End of Stabilization

As the gong closed May trading in U. S. grain pits last week the Federal Farm Board, as it had promised to do, ceased stabilizing wheat prices. Board officials declined to reveal precisely how much wheat the U. S. had bought in the open market or how many U. S. dollars had been lost in price-pegging operations. Grain experts estimated, however, that the Board owned more than 200,000.000 bu. (exclusive of the 35.000.000 bu. sold abroad this spring) with a book loss of $90,000.000. Still undetermined was what the Board would do with the largest amount of wheat ever held by a government in peacetime.

The Farm Board began buying wheat in February 1930. when it was $1.18 per bu. Last week it closed with the price stabilized around 82-c- per bu. The average price the Board paid for its wheat was figured at $1.05 per bu. Unpegged was the price of the new crop which last week was selling for 60-c- per bu. at a world level. The Farm Board's losses were calculated on the basis of sales at this price rather than at the artificial one of its own making. Into the losses also went what the Board had dropped on its foreign sales.

To carry its vast wheat stock will cost the Board about $4,000,000 per month. Assuming the purchase price to be about $210,000,000, holding this wheat for a year would run the total up $258,000,000 which the Government would have to get back to break even. To do so. sales would have to be made at $1.29 per bu.

With pride the Farm Board pointed to the fact that its stabilization had held U. S. wheat prices about 20-c- per bu. above the world level, had saved many a bank and business in the wheat belt from ruin.

Another Farm Board loss: $50.000.000 in trying to stabilize cotton prices through the purchase of 1,300,000 surplus bales.

Last week's Farm Board resignation: Charles Collins Teague, vice chairman and fruit representative, who declared wheat and cotton stabilization were "entirely justified," emergency operations resulting "in benefits to agriculture and business far outweighing any cost to the Treasury."

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