oreg., outlining the Federal Farm Board activities with relation to wheat transactions in the Pacific Northwest. PENDLETON, OREG., November 10, 1931. Hon. CHARLES L. MONARY, Senate Office Building, Washington, D. C. DEAR SENATOR MONARY: Quite recently there appeared a news story in the Portland Oregonian to the effect that an investigation was contemplated regarding the activities of the Federal Farm Board. I therefore trust that you will not consider me presumptuous in addressing you concerning the present status of the wheat situation as it relates to the Pacific Northwest area. I am inclosing a story which appeared in the Pendleton East Oregonian of October 30, written by its editor, E. B. Aldrich, calling attention to the fact that the advance in the price of wheat on the Portland market between September 26 and October 30 was 141⁄2 cents, although the advance in the Chicago market during the same period was but 84 cents. This emphasizes the importance of the Farmers National Grain Corporation and the stabilization corporation as it relates to Pacific Northwest wheat. Upon the recommendation of the stabilization corporation, the sale of wheat to China was based on the price effective on the date of clearance. This unquestionably was a "master stroke," as expressed in the words of Mr. Aldrich and has proved most beneficial to the bankers and producers. It has removed the surplus from the market and eliminated any "bearish 99 tendency by the superb manner in which it is being handled. Moreover, it has provided an active market for the 1931 crop, much of which is still in the hands of the producers. The rapid and substantial advances in the Portland market prove conclusively that the action of the Grain Stabilization Corporation was fully justified, and has brought about a much healthier economic condition at this time than we could possibly have hoped would exist some 60 days ago. The feeling locally is greatly improved, as well as the market. The steady advance of the local market from 35 cents to 622 cents per bushel, basis No. 1, in the last 60 days naturally creates an entirely different atmosphere. The wisdom of the policy adopted in relation to the delivery of the wheat to China whereby 50 per cent is exported in the form of flour is quite apparent. It has proved a valuable aid, at least temporarily, in the employment of labor in connection with the various mills furnishing flour, thereby increasing pay rolls. In addition it has created an increased demand for cotton bags to be used in the shipment of flour, which certainly is of benefit to that industry. In our own district it has permitted the opening of several flour mills that have been inactive for years, therefore it would seem that the decision to adopt such a policy was wisely taken. I know of your intense interest and activity in farm relief and the strategic position you held in bringing about the agricultural marketing act. I feel that should an investigation of the entire situation be made it must deal with causes and effects and not with personalities. The disorganization of the financial and economic structure of the entire world has certainly offered problems never before confronted by business and agriculture. It would appear most obvious that the activities of the stabilization corporation averted a much greater catastrophe than is possible to comprehend had not the agricultural marketing act provided a means for it to perform that herculean task. Unquestionably, the Farmers National Grain Corporation, in its operations in the Pacific Northwest, has had the advantage of utilizing the best talent obtainable in conducting its affairs, and I conscientiously believe that the results of its operations on the Pacific coast will more than substantiate this statement. The American farmer, in the past at least, has been rather slow in accepting proof of attempted agricultural benefits. Moreover, the agricultural act under which we are operating has naturally drawn criticism and condemnation from private sources. However, when the entire situation is summed up and carefully analyzed it is most obvious that the producer owes to you and your colleagues a vote of sincere thanks for the vision and energy which you displayed in the establishment of an agency that unquestionably has served the producer in a valuable manner, notwithstanding the adversities to which all lines of business endeavor have been subjected. My knowledge is based on the operations of the Pacific coast division, as I have come in contact with the results it has obtained, and I believe that an investigation of the entire situation without prejudice will prove the wisdom of your efforts and the efforts of the officials of the quasi-governmental agencies who have endeavored to attain efficient operation and administration in the interest of the producer. With kindest personal regards, I am, very sincerly yours, GEORGE C. BAER. [From the East Oregonian, Pendleton, Oreg., October 30, 1931] PORTLAND WHEAT PRICE IS BETTER THAN AT CHICAGO PORTLAND, OREG., October 30.-Since September 26, the day on which the 15,000,000 bushels of wheat sale was made to China for relief purposes, the price of wheat in Portland has gone up 142 cents, and the price in Chicago during that period of time has advanced but 84 cents. At the time the China sale was made the Portland price was 4 cents above Chicago, but the claim is made here to-day that the price is now actually 10 cents above Chicago quotations. What are the factors back of such an unprecedented spread? That is a point regarding which the writer has been making inquiries and the answers are interesting. The general gossip at the merchants' exchange, I am told, is that a number of houses had sold short. In other words, they sold wheat without first going through the formality of buying it. Apparently they thought the price would remain low and that they could step out and buy wheat whenever they needed it. They have been disillusioned. Whether or not they have yet made up their requirements is a point about which there seems to be great silence. MASTER STROKE The sale of wheat to China was unquestionably a master stroke, particularly from the standpoint