-t: ^ ^ry<^' ^t^' t^ i.-t'i *r ^v#^ ^^. (QntttKU HmowHUg Slibtarg Strata, Mem ^ntk THE GIFT OF M. o. Cornrvwt^ee. onVY»c.«-& The date shows when this volume was taken. To renew this book copy the call No. and give to tibeboranan. HOME USE RULES All Books subject to Recall All boFrowers Enust regis- ter in the library to borrow books for home use. All books must be re- turned at end of College year for inspection and repairs. Limited books must be re- turned within the four week limit and not renewed. Students must return all books before leaving town. Officers should arrange for the return of books wanted during their absence from town. Volumes of periodicals and of pamphlets are held in the library as much as possible. For special pur- poses they are given out for a limited time. Borrowers should not use their library privileges for the benefit of other persons. Books of special value and gift books, when the giver wishes it, are not allowed to circulate. Readers are asked to re- port all cases of books marked or mutilated, f Do not deface books by marks and writing. Cornell University Library HD9049.W4 U57 Minutes of the Committee on P^^^^^^^^ 3 1924 030 156 412 olin The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924030156412 United States Food Administration WASHINGTON, D. C. December 17, 1917. IN YOUR REPLY REFER TO 2-G Librarian, Cornell University, Ithaca, K.Y. Dear Sir: I am sending you under separate cover one complete set of the Minutes and Appendices of the Committee which recommended to President Wilson the price for the 1917 wheat crop. I have had a number of requests for the information which is contained in these minutes, and believe that the Library of Cornell University is the logical place in your section in which to have these records avail- able for reference. Yours very truly. Secretary, Committee on Pri^efe, GWN.BEC UNITED STATES FOOD ADMINIS^BATION ^^ MINUTES OF THE COMMITTEE N PRICES AUGUST 17 - 39TH, 1917 L.L. Minutes of preliminary meeting of COMMITTEE ON PRICES > Friday j August 17th - 10 A. M, The meeting was called to order by Chairman Garfield in his office, room 301^ Gordon Hotel Building. Present:- Messrs. Doak, Sullivan, Taber, Taussig ani Garfield, members of the Committee, and Messrs. McCarthy and Nasmyth as guests at the invitation of the Chairna.n. Telegrams were received from Mr. Vail of New York stating that he was on his way from Oregon to New York and would reach Washington in time for the meeting on Tuesday morning, August 31st; from Mr. Rhett of south Carolina stating that he had received the telegram too late to at- tend Friday's meeting but would be able to reach Washington in time for the meeting next Monday j Mr. Ladd of North De.kota arrived shortly after the close of the meeting and stated that he would be present on Monday; Mr. Shorthill of Nebraska telegraphed that he would reach Washington Friday evening; Mr. Waters of Kansas telegraphed that he would reach Washington Saturday morning; Mr. Funk of Illinois, v7ho had arrived in Washington earlier in the week, was compelled to leave before Friday but stated that he would retiorn in time for the meeting Monday, Mr. Barrett of Georgia had not been heard from. The Chairman outlined the duties of the Committee and the broad questions of policy to be considered and then took up the discussion Of the Food Bill under which the -3- Committee is acting. At the suggestion of Mr. Taber, Chairman Garfield requested Mr. Nasmyth to act as secretary of the Committee. In view of the emergency which exists it was decided that the price of wheat should be determined as quicl^ly as possible and that the Committee report to Mr. Hoover on or before September 1st, In order to accomplish this task it was decided to hold one meeting a day for four or five days a week until a decision is reached. The Chairman was authorized to consult with Mr. Spillman of the Department of Agriculture concerning questionnaire to be sent to three hundred county agents and through them to three thousand farmers in the princi- pal wheat growing sections in order to determine the cost of production of 1917 wheat crop, Meeting adjourned until 10 o'clock Monday morning, August 20th. -3- Minutes of meeting COMMITTEE ON PRICES Monday, August 20th - 10 A. M. Present:- Chairman Garfield, and Messrs. Doak, Funk, Ladd, Rhett, Shorthill, Sullivan, Taber, Taussig and Waters of the Committee j also Mr. McCarthy and Mr. Nasmyth, acting as Secretary. Mr. Vail telephoned from New York that he would arrive in Washington for a conference with Chairman Garfielc Monday evening and would be present at the meeting Tuesday. Telegram was received from Mr. Barrett at Toledo, 111. stating that he would reach Washington Thursday. VOT ED On motion of Professor Taussig that Dr. Waters and Dr. Ladd be appointed a Committee to determine what in- tangible co-eff icience should be taken into account in estimating cost of production of wheat. In response to a request of the Committee, Mr. Hoover made a statement of the world virheat situation. See appendix #1. Meeting at 3 P. M. Monday, August 20t At the request of 'the Committee Mr. Barnes, President of the Food Administration Grain Corporation, answered a large number of questions regarding the technical features of the grain trade. An abstract of Mr. Barnes remarks and -4- VOTED VOTED memoranda, submitted by him later in response to the re- quest of the Committee, are appended, appendix #2. Following Mr. Barnes' departure the Committee dis- cussed the supply of farm labor as a factor in wheat pro- duction. Mr. Sullivan submitted a memorandum, appendix #3, showing that there is no general shortage of labor but only a mal -adjustment to the economic needs of the country, Mr. Shorthill pointed out that the question of farm labor is much more acute in the case of wheat, where a large supply of labor is needed for a short time, about ninety days, as compared to corn where the labor can be distributed over almost the entire year. It was agreed that an adequate supply of labor by governmental action is possible and ie an important factor in increasing the vifheat supply, and that steps already takan in this di- rection by the government should be developed. On motion by Professor Taussig that Committee should not hold public hearings, but that the Committee will cordially receive all statements and memoranda of information sub- mitted in v\rriting. That the Chairman, with the consent of the Committee, shall have the right to invite persons to give testimony or information. That while the minutes of the Committee shall be open at all times to members of the Committee they shall be -5- read at the meetings but net duplioated ox distributed:.ln typewritten form. VOTED Tlaat "the Department of Labor and the Department of Agriculture be requested to fizrnish statistics concerning the relative proportion of wheat in the typical nutrition tables. yOTED That the Department of Agriculture be requesterd to furnish daily reports of the prices of wheat and corn at Chicago and Kansas City and a statement daily of sales of spot cash wheat which actually passed from the 1st of August to the present. Meeting adjourned to meet Thursday at 10 A. M. -6- Minutes of the meeting of the PRICE COMMITTEE Tuesday, August 21st - 10 A. M, Present*, all members of the Committee except Mr. Barrett The minutes of the meeting of August 30th and of the preliminary meeting of August 17th were read. Professor Taussig suggested that the v;ord "estimate" W Inserted in- stead of "determine" the cost of production; Dr. Waters called attention to the motion requesting the Departments of Labor and Agriculture to furnish information relating to the proportion of wheat in nutrition tables, which should have been included, To approve the minutes as amended, On motion by Mr. Taber, that following the ixeaditlg of the minutes each day the telegrams and communications re- ceived by the members should be filed with the Committee. Mr. Taussig expressed his opinion that in consideration of the fact that the minimum price of wheat for 1918 had been fixed by Congress at $2,00 and that this was likely to be the maximum also, the Committee will have to come to some prioe approximating $2,00 for the 1917 crop. Mr, Sullivan asked for an interpretation by our legal advisor as ta whether it is in the power of this Committee to recommend that the government purchase the v/heat at a certain price, say for example $2i00, and sell the flour to the people at a loss, say at $6.00 per barrel or a price -7- corresponding to $1.50 per bushel for wheat; distributing the loss, say of ^300,000,000 on 600,000,000 bushels of wheat, on the tax payers of the United States as a whole. Mr. Rhett emphasized the importance of determining the task and scope of the Committee. He suggested that we get a chart by which we can go, determining what as a matter of law we can do and vjha,t are the limits beyond which we cannot go. He suggested further that we should take up the discussion of price on the basis of necessities that are thrown around the subject including the fact that a minimum price of ^3.00 has been set for the 1918 crop and that the farmer, by holding the 1917 crop, can ob- tain this price for it less the cost of carrying it over, Mr,. Waters asked if there is any fund available to meet the deficit which would be caused if the wheat crop were bought at a certain price and sold at a lower price. It was stated in reply that under the terms of the Act the Grain Corporation has only $50:,.000,000 available as a revolving fund. Mr. Vail asked for a consideration of the object of fixing the price, whether; it is to stiraulate production; to reduce the cost to the consumer; or to increase the amount of wheat available for export to the Allies. If maximum exports to the Allies is the governing considera- tion, Mr. Vail pointed out that the high price of wheat -8- would help to reduce the consumption in the, United States, Mr. Sullivan replied that our object should be to take care of our own people first and that the problem of the English people could be met in part if they could be in- duced to give up their prejudice against corn bread, Mr. Taussig added that even at a price lower than the present, considering how slowly wages advanced for the wages- receiving class, the price of wheat would be very high and constitute a very heavy food tax. Mr. Waters summarized the results of recent investiga- tions which he had made showing that the per capita production of food products has been increased while the per capita exportation has been falling off, showing an increased per capita consumption of food products by the American people in recent years, Mr. Shorthill gave it as his conclusion from the number of telegrams which he has been receiving that |3,00 wheat would be regarded by the farmers not as a bonus which they would receive but as a sacrifice. Mr. Taber emphasized the importance of improving the condition of farm labor through higher wages and shorter hours and emphasized the debt which the city owes the country as the result of attracting labor to the industrial centers of the cities in recent years. Meeting adjourned at 12; 15 to meet at 2:30 P. M, -9- Minutes of meeting COMMITTEE ON PRICES August 21st - 2:30 P. M, Meeting called to order at 2:30 P. M. by the Chairman. Pres- ent: — all members of the Committee with the exception of Mr. Barrett. Moved by Mr. Tabor, but not voted, that this Committee report to Mr. Hoover a fair price for the 1917 wheat crop on or before adjournment Monday, August 2 7thj date amended to read Friday next and then Tuesday, August 2 8th, when all members of the Committee could be present. To lay the motion on the table. Mr. Funk, who will not be able to be present at the end of the -week, was asked by Professor Taussig to frankly state his views. Six weeks ago the 40,000 farmers whom Mr. Funk asked for information stated that they would be satisfied with a price of ^1.85 to $1.87 per bushel and willing' to grow wheat for next year at that price. As a result of the changes that have taken place during these six weeks they now want to withdraw the Si. 85 price and feel that another price should be set. In Mr. Funk's judgeiaeo"^, taking everything into consideration^ this other price should be |2.25. In response to questions as to what the new factors were that had entered into the situation Vi'ithin the last six weeks, Mr. Funk stated that they were conscription, which had greatly decreased the available farm labor, and the increased prices of materials. -10- Mr. Sullivan opposed, fixing an early date for adjourn- ment because this would tie the hands of the Committee. Mr- Vail stated that he would have to go to New York for im- portant engagements on Friday but that he could return to Washington Monday afternoon of next week and be present at the meeting Tuesday. The fact that the Committee had authorized a questionnaire on the cost of production results of which will not be avail- able until Monday, August 27th, was also cited as a reason against adjournment before the facts which it will furnish are av 6. 3.1 able. Dr. Garfield stated that in his judgement also no deci- sion should be reached before Tuesday, August 28th, the first day next week when it will be possible for the full Committee to be together. A discussion followed on the cost of production and the comparatively low yield and crop failures in certain sections, Mr. Taussig brought out the fact that there is no crop failure or exceptionally low production in the country as a whole; that the considerations of low yield were confined to certain areas. Dr. Garfield quoted from the evidence he had gathered showing the wide range of cost of production \indQr certain conditions. Dr. Garfield read a telegram sent to the Canadian Grain -11- Supervisors requesting information and the reply received, included herewith as appendix #4. Mr, Shorthill asked v^rhether the Committee should take into account the disadvantages of certain wheat growing sections due to disarrangement of transportation, which caused the charge of 70^ per bushel for freight across the country from some of the northwestern states, I know that 70 cents is too high, but I cannot give the definite figure . Mr, McCarthy reported from the whole milk section that the almost universal decision was that dairymen should sell their cattle and plant wheat in place of the corn acreage. A discussion on the increased use of tractors followed. Meeting adjourned at 4:55 until Wednesday at 10 A. M. -12- VOTED VOTED Minutes of meeting Committee on Prices, Wednesday, Augusi 22nd - 10 A, M. Present, all members of the Committee except Messrs Funk, Barrett and Rhett. Mr. Rhett was detained at his hotel by illness, on motion of Mr. Waters that only the actions taken and the questions asked should be incorporated in the minutes , The minutes of the meetings of the Committee on Tuesday, August 21st, were corrected to read that the motion to set a date for adjournment had been laid on the table . It was suggested by Mr. Taussig that each member of the Committee should be sent copies of his remarks for verification. to approve the minutes as amended. Mr. Sullivan made a formal request for information regarding the price of wheat and flour during the past three years. (See appendix #6) Mr. Sullivan requested that Judge Lindley be asked to give his opinion in writing and in detail regarding the limitation of the powers of the Food Administration to sell wheat at a loss. Moved by Mr. Waters that a representative of tlie delegation from North Dakota be permitted to present its VOTED VOTED -13- ■ ' ^ case before the Committee. Moved by Mr. Taussig that the motion of President Waters be laid on the table. After a disc\ission Mr. Waters withdrew his motion and it was on motion by Mr. Shorthill that the delegation from North Dakota be requested to submit its written statement at the earliest possible moment. Question asked by Mr. Sullivan:- "In fixing a price to be paid the farmer can a difference be made in prices f wheat which is to be sold in the United States, to neutral countries and to the Allies?". Secondly:- "Can we base a price to foreign countries contingent upon their taking a proportionate amount of corn?" Question asked by Mr, Ladd:- "Is this Board expected to fix the price for Number One Durham wheat or only Number One Northern?" . Question asked by Mr. Waters:- "Are we expected to fix a price on other grades and classes of wheat than the one designated in the Food Bill, namely, Numfeer One Northern Spring?" These questions were referred to Chairman Garfield to bring back definite instructions. on motion of Mr. Sullivan that the action of the ; Committee in deciding that no typewritten copies of the minutes should be distributed, be understood to mean "unti the date of the final adjournment of the Committee", -1 ';- VOTED to adjourn until 2:30 P. M, VOTED VOTED Minutes of meeting VIednesday, August 23nd - 2:30 P. M Present, all members of the Committee except Messrs Funk, Barrett and Rhett. The question asked by Mr. Taussig at the close of the morning meeting was taken up for discussion, namely, how much weight should the Committee give to the cost of pro- duction of wheat in those sections in which the crop has bfeen sHdtii this year. Mr, Sullivan asked that the Dept. of Agriculture be requested to furnish information regarding the cost of farm labor during the past three years. This information was received over the telephone from Mr. Murray, assistant chief of the Bureau of Crop Estimates, and later submitted in written form, included herewith as appendix #6. on motion of Mr. Sullivan, that the Dept. of Labor be asked to furnish information concerning the relative rates of wages in about forty of the principal occupations during the past three years. on motion of Mr. Waters that the U, S. Dept. of Agri- culture be requested to furnish this Committee with a statement of the average labor income of the farmer of the U. S, for such years as statistics are available. -15- VOTED on motion of Mr. Taber that the Dept. of Labor be requested to furnish charts showing prices of certain commodities during the past three years. (See appendix #7) On account of the need for time to compile neceaeary information and the engagements of some of the members of the Committee, it was agreed that no sessions be held Thursday afternoon or Friday morning but that a meeting would be held Friday afternoon. Meeting adjourned at 4 P. M. to meet at 10 o^clock Thursday morning. -16- Minutes of meeting COMMITTEE ON PRICES Thursday, August 33rd - 10 A. M. Present, all members of the Committee except Messrs. Funk and Rhett. In reply to questions asked afe the request of members of the Committee, Mr. Hoover stated that there was no desire to hurry the Committee, because of the importance of the de- cision it is to make. At the same time the fact should be borne in mind that grain transactions were almost at a stand- still making it difficult for the mills to obtain supplies and threatening a congestion of shipping, which is beginning to be tied up waiting for cargoes of grain to be received. Minutes of the meetings of Wednesday, August 32nd, were amended to omit the result of the discussion of the question raised by Mr. Taussig and to include the questions asked by Mr. Sullivan in regard to relative rates of wages during the past three years. To approve the