Grandiose Scheme

Pharaoh of Egypt thought so highly of Joseph for inventing the ever-normal granary plan of crop control that he freed him from jail, made him governor. Although the scheme worked well enough then, it has taken thousands of years, millions of dollars and Secretary of Agriculture Henry A. Wallace to put it on the grand scale. After four years Secretary Wallace finally succeeded in getting Congress to adopt the plan in the Agricultural Adjustment Act of 1938. Last week his emissary to the International Wheat Conference in London ambitiously proposed putting the granary plan on a world-wide basis.

In Washington, Secretary Wallace had just fixed wheat loans for the 1938 crop and the acreage allotment for next year (55,000,000 acres, compared with about 80,000,000 actually seeded this year). Figured on the basis of 52% of the present farm parity price of wheat ($1.14 a bu.), the loans will average about 60-c- a bu. at the farm. The 1938 crop estimated at 967,000,000 but, will be the second largest on record, and Commodity Credit Corp. has set aside $100,000,000 for the loans. Purpose of the loans is to let farmers keep their wheat off the market until they can get a better price. Secretary Wallace chose the minimum rate permitted by the 1938 AAA, but wheat prices on exchanges promptly sagged as brokers figured the loan might actually turn out to be the maximum price, as occurred with last year's 9-c- cotton loans.

If the price of wheat, last week 71-c-, falls below the 60-c- fixed figure, the Government must hold the wheat until the price rises. Thus it will be spending $100,000,000 or more to store the surplus, while foreign producers will have the world market to themselves by selling at the prevailing price. To insure the U. S. of a "fair share" of the world wheat business, Secretary Wallace would like the world's farmers to store their surplus wheat this year.

U. S. representative at the London conference, at which Ambassador Joseph P. Kennedy presided, was Albert Gain Black, Chief of the U. S. Bureau of Agricultural Economics. A drawling, scholarly man whose hair is the color of July wheat. Economist Black, 42, took to farming almost before he could wield a pitchfork, taught agricultural economics at Iowa State College for four years, joined the AAA's inner council in 1935. Well-qualified to expound the ever-normal granary plan to the London delegates, Economist Black nevertheless failed to convince them.

Aside from extending for two more years the International Wheat Agreement (drawn up in 1933 to limit wheat production and export), the 25 delegates from 16 nations* did nothing last week except view the outlook with much alarm. Conference experts figured that the world harvest, excluding the Soviet Union, China and Manchukuo, would total 4,205,000,000 bu., 216,000,000 bu. above the all-time record set in 1928. Especially ominous was the prospect for the U. S. Once a major wheat exporter (200,000,000 bu.), the U. S. last year sold only 100,000,000 bu. abroad. This year, unless foreign countries store part of their crops, the U. S. will have an exportable surplus of 250,000,000 bu. Last week Secretary Wallace hinted his department might subsidize wheat exports.

* Only major producer not represented was Argentina, which has never adhered to the International Wheat Agreement, is currently upping its wheat acreage considerably.

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