of the Pacific Northwest. It took all the stabilized wheat the Farm Board had on the Pacific coast and more, and the board owned virtually all of the carry-over wheat. The sale was made following the harvesting of a short crop, the crop of the Pacific Northwest being placed at 12,000,000 less than the 5-year average, while the shortage in California was even greater proportionately than the Northwest. But that was not all of the story. The terms of the China sale, which were suggested by H. W. Collins, vice president and western manager for the Farmers National Grain Corporation, have apparently improved the situation greatly. The wheat sold to China was sold on a basis of the current price on the day of shipment. That means that the higher the price goes the more will the Farm Board get for its wheat. The price has already gone up over 14 cents, as previously stated. The writer was told to-day by a man who should be in good position to judge the market, that he thinks the price will go higher. He did not say his view was confidential, but in view of his position I do not feel like quoting him to the extent of giving his name. SHIPS CHARTERED How much of the 15,000,000 bushels has been shipped thus far 1 do not know, but I take it that most of the wheat is still on the Pacific coast. There are 12 ships chartered to leave northwest ports between October 20 and December 15. Another provision in the sale, suggested by Mr. Collins, was that all of the sacks of wheat and flour be clearly marked for relief purposes. It is labeled "For Flood Relief Use," the purpose being to insist that the wheat go to the flood sufferers and not be resold to the trade in the Orient. Another factor in the situation that is different from the situation prevailing in former years is that the Farmers National Grain Corporation has been buying all the time. It is the boast of the organization that it will always buy wheat and always has a price. How much that has affected the market can be surmised, but the set up was good from the growers' standpoint because the Farmers' National and the Stabilization Corporation, though two entirely separate organizations, seem to have a close affinity, and it is naturally to the interests of the latter corporation to get as much as it can for its stabilized wheat. Incidentally the more the price goes up the better it is for the grower. The situation is unusual in the combination of circumstances. CROP AFFECTED While discussing the wheat subject, here is something more relating to crop damage in Europe which has previously been referred to several times in these columns. Mr. C. F. Huffman, local representative of the market news office of the United States Department of Agriculture, told me to-day that the wet weather in Europe, or a portion thereof, also affected European hops. As I understand it, the hops were made unfit for use. That should help Oregon hop growers. I refer to the subject because the hop damage story jibes with the reports of damage to wheat. The total yield of wheat in Europe was slightly above last year's production and the last reports from 35 nations making reports, not including Russia, are that the world yield from the reporting countries is 96 per cent of the 1930 yield. But there was evidently a deterioration in the quality of the European wheat. I note in the October 19 report by the foreign agriculture service of the United States Department of Agriculture, this statement: "An official report from Germany states that the cool, rainy September weather delayed harvesting, which caused further deterioration in grain remaining in the field." Also this statement: "A semiofficial figure places the wheat harvest in France at 257,203,000 bushels, which is the same as Mr. Steere estimated in August. The quality of the crop is reported as unsatisfactory." IS IMPORTANT The last statement about the quality of the crop seems important, for there is a lot of news of that character in the reports from Europe when one digs it out. Also the continent of Europe, with Russia included, produces nearly half the world's supply of wheat. Whether the price from now on will go up or go down is something about which the East Oregonian knows nothing, but it seems fair that the growers should be given the facts as we find them. It is certainly pleasant to have the Pacific coast price 10 cents higher than Chicago. Last year when the wheat price was pegged the coast price was pegged 13 cents under Chicago and in war time when the price was fixed the Portland price was 3 cents under Chicago, if the writer is not mistaken. Mr. Robin Hood, secretary-treasurer, National Cooperative Council, Washington, D. C., was unable in person to appear before the committee and submits the following statement: Hon. CHARLES L. MCNARY, NATIONAL COOPERATIVE COUNCIL, Washington, D. C., November 30, 1931. United States Senate, Washington, D. C. DEAR SENATOR MCNARY: I submit for the record a statement expressing the policy of the National Cooperative Council with respect to the matters under consideration during the past week by the Committee on Agriculture and Forestry. I appreciate your kindness in extending to us the privilege of presenting a written statement. Very truly yours, ROBIN HOOD, Secretary-Treasurer National Cooperative Council. STATEMENT OF ROBIN HOOD, SECRETARY-TREASURER, NATIONAL COOPERATIVE COUNCIL The National Cooperative Council, maintaining offices at 1731 I Street, Washington, D. C., consists of the following Capper-Volstead cooperative associations and federations of Capper-Volstead cooperative associations: American Cotton Cooperative Association, New Orleans, La. American Cranberry Exchange, New York, N. Y. California Fruit Exchange, Sacramento, Calif. California Fruit Growers Exchange, Los Angeles, Calif. California Walnut Growers Association, Los Angeles, Calif. Equity Union Grain Company, Kansas City, Mo. Federation of Cooperative Purchasing Associations, Columbus, Ohio. Florida Citrus Exchange, Tampa, Fla. Hastings Potato Growers Association, Hastings, Fla. Idaho Egg Producers, Caldwell, Idaho. Mutual Orange Distributors, Redlands, Calif. National Cooperative Milk Producers Federation, Washington, D. C. |