minutes as amended. Communications were filed by Mr. Shorthill from Mr. C. ! Calkins of Ponca City, Okla. j by Mr. Taber from Mr. M. C. Drake, Master of Lebranon Grange, No. 1462,; from Mr. L. P- Bailey, President Ohio Dairymen's Ass'n; from Mr. Depew Head, Marion, Ohio; by Mr, Todd from Mr. Bacon and other members of a delegation from North Dakota, A statement of the delega- tion from North Dakota was read and distributed in mimeograph form to the members of the Committee. (See Appendix 7A) -17- VOTE D On motion of Mr. Waters that Mr. Bacon be requested to come before the Committee to furnish information as to what, in his judgement, is the possibility of farmers feeding wheat to live stock and in regard to the price it would be neces- sary to fix in order to prevent this happening on a large scale. Mr. Sullivan requested that the information asked re- garding relative prices of wheat, flour and bread (16 oz. loaf) should include both the relations under the unregu- lated conditions of the past and the estimated relations under the contemplated regulations by Mr. Hoover. The Chairman suggested that the Committee should sub- mit in support of its recommendation of price a statement of the reasons which had lead the Committee to reach its conclusion and asked that each member of the Committee consider the matter and be prepared to submit some statement at the meeting on Friday. Meeting adjourned iintil Friday at 2; 30 I'P, M. -13- Minutes of meeting COMMITTEE ON PRICES, Friday, August 24tli - 3; 30 P. M. VOTED VOTED Present ;- Messrs. Garfield, Barrett, Doak, Ladd, Shorthill, Sullivan, Taber and Waters. The minutes of the meeting of Thursday, August 23rd, were ree^d and approved. Requested that Mr* Barnes be asked whether the Austra- lian price quoted approximately as ^1 per bushel is a mar- ket price or a price whscli tbe government is actually pay- ing; also that similar information be furnished concerning the price of wheat in India. The following documents were received and distributedj- written memorandum from Judge Lindley concerning the power of the Grain Corporation to sell at a loss, appendix #8j from LIT. Sullivan providing rates of wages in certain Build- ing Trades occupations, appendix #9; from Mr. Shorthill concerning controlling factors, appendix #19;from Mr. Waters, data from Mr. Spillman concerning labor income and wages of farm hands, appendix #11. To issue a statement with the approval of Mr. Hoover and Ut . Barnes relating to the price of other classes and grades of wheat than #1 Northern Spring; commission to be charged and plans for selling the seed to the farmers at cost, see appendix #12. To request Mr. Duvel of the Department of Agriculture to appear before the Committee Monday morning, August 27th, at 10 o'clock. Meeting adjourned to Monday, August 27th, at 10 o'clock, -19- Minutee of meeting COMMITTEE on PRICES, Monday ^ August 27th - 10 A. M. Present - all members of the Committee except Professor Taussig and Mr. Rhett. 29JED To approve the minutes of the meeting of Friday, August 24th, as read. At the reqtiefet of the Committee Mr. Duvel of the De- partment of Agriculture answered a number of questions re- garding the different grades and classes of wheat. The following documents were submitted and distributed to the members of the Committee in mimeograph form:- Appendix # 13 Statement issued to the press " # 14 Price of cash wheat diiring the past three years " # 15 Relative increases of wheat prices on percentages " #16 Letter from Mr. Ingram on exploitation of the farmer " #17 Sample letter from Dept. of Home Economic " # 18 Brief for the Consumer " #10a Memorandum of delegation representing consumer " #19 Table of cheapest foods " #20 Prices of wheat during past three years, averages Meeting adjourned until 2:30 P. M. -20- Minutes of meeting COMMITTEE on PRICES > Monday, August 27th - 2:30 P. M. Present - all members of the Committee except Profeesor Taussig and Mr. Rhett. The following documents were submitted and distributed to the members of the Committee :- #21 Report on intangible factors of cost production #22 Results of questionnaire on cost of production #23 Letter from Mr. Barnes on differentials #24 Statistics of exportable reserves ^OTED To add the following note to appendix #15 ;- "Note; The prices here named are retail prices and th 75 percent patent flour figured is a hypothetical flour. It is not the flour used as a basis by Mr, Barnes nor is it the flour actually used by the consuming public." "^OTED That a telegram be sent to Mr. Rhett expressing the wish of the members of the Committee for his speedy recovery. Heating adjourned until 1;30 P. M. Tuesday, August 28th. Minutes of meeting COMMITTEE ON PRICfS, tuesday, August 38th - lj;50 p. M. Present, all members of the Oommittee except Mr. Rhett. To approve minutes of meeting of Monday > August 27th as read. The following documents were distributed to the members of the Committee in mimeograph form: - Appendix # 25 Estimate of probable vvorld wheat surplus by Mr . Iloovei' " #26 Memoranda by Mr. Duvel on wheat statistics " #37 Letter on price of wheat by North Dakota farmers " #28 Memorandum by Dr . Ladd " #39 British Food Ministry measures ^ # 30 Proportion of bread in menus of rich and poor by Miss Stern " # 31 Statement by Prof, Andrews " # 32 Memorandum on the stabil'-.ty of prices by Dr , Waters " # 33 Cost of bread among the jvoikers " #34 Statement of Mr. Shorthill " # 35 Bltumincua coal prices fixed by the President " #36 Statement by Mr. Sullivan and Mr. Doak " #37 Statement by Mr. Funk " # 38 Report on number of v/heat farmers in the United States " #39 Basis for ascertaining reasonable price of wheat by Mr. Waters " # 40 Influence of American prices on wheat supply for Allies by Mr. Waters Moved by Mr. Taber that after the filing of statements by the members we proceed to set the price on No. 1 Northern Spring Wheat and its equivalent at Chi cage j Illinois, in the following manner; Tvvo informal votes shall be called., then the Secretary sha\l call the name of each member of the Committee and they shall respond by giving the price for v;hich they vote. This -32- plan shall be continued until a three-fourths majority of the Committee shall agree upon the same price* All such votes shall he made a permanent part of the records of this Committee. "^OTED To divide the motion into two parts. VOTED To adopt the first part as follows :- That after the filing of statements by the members we proceed to set the price on No, 1 Northern Spring Wheat and its equivalent at Chicago, 111,, in the following ' manner : Two informal votes shall be called, then the Secretary shall call the name of each member of the Committee and they shall respond by giving the price for which they vote. Moved by Mr. Taber that statement be issued as follows: The Committee on investigation fi.ids that the wheat from which the flour is made is on the average between the third and fourth grades. No formal action was taken on this mo- tion. The following questions were asked by Mr. Sullivan :- What is the proportion of each grade in the present crop? State present grades of wheat made into ordinary flour under new classification. What price at Chicago would be equivalent to $1.75 for that grade? What figure for No. 1 Northern Spring would represent fairly the price of flour wheat? Meeting adjourned at 6:30 P. M. , until 7;30 P. M, VOTED VOTED VOTED -23- Minutee of meeting COMMITTEE ON PRICES, Tuesday, August 38th - 7;30 P. M. Present, all members of the Committee except Mr. Rhstt. The replies to the questions asked by Mr. Sullivan at the close of the preceding meeting as given by Mr. Ladd and verified by Mr, Waters were read. (See appendix 42) That Committee proceed to first informal ballot That Committee proceed to second informal ballot That Committee proceed to first formal ballot The result of the first formal ballot was as follo'we:.- Mr. Barrett ^3.50 Mr. Doak 1.84 Mr . Fimk 3.25 Dr. Garfield 3.10 Pr of . Ladd 3.50 Mr. Shorthill 2.50 Mr. Sullivan 1.84 Mr - Taber 2,30 Prof, Taussig 3.10 Mr. Vail 2.25 Prof. Waters 2,50 VOTED That the Committee proceed to second formal ballot The result of second formal ballot was as follows'.' Mr, Barrett |;2 . 50 Mr. Doak 1.84 !Ir . Funk 2.25 Dr. Garfield 2.10 Prof. Ladd 2.50 Mr. Shorthill 2.50 Mr. Sullivan 1.34 Mr . Taber 2.30 Prof. Taussig 2.10 Mr. Vail 2.25 Prof. Waters 2.50 Meeting adjourned at 10:30 P. M., until 10 A. M. , Wednesday, August 29th. -:a4- Minutes of meeting COMMITTEE OW PRICES, Wednesday, August 29th, 10 A. M. Present > all members of the Committee except Mr. Rhett, At th^ request of the Committee, Mr. Eoov^i answered a number of '-■^'pof ons , ' , VOTED To approve the minutes of the meetings of Tuyday, August 28th as read. The Secretary was requested to note that the Committee had been asked to determine the equivalents of No. 1 Northern Spring. VOTED That the Committee proceed to the third formal ballot. Results of the third formal ballot were as follows:- Mr. Barrett ^2.50 Mr, Doak 1.84 Mr . Funk 2.25 Dr. Garfield 2.10 Mr . Ladd 2.50 Mr. Shor thill 2.50 ISx . Sullivan 1.84 Mr . Taber 2.30 Prof. Taussig 2.10 Mr. Vail 2.25 Prof. Waters 2,50 Meeting adjourned at 12:45 until 2:30 P, M. Minutes of rr^^efin:^ ^edrsesday, August 29th, 2:30 P. M. Present, all members of the Committee except Mr. Rhett. Following statements were submitted and distributed to the members of the Committee:- appendix #43, Reasons for |2,30 wheat as stated by L. J. Taber; appendix #44, — (rf.3— VOTED VOTED Statement by Mr. Shorthill on relative prices of wheat and flour. Moved by Mr. Taber that an informal ballot be taken on the question Vvhether the price of No. 1 Northern should be $8.25 at Chicago. On successive motions informal ballots were taken on the following prices:- 12.15; $2.30; $2.20 (t¥0 ballots) ; $2. 2 Meeting adjourned at 6 P- M., to meet at 10 A. M., Thursday, August 30th. Minutes of meeting COMMITTEE OK PRICES, Thursday, August 30th - 10 A, M. Present, all members of the Committee except Mr. Rhett. Minutes of the meetings of August 29th were approved as read. Statement by Mr. Veil was read and distributed to the Committee — see appendix #45. To take an informal ballot on price of $2.30 for No. 1 Northern Spring wheat at Chicago. To take informal ballot on $2.17; $2,25; $2.20. Meeting adjourned at 12.30 to meet again at 2 P. M, Minutes of meeting Thursday, August 30th - 2:00 P. M. Fresent; all mv^mbers of the Committee except Mr. Rhett. Informal ballots were taken on the following prices; - $2.17; $2.25; $2.ciO; !$2,21. -26- VOTED TO RECOMMEND UNANIMOUSLY THAT THE PRICE FOR #1 NORTHERN SPRING BE FIXED AT ^2.20. Statement by Mr. Waters was read and distributed - see appendix #46. (AT CHICAGO) Statement v/as prepared and read to the Committee - see appendix #47. Meeting adjourned at 5:30 to report with Mr. Hoover to President Wilson. Minutes of meeting Thursday^ August 30th - 6:00 P.M. Present; all members of the Committee except Mr. Rhett. Minutes of meetings at 10 A. M., and 2 P. M., were read and approved. Meeting adjourned at 6:10 P. M. Certified correct (Signed) GEORGE NASMYTH Secretary, Committee on Prices. LIST OF APPENDICES # 1 Mr, Hoover's Report la Agenda for the Meeting of August 30, 1917 2 Mr. Barnes' Report 2a Personnel of Price Coimittee and Grain Corporation 3 Mr, Sullivan's Report 4 Report of Canadian Grain Supervisors 5 Questions by Mr* Sullivan 6 Report of Department of Agriculture - wages of farm labor 7 Report of Dept, of Labor - questions asked by Mr, Tabsr on p 7a Statement of Delegation of staples 8 Memorandum from Judge Lindley on powers of committee 9 Scale of wages in building trades 10 Controlling factors 11 Report of Dept, of Agriculture - estimate of 1917 productior 12 Report of Dept. of Agriculture - farm labor income 12a Statement issued to the press 13 Price of cash wheat during past three years 13a Available U, S, wheat supply and surplus 1916 and 1917 14 Relative inc:^eases of v^rheat prices on percentage 15' Relative prices of wheat and flour 16 Letter from Mr, Ingram on exploitation of the farmer 17 Sample letter from Department of Home Economics 18 Brief for the Consumer 18a Memorandum of delegation representing consumer 19 Table of cheapest foods 20 Prices of wheat during past three years - averages 21 Report on intangible factors of cost of production 22 Results. of questionnaire on cost of production by Mr, Spilln 23 Letter from Mr. Barnes on differentials' 23a Telegram from Mr. Barnes 24 Statistics 'of exportable reserves 25 Estimate of probable world wheat surplus by Mr. Hoover 26 Memoranda by Mr. Duvel on wheat statistics 27 Letter on price of wheat by North Dakota farmers 28 Memorandum by Dr . Ladd 29 British Food Ministry measures 30 proportion of bread in menus of rich and poor by Miss Stern 31 Statement by Prof. Andrews 32 Memorandum on the stability of prices by Dr. Waters 33 Cost of bread among the workers 34 Statement by Mr. Shorthill 35 Bituminous coal prices fixed by the President 36 Statement by Mr. Sullivan and Mr. Doak 37 Statement by Mr. Taber 38 Report by Mr. Funk 39 Report on number of wheat farmers in the United States 40 Basis of ascertaining a reasonable price for the 1917 crop j Mr. Waters 41 Influence of American prices on wheat supplies for the Allie by Mr, Watei 42 Replies to questions concerning grades of wheat made into f] 43 Reasons for $2.30 wheat as stated by L, J. Taber 44 Statement by Mr, Shorthill on the relative prices of wheat £ flou] 45 Statement by Mr, Vail (Minutes of Meeting of August 20,1917) Mr, Hoover's report in abstract was as follows: During the past five or six weeks the country haply 150 million bushels still short of the re- quired amount • In reply to a question by Mr. Sullivan, Mr, Hoover stated that he did not believe it practical for England to use corn-bread first, because the mechanical equipment in the kitchens of the homes was not designed for baking bread, practically all of which done in the bakeries; second, because corn bread cannot be sold from bakeries. In Mr, Hoover '3 cpinJ.cn -these phyBlcal facts were responsible for the failure to use mere corn rather -chan any prejudice against corn bread. In Mr* Hoover's opinion also the peoples of all Eiiropean coxintries would prefer co:T?n bread to the Wc breads made of a 35fc. mixture of barley, rye, oats or potatoes, if ? were not for these physical difficulties. Another obstacle is the lack of corn milling machinery in England and the difficulty of transporting corn meal owing to its deterioration. However, some corn milling machinery is being introduced in England a-nd steps are being taken to take as much advantage of the corn opportxinities as possible. There can be no doubt that the peoples of the Allied ooxmtries will be compelled to practice every economy f^nd use everj food stuff possible because, even from the most optimistic viewpoir there will be a shortage of at least 100 to 150 million bushels of wheat and we ought not do anything to make their sufferings any greater than they will necessarily be in any case. Mr, Hoover gave it as his judgment that war bread should not be forced i?)on the people in this country by law and that it woui.c[ be a common sense start to induce th© people to eat a larger pro- portion of other cereal breads. Th© ixidioations are that there wi] be an abundant corn crop and that the differential in price between wheat bread and corn bread will be great enough to induce many people to eat corn bread to a great extent* Mr, Hoover outlined the steps that are being taken to stabi3 the price of flour relative to that of wheat. Negotiations have b€ conducted with the millers looking toward an agreement to limit the maximum profit on flour to 25^ a barrel and the profit on feed to £ -3- per ton. An effort will be made to have the majority of ex- ports shipped in the form of flour instead of wheat. In reply to the question as to what poiArer the Food Administration has to control prices, Mr. Hoover cited the ability to purchase wheat on the one hand, and to limit ex- ports on the other, Mr, Hoover expressed his (Willingness to place himself at the command of the Committee at any time he could be of service. APPENDIX #1 A COMMITTEE ON PRICES AGENDA Meeting August 30, 1917 - 10 A. M. I. Outline of the Comnjittee's task by the Chairman II. Informal address by Mr Hoover III. Consideration of questions of general policy Ob.ject t To determine the price for the 1917 wheat crop whicl will be equitable to both the producer and the con- sumer, taking into account the fact that the country is at war. Among the factors to be considered are: (l) Welfare of the industrial population as affectec •• '.by ttug-G^et' of .tiread. (3) The effect of high wheat prices upon the cattle raising and dairy industries as the result of reduced corn acreage and high prices of feeds, (a-) The relation of American prices to the world condi- tions and needs of our allies. 0^) The relation of general policy to the changed condi tions at the end of the war. As soon as the Dardnelles are re-opened great stores of Russian wheat will be available for the people of western Europe; European wheat prices will fall rapidly and the prices for American wheat, which is determined normally by the exportable surplus, will also tend to fall rapidly. On the other hand there will be an increased demand for American cattle to re- stock Europe, The effect of wheat prices on the conservation of live stock resources of America during the war should receive careful consideration from this point of view. (c) The relation of the 1917 wheat prices to the produc tion prices and acreage of the 1918 crop. (d) The relation of prices to the movements of populati and labor troubles. (e) Should the Food Administration prices be related to farmers' cost of production? IV. Proposed questionnaire on price of producing wheat. Information to be determined by Mr Spillman of the Department of Agriculture from three hundred county agents each gathering information from ten farmers in the most important wheat producing centers. APPENDIX #1 A - 2. V, Should the Committee hold hearings? VI. Should some sub-committees be appointed now to deal with certain technical questions, for example: (a) The relation of wheat price to cost of bread to consumer; (b) Differential prices relative to #1 Northern wheat; (c) Geographical differential relative to base price at central market; (e) Statistics on 1917 cost of production. APPENDIX #S (Minutes of the Committee on Price August 21, 1917) Mr. Barnes' report in abstract was as follows :- In reply to the question as to what constituted primary interior markets under Section 14 of the Food Law, Mr. Barnes stated that on account of the fortunate geographical situation of one city, which was able to draw from all sections of the wheat growing areas, Chicago was universally recognized in the grain trade as the most important market. In view of the fact that Section 14 used the word "markets" in the plural, however, it would be necessary in fixing a price for the 1918 crop to designate more than, one point, and that at least those markets most unfavorably situated as regards transportation, namely CTmaha and Kansas City, would have to be the places at which the minimum rate of $2.00 would apply, and that the rate at other raarkets, such as Chicago , St. Louis, Minneapolis and Duluth, would have to be a few cents higher. The Grain Trade recognizes as "Principal Int erior Primary Markets" - Duluth, Minneapolis , Chicago, St. Louis, Kansas City, Omaha. For the 1917 crop, lilr. Barnes stated it would be most convenient for the Grain Corporation if the Committee would recommend a price at one base market, such as Chicago, and leave the experts of the Grain Corporation free to fix the geographical differentials and the differentials relative to the various grades of wheat, for the experts of the Grain Corporation to determine in aooordaaca with the trade condi- tions. Mr. Barnes suggested that for convenience in classify- -3- ing the wheat, the following grades be declared equivalent :- Number One Northern Number One Hard Winter Number One Red Winter For markets east of Chicago Mr. Barnes stated that about 10^- should be added to the Chicago price, representing the cost of transportation from Chicago to New York, and from this should be subtracted the cost of transportation from the market in question to New York. ¥ix, Barnes stated that he had conducted an investigation in regard to the effect of changes in the price of wheat upon the wholesale prices of flour and that the result worked out at from 45?-" to 50^ per barrel of flour for ea oh 10^ change in th e price of wheat. lAr, Barnes stated he had made two careful calculations, one for |3.00 wheat which worked out at slightly less than $10.00 per barrel for flour, and the other for $1.90 wheat at Chicago, which worked out equivalent to ^9.00 per barrel for Car lots Bakers floiir in New York. The computations for $1.90 wheat had been carried out with special care because he had foiind that under exceptionally favorable conditions, such as the chain stores which distributed two million loaves a week in Philadelphia, a two pound loaf of- bread could be sold for lO?^', so that $1.90 wheat at Chicago reflected back to Minneapolis at about $1.86 for Niomber One Northern, and $1.80 for commercial grades, would make a two pound loaf for lOV- a commercial practicability, under especial- ly favorable conditions which he outlined. iis a oDumier-Daiance "co "cne cause oi une Diarmer lor nigxa pL-xvai kr. Batnes pointed out that the action of the government may be the only protection to the farmer against the worst demoralisiation of the wheat growing industry in history in case of certain oontin- genoies. He based his conclusion on the following estimate of a world wheat surplus:- Australia, for the present crop 180 million bushels New crop on the first of January 150 million bushels Making total exportable surplus of 330 liillion bushels India, present crop 100 million bushels New crop February 1918 100 million bushels Total exportable surplus 300 million bushels United States, total crop 700 million bushels Less home consumption 500 million bushels Available for export 200 million bushels Canada, exportable surplus 150 million bushel s Total, not including Argentine 880 million bushels Mr. Barnes stated that in his opinion six weeks ago $1.75 a bushel at Chicago would have been absolut^iy satisfactory to the farmer. He stated that within sixty days the price of corn would be reduced to $1.25 per bushel or less. The Chairman requested that unless the Committee had any other questions, Mr. Barnes be excused in time to catch the 4 o'clock train for New York. Mr- Barnes stated that if the members of the Committee desired any further information he would be glad to place himself at their service and that he would come to Washington at APPENDIX #2 A FOOD ADMIITI STRATI ON The committee on prices includes President Harry A Garfield, Williams College, Williamstown, Mass. Charles J. Barrett, Union City, Ga., President Farmers' Union William N, Doak, Roanoke, Virginia,, Vice-President Brotherhood of Railway Trainmen Eugene E, Funk, Bloomington, 111., President National Corn Ass'n Edward F. Ladd, Fargo, N. D., President North Dakota Agricul. College R. Goodwin Rhett, Charleston, S, C, President Chamber of Commerce of the United States J. W. Shorthill, York, Neb., Secretary National council of Farmers' Cooperative Association James W. Sullivan, Brooklyn, N- Y,, American Federation of Labor L. J, Tabor, Barnesville, Ohio, Master Ohio State Grange Tausig, Frank W. , Washington, D. C. , Chairman Federal Tariff Commission. Theodore N. Vail, New York nity, President of the N. E. Telephone and Telegraph company Henry J, Waters, Manhattan, Kansas, President Kansas State Agricultural College NL FOOD ADMIIII STRATI ON GRAIN COPT^OPJ\TIOK The wheat purchasing division of the Food ?\dmini strati on will consist of the following ffiembersJ Chairman, Herbert C. Hoover President, Julius H, Barnes, Duluth, Minn. Treasurer, Gates V/. McGarran, Pres . Mecnanica & Metals National Bank J New York City, Vice-President, F. G. Crowell, Kansas City Transportation Director, Edward Chambers, Chicago, Vice-President Santa Fe R. R. Counsel, Judfe Curtis H. Lindley, San Francisco Secretary, J. Vf. Shor thill NL FOOD ArMINIFTRATION GRAIN CORPORATION Th3 following men v;ill represent the grain division at the various terminals; Edward M, Flesh, M. H. Houser, C. B. Fox, H . B , I rva n , P , H. Ginder, Frank L. Carey, George S. Jackson, Howard B. Jackson, Charles Kennedy, R. A. Lewin, D. F. Peazzel, Charles T. Neal, 3t . Loui s , Mi s souri , Portland, Oregon. 11 ev. Orleans, La. Philadelphia, Pa. Duluth, Minn. Mi nn e ap 1 i s , Mi nn , Baltimore, Md. Chicago, 111 . Buffalo, N. Y. San FrancisTC, Cal. Kansas City. Omaha, Neb. NL FOOD ADMIWIPTRATION QPAIN CORPORATION The United States Millers' Committee to co-operate with the Food Administration in negotiating voluntary regulation of the milling industry, will comprise the following: Chairman , Secretary^ Northwest, Southwest, Southeast, James F. Bell, A» P. Hushand, Albert C. Loring, Andrew J . Hunt , E. M. Kellir, St « Louis & Illinois, Sanuem Plant, Ohio Valley, Chicago & Milwaukee, Pacific Coast, Mark N . Nannel, Minneapolis Chicago Minneapolis Arkansas City, Kan. Nashville, St, Louis, Toledo Bernard A, Eckhart, Chicago Theodore S, Wilcox, Portland, Ore. NL l^.-^ ni .4.^^.r^:^Ciy, /[^^ J Or '/ MEMORANDUM AS TO THE SUPPLY OF LABOR. (From J. W. Sullivan to Herbert Hoover.) 1, Cornniissioner of Labor McLaughlinj of California in a re- port on the subject of farm labor in that State, issued in June, stated that the supply was sufficient, merely needing organization to meet the requirements of gathering the crops. The San Francis- co Chamber of Commerce, after making its own investigation, re- ported to the same general effect. The trouble was not in a short age but in a neglect of the State to establish a system which woul care for the distribution of the farm labor regularly year in and year out. 2, Simon J. Lubin, President of the State Commission on Hous- ing and Immigration, in a public star.ement saysi *'The need for la- bor in California does not refer to permanent employment but is merely a demand for large numbers of men and women whose services will be required for only brief periods." 3, A. W, Jones, Director Public Employment Bureau, Portland, Oregon, writes, August 6: "No particular shortage prevails, ex- cept possibly a shortage of calkers only in the shipyards. As to common labor, we have no difficulty filling orders for any number men where a reasonable wage offer accomipanies the order, or where no strike or other labor trouble exists... We are in almost daily touch with the county agricultural agents of the several counties Oregon, and all report no labor shortage in their district in the handling of the present harvest... I would not feel justified in as- saying there r^a.B a labor shortage in view of the fact that any day betv.een 7 <&. ra. and 5 p. m, we have from t®o to four thoiasand men passing through our rooms investigating what \ve have to offer in the line of v7ork. As a matter of fact, men seem to he as plentiful as they were at any time during last 'winter." 4. the Official Bulletin, (Washington, :u. C.) Monday July 16, reported: "No' Acute Shortage of Farm Labor Reported from the West." On July 6, the Bureau of Immigration had telegraphed to the State Commissioners in the Middle Western States asking as to the supply of agricultural labor. The Department la,ter reported: "Re- plies have been received from practically all of the States and in- dicate that the harvest help Bituatlon lin.s been carefully and ef- ficiently handled by Mr. E3.rl:.iur:::;, i:a coop ax 3:^:, on r^rith the State of- ficials." The replies came f..'''~c;i •niTtvi-ox-B ■,uid U;-,.ii/alr.'aiouers of La- bor in various states, (Oklahoma, Haiisas, Missouri,, Nebraska, lovira, and North Dakota.) They refuted the stories of a general shortage of farm labor in the states reporting. 5. From the F&,xgo, North Dakota, "Daily Courier-Newsl' August 5: "Enough men are being found t@ fill the present demands for harvest help, Fargo Emplo^^ent agency men reported yesterday. The shortage of men' felt the first of the week has disappeared, they say... "We have had enough men to fill every oall we-ve had where $3 was offered," the manager of one office said last night. 'We have some calls for some big farmers in the country "ho are offerinp^' less than that amount we haven't been abL: to fill'". 6. Ethelbert Stewart, Acting Coffi.missioner of Labor Statistics, Department of Labor, in a letter dated Jime 5, 1917, spceaking of industrial labor throughout the country said; "Of course, there -3« might be local scarcity, and of course, again, there might be scarcity withovit this Bures-u having the definite evidence of the fact, but so far as any information that r:e have or that has been obtained by our agents, it exists only in newspaper headlines,"' 7, As to the farm labor of the present season, under date of August 4, W.J.Spillman, Chief, Office of Farm Management, Depart- ment of Agriculture, writes: "As yet we have no definite report that gives us anything like a statistical review of the matter, but we have correspondence which indicates that there has been a very large use of inexperienced farm help this year, more espec- ially in simple tasks such s.3 harvesting wheat, picking up pota- toes, gathering tomatoes, peaches and the like, but there has al- so been a large use of inexperienced rc:'?.j\ for regula-r farm. "-vork. In many cases these men have made good, although they are of course not as satisfactory as experienced men," 8, Director Charles B, Barnes, Bureau of Em:ployment, State Industric>,l Commission, writes from New York, August 13: "It is undoubtedly true that there is at the present time no scarcity of labor in this country, \inless it would be in the line of common labor which is required to do heavy, hot and dirty work.,.. This country will require an extensive system of public employment of- fices to enable the proper shifting of labor to be carried on be- tween one section and another,, and also' to give accurate informatio as to where labor can be found, which -.vill be willing to take up new trades and be retrained for special, wcrk*.,...,. This Bureau has found i some instances where there have b.e.en requests made for the extensio -4- of hours of women that the plent was not paying sufficient wages tc bring the desired help. Tho farm situation in some sections of Nem York State was, and will be for the next two or three weeks, rathei acute. This is largely because the farmer feels he cannot afford t pay the wages demanded by ':hoGe who are willing to take up farm work. Our Bureau never has difficulty in securing a man to take a farm job, provided the wages are considerably above what farmers have heretofore been paying. This matter of the adjustment of farm wages to meet the competition of the high wages paid to men in factories and industrial plants is a serious one. It does not, how ever, mean that there is a scarcity of men to do farm work. It simply m.eans that they refuse to do it at the wages offered." 9, Not one case of actuaJ. scarcity of labor in organized occupations has been brought to the attention of any trade union official in the American Federation of Labor Building. 10. Applications have been made to the Committee on Labor, Advisory Commission, Council of National Defense, for the exten- sion of the hours of women in the day's work and the lowering of the legal age for the employment of young persons, with the ex- pectation that the Council of National Defense, as so empowered by the President, might in these respects modify existing statut- es. The persons making these applications were informed that they would be obliged to prove scarcity of women's and children's la- bor in an entire occupation, not only in a single locality but in a region within a reasonable traveling distance of the place viThere a shortage should be alleged to exist. Furthermore, an -5- investigation would be made as to the wages paid and as to whether somewhat higher wages might not bring the desired help. As yet no applicants for modification of the labor laws have proved their case, 11. The editors of labor papers in fifty of the leading cit- ies of the country have recently been asked to send in the tes- timony of the columns of the "situation want ads" of the leading daily papers of their localities relative to the labor supply. From the ret\i'rns in response to this inquiry it is evident that while on the average not so many of these "want ads" are now published as when immigration choked the channels of labor supply, there are every v-reek in the large cities thousands of persons seeking situationss through this method. 12. What is called "a very high labor turnover" may be the cause of much of the talk of "shortage of labor" among a certain class of employers. In one plant, to keep up a force of 200 men not less than 4,000 men were taken on during thirteen months, ac- cording to an investigator recently reporting to the Department of Labor. 13. From labor editors a common report to this office is in effect: "There is no shortage of Is.bor where living vrages are paid'!',' 14. From New Orleans a letter says: "There are at present hundreds of able-bodied negro men idle in the streets of New Orleans throiagh no fault of their own." -6- From Newark, New Jersey: "Come and look at the public squares of this city and see the benches occupied by hundreds of men T'ho might be at work." One of the trade unions whose members vjork on articles of luxury \7ritea: "Upon your request, we can provide thousands of men able to do useful ^"ork." 15. The New York State Department of Labor reports for June, 1917, a decrease of 50 per cent in the estimated cost of work in the building trades as compared with June, 1916. For May, 1917, th« decrease was 67 per cent less than May, 1916. Here, as in the lar§ cities of the country generally, is indicated the release of thou- sands of men for work of another character. 16. The comprehensive fact that among our population of more than 100,000,000 a considerable percentage of the wage-workers are at any given time unemployed while there exists somevv-here an un- supplied demand for labor of one kind or another, with no ade- quate public attempt at solution of this problem, was the reason for conferences held within the last month in the Assemb3.y Room of the Labor Committee, Advisory Comnission, They were s,ttended by representatives of the various Governmert-al departments, the trade unions and the general public. Further conferences of spec- ial committees were held under the direction of Chairma^n Samuel Gorapers, of the Labor Committee, and Secretary of Labor William B, Wilson. To meet the emergency needs of the departments and contractors in the great pre pF^rat ions for the war, it was decided to establish a War Labor Service Board. -7- 17. From the office of the Secretary of Labor has been is- sued a plan for a SA/stem of employment agencies in ?/hich Federal, State and Municipal offices will work in cooperation. Numerous letters and various plans, sent to the Committee on Labor, may be discussed at a national conference to be called by the Secretary of Labo.r > The foregoing statement, the sketchiness and inadequacy of which the writer recognizes, indicates the extremely unsatisfac- tory situation in the United States with regard to the duty of public management in assisting in bringing together the worker and the job. Enough, hovjever, is shown to conclude that the wastage of the time and money of the wage-working class v«hile seeking employment is s-ppalling, '::aile ulie neglect of the needs of the employing ola,ss when wanting laborers le a striking ex- ample of social inefficiency, August 15, 1917, APPENDIX #4 COPIES OF TELEGRAMS August 18, 1917. Dr. Robert Magi 11, Chairman Canadian Grain Supervisors Winnipeg, Canada. Unitee States Food Administration Committee on Prices will meet next week to determine equitable price for wheac 1S17 crop. What price and .guarantee if any has been fixed for Canadian v^fheat and at what price is government purchasing wheat. Would appreciate any information you can send "..i. Garfield Chairn.an Committee on Prices August 30, 1917. H. A, Garfield United States Food Administration Washington, D, C . Eoard fixed twentieth July maximum price two forty basis Number One Northern at Ft YJilliam covering balance old crop. Seventeenth August converted two forty into fixed price until end August 1917. Government now buying. Wheat Export Company buying at market. Further steps postponed pending action your Committee Board of Grain Supervisors for Canada Questions by Mr. Sullivan Let a table be conetructed showing the price of wheat at each of the terminal points named Monday by Mr. Barnes (namely Chicago, St. Louis, Omaha, Kansas City, Minneapolis and Duluth) for each month, beginning August 1, 1914 and ending August 1, 1917. Secondly, give the general average of the price of wheat at Chicago for each month and for each year and for the three years mentioned. Another table showing the percentage of the increase above the general average for the three years, beginning at the 5(p point nearest that general average, advancing by 50 steps up to $2,25 per bushel. Another table stating what would be the retailer's price for flour as based on the methods inscribed by Mr. Barnes, (indicating the probable relation between a given price 6f wheat and the corresponding retail price of flour) beginning with wheat at the general average for three years Ojad advancing by 50 steps to S2. 25 per bushel. APPENDIX #5 United States- Department of Agriculture Bureau of Crop Estimates. Wages Farm Labor, by day other than harvest, without board. United States lorth Central States East North Gfentral States West March 1, 1917 liarch 1, 1916 1/iarch. 1, 1915 |1.63 : ^1,47 : |1.45 1.93 : 1.72 i 1.71 2.08 : 1.93 \ 1.80 Rate by Month, without board. United States North Central States East North Central States West Llarch 1, 1917 lilarch 1, 1916 March 1, 1915 139.88 33.55 37.13 Memorandum: The above figures were telephoned to Mr. Garfield's Secretary this afternoon, and are mailed herewith by telephone request. ( Signed) .. Nat C. Murray Assistant Chief of Bureau. August 22, 1917 APPENDIX #7 A Chart and statistics showing relative changes in prices of cotton, bituminous coal, copper, steel and wheat bdfore the Wa: (1911-13) and thence to date* Departlft»nt of Labor - Price Statistics Division a Chart showing Relative prices monthly from August 1, 1914 to date, (l)cOotton (upland) (3) Bituminous Coal (run of mine, or any standard grade, if pos- sible at mine f»&*D« Ohio mines) (3) Copper (pig) (4) Steel billets (5) Steel sheets (6) Wheat No. 2 hard at Chicago The average for 1911-13 as base — 100 Appendix #7A Statement ofo Delegation from North Dakota. Washington, D, C, August 22, 1917 To The Garfield Committee, Washington, D. C, Gentlemen :- The undersigned Committee, representing farmers and busines interests of North Dakota, have traveled many hundreds miles for the purpose of appearing before your Committee in order that we might sho" you the real position of our producers of spring wheat, their attitude toward the Government in this great crisis, and to present our '.;••• <• thoughts and ideas with relation to the pride of practically the only commodity we raise for sale. Being unable to get a hearing before your Committee, we desire to express our ideas in v^riting in order that they may be thoroughly considered by each member of your Committee. When we heard you were to fix an arbitrary price we were naturally interested and especially when Mr Hoover's statement was to the effect that the price of wheat was to be lowered in order to maintain the present schedule of wages. We were willing, as we always have been, to accept the price made by supply and demand but Mr Hoover's statement demoralized our market, for many elevator men will not purchase our viheat at all on accovmt of the great hazard by the possibility of an arbitrary price being too low and others who are willing to buy insist on a margin of from 50 to 75 cents be- tween the price at leading station and the terminal, which*; of course, would entail a loss of many millions of dollars to the farmers. In response to the request of our Government and special efforts by the President of our Agricultural College the.far&er:5 - were induced to increase their acreage 1,200,000 acres over 1916, thereby titilizing the land they had intended to summer fallow. Much of the flax produced in the United States is raised in North Dakota. Many farmers in the Western part of the State planted their flax ground to wheat on account of the above request , The result is what flax they did plant is a fair crop, but the wheat in this jlooaliitiy is very poor and flax is now $3.46 per bushel for delivery in Spp- tember^ October, and November. Consequently, they are disappointed for they planted the wheat and cultivated their ground at a greater expense on account of the high price of seed^ feed, extra horses, machinery, labor, board, twine and threshing, which we believe is fair proof of their desire to be patriotic' The wheat crop of the United States according to the Government report is 658,000,000 bushels. About one-third of the same is raised in the Northern spring wheatt belt. Much of the wheat in the winter wheat belt having been marketed at the high price leaves practically only the spring wheat to be affected by an arbitrary price .>so far as the 1917 crop is -2- Oonoemed. In view of the fact that the United States raised nea.vl dOTible as much o^ts and practically five times as much corn as whca and the further fact that corn, pork.beef and practically all fooc. stuffs as well as fuel have increased in value proportionately more thah wheat, and the further fact that a dollar's worth of wheat has more Dtatriseikt value than a dollar's worth of any other food product, and further that it takes only about 3 of 3-1/2 cents per capita per day for bread, with wheat at $3.00 per bushel, it seems to our Committee that you should fix the price at least as high., as the price determined by supply and demand the day Mr Hoover made his statement. I f Mr Hoover is correct in his statement that there is a shortage of 400,000,000 bushels of wheat to furnish bread and seed for the Allies, supply and demand we believe would make the price of wheat $5.00 per bushel before January 1st. It will be three months before corn is fit to feeld. With corn at the present cash price of $2.28 per bushel much wheat is bound to be fed unless the price is kept up, for the Agricultural Department claims that 30 pounds of corn is only equal to 12 pounds of wheat as food for stock and poultry. We assure the Government of the loyalty of North:.Dakota people, and we will furnish our share of the products, funds and men to carry the present war to completion, but request in return fair and equitable treatment. The wheat grower has not made his money raising wheat. The prosperous farmers in our sec- tion have mad© a large portion of their money out of the rise in value of land. Many farmers in every exclusive grain growing country go broke annually. The hazard is greater than in any other line of business. Hail-> frosts, hot winds, drought, rain, rust, chinch bugs and grasshoppers make it so. The farmer and his wife put in more hours than any other class of labor and receive less wages per hour than any other class. If you lower the price it means less production and greater consumption. Wheat is -,?orth 5 cents per pound for feed to produce pork, poultry and eggs, and muct of it will be used for that purpose if you should lower the price, for it is natural for farmers to feed the cheaper product. When Canada commandeered wheat they placed a price 3 cents above the price mads by supply and demand. The Commission man and millers will not suffer as their commission has been raised from 100 to 200 ^ex cent and is now in effect, and we trust you will not discriminate or be unfair to the farmer who has only the one crop (Spring wheat) to sell. If the price of corn, oats, potatoes, beef, poultry and other foods already established by supply and demand has been re- duced by an arbitrary price during the marketing season of 1917 and you should now reduce the price of our wheat proportionately we would not complain, even though Government statistics show that wheat is the only crop that is materially short, and the nutriment value of one dollar's woribh of wheat is greater than that of one dollar's worth of any other commodity. -3- We herewith submit schedule of cost pf production whiuh if compared with Government estimates vjhen you consider the extra. high cost of seed, labor, machinery, etc., for this year will be fo\and quite favorable* We suggest and urge that the same be ex- amined by experts familiar with spring wheat growing during 1917. If you consider $1200 too much salary: for the farmer and hie wife when boarding themselves, except the use of cow and their garden, deduct any amovmt you deem fair and we believe you will still find that under present prices for everything the farmer uses he is still entitled to the price fixed by supply and demand before Mr Hoover issued his statement* Schedule of cost of farming one hundred and sixty acres . Value of farm, $50 per acre • v $8,000.00 Including house $600, out -'bui 1 dings $800 Five horses 1,000.00 Harness 100.00 Wagons and machinery 900.00 Cow and chickens 125=00 Total - 1 $10,135.GU Interest at 5^ $607.50 Taxes on land, machinery and stock --- _____ 50.00 Insurance (hail and fire)--------------- 40-00 Repairs and depreciation, buildings ------^_-_ 75.00 Risk, life of live stock 35.00 Depreciation on horses and machinery (l5fo on $1200)- -- 315^00 Seeding 100 acres wheat @ $4 per acre ------ - 400.00 (much of the extra acreage cost more) Seeding 35 acrea oats ---------_-_--__-- 70.00 (25 acres for pasture, hay, building spot and harnyard) Twine, 135 acres at $0^'30 per acre ^40 -50 Help, one roan, one month in spring, wages and board - -- 60.00 Help, one man in fall, wages and board --------- 75.00 Thrashing 135 acres, at $1,50 per acre --^~~^---- 202.50 Salary and ^oard for farmer and wife one year - - - - -> ^ 1200.00 Total $3180.50 Respectfully submitted, (Signed) Q. J . Barnes J. Nelson Kell^ Chairman urandJi!"orks". Grand Forks. Nathan Uphan, Drayton Clay Lanman, Larimore J. D. Bacon, Grand Forks. Aubrey Lawrence, Fargo J. G, Browh, Ambden G> H. Garnett, S t. Thomas. COMMITTEE. MEMORANDUM FROM JUDGE LINDLEY August SS, 1917. Dr. H. A. Garfield, United States Food Administration. My dear Dr. Garfield:- In an informal conservation the other even- ing! was asked by you as to whether the United States Food Administrator would have the au-ohority under the Food Control Bill to purchase wheat, and sell it to the consumer at less than cost. For example if the Foot Administrator should purchase wheat at !|3.00 per bushel, is he authorized to sell the same wheat at $1^50 per tushel to the public, thus in- volving the Government in a loss of fifty cents a bushel? My response to you was that the Food Ad- ministrator would not have such power. You have asked that I confirm this by written memorandxan to be presented to the Committee of which you are Chairman, that it may be made part of the record of your proceedings. It affords me great pleasure to comply with your request. First section 11 of the Food Control Act authorizes the President to purchase and sell wheat and other commodities for'' cash at "reasonable prices". Your Committee has been asked to determine what is a "fair price" to be paid for wheat. I take it that the conclusion of your Committee would establish a "reasonable price". Thus there is estab- lished a "reasonable price" for both purchase and sale. A sale price fifty cents below the purchase price would tlsgre- fore not be reasonable. If $1.50 is reasonable Ss.OO is not, and vice versa. Of course it will be understood that the conclusion here stated would not inhibit the Government from selling wheat to the public where by reason of over pro- duction or market conditions the price of wheat should fall below the price paid for it. The action of the Government in selling wJieat for less than cost might have a tendency itself to lower the market price. My response to your (2) Dr. Garfield. inquiry is predicated on the assumption of a continuing stablized purchase price, and a sale by the Government at a continuous loss, SECOND If the "fair price" should, by way of illustration, be established for Government purchases at $2,00 per bueheli a policy which permits the Government to purchase at $2.00 and sell at $1.50 to consumers would re- sult in stifling competition and putting private dealers in wheat out of business. They could not afford to buy wheat at $2.00 and sell at $1.50. Governmental power with its large financing machinery should not be used to compete with private business. This is not a proper Governmental function. THIRD The $150,000,000 appropriated for the pur- pose of carrying on the objects of the act is intended as a "revolving fund". This fund would cease to exist in a short time if the Government sold its purchases at a loss. FOURTH The question submitted involves a question ' of Governmental policy, as to whether or not funds raised by taxation should be used to ameliorate the condition of the poorer classes. This is a question which may alone be determined by the Congress of the United States. I do not feel called upon to discuss this question of policy. History is replete with instances where it has been given practical test. Debates in- Congress on a proposal to adopt the "Bread and Circus" policy of ancient nations would undoubtedly furnish the public with sufficient data to enable it to form an intelligent opinion as to its wholesomeness and advisability, and as in my judgment Congress may ^lone determine this question it is clearly beyond the powers of the United States Food Admin- istrator. While the policy of the Food Administration in dealing with wheat purchases has not as yet been definite- ly settled and I am not in a position to state it the follow- ing plan is tentatively under consideration: 1. Purchases will be made through the Food Administration Grain Corporation, As the regulations of the Food Administrator foverning the milling trade may result in orcing accumulations in elefators or storage warehouses pending the equitable distribution and movement, the Grain Cor-Doratinn will he (3) Dr. Garfield. called upon to guarantee:, the miller and elevator against loss so arising. As consideration for this guarantee and to protect the Government against the loss the millers will pay to the Grain Corpor- ation a small per cent in addition to the cost price. This would apply to all wheat purchased by the miller from all sources of supply. 2. Sales to the Allies and Neutrals will be at such profit as will fairly cover the expense of operating the Grain Corporation, 3, Sales to the Army and Navy would probably be at cost . Please explain to your Committee that this whole question of dealing with wheat and flour is still under discussion and nothing has thus far been definitely settled. These questions of policy are not strictly within the function of the Law Department. Sincerely yours, (Signed) Curtis H. Lindley, Chief Counsel, United States Food Administration. BIRMINGHAM, AU. NEW ORLEANS, LA. Carpenters $ .45 Carpenters $ .50, Plumbers .75 Plumbers .56^ .56t Electricians .50 Electricians painters .50 Painters .45 Plasterers .63i .63f -63i Plasterers .62^ Bricklayers .50 to Laborers ,35 Engineers Bricklayers .63| Sheet Metal Wkrs. ,50 Cement Finishers .50 Engineers .63i PALO ALTO (Santa Clara Co. , ) CAL. Sheet Metal Wkrs. .45 Roofers, Composition .45 Carpenters .68| " Slate & Tile .50 Electricians .75, Painters .63-1 ,87| .62| .87J BALTIMORE, MD. Plasterers Hod Carriers .56^ & Carpenters .50, .56^ Bricklayers Plumbers Cement Finishers .75, Electricians ,58, Cement Laborers .43-i Painters .43| .681 Engineers .75 Plasterers Sheet Metal Wkrs. .75 Bricklayers ,75 Cement Finishers .50 CHICAGO, ILL. Engineers .70 Sheet Metal Wkrs. .45 Carpenters .70 Roofers, Slate & Tils .62i Plumbers .75 Electrioidns .75 SPRINGFIELD, MASS, Painters .72i Plasterers .75, Carpenters .55 Laborers . 45 to .63^ Plumbers .50 Bricklayers . 75 Electricians ,57 Cement Finishers .731 Painters .50 Engineers .75 Plasterers .70 Sheet Metal Wkrs. .75 Laborers .45 Roofers, Composition .70 Bricklayers .70 " Slate & Tile. .73i Cement Finishers .70 Engineers .75 Sheet Metal Wkrs. : 546/11 Roofers, Slate & Tile .60 (1) WORCESTER,MASS. JERSEY CITY (Hudson Co.)N.J. Carpenters #.54 Carpenters 1.63 1, Plumbers .60 Plumbers .63 1 Electricians ,50 Electricians .70 Painters .50 Painters ,63 1, Plasterers .65 Plasterers .73 Laborers .45 Laborers (cement) .40 Bricklayers .65 Cement Finishers .73 Cement Finishers .65 Engineers .93 1/ Engineers ,63 1/3 Sheet Metal Workers .63 1/ Sheet Metal Workers ,50 Roofers with latter. BATTLE CREEK, MICH. Trenton, N, J, Carpenters .50 Carpenters .56 1/ Plumbers .56 1/3 Plumbers .63 1/ Electricians .65 Electricians .56 9/ Painters .60 Painters ,50 Laborers .37 1/3 Plasterers .65 Bricklayers .70 Laborers Bricklayers .45 .65 DETROIT, MTCH. Cement Finishers Sheet Metal Workers .65 • 50 Carpenters ,60 Plumbers .75 CINCINNATI, 0, Electricians .63 1/3 Painters .60 Carpenters .60 Plasterers .73 1/3 Plumbers .65 Laborers .50 Electricians .63 1/ Bricklayers .75 Painters .55 Cement Finishers .60 Plasterers .70 Engineers .70 Laborers .37 1/ Sheet Metal Wkrs. .60 Bricklayers .75 Roofers, Composition .65 Cement Finishers .55 " Slate A.Tile .60 Engineers Sheet Metal Workers .65 .53 1/ KANSAS CITY, MO. Roofers, Composition " Slate &. Tile .45 .60 Carpenters .65 Plimibers .75 Electricians .68 3/4 Painters .60 Plasterers .87 1/3 Laborers .43 1/3 Cement Finishers. 80& 1.00 Engineers .75 Sheet Metal Workers .63 1/3 Roofers, Composition .45 (2) OKLAHOMA CITY, OKLA , PluiTibers Electricians Painters Plasterers Laborers Bricklayers Cement Finishers Engineers |.60 .75 .50 .60 .87 1/2 .30.,35 &.40 .87 1/2 .75 .65 Sheet Metal Workers PHILADELPHIA, PA. .65 Carpenters .60 Plumbers .55 Electricians .55 Painters .50 Plasterers .68 Laborers .40 Bricklayers .70 Cement Finishers .55 Engineers ,72 Sheet Metal Workers .56 1/4 Roofers, Composition .50 n Slate & Tile .62 1/2 CHARLESTON, S. C. Carpenters .33 1/3 Pliimbers .40 Electricians .33 1/3 Painters .25 Plasterers .40 Laborers .16 2/3 Bricklayers .40 Sheet Metal Workers ,25 Roofers, Slate & Tile .40 HOUSTON, TEX. Carpenters ^G^ l/2 Plumbers • 75 Electricians .65 Painters ,60 Plasterers .87 1/2 Laborers .31 1/4 Bricklayers 1.00 Cement Finishers .75 Engineers •62 1/3 Sheet Metal Workers .75 FORT WORTH, TEX. Carpenters .67 1/2 Plumbers .81 1/4 ■ Electricians ,68 3/4 Painters -SB Plasterers •87 1/3 Bricklayers .87 1/2 Cement Finishers .62 1/2 Engineers .67 1/2 Sheet Metal Workers .68 3/4 DALLAS, TEX. Carpenters .60 Plumbers •'''S Electricians .70 Painters -60 Plasterers .75 Laborers -30 Bricklayers .87 1/2 Cement Finishers .62 1/2 Engineers .62 1/2 Sheet Metal Workers .68 1/4 Roofers «62 1/2 (3) PORTLAND, ORE. BRIDGEPORT, CONN. Carpenters $.62 1/2 Carpenters !|.60 Plumbers .75 Plumbers .62 1/2 Electricians .56 1/4 Electricians .54 6/11 Painters .56 1/4 Painters .50 Plasterers .75 Plasterers .70 Laborers .50 Bricklayers .70 Bricklayers .75 Cement Finishers .70 Cement Finishers .62 1/3 Engineers .63 1/3 Engineers .62 1/2 Sheet Metal Workers .62 1/3 Sheet Metal Workers . 65 "5/8 Roofers, Composition .50 DAYTON, OHIO TACOMA, WASH. Carpenters Plumbers .60 .63 1/3 Carpenters .62 1/2 Electricians .50 Plumbers .75 Painters .45 Electricians .62 1/2 Plasterers .68 3/4 Painters .56 1/4 Laborers . 45 & .50 Plasterers .75 Bricklayers .75 Laborers .37 1/2 to .62 1/2 Engineers .62 1/3 Cement Finishe: rs .62 1/2 Sheet Metal Workers .45 Engineers .75 Sheet Metal Wo: rkers .68 3/4 DAVENPORT, lA. WASHINGTON, D. C. Carpenters Plumbers .63 1/3 .60 Carpenters .62 1/2 Electricians .63 1/3 Plumbers .62 1/2 Painters .55 Electricians .60 Plasterers .75 Painters .56 1/4 Laborers .33 1/3 Plasterers .70 Bricklayers .75 Sheet Metal Workers .56 1/4 Cement Finishers .55 Bricklayers .75 Engineers Sheet Metal Workers .63 1/3 .55 AUGUSTA, GA. Roofers .50 Carpenters .40 TOLEDO, OHIO Plumbers .56 Electricians .40 Carpenters .55 Painters .45 Electricians .63 1/2 Plasterers .50 Plasterers .75 Bricklayers .50 Bricklayers Engineers Sheet Metal Workers .70 .65 .50 (4) ANNISTON, ALA. ('See Birmingham Scale) MOBILE, ALA, Carpenters t.43 3/4 Plumbers .56 1/4 Painters .40 5/8 Bricklayers .62 1/2 MACON, GA. Carpenters .35 & ,40 Plumbers .62 1/2 Electricians .50 Painters ,35 Plasterers .45 Bricklayers .45 & ,50 Sheet Metal Wkrs, ,50 SAVANNAH, GA, t Carpenters ,50 & .62 1/2 Plumbers .62 1/2 Painters ,50 Bricklayers ,62 1/2 LEAVENWORTH, KAS. Carpenters .55 Pliambers r62 1/2 Painters ,45 Plasterers ,62 1/2 Bricklayers .75 SPRINGFIELD, ILL, Caxpenters ,55 Plumbers ,'66 $/A Electricians ,55 Painters .50 Plasterers .75 Bricklayers *l^ /. Cement Finishers ,56 1/4 Sheet Metal Workers .55 NEWAM, N. J. Carpenters 0,62 l/2 Piumbers .68 3/4 Eljectricians ,68 3/4 Pe^inters .60 Laborers .37 1/2 Engineers ,75 S]:^eet Metal Workers .62 1/2 Roofers, Composition .56 l/4 " Slate & Tile .62 l/2 (5) Controlling Factors. In determining the price to be paid by the Govern- ment for 1917 wheat crop overshadowing all other fact- ors is the present actual crisis in our wheat supply. In view of this crisis the price must be such as will: 1. Primarily a, Compel substitution b. Penalize waste 2, Secondarily a. Avoid penalizing producers b. Avoid sectional advantage Questions which should not be considered as factors 1, Cost to producers. 2. Cost to consumers, 3. Income of producers. 4, Income of consumers. August 24, 1917. Submitted by J, W. Shorthill. AFFmLlX #11. Augast,24, 1917 Dr. H. J. 7/aters, Price--Fixing Committee, Office of Food Administration, Washington, D, C, Dear Dr. Waters: In compliance with your oral request, I take pleasnxQ in. agLyaeing you that the estimates of this Bm-eau with respect to the production of the laading ccraul crops in tl-.is country, and for potatoes, arc as follows All Whoc^t Produc tion: Thj Aug^ast 1, 1917, ostimata is for 653 million bushels. This is the smallest produot- (lO-yr, average ion since 1911. when 521 million hushels was pro--^ prodiiction of all wheat duced. The largest total production of record for 728 million hushels) the United States is 1,026 million bushels, in 1915 Winter llTheat Acreage : The area sown to winter wheat in the autumi of 1916 for the 1917 crop was estimated at^ 40 million acres^ Due to extreme winter conditiojas this acreage was reduced to 27,653,000 to be harves ed this ye^r, showing ar; abandonment of nearly 1^-1, million acres, or more than 30^^ which is the lacgei of record. The average .abandonment for the past, 10 years is about Sfo. S-pring: Wheat Acreage : The area sown to spring wheat in 1917 in the United States is estimated at about 19 millii acres. The acreage abandoned is not estimated by this Department, hut owing to drouth in the principj spring wheat Statas it is known to be considerable. The reduction in acreage from this and other c^'Uses- is reflected in the estimated yield per acre, which on August 1 was 12,4 bushels, as compared with 18,3 bushels in 1915. Com Production : The August 1 estimate indicates a total pro- duction of corn in the United States of 5,191 millic bushels, which is the largest ever produced, the near;ist approach to it being 3,135 million bushels in 1^12. The 10-year average (1906 to 1916, inclus: is 2,740 million bushels, Oats Production: The August 1 forecast is for a crop of 1,455 million bushels, which was exceeded only by the buTiiper crop of 1,549 million bushels in 1915. The' 10- year av3rj,ge is 1,037 million bushels ^ -2- R ye Production : The August 1 estimate indicates a total yield of 47,400,000 bushels, which is the largest ever produced in the United States excet)t the bumper crop of 54 million bushels in 1915. The IQryear average production is 38,221,000 bushels. ^ §rle^ Production : The August 1 forecast for barlej is 203 million bushels, which has been exceeded twice in the past ten years, 224 million bushels having been pro- duced in 1912 and 229 million bushels in 1915* The 10-year average is 183 million bushels. Potato P]^eduction : The August 1 forecast indicates a total production of 467 million bushels, which is by far the largest crop ever produced in the United States. The crop in 1916 was 285 million bushels and the 10-year average is 344 million bushels. If 1 can be of further assistance to you, please advise me. Very truly yours, (Signed) Leon M. Estabrook. Chief of Bureau COPY APPENDIX -Is. DEPAF^TMENT OF AGRICULTURE Office of the Secretary, AV4.- • ^ ^ ^ Washington, D. 0. Office of Fai^m Management. August 34, 1917. Dr. H. J. Waters, Dr. E. F, Ladd, Subcommittee of the Price Fixing Committeei Food Control, Washington. Gentlemen: I am in receipt of your request for information as to what is the average labor income of the farm family of the Unite. Statesand what is the average yearly wage of the farm hands of the United States, and in reply will say that the average labor income, which represents what the farmer gets for his labor and managerial ability after allowing 5 per cent interest on his in- vestment, was shown to be by an extensive investigation made by this office $318.33 for 13 months. The average labor income of 15,000 selected farmers, which were much above the average for the country in their earn- ing capacity, was $433. At the time this investigation was made the average farm hand was receiving about $35 per month, or $300 per year. The total receipts of the average farm family, after de- ducting the expenses of conducting the business, was 1640.40. Of this amoiint, interest on the investment amounted to $333.18, leaving as a labor income the figure I have just given you of $318.33. This includes the services of his wife and children, as well as himself. This also includes what he received towards his living from the farm and, therefore, represents the total labpT income of the farm family. Very truly yours, ( Signed) W, J. Spillman. WJS-F Chief. APPENDIX # 12 - A Statement issued t« the Press, August 24th. When announcement is made of a reasonable price for the 1917 No. 1 Northern Spring -wheat. The Food Administration vifill at the same time state the basis on vvhich the Grain Corpora- tion will buy the different classes and grades of vvheat in the principal grain markets. The expenses of the Grain Corporation will be met by volxmtary fees paid by the millers and the export buyers, and will not be deducted from the price fixed. The Food Administration, in co-operation with the Agricultural Department, is providing for the establishment of suitable stocks of seed wheat which it proposes to sell to the farmer without any profit . PPENDIX #13 PRICE' OF CASH WHEAT (Mean of high and low for month) Monti: I No. 3. Hard ATo . 2 North en ol 1 Minneap Chicago St » Louis Kansas City is Aug. 1914 f, 1.004 1 .967 $ .929 $ 1.062 Sept . II 1.117 1.110 1.060 1.135 Oct . 11 1.091 1.077 1.023 1.073 Nov. ^ II 1.141 1.125 1.080 1.133 Dec. n 1.814 1.205 1.155 1.185 Jan. 1915 1.403 1.393 1.340 1.346 Feb. II 1.570 li565 1.515 1.458 Mar. n 1.513 1.497 1.473 1.418 Apr. It 1.590 1.575 1.530 V 1.537 May It 1.503 1.530 1.480 1.527 June It 1.367 1 . 290 1.225 1.264 July n 1.249 1.257 1.310 1.365 Aug I It 1.155 1 . 260 i 1;245 1.229 Sept t II It 083 1.110 ! 1.086 ■ .943 Oct. IT 1.097 i 1 .105 : 1.075 .984 Nov. n 1.053 1 . 057 ! 1.045 .983 Dec. II 1.210 i 1.133 \ 1.095 1.099 Jan. 1916 1.269 1 1.260 1.220 i 1.253 Feb. II 1.207 1.203 1.170 [ ! 1.189 Mar. II 1.107 1.117 1.065 i 1.116 Apr. II 1.179 i 1.126 1.145 ! 1.193 May It 1.120 1.120 1.085 1.181 June It 1.027 1 .077 1 1,017 I lv086 July II 1 1.175 1.163 1 .103- i 1.158 Aug. It i 1.429 1.435 1.385 1.446 Sept. n It 1.555 1 _aQA_ 1.580 1.525 _JL.312 iBrti Hi - , -. : i .^ Li..r i^..;!^^, • ■■ i ::' ""■ '■ d^ ..'. ^ g t* •g^ ^ o O t+ (D c* H 8o,M- o o o i Vi) O* P t) i --. JB * i (D ti H W ►1 W ■^ 1 *^ . t+ c+ s Of flhea wheat) IS f M c^ O OQ o o o — o o o V>4 to o o o OA en • o o o O OQ O *~>J o en o a^ "b o o o o o Zj~[ o en o cno 00 o o o o APPENDIX #14. :Price of wheat ' Percentage increase : :per bushel above average price : • . ."for.'hlnT'pe^. vppcp q • : $],,50 0.5 per cent : : 1,55 3.8 ; : 1.60 7.2 : : 1.65 10,5 : 1.70 13.8 : : 1.7 5 17 . 2 : 5 1.80 20, 5 1.85 23,9 : : 1,90 27,2 ; ; 1.95 30,5 : 2.00 33,9 : 2.05 37 = 2 : : 2.10 40.6 : 2,15 43.9 2 . 20 47 . 3 : : 2.25 50.6 : Appendex #|5. The per barrel of calculated on Committee, as 90 per cent, o patent, will, family patent the magnitude following table shows the probable retail price family patent flour at different wheat prices the basis suggested by Mr. Barnes to the Price per attached memorandum. The probable prices of r bakers' patent, or 100 per cent, or export of course, bear fixed relation to the probable prices here given, that relation being of about or sort indicated by the other figures. RELATIVE PRICES OF WHEAT AND FLOUR :Price of wheat : Retail price per bbl : per bushel. : 75^ patent flour, figured on Mr. Barnes' data. : ll.OO : |6.00 : 1.05 6.30 : 1 . 10 : 6.60 : 1,15 6.90 l.EO ; 7.20 : 1.25 7.50 : . 1.30 7.80 1.35 8.10 : 1.40 8.40 : 1.45 : 8.70 : 1.50 9.00 : 1,55 9.30 : 1.60 9.60 1.55 : 9.90 1.70 10.20 : 1.75 10.50 : 1.80 10.80 : 1.85 ; 11.10 : 1.90 11.40 : 1.95 11.70 : 2.00 : 12.00 : 2.05 : 12.30 2 . 10 : 12.60 2.15 : 12.90 : 2.20 ; 13.20 : 2.25 : 13.50 APPENDIX #16 Submitted, by Frederick F. Ingram, Detroit, Liich. Dr. K. A. Garfield, Chairman, Committee on Prices. EXPLOITING THE FAPiJER. In the days of the Country liiller when a grist mill was a common feature of the country-side and before the days of the Giant Roller Process Flour Mills and their mdllionaire owners, the farmer took his wheat to the mill and for each bushel got his grist of 50 pounds of flour and bi-products, leaving 10 pounds with the miller for toll. The farmer vrould get for his bushel (60 pounds) of vmeat 58 pounds of flour .10 " " bran 2 " " middlings Now if the farmer gets $3.00 per bushel for his wheat he v;ould get for one bushel of v/heat . 26-j pounds of flour no bran no middlings Under the old system he got 5/6 of the weight of his wheat bac in flour. and bi-products, now he gets less than half. He must now pay i*7.55 per hundred for flour ^3.20 " " t' bran $3.70 " " " fine middlings ^3.60 " " *' coarse middlings So his loss is 11-| pounds of flour <§ ^7.55 .86-8/10 10 " " bran ^ 2.20 .22 3 " " middlingf^ <§ 2.65 .05-3/10 His loss on a bushel of wheat expressed in money is |1.14 His loss on 1000 bushels of wheat expressed in pounds and money is Flour 11500 poimds or ^868. 25 Bran ..1000 " " 220.00 Middlings 2000 " " 55.00 Farmers total loss on 1000 bushels wheat is $1141.25 If the farmer was now under the old system, for a bushel of wheat J after paying the miller for grinding it he would have left 38 pounds of flour ^ $7.55 $2.87 10 " " bran <£ 2.20 .22 2 " " middlings <& 2.65 .05-3/10 Total,- $3.14 He actually gets now only 2.00 He and other consumers nov/ lose .on every bushel $1.14 Who gets the $1.14? If we were now under the old system the farmer vjho raised 1000 bushels of v/heat and milled it would get back from the mill T.5- 10000 pounds of bran |320.00 2000 " " middlings 53.00 and have 11500 pounds of flour to sell, worth |868.,25 besides, and over and above what he does get under the ptesent system. He could feed the bran and middlings to his livestock and spen the $868.25 for more mill-feed and thus have $1141.25 worth of mill feed for his livestock. Because he gets none of this under the present system is one of the reasons why we a,t& short, both farmers and livestock, and must pay so much more for what we eat; In Collier's Weekly of August 11, 1917, the statement is made, "Last year the farmer sold his v^^eat at an average of |1,50 per ^i bushel." Wheat bread he says "Sells at 10 fr and Ufa pound, which is $20.00 a barrel for flour. $20.00 flour means nearly $4.25 a bushel for wheat, but the farmer got only $1.50. Where did the $2.75 go? Who was it thalp got nearly twice as much for doing nothing as the farmer got for raising the wheat?" APPENDIX #17. COPY Norfolk, Va., August 8, 1917 Honorable Mr Herbert Hoover, Food Administrator, Washington, D. C. Dear Sir: Received your first literature today. Read same. You are trying to do a good and great work, but there is something amiss, Our city is supposed to contain 100,000, nearly half negroes. The greater portion of these people both black and white, are laborers and petty paid clerks, shop girls and the like. You must do some- thing to help the masses if you help these ordinary 2/3 of 100,000 can't save what they don't get. Who has stale bread when flour is 90-95 for 12 pounds? Who has sour milk when milk is 18(p a quart-and poor milk 15(p quart? Who eats young meat, veal^ lamb, etc. when the commonest white pork is 28^ retail and the next best 30^, with a decent price of season- ing meat selling at any price the folk choose to charge? Who has fats to save? Who has fuel to save, common slab wood is $2,00 quarter cord, block wood |3.00, six inch blocks 5(p and the coal men in my town have cut out advertising the cost of coal since the government agreement on coal. Not a single dealer advertises the retail cost to consumer. Who can use perishable goods? They require seasoning. Wn.< can buy locally? My local dealers charge more than distant folk. The answer to these questions is this. Only those women who have considerable money have any of these things to save. This is true throughoi.it the country. Do you know 'jve are actually straving in a land of plenty when food is perishing in mid-ocean? Don't you think for a moment that there is a shortage everywhere you go there is plenty of every- thing. God has given an abundant harvest. The /trouble is with us. Our men are not patriotic . They preach Conservation and Canning to hide speculation. Is there a profit in canned food when as soon as a demand exists V7e are asked 10^ a. quart for a jar? There is no saving when the .final cost is so much. Think, ten cents for a quart jar. These are facts. I raised a fine garden; but my food bill has steadily increased. If I cook a cabbage out of the garden^ NL -3- the meat will make the pot cost twice as much as it did before i I had a garden, the speculator adds the cost 6f the gardens to his staples, thus he gets the savings. Examples, ';e had three really hot days, July 30, 31, Aug. '1, and the milk men came out with a loud howl that milk would be high until after the v/ar, heat had incapacitated them. Does war stop cows from giving milk? We have had a pleasant summer, plenty of rain, but ice has advanced in price. Is it water we need? Preach conservation to those who have something to conserve, but preach to us, the majority, how to get staple food with our small pittance. Think of a family of eight living on less than $15,00 a week. There are one thousand of them. We are starving in a everywhere, the storage houses raise chickens, corn is 7^ for away in this town in less than six darling babies because she land of plenty, there is plenty are filled with staples. We cannot one quart. Two children were given ten days. A Chicago mother gave awa^ could not feed them. Do not get offended. I do a thing you advise. There are simply want to thousands like Respectfully, show why me . I cannot (Sig.) Bessie B. Dixon, 1219 Gait Street, Norfolk, Va. P. S.- The more I ,\frite the more I feel. Mr Hoover you see the situation with the eyes of the men who are to fight this war- That paper of yours hit the nail on the head. The people, the common people, know there is plenty because they handle it and if some- thing is not done labor must either starve or revolutionize. These are not war prices. I paid fen cents for sugar long before war was declared. I am patriotic. I say to my people fight whether you get justice here or not. Fight for home. Lay aside petty troubles, sustaain' your reputation, but to be frank we had better take a, .plain example from Germany's food administration. Never antagonize your main dependence; that is these folk who must buy 4:8(p butter are the majority of the brawn of the country. What actual value is an honored statesman in the trench? None. We must have yoemen to fight. Wages have not increased in proportion to prices. Food is higher here than in warring nations. NL A BRIEF FOR THE CONSUMER ADDRESSED TO THE COMMITTEE ON PRICES FOR WHEAT OF THE FOOD ADMINISTRATION. On feehaXf of all who eat bread and use other vheat pyoductu, the American Home Economics Association begs to submit to the Committee on Prices the following considerations: A. " OUR DAILY BREAD." - 1. The Food Bill was passed in answer to the demands of the consxxralng public which includes all of the people whose interests are therefore paramount to those of any- smaller group within the nation. 2, The price of wheat is a matter that concerns all of the people since wheat products are the staff of, life in every Americai^ home and since they bear a direct relation to the supply and price of other foods. This higher cost strikes the people who already bear the greatest burden. They are the ones who can most effect- ually uphold Food Administration., and who will be most likely to support it.i It is comparatively easy for all other interests to be represented. The unorganized consumer, with the pcorss-^ clasei typified in the East Side, is looking to a beneficent administra- tion for its representation. 3, Bread is in particular the poor man's food. Any increase in its price" is equivalent to a reduction in wages and in American standards of living, and becomes a form of daily war tax that may lead to food riots and to labor troubles that would seriously handicap the nation at war. The declared policy of the nation in this war is to put the burden of its cost upon those who can best afford the pay. To increase the cost of bread is exactly to reverse this process and is likely to still further stir disaffection that is already beginning to be apparent. B. THE CONSUMER'S STANDPOINT . -1. The consumer urges that an equitable iJrioe be fixed which shall guarantee to the producer a price that will fully cover the costs of production Plu-s a fair profit, and yet bo such as to give if possible to the public in a "government fox the people", the five cent loaf" or a two pound loaf of bread for ten cents, - now o^Ay a msmory in many American cities because of the high prices of whea.t during the last few months. (a) A change of lOc a bushel in wheat adds 50c a barrel to the cost of flour. (b) Only the very efficient baker can furnish a pound loaf for five cents when wheat goes above $1.85, (c) An analysis of records of wheat prio®o' m the past shows that a market price of $>2,00 has lio* H©«=n Ljucted since the Civil War and that even the rising prices of the past three years of world war have not found wheat above $1,30^ except during the recent near-panic in wheat. G . FUTURE WHEAT CROPS , THE RECENT HIGH PRICES . AND THE GOVERN- MENT GUARANTEE . I. Reasons why the price to be fixed should not be based on the high prices of spring and sum:ner oi 1917, (a) There were factors lea.ding to the recent rise of wheat prices to points above |2.00, which were highly artificial and therefore prices determined by these factors should not be ele- ments in the determination of prices under other conditions, Thes temporary factors incl^lded, among others, an over-exportation of wheat by the United States leaving the country short for a few weeks; the Canadian vrheat, ordinarily a check on the market, was withdrawn arbitrarily by governmental action; and very little whea actually changed hands at the prices quoted because there was little to sell and millers would not buy at the prices named. Therefore this top notch price for wheat was more a fictitious than real market figure. Thus it Tjould seem to be manifestly unfair to base the price on factors that were so transitorj^ that they are already almost non-operative. 2, Reasons why price to be fixed should not be based on the IS.OO guarantee provided in the Food Bill for a specific crop. (a) With peace declared, or with the reserves in Australia, India, and Russia released, enough wheat would be placed on the market to supply western Europe and to make a large export by the United States unnecessary. (b) This would leave an export surplus in the United States that would gause demoralization of prices. (o) If the producer had to run the risks listed above, a high price for his next crop would be but a reasonable insurance to ask for. That risk has been assumed by the government's minimu guarantee of $2 ,.00 for the 1918 crop. This, in turn, automatical! eliminates risks and offers the producer a chance to give patri- otic service. He could lov^er prices to the consumers by tne margj the government guarantee will net him over and above his actual costs of production and fair profits. D, STORAGE AND THE PRICE OF WHEAT TO THE CONSUMER. A sliding scale of prices whereby the consumer might benefit- when costs are saved on deliveries made before storage charges of 2-1/20 a bushel per month have accumulated - if made regulatory would allow of an adjustment of prices within-a margin of 30c per bushel per year to the consumer. This would contribute some mea- sure of relief to the consumer who must pay all the bills of the -,3- whole process. E. TEMPORARY NATURE OF PRESENT PRODUCTION COSTS^._ ^ ^+-^- ^^?^ prices of agricultural machinery, binding twine, lertilizer, horse and man labor, are admitted; but Governmental Sgencies are at work under plans that provide for a reduction • Oj. these operating costs to a level covering necessarv costs of production, distribution, and fair profits and these efforts will get results by the time the crop under consideration is harvested. F . RELATI ONS OF THE PRICE OF WHEAT TO OTHER IFOOD. 1. Increased prices for wheat will reduce the acreage of feed grains. The resultant diminished acreage of corn may make the price for feeds even higher than it has been during the past year. It is already so high that dairy and poultry pro- ducers are killing off their animals, thereby creating a basis for further rises in the prices of meat and milk and making even more serious the problem of re-stocking Europe with dairy and meat animals after the vvar. A careful consideration will take into account these after-the-wax problems in determining a price for wheat that will be far -reaching in its results on the feeding of the world. G. WHEAT PRICE FIXING AS A PRECEDENT . Since ivheat is but the first food upon which a price ife to be set by the government, the principles upon which that price is determined will set a precedent for the future control of other necessities yome of which are being reduced by govern- ment action, as v;ith coal, to pre-war or cost of production level. This piece of work therefore offers a chance to estab- lish as that precedent a price which will be a square deal all around, namely, a price to the consumer that shall be a minimum based on necessary costs and fair profits on production and distribution with all speculation eliminated. If a precedent should be established involving a net pro- fit on wheat of from 35 to 100 per cent it will prove serious for the nation, - including the wheat grower whose expenses for agricultural materials and foods he does not produce will be proportionately raised, thereby neutralizing any advantage that might accrue from a "velvet" price for wheat. H. FAR-REACHING ECONOMI C AND SOCIAL RESULT S OF TI^ PRICE OF WHEA T. 1. High prices of bread - the poor man's food - strikes hardest the poorest classes, and becomes a terrific war tax on the masses of the population that aiJe least able to bear the burden. No sacrif icesmade by anyone in this war can equal those made by the p9qr man. The one-oent difference between a five and six cent loaf - significant in the aggregate - must be put somewhere e?i.se, be- cause it means e^lsewhere but little; on the poor man it looms disproportionately large. The -whole war looks to the future; the future is bound up in little children; the fundamental balanced diet for children of rich and poor alike - and most important for those who would be otherwise poorly nourished - is bread and milk, 2. The rise? t!!:xit have already occurred in the price of bread resulted in threatened food riots, strikes, and shortage in other foods (see above, F l) , thereby adding to the problems and substracting from the efficiency of the nation at. war. 3. A minimum price, covering costs of production, and a fair profit becomes therefore a matter of patriotism as well as of economics. 4. In these days of specialization in food production, food producers are no longer self-sufficient but are also consiomers of whatsoever they do not produce. Thus the wheat producer, if he exacts an unnecessarily high price for wheat, will thereby raise the costs of his other foods (as explained under F l) . 5. Therefore, an equitable decision regarding the price of wheat r- based on a conciliation between the interests of the producer, distributor, and ccncun:er •:- is CBP.e-ntial to the best interests of the greatest number, in whose behalf this memorandum is respectfully submitted. Appendix # 18 A August 37 . 1917. MEMORANDUM OF DELEGATION CALLING ON DR. GARFIELD IN BEHALF OF THE CONSUMERS' POINT OF VIEW AS TO THE PRICE OF WHEAT. Miss Abby L. Marlatt — Wisconsin. Director of Home Economics, University of Wisconsin^ Chief of Home Economics. Division of Food Conservation, U. S. Food Administration. Miss Edna White — Ohio. Director of Home Economics, University of Ohio, Chairman of Food Conservation, State of Ohio, Editor of Bulletins. Miss Frances Stern — Massachusetts. Formerly Industrial Health Inspector, Massachusetts State, Board of Labor and Industry, Co-Author: "Food for the Worker. " Isabel Bevier — Illinois. Director of Home Economics, University of Illinois, In charge of Food Conser- vation for Woman's Committee, Council of National Defense for Illinois, "Food Laboratory Manual," and "The House," Appendix # 18 A -3- Katherine Blount, Ph. D. Illinois. Assistant Professor of Food Chemistry, Universi-^y of Chicago, formerly Profeegor ^''assax College, Editor in Charge of ■"Emergenoy Food Lessons" for Office of Home Economics. Mary E. Sweeney — • Kentucky. Director of Home Economics, University of Kentucky, In charge of Extension Teaching of Home Economics for State of Kentucky. Editor of Food Bulletins. Mrs Miriam Loomis — Massachusetts. Formerly, Director of Home Economics, Laselle Seminary; Chairman, Home Committee, Women's City Club, Boston, Mass., Manager, Ludlow Hotel, Boston, Miss H, J, Patterson — t'ennaylvania. Acting Executive Secretary, Woman's Committee, Council of National Defense; Trustee of Wilson College, Pa.; formerly Secretary of National American Women's Suffrage Association, Pittsburg. Mrs Albert W. Smith, Ph. D. — New York. Cornell University. Now with U. S. States Relations Service. Active in cooperative efforts in behalf of a better distribution of foods. Author of articles in scientific and popular literature; Organizer of many Producers-Consumers Appendix # 18 A _3_ Agnes E. Harris — Florida. Director of Heme Economics, State College, Tallahassee, Florida; formerly, in Charge of Home Economics, Summer Session, Johns Hopkins University. Carrie A. Lyford — Illinois. Specialist in Home Economics, U. S. Bureau of Education: formerly. Director of Home Economics, Illinois Normal School. Miss Florence Ward -- Iowa. In Charge of Extension work for Women, Northern and Western States, U. S. Department of Agriculture. Florence Powderinaker — Maryland. Formerly of Board of Health Laboratories, Baltimore; now of office of Home Economics, Department of Agriculture. C. F. Langworthy — Vermont. Chief of Office of Home Economics, U. S. Department of Agriculture; i^uthor of Scientific and popular publications on food. Mrs Mary Hinman — Maryland. Author: "Practical Economics and Sanitary Cooking" and "The tl,500 Family" (in preparation), for many years editor of Journal of Home Economics; authority on diet of working people; diet for institutions. Appendix # 18 A -4- Marie Sayles — Massaohusetts. Massachusetts Agricultural College, Amherst, Mass, Director of Horna Economics for State of Massac aaeetts • Martha Van Renselaer — New York. Joint Director of Home Economics, New York State College 6f Agriculture, Cornell; Director of Home Economics Extension Work for New York State; Author of many bulletins on Home. Flora Rose — New York. Joint Director of Home Economics, Cornell^ Author of many popular food bulletins, such as "Milk a Cheap Food", "Choice of Food". Alice P, Norton — Illinois. Formerly, Director of Home Economics, University of Chicago; Director of Sci).ool of Domestic Science, Chatauqua, N, Y, } Editor of "Journal of Home Economics''; Author, "Food and Dietics" and of many bulletins and artxcles. Benajamin R, Andrews, Ph. D. -"- New Jersey. Assistant Professor of Household Economics, Teachers College, Columbia Universi''v;y; Author of "Eaucation for the Home, "Survey of Household Finance'' (bulletins), and editor of Lippincott's "Home Manual", series ox textbooks; "Specialist on Household Thrift", U, S, Department of Agriculture, Mrs Frank M. Roosing — Pennsylvania. National American Woman's Suffrage Association. bd ID CD, o fC- . e+ S IB w ci- O (B m ^. -J o o S o B O Eef-iise 4 rcr * 'D V/J O OQ Water in'' o I ui OQ Protein oa \3 ro o Fat -■J D VJ1 T> »n ^r> CarlDOliydrates VJ o I \o K o Ash MrJ CPl 9 P D -P" 0■^ o Calories IfV) lo it-*' a- 3 -?>. f I. O ■a. D'' 4=- 0^ ?^ V* oj i o M tv Be tail price o —J Cost 100 c&.lories in cents. APPEUtllX #20. AVERAGE WHOLESALE ACTUAL PRICES OF NO. 1 NORTHERN WHEAT. July, 1914 - .897 July, 1915 - 1.390 July, 1916 - 1.170 Average for three years - 1.153 Average monthly price first six months of 1917: Ja.nuary - 1.917 • February- 1.808 March ~ 1.984 April - 2.381 May - 3. 981 June - 3.694 Average 3.394 Average three- year period 1914, 1915 and 1916 - 1.153 Average first six months of 1917 - 2.294 Average - 1. 723 Highest average, July 1915 - 1.390 Highest average, May, 1917 - 3.961 Average - 3.185 Highest point for three- year period (Ju].y, 1915) - 1.390 Average first six months of 1917 - 3.294 Average 1.842 Average for three-year period - 1.153 Average for first six months of 1917 - 3,394 Average - 1.733 Average first five months of 1917: January - 1.917 February - 1.808 March - 1. 984 April - 3.381 May - 2.981 Average - 2.194 July, 1916, as compared with June, 1917: July, 1916 - 1.170 May, 1917 - 2.981 Average - 2.075 July, 1915, as compared with" June, 1917: July, 1915 - 1.390 June, 1917 - 2.684 Average - 2.037 -2- Average 1914, 1915, and 1916, as compared with May, 1917: Average 1914, 1915 and 1916 - 1.153 May, 1917 - 2.981 Ax'-erage - 2.066 May, 1917, as compared with June, 1917: May, 1917 - 2.981 June, 1917 - 2.684 Drop of - .297 Pre-war prices as compared with highest war prices: July, 1914 ^ .897 May, 1917 - 2.981 Average - 1.989 June, 1917, as compared with 3*-year period 1914, 1915 and 1916; Average for 1914, 1915 and 1916 - 1.153 June, 1917 - 2.694 Average - 1. 9,23 REPORT OF SUB-COMMITTEE ON THE INTANGIBLE FACTORS ENTERING INTO THE PRODUCTION OF WHEAT. August 24, 1917 Hon. H. A. Garfield, Chairman, Wheat Price Committee, Food Adrainiatration, Washington, D. C. Dear Sir: Your committee, appointed to consider the intangihle factors entering into the cost of the production of wheat, has consulted a number of the officers of the United States Depart- ment of Agriculture and secxared information from other reliable sources, and begs leave to submit the following report: The principal factors of this nature are: Crop rotation, Summer fallow. Abandonment of areas sown, , Insurance against hail, floods and cyclones. Loss after harvest through excessive rain, Loss from floods, droughts, insects and diseases, General overhead expense, such as upkeep of animals, machinery and buildings, Cost of raw materials. Rotation of Crops; Experience has shown that wheat cannot be grovm suc- cessfully on the same land year after year. It is necessary to pursue some sort of rotation in which during a part of a given cycle of years some crop shall be grown ■ which will be, in large measure, a preparation for the production of wheat. The crop used for this pxirpose as a rule yields little or no profit and in many instances is grown at a loss, except for the benefit it is to the wheat crop. Perhaps the most typical crop rotation in the States east of the Missouri River is corn, oats, wheat, clover and timothy. The two crops in this 5-year rotation which are expected to yield a profit are corn and wheat. Oats seldom pay expenses and is a crop used primarily to bridge over between the corn and the wheat crop. Both the clover and the tiaothy crops are produced at a loss, except as they affect the yield of corn and wheat. The cost, therefore, of growing wheat and corn is influenced materially by the lacl?: of a return on the land for three years out of five. Your Committee was not able to secure information. upon which to fease even an approximate estimate of the extent to which this factor affects the cost of wheat production. Summer Fallow ; In the important wheat states of Washington, Oregon, Idaho, Utah, Montana and Wyoming it is the practice to summer fallow from one- third to one-half of the land each year. In Western Kansas, Western Nebraska, Western Oklahoma, and a large share of Worth Dakota and South Dakota it is the practice to summer fallow once in five years. The summer fallow is for the three fold purpose of accumulating moisture, destroying weeds, and unlocking plant food. By these practices from one-fifth to one-half of the land remains idle each year, requiring an average of three diskings or harrowings; labor from which no return is secured, except as it influences the wheat crop of the next year. -3- Failates and Abandonments . All estimates of orop yields and costs of production are based on the acreage harvested and disregard the cost of the acre- age sown but not harvested. This abandonment in the average year, according to a statement of the Chief of the Bureau of Crop Estimates, is nine per cent for the United States. For the crop which we are called upon to appraise the loss was 12,500,000 acres of winter wheat, out of a total of 40,000,000 acres sown, or 31.3 per cent. It is estimated that more than 10 per cent of the spring wheat area sown was abandoned, making a total abandon- ment of 14,500,000 acres out of the total of 59,000,000 sown, or an abandonment of 24«Q per cent for the entire crop srown. The financial loss of the farmer of abandonments in 1917 is estimated to be as follows: Cost of seed used $3,50 an acre. Cost of seed- ing 1.50 an acre; unnecessary preparation of land $1,50 an acre, or a total of #4,50 an acre. The lose of.|4«50 an acre en the 14,500,000 acres abandoned amounts to 165,250,000; or 10 cents a bushel on the 653 million bushels of wheat harvested this year. General Upkeep : This includes the replacement or loss of animals, wear and tear on nsachinery, decay of farm buildings and fences, amounting, according to a statement by Prof. W. J. Spillman of the Office of Farm Management, to from flto t5 an acre a year. The estimate of the ten representatives of North Dakota farmers, which appeared through its representative, Mr. Bacoh, Isefore this committee, was ,4- #460 for a 160 acre farm, or $2,88 an acre. The average annioal cost of t?jkeep Ib probably not leas than $3.00 an acre, or 30 cents a bushel, on the basis of the average acre yield of the United States. Raw Material ! The farmer is as much entitled to a full retiirn on the value of the raw material entering into his product as is any other manufacturer. If the manufacturer of steel were asked to make an estimate of the cost of his production, the first item he would enter in the record would be the cost of raw material. At present prices the raw material entering into the prodiiction of a bushel of wheat is worth at least 35 cents. Respectfully submitted, (Signed) H, J. Waters, £. F. Ladd. Committee. #22 August 27, 1917. Dear Dr. Garfifeld?? I take pleasure in. presenting you herewith the resiilts of the questionnaire recently sent out, at your request, with the oboect of securing as accurate information as possible in the time avail- able on the cost of producing wheat for the present crop. These questionnaires were sent to every county agent in the wheat produc- ing counties east of and including the line of States from North Dakota to Texas, Our knowledge of the cost of producing this cereal leads us to believe that in general cost per bushel is somewhat less west of the States just mentioned than it is to the eiast, so that a price of wheat which would be fair in the Eastern and Middle States will also be fair in the Moimtain and Pacific States. We have received telegraphic replies from approximately half of these county agents. Figure 1 shows the average cost per bush- el as reported by the county agents for each of the various States for the crop harvested in 1917. The unweighted average of these State averages is |l,65 per bushel. When the State averages are weighted in proportion to the amount of wheat produced in the Statec the weighted average thus secured is $1.71 per bushel. The average of geographic regions is as follows: Middle Atlantic States $1.50 East North Central liM West North Central 1.68 South Atlantic 1*42 East South Central li70 West South Central 8i41 Figure 2 shows, by States, the average reported yields for 1917. Figure 3 shows the usual yield in each of these States. Both these figures are constructed from data contained in the tele- grams above referred to, which have already been delivered to you. H. A. G. 2. As explained to you previously. Information obtained in this manner invariably gives results that are too low* The reason for this is that in this case the ttan who asked the questions of the farmer was not himself a skilled cotjt accountaht and hence did not in all oases know when he had obtained complete infbtmatibii concern'- ing some of the more obscure questions . The farmer not being a cost accountant did not realize that nearly all the operations on his fatra affected the cost of every commodity on the farm. No one except a skilled cost accountant who is thoroughly familiar with farm practice can hope to obtain the ultimate cost of production of any farm produc I notice on one of the blanks which is now before me that the county agent and the farmer, who together filled out the blank, mak& no allowance for hauling fuel for the thrashing machine, for storing the grain on the farm, for hauling the grain to market, for superin- tendence, or for the use of machinery in producing the crop. Althoug this blank is filled in by a county in South Dakota, no allowance whatever is made for risk due to crop failure, although this is a State in which crops frequently fail. This year, in the vicinity of Washington City, a large proportion of the excellent wheat crop was lost from continued rain after the wheat was in the shock. I have seen this same thing happen in this community one other time in the last fifteen years. The income from the wheat industry must pay for these losses, and they are, in general, not taken into account by the methods of securing data in this case. In view of the responsibility your board must assxime in fixing the faim price for wheat, I wish to call attention to a few funda- mental principles. The farmer's business is unlike that of most oth- ers. He has the choice between many enterprises. It is therefore impossible to regulate one of his enterprises without taking into consideration of the others. Thus, land that will produce twenty bushels of wheat to the acre v/ill ordinarily produce fifty bushels of oorn. Twenty bushels of wheat at $2 a bushel means to the farmer only |40 gross income per acre. Fifty bushels of corn at the pres- ent market price of about fl.50 per bushel means ^75 income per acre. There is therefore great danger that a price regarded as unsatisfac- tory by the farmer would cause him to restrict his acreage of wheat ai increase his acreage of corn or of other crops that might be more profitable. Again: a bushel of wheat fed to hogs will make twelve pounds in- crease in live weight. Hogs sold at Chicago last Saturday for $17.40 per cwt. At this price a bushel of wheat fed to hogs will return to H. A. G. 3. the farmer $2.08. Because the German food control overlooked this fact and fixed the price of grain too low» German farmers, instead of saving the grain for h\iman food> fed it to live stock> for in this way they could get more for it. The same would happen in this country on a larger scale, because we have more live stock. Very truly yours, (Signed) W. J. Spillman Enc. Chief. FOOD ADMIMISTEATIOW GRAIN COF.POEATIOH C_0_P_Y» General Office 42 BROADWAY, WLV" YORK CITY. AUGUST 2^ 1917 Dr. a, A. Garfield, Food Administration, Washington. My dear Doctor: In accordance with the telerihone, I enclose you sheet which shows the relative market basis and the relative grade basis, which can be a-mDiied to your expression of price. For instance, you vlll note that there are five grades of wheat v'hich we will treat as basic grades. That is, if your ex- tjression of a orice should be for 1 Northern £-oring Wheat, or its equivalent, then ve nro-oose these five grades underscored on this memorandum shall all be at the lorice of'your recommendation for 1 Northern Sioring. Then you v/ill see the other number ones of various descriptions are framed for premiums over or discounts under the basic nrice. For instance, the grades of 1 Dark Hard ¥/inter, 1 Dark Northern Spring, and 1 Amber Duram will be 4^2^ higher than your expression for 1 Northern S'pring; and the other number one grades as listed in the schedule will be at varying discounts under your ex-oression. In all these qualities the grade of number two will be Z(/ less than number one; the grade of number three 6^ less than number one; and the grade of number four lOc/ less than number one of the same variety, ' Have I made this clear? Then as to the relative markets : I have framed this so that KansE^s City and Omaha, which are the markets most severely handicapped by their freight relation of all those entitled to rank as "principal, interior T)riraary markets," shall be one basis, and the other Tjrimary markets of Duluth, Minnea-oolis, St. Louis, Chicago and the seaboard markets of Galveston, New Orleans, Baltimore, Philadelphia and Hew York, and the milling Lake market of Buf f a].c , shall be at certain nreraiums over the Kansas City xirice as listtd. You can readily apr)ly this scale up and down in case your expression should refer, for instance, to Chicago. In which case, Chicago, New Orleans and Galveston would all have the basic price. St. Louis would be Z(^ under Chicago. Duluth and Minneapolis 3{/ under Chicago; Kansas City and Omaha 6(;^ under Chicago; while Buffalo would be b^ tver Chicago, Baltimore and Philadelrihia 9^ aver Chicago 8.nd New York lO^if over Chicago. Have I made this clear? Yours truly, ^Rle-nfid^ .TTILTTIR TT. BA-RNF.R Prices a.t Intoxior primary market. No. 1 Hard ^finter) (Equivalent of 'No.'l Re^I ^'inter ) Basic grades (No. 1 Northern Spring No. 1 Dark Hard ^inter 3.04 (? 1 Hard '^inter Basic 2.00 If 1 Fed ^f inter laBib S^Q-O II 1 Yellow Hard ^ifroer 1.96 II 1 Soft Red Winter 1,98 II 1 Dark Koithern Spring 3,04 « 1 I'o r t li e r j:i f^r v. i ng; Basic s«oo It 1 Rod Bprink.5; 1.98 n 1 Humpback 1.90 t» 1 Aifibei' 'Durair. S«04 11 1 Durarn Basic_ 2.00 n 1 Red T'Lirura""" i~93 n 1 Red ^aila 1,93 ir 1 Ka.rd White Basic 8,00 II 1 Sof-f^ 'White r.98 II 1 White Club 1,96 Govt. Price 3 of grade 3 cents "less. 3 of e:rade 6 cents less. 4 of grade 10 certs less. Relative Market Basis. Kansas City Omaha Tluluth Minneapolis F?t . Loui s Chicago New Orleans Galveston Buffalo Baltimore Philadelphia New York 3 cent 3 cent 4 cent 6 cent 6 cent 6 cent 11 rent 15 cent 15 cent 16 c.jnt Basis Basis s more more more rcore more more more more more more APPENDIX #23A COPY OF TELEGRAM New York, K. Y. Aug. 28, 1917- H. A. Ga'rfieild, Washington, D. C. Referring my letter August twenty- fifth on more careful analy- sis it seems necessary to raise l^fijasafr Sity and Omaha basis one cent as compared with all the other markets. Please chan^ in my schedule the premiums of all other markets over Kansas City and Omaha "by a reduction in the stated premium of one cei so that they now read as compared with Kansas City and Omaha to be Duluth and Minneapolis two cents more St. Louis three cents more Chicago New Orleans and Galveston five cents more Buffalo ten cents more Baltimore and Philadelt»hia fourteen cents more and New York fifteen cents more. This makes no change whatever in relative grade basis for all grades simply in relative market structure. Please telegraph confirming receipt of • this new change. Julius H. Barnes . NL / % ^ < -J w li '< M .?l^ W ^ ct- o H- O' CD ty < w c+ H 3 I-" P5 CD H H CD ^J *->■ CJ\ =+ 1 O N3 P i^'; CD H p3 >-i H t~i Pli CD H ^ i-vtj tn o tn p - cy CD ^^ CD ^ <• S3 ai *ai Ol Ovjl von M fe- te <• V W 4* k* s O U3 OUD —J -4 B o rv) Q (V) 0—4 -J O c+ o •—4 -~4 -P 4 ^ * «■ w fe* V p o o o o o o H 8 o o o o o o 88 &■ V^Vjvl c« OQ H-~J H" CJQ^ o o o o M ro' » w jv b » '«• o VJ1 o»ai -pro o "^ OVjg CT\0 M o CXI O M ru o 3 ^ M M M « M P- o o 88 o o H- o o o o JB o o o o o o w ro H VJl -J ^ CTi — J<.£) 0<5-^ ^ « te «■ t* ^ o H O M OJ ^=- o o o o UD O m o -^ O-J VjJ O 2 •a V W M M «• |3 o Q O O o o t-t- o o o o o o H- o o o o o g SB CD W (y a* CD -2- As the present moment is a betviceen-crop period, it is impossible to give acreage statistics for the next crop,, except for Argentina^, whose crop has already been sown (Australian sowing is now in progress), The new Argentine crop is officially estimated at 239,575,000 bushels^ a record crop. On the cons-umption basis taken above the export s\irpl-us would be ISl, 232,000 bushels. The exportable reserve from the new crop was estimated by Brcomhall's at lUS.,000,000 bushels, before the official estimate was made. As the official estimate showed an increase of 60.,000,,000 bushels over previous estimates, the exportable reserve, on that basis, woxdd be about 200,000,000 bushels, which would approximate the estimate as calculated from the pro- duction and consumption figures, (Signed) EArjIOllD PSAPi. APPENDIX #25 Estimate of probable world wheat siixplus by Mr. Hoover Australia, for the present crop 180 million bushels New crop on the first of January 100 million bushels Mak ing total exportable surplus of .India, present crop Total exportable surplus avail- able if submarines are over- come or peace intervenes To which add Argentine's surplus United States, total crop 280 million bushels 100 million bushels 380 million bushel ? 380 million bushels Less home consump- (based upon ) 500 million bushels tion and seed (success of ) (conservation) (means ) Available for export Canada, exportable surplus (based upon ) (success of con-) (servatioh means) Total, not including Argentine, 180 million bushel 150 million bushel 710 million bushel Total requirement i. e. - a shortage without Australia, India and Argentine; a surplus with them. 525 million bushel #26 Memoranda submitted by Mxi Duvel. WHEAT STATISTICS ARGENTINA As a resTJlt of the short crop in 1917 there is praotioally no surplus in the Argentine, The acreage seeded for the 1918 crop is estimated as 17,000,000 or approximately normal. With a normal yield of approximately 175,000,000 bushels, there should be a surplus for export in 1918 of from 90,000,000 to 100,000,000. AUSTRALIA It is estimated that there is at the present time held in Australia a surplus of about 100,000,000 which has accumulated 0T;ing to the lack of transportation facilities. Normal exports of Australia are in the neighborhood of 50,000,000 bushels, making a total which would be available for export in 1918 of approximately 150,000,000 bushels. INDIA The normal yield in India is in round numbers 350,000,000. The increaeSd acreage for the present crop is 9,6 per cent. The preliminary estimate as to the yield was 376,000,000, or an increase of 19.3 per cent. The exports from India under normal conditions vary from 30,000,000 to 55,000,000, With the increased acreage and the estimated increase in productioniji if the next crop which will be harvested in 1918, is normal, there should be available for export from 60,000,000 to 75,000,000 bushels. New U.S. Standard Minnear>oliB Insioectlc^ns of Spring Wheat. Jan. to Dec. 1916, 1 2 3 4 5 Sample. Classification No. 1 Hard No. 1 Northern No. S « No. 3 " No. 4 " Rejected No Grade Bushels 4,403,760 ,26,922,7 40 20,395,330 11,824,570 17,771,370 10,046,400 5.065.620 Total 94,429,790 Estimated Average Grade - No, 2.62 Northern Spring. Minneapolis Inspections of Hard Winter Wheat. Jan. to Dec. 1916 , Per Cent of Total 4.66 28.52 21.59 12.52 18.81 10.63 3.24 Classification No. 1 No. 2 No. 3 No. 4 No Grade Total Bushels 1,012,540 14,444,830 6,198,440 3,593,220 57 2.590 Per Cent of Total 3.92 55.94 34.01 13.91 2.22 25,820,620 Estimated Average Grade - No, 2.7 5 Hard Winter. Chicago Inspection of Red Winter Wheat. Jan. to Dec. 1916. Classif icat iion Cars 5 Per Cent of Total No. 1 Red Winter 0.1099 2 11 II 1,108 24.37 3 n II 1,982 43.59 4 n II 950 20.87 S.G. It n 501 11.02 Total 4j546 _Chicago Inspection of Hard Winter Wheat, Jan. to Dec. 1916. Classification Cars Per Cent of Total No. 1 Hard Winter 68 0.3782 2 " " 9,065 50.48 39.92 6.76 2.45 Total 17,957 Chicago Inspection of Spring Wheat, From Jan. to Dec. 1916. 3 11: ?i 7,169 4 n II 1,215 S.G. II II 440 Classification Cars Per Cent of Total No. 1 Hard Spring .. 139 2.16 1 Northern Spr; Lng 2,330 36.25 2 II II 1,359 21.13 3 II II 1,120 17.41 4 II ti 1,100 17.10 S.G. II n 382 5.94 Total 6,430 ■p A pq o o o § § 8 o o 8 o q^ o 8 o o IcO P vo" co" CO (T\ cu K> ^ cr« r^ o" cn Pci «H W CO ^JD o r~ CO ^ o ^ cr> m 1 — ^ ^ ir^ ^ J- ir^ Tr^ ^ LTv ^ M ^ (A o o o o o o o o o O o !h td rH o o o o o o o o o o o M 0) CD M o Q -o •• o o ** o o o -o -o -P >i o* o ^^\ p_ CO o CTiO CO o ^ o ir^o SS v^"o cn - CM O Q) n3 T^ t^ r- cri r~- ir r-i Jt to 1 o 1 O 1 o 1 o 1 o 1 o 1 O 1 o 1 O 1 O ( o ^ u >H to o t^ o CO o o> o o o r-^ o CM o K^ O^ o LP OVX) o r- A ^ lA rH o o o o o o o rH o r-i o rH o rH O H o <-i O rH O rH g^ ri W a in Q) « o"-> -a> •* O^ •» cr\ •• cr< « cn -CT " CT -CT -cn o M o H o H O rH o rH o rH o r-i o rH O rH o rH O r-A O H fH tH nJ S 52 o o o o o o o O o O O o ro pR m pq o_ rH q_ rH O - - rH o rH o_ rH o r-i o rH o - o rH O - -rH O - •r-i +3 a LTA ^ .UO VOD ^ J- u^ OJ cr\ ^ KD nJ HH .,. 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I 1 r— vi) 1^^ r^cu I-I o cri60 r~- lHl-lr-^l-^r^^^r-ll-IOOO cr>crvcr\crvcrvcr»o>crtcricr»cr5 rHrHf-IHf-tHrHrHi-li-l>-l r-l O CTvO ■-♦ O u o" p O «H O rMviD O o J-t CO t-^ t— c-t U C7^ 0) rH 4J u - • O 60 r- ftCM cr\P4 P! CM nj '-* hi (D ^ 5! 4J>sO ^ ° ^ O VD O H tJ C3^ ushels per acre, for 100 acres in wheat we have the cost per mshel a-t^.#2.53; or for the estimated abnormal yield of eight mshels i?er acre for the section represented, the price becomes ^3,95 peif bushel. 20, Wheat when milled at the standard of 72,6 percent flour, requires four and one-half bushels or 270 pounds of wheat ;o produce one barrel or 195 pounds of flour, and gives approximately H pounds, of millfeed. Mr. Hoover is reported as having recommended that we nill to 8X percent, which would materially increase the amount of flour, and of course, proportionally decrease the mill feed, 21. The cost of wheat at mill centers, for wheat to pro- iuce one barrel of flour, would, at the prices named for No. 1 Slorthern,; be as follows: Price Flour per barrel , $2.00 X 4| == $9 .,00 |2,25 X 4| == $10.13 $2.50 X 4^ == $11.25 $2.75 X 4^ == $12.38 $3.00 X 4^ == $13.50 rhe cost for other grades would be considerably below the above figures ajs based on precedflig" years. The cost of handling and milling at Minneapolis is not Included In the above, neither is the saving for reduced cost for freight differentials, or for advantages of milling in transit. 8. 23, The feed from flour production, according to Minneapolis quotations this week, is per ton as follows: Red dog $60 @ |>61 Bran $Z1 @ to. 50 Middlings $50 @ $52 At an average price for feed of, say, $30.00 per ton the 74 pounds of mill feed would be worth $1.11; at $40.00 per ton, the value would be $1.48 which should be deducted from the cost price of flour per barrel. 23. One barrel of flour will produce not less than 261 loaves of bread of 16 ounces per loaf; 298 14 ounce loaves; or 345 12 ounce loaves. Ab handled by the bakers, a barrel of flotir will yield above these figutes. 24. The retail price of tkig br^kd at five cents and at 10 cents per loaf, would be per barrel of flour as follows: At 5(^ per loaf At 10(^ per loaf . 16-ounce loaf —261 loaves— $13.05 per bbl. $26.10 per bbl. 14-ounce loaf— 298 loaves— $14.95 per bbl. $29.80 per bbl, 12-ounce loaf— 345 loaves— $17.25 per bbl. $34.50 per bbl. The figures furnished the Committee for bread in Washington were 10 cents for a 14—ounce loaf, or at a rate of not less than $29.80 per barrel of flour, 25. We still have the feed stuff valued at from $1.11 to $1.48 per barrel of flour, to be added to each of the above prices, or to be deducted from the cost of the wheat, either of which is assumed to be well above the millers profit. The baker usually 9. grade flour as indicated above, but rather, what is known as "Bakers" flour, more nearly first to second clear. August 20, 1917, the Minneapolis quotations for flour were as follows: F» Oi B. in cotton sacks, oar-load lots. Price per barrel First Patents |12.30 to |12.50 Seconds $13.10 to $12.30 First Clears $11.20 to $11.70 The above sales are based on flour produced from wheat costing from te.50 to $3.00 per bushel. Nor does the miller use the No. 1 Northern spring wheat to produce the commercial flour, but a mixture which probably does not average better than Grade No. 3, or in cost materially below what I have indicated, thus saving about 200 per bushel on wheat, or 900 per barrel of flour output on the cost price of the wheat and this more than pays the expenses and the profits for the small dealer. 26, The Committee are asked to fix the price not on a cror to be grown, thus giving the farmers an opportunity to determine whether it would be profitable to grow the v^rheat at the price named but we are setting a price on wheat already grown and now being thras ed under abnormally heavy expense for much of the spring wheat terri- tory and not elsewhere prevailing. The wheat growers in the winter wheat belt have had the privileges of an open unrestricted market ranging from $2.50 to $3.00 per bushel at the terminal for the 1917 crop, now being denied the less fortunately located territory. Heavy expenses have been 10. added because withdrawing the National Guard and the conscript draft of an army have brought about great scarcity of labor and exceptionally high wages on the wheat farms. To now penalize this particular group of wheat farmers, when the cost of growing wheat per acre has been tne greatest in fifty years and because of unfavorable climatic con- ditions the yield largely reduced virould be manifestly unjust, Appendix # 39 British Food Ministry- Wheat and Bread Measures taken by the British Goverliment EXTRACTS FROM SPEECH OF UNDER SECRETARY OF THE BRITISH FOOD MINISTRY,. IN THE HOUSE OF COMMONS, (from the) LONDON TIMES. July 26,1917 Mr. Clyne ! Wages .have not inorQaseri ir anything like the saiTie proportion as the cost of food. Sections of the population who had received little advance in wages, and the only remedy that the Food Controller could apply to re- lieve these people was the remedy of cheaper food . Reducing cost of bread by Government taking our mills and selling to bakers at uniform price in order for them to sell loaf at a corresponding price. Extra charge for loaf for delivery. Government establishing a price by law, reducing the price to the poor and making up the differ- ence from the Excheqtier, Subsidy from Exchequer to pay for higher price of wheat. If the Government succeeds in reducing the price of the loaf to ninepence that would go far to ease the situation in many thousands of homes. The difference between the price which the millers had to pay the farmers for wheat and the amount realized by the millers from the bakers for the flour at the uniform price would be met by the Government from the Exchequer. Short cut by Government establishing price by lavv, reducing price to the poor and making up difference from Exchequer. EXTRACTS FROM SPEECH OF LORD RHONDDA, FOOD CONTROLLER, IN THE HOUSE OF LORDS. July 27, 1917, Lord Rhondda ; All flour mills to be taken over by Government and to be worked on Government account. Millers to sell flour to bakers at a uniform price. -3- rd Rhondda (cont'd): The quartern loaf to be Gold across the counter at maximum of ninepence for cash. Bakers not to 'be allovasd to charge more unless they can prove specially high Koney cost. The Retail price of flour will be fixed to correspond with that of Bread., British wheat will be bought by the mills at the price determined by the Government from time to time.. Subsidizing the Loaf'.. Many responsible representatives of Labor have as- sured me they would rather see the high cost of living met by a reduction in the cost of food than the advance in wages. PROPORTION OF BREAD IN MENUP OF RICH AND POOR DINNERS )Up 1 Beef Soup with vege- , tables 2 3 4 5 6 jat 1 Slice Roast :1 slice ; Roast : 1 slice : Roast : I slice : Roast : Chicken : :avy : Brown : Browm jgetable- larchy '1 Baked potato •1 Baked : potato :1 Baked 1 potato • Rice } Rice 3getable- ■ reen Beets Butter • Staying ; BeSi^hs 'flitter \Z h.T : Cauli- : flower, Oreetmed :Lirna {Beans & ; Tomatoes : Lima & : : Tomatoes: Lima & Tomatoes ilad Tomato & Lettuce s Tomato : & Lettuce ! LQttUde : 3Bsert Dessert Dessert . Prune : Jelly & ; Sauce •Dessert ; Dessert ; Dessert read 1 slice •3 slices ;1 slice 1 slice ■■| slice ; 2 slices utter iT. i T. :i T.s-loz. iT, ^T. ; 1 T. • 1370 : 1323 : 1303 1329 1301 ' * 1324 • BREAK! read ''ASTS I A ►3 SI. B » 2 SI. 2^ Sis, • 1° li Sis. E li Sis. : F 2: Sis : G :1 SI. utter •4 t. 2 t. 3 t. : 2-t. 2 t. 2:t. \z t. eve rages ith Milk Sugar 'Coffee 1 cup Coffee 1 cup ' Fried - Potatoes Milk 1 cup ; Milk 1 cup Coffee 1 cup Coffee 1 cup Coffee -1 cup ereal ithMilk • Sugar 4 1, 1 0. 1 C. 1 C. li cup ruit - Baked < Apple : Raw Berries ?gs : t, 2 sat : 2 Chops Appendix >»»- Statement by Benjainin R, Andrew^ i Phi ij, , Assistant Professor ' of Household Sobnoirdos, Teaahers Gcllege, Columbia Uni- versity, New York City. The cereal foods, which mean primarily wheat, have taken during the last fifteen years an increasingly important part in the diet of American working people, and to-day a high price fox cereals and for wheat especially means a high cost for food, and a high cost of living. Our wage-earning people depend more upon cereal foods than do those of larger incomes. The national study of "The Cost of Living" in 1901, published by the U.S. Bureau of Labor in 1903 showed that at that time the average working man's family spent about 33fo of its food money for meat and lOfo of its food money for cereal foods. There are no figures available for conditions to-day that offer an exact comparison. But in January 1917 the feeding experiments with the New York police recruits or. "rookies" which under the direction of nutrition experts succeed- ed in furnishing an adeqiiate and satisfactory diet to these men over a period of several weeks at 25^ per capita per day, were only successful by alloting 29^ of the food money for cereal foods, while only 10^ could be used for meat foods. In 1901, the proportions were one-third of the food money for meats and one- tenth for cereals; in 1917, the proportion is reversed - one- third, nearly, for cereals and only one-tenth for meats. Wheat and other cereals form the central item in the diet of small in- come families. As incomes increase, the proportion of the food money spent for cereal foods decreases; or stated differently, the smaller the income* the larger the consumption of cereal foods This fact, established by cost of living studies such as that of prioes falls precisely where it can be least easily borne, name- ly upon those of small incomes. When one remembers that with families in large cities living on |1300 or less, nearly half the income goes for food (and for those in smaller places it is not much less, probably 36-45^), and that cereal foods make up prabably one-fourth to one-third of their food bills, it is evident that high prices for wheat bring stress particularly upon this partv of our people. Appendix 32 THE STABILITY OF THI? PRICES TO BE FIXED BY THE GOVERNMENT FOR THE 1917 WHEAT CROP. Memorandum submitted to the Wheat Price Comm ittee by H.J. Waters. Auf^. 28, 1917 . ^ I understand that the Wheat Corporation of the United States Food Administration Department has made such arrangements as will insure the full and uniform enforcement throughout the country of the wheat prices to be fixed by the Oovernment for the 1917 crop. I understand that through the control of wheat buying exercised by the Wheat Corporation, , that the farmer who cooperates with the Government and sells his wheat at the price fixed and at such time as will best meet the needs, of the United States and the Allies, will not suffer financial loss as compared with the farmer who refuses to be bound by the agreement. I understand that for the period for which the fixed prices are in force, it will be impossible for any producer or speculator to sell wheat on a market other than that created or controlled by the Wheat Corporation and at the price fixed by the Government. I understand that the Wheat Corporation has made the necessary financial arrangements, and that such arrangementf/ are not contingent upon an appropriation by Congress, to continue in force and effect the price to be fixed by the Government until the harvest of 1918, or until the Government guaranty of $2.00 per bushel goes into effect, and that the fixed price is to be main- -2- tained through this pericd, even thQUgii peace.be declared in the meantime and wheat prices in the other markets of the world fall to a peace basis* COST OF BREAD AMONG THE WORKERS Memorandum by Frances Stern Author of "Food for the Worker" Associated with U, S» Food Administration. oOo The work with the people of the crowded district of Boston and my association with them previous to the war, has led to serious thinking and many conferences with them since the increased cost of food due to war conditions. The ory on every side is that it is almost impossible to live, and that every luxury — such as cake perhaps once a week — must be cut out. They complain a great deal of their nec- essity of life,- flour and bread, In the book "Food for the Worker", seven weeks' menus have been very carefully worked out relative to food values and costs, and the cost of bre^d in that seven weeks of the total supply, which amounts to $53,11, is about twenty- five per cent of the total, These menus have been carefully worked over by experts in nutrition and people familiar with the habits of the people for whom they were intended. Variety has been given, and as much meat and vegetables as the purse would allow;- and yet to make up the necessary requirements of i food values, bread to the amount as heretofore stated would have to be twenty-five per cent. (Page 119), In another group of flexible menus where different types of meals were planned, from the simplest to the elabo- Tjate, it was interesting to note that from twice to three times as much bread was needed with the simple meal as with -2- the elaborate Qne> Tlhict again leads us to see that people living pn the one-piece meal must have bread to make up the required feod value. It is desirable for them from many points ot view: cost, ease in cooking, habit, nutrition, and a safe food for children. On page 22 of "Food for the Worker ♦» the following statement is made: "It has been estimated that between ^800 and |900 a year is the minimum figure at which a decent and efficient . standard of living can be maintained for the- typical family of five. "In a recent study by Schereschewsky, it was found that in the group virhose income was $500 or less, under nur- ishment and sickness were twice as great as in the groups . earning |!700 to |900, .An average wage of an unskilled labor- ex is il2 per week, or $624 per year, if he is continuously employed. The man who earns this income, however * is on the average unemployed eight weeks out of the fifty- two. This period of unemployment without pay reduces his annual income to $528, The cost of our menu is $364 a year — an extremely conservative estimate. Lower estimates are possible, but fail to allow for one of our essential considerations — va- riety. The cost of our menu is 69 per cent of an income of $528 per annum, and if we allow $144 per year tpf rent, a fair average, only $20 remains for all other needs of life for the family of five, such as fuel, light, clothing, car faxes, insurancei piedicirie and recreatiohf" FRANCES STERN. APPENDIX #34. Statement by J. W. Shorthill. The predominating factor in determining the price which this Committee will fix for wheat must be the present con- dition viewed in the light of future probabilities. This con- dition is a crisis in our wheat supply. While our present crop of wheat, added to our reserve, is barely sufficient to supply the normal needs of our own country, we are asked to export two hundred million bushels, or nearly one-third of our total produce tion. It is obvious that the public does not realize that this grave crisis confronts us, and for that reason this com- mittee will be compelled to fix a price which to the public may seem unreasonable. We must go somewhat beyond public sentiment in order to protect the future welfare of our nation, depending upon a later campaign of education to which the American Press will lend its aid, to bring the public to an appreciation of the wisdom of our action. Our prime purpose in food administration is to re- lieve that situation by decreasing consumption and increasing production of wheat. Both must be done or conditions will become worse and disaster will be sure to follow. The price fixed must be such a price as will not make flour cheaper than those other food products which can readily be substituted for flour, or that will make the value of wheat so low comparatively, that it will be substituted for other foods for stocks The price must be fixed at such a point as will, in the ligh-'j of proba.bilities, induce the substitution of other producuS for wheat. Only such a price will reduce consumption. Unquestionably, a price fixed on such a basis will be suffici- ently high to appeal to the grain grower and induce him to in- crease the production of wheat. APPENDIX #35 BITUMINOUS COAL PRICES AS FIXED BY PRESIDENT WILSON AUGUST 21, 1917. -- X — Prices f. o. b. mines, as follows: Run of Prepared Slack or Mine Sizes Screenings. Pennsylvania §3.00 #2.35 tl.75 Maryland 3.00 2.35 1,75 West Virginia 3, 00 3. 35 1.75 West Virginia (new River) 2.15 2.40 1.90 Virginia 3.00 2.25 1.75 Ohio (thick vein) 2.00 2.25 1.75 Ohio (thin vein) 3,35 2.60 2.10 Kentucky 1.95 2.30 1.70 Kentucky (Jellico) 3,40 3.65 3.15 Alabama (big seam) 1.90 3.15 1.65 Alabama (Pratt, Jagger, CoroYia) . . . . 3.15 3.40 1.90 Alabama (Cahaba & Black Creek).,., 3.40 3,65 3.1b Tennessee (Eastern) 2.30 2.55 S.Ob Tennessee Jellico) 2.40 2.65 3.1b Indiana 1.95 3.30 1.70 Illinois X.95 3.30 1.70 Illinois (third vein) 2.40 2,65 ^.ib Arkansas 3.65 2.90 2.40 Iowa 3.70 2.95 2.45 Jansas I* . 3.55 2.80 2.30 imilxi : . 3. 70 3. 95 3.45 Oulhoma 3.05 3.30 2,80 ?etas : . 3. 65 3. 90 3. 40 olloAdo 2.45 3.70 2.30 S° i? ana ..... 2 . 70 3.95 2.45 NefSexUo::;:;::::;:::::: 3.40 2.65 215 Wvomins 3.50 2.75 3,35 Sah ..... 3.60 3.85 2.35 Washington::;:::::;:.: ;...:. 3.35 3.50 3.00 Average 3.362 ' 2.612 2.112 Note-.- It will be observed that prepared sizes of coal are fixed at 25(i above Run of Mine and Slack or Screenings at til below fhe price fixed for Run of Mine, which -^kes the Run of Mine rate the average for all bituminous coal prices, ^here- Jore^the average pricl is ^2,362 per ton for the entire country. PPEUDIX #36. M ESSRS. DOAK AND SULLIVAN PROPOSE $1.84 The foremost fact which confronts this Committee in its ieliberations is that our country is engaged in a desperate v/ar. In comparison with this fact all others in the problem assigned us sink to a minor basis. If Germany wins, she may^ at the day of her choice, threaten any other nation with disaster. She may succeed in bringing upon the English the doom of the Belgians, Serbs and Poles; she may, employing the enslaved forces of her conquered lands, seek to substitute the iron rule of Kaiserism for the free civilization of Amer ica. Never has any nation gone to war for a higher stake than one for which we fight; never has there been a war so awful in its losses of me and the products of men; never a war fraught with such consequences to mankind. Realizing this gravest of national crises, the people of the United States are in deep earnest preparing for aj^decisive part in i i the tremendous struggle. Under the pressure of urgently exigent war necessities their ggtvernment has been constrained from the outset to resort to extraordinary war measures. It looks for no easy triumph ove a feeble foe, as in 1898 - 1900, employing a voluntary army, it rescued oppressed peoples. Its first far-reaching step, significant of others logically to ensue, the compulsory registering of ten million young mei! has been immediately followed by the selective drafting of sufficient to make up a first army of a million, who may be sent to Europe to meet the fate of soldiers going to battle. Those acts established the stand a-rd of duty for every element in our population. No citizen can claim the liberties of peace now. No man is in his person beyond the reach of the government now , No property is individual now . In all the import -3- )Ublic, the rights of the community collectively take absolute and invariable precedence over the usual rights in times of peace enjoyec )y the citizens separately. All our people must in these times bow 1 t common fate. Proceeding consistently with thees facts and principles since its declaration of war, our Government, besides enforcing the draft, has entered upon a course of suspending the law of supply and demand in free markets and of stipulating to dealers the prices of cc uodities. Prices are to be based both u^on public necessity and the lecessary reward of production. Dictation of the rates for coal has ready taken place. It is with confidence' generally expected that simi lar action is shortly to be had relative to other fuels, to the princ ?al metals used in industry and to the food staples consumed by our p pie. Of the latter, first in order, through an act of Congress, the ptice is to be set on wheat. To this committee was assigned this task The committee in session has for days endeavored to take ir uo account the essential facts bearing on its complicated problem. Its studies, however, have not resulted in clearness on inportant •oints. Statistics presented to it have been contradictory. Lack ol :niformity in the naming of the market grades of wheat, questionable 1. ractices of millers in blending grades, absence of standards In iten ing estimates of cost of production, speculative influences in the f] nations of market prices - such obsftncles have rendered unsatisfactc 3rtain conclusions necessary in estiablif^hrng a sure judgment. I Here is a determining question; Is this committee to aware r. ' ♦ * price based on the unusual, speculative, artificial, or scarcity -3- )rices of wheat in recent months, or on the usual prices obtained in I series of years, modified by factors such as the general increased 30st of living, an alleged scarcity and hgih rate of labor, and advani in the outlay for necessary materials used in farm work? The Congress considered the last named factors in taking upon itself the responsibility of guaranteeing a minimum of |3.00 per bushel for the crop of 1918. But the main purpose of that price was a stimulus to production through an ample reward to the farmer. This Committee is to decide on the price of vvheat for the crop of 1917. That crop by estimate is 653,000,000 bushels. That amount, we are officially informed, is sufficient for the needs of ou: lopulation for milling and seeding, it leaves a surplus of 80,000,000 bushels for export to the allies, and it is hoped that for the same pi pose 120,000,000 may further be saved through abstinence. Since what is to be a reasonable price depends upon the rel£ tive importance we as judges are to give the various legitimate facto] in the case, the undersigned submit that the following seem to be the most weighty of these factors; 1. Bread is the staff of life to the masses of the wage- workers of this co-antry, whether in the factory, in transportation se: vice or on the farm, It is the staff of life also to great numbers of people of small means not in these classifications. In the popula: mind the price of bread is the symbol of plenty or scarcity. It is t( a great extent the unit popularly employed in establishing prices of other commodities. When bread becom.es dear other things are expected VQ become dear. Flour at tl5 a barrel plunges the bulk cf our people into despair. -4- 2, Some effect is naturally produced in the minds of men in general on comparing the proportions of the population of our 30untry to be affected on the one hand by a low price of wheat and on the other by a low price of bread. The number of wheat producers, reported by the Agricultural Department as two millions, is to this committee not a mere census question, but a matter of the volume and significance of the wheat producing interest. To produce a crop of 675,000,000 bushels, the number of operating farmers cultivating on an average of 100 acres yielding 15 bushels to an acre would be only 450,000. It is to be ob- served that in the Agriciiltural Department's table of two millions the; are 330,000 recognized as wheat farmers who have only eight acres or less sown, which at uhe Average yield this year of eleven bushels per acre can hardly qualify their number as among the farmers having an occupational interest in the wheat market. And only a subsidiary crop can be conceded to the 550,000 v/hose average is 14 acres, with a yield of 154 bushels each. Somewhat more than a million is thus left who can really be classed as wheat growers, men whose yearly returns could be sens iblytaf fee ted by the price per bushel. Of that million, 335,00 have 23,000,000 of the entire 59,100,000 acres on which wheat v^as grow in the United States. The most striking fact is that considerably mor than one-seventh of the entire acreage, 9,350,000 acres, is in only 50,000 farms, averaging 500 to 1,000 acres, of which 156 to 300 acres were in wheat . Now, what is the number of consumers? It includes, of course, the farm operators themselves, their families, the daily and inomthlyv wage-workers of the farm, in fact every one connected with -5- sumer. The wage-workers in general, the largest body of bread consum- ers, represent the bulk of the population aside from the farming class /imong these are the membership of the American Federation of Labor, he Railroad Brotherhoods and the minor independent unions, amounting io about 3,000,000, representing, at the rate of five persons to a breadwinner, 15,000,000, or of four persons, 13,000,000. The unorganis able workers, the small shopkeepers, the professional people having small earnings, bring the count upward by many millions. The million and odd v^heat farms represent certainly less than 10,000,000 persons. -Vere we dealing with the question of the greatest good to the greatest number the choice must perforce fall to the consumers. 3. The undersigned cannot admit that the wheat prices of recent months should have a determining relation to the crop price of 1917. Those prices were largely created through the arts and practices and abuses of speculative markets, directed by exparts in gambling with the peoples' food. That game has been abolished by the law under which this Committee is acting. 4. Reports of farmers' estimates of what the price of the 1917 crop should be are self-destructive through wide differences. ^ member of this Committee, a representative of an agricultural organ- ization, told us; "Six weeks ago '|l.85 at Chicago would have satisfied the farmer" . From Washington, Montana, North Dakota, South Dakota, Jansas, Iowa, Minnesota, Ohio and Indiana, in reply to telegraphic inquiry by another committee member worded, "What is the lowest price 3rop wheat on normal yield should now bring, basis Chicago, to bring -6- faxmers in that section good profit?" nmerous farmers, members of grain dealers^ associations and other representative men connected wil agriculture, have sent answers, a half varying from ^l.SOto 01.75 and the other half running along in higher figures up toward t3. A milli company of Oklahoma aft-r estimating cost of production, says #1.50 would yield to the farmer, net, f 8, 10 per acre in that State, The Indiana State Board of Agriculture, from a "grand average of 944 ex- pressions," estimates that the price in that State should be gl.85. Other testimony offered the Committee has put the "reasonable price" on a progressive scale upward to the point of ^3, while one claim has been made before it, by a farmer capitalist, that if the exchanges hac been left a free and open market the price would be today ^5. per bu- shel. The estimates sent in to the Committee, in all numbered by the thousands, vary in general according to whether the regions reported upon have had good, bad, or medium crops. The Middle West wheat farmers are fairly prosperous, many of the Central and Northwest men are ruined, is the burden of reports on the whole, and among the widel different figures is usually discerned the fact that each region talks for itself exclusively. 5. By keeping down the price of wheat flour, the retailer may be deprived of an argument for raising the price of corn meal and other meals, which, however,. \.e rresume, are also to come under the judgment of the Food Administration. Further, in announcing a price for wheat bearing a direct relation to what will become a war bread price, the Government will announce to producers of all commodities a policy, whic may be followed out consistently, of combating exorbitant prices for any commodity. -7- 6. It has been proposed by niembers of this Committee to place sue a price on the wheat of this year's crop as would discourage, or "pe: lize,« the consumption of wheat flour. To this proposal the under- signed cannot agree. Any appeal to the nation should rely on persua- sion rather than coercion. The Food Administration reports that in the last two months our people have responded well to the request to abstain to a reasonable degree from the consumption of wheat. While is to be expected that the very poor must necessarily consume proi^r- tionately more bread than persons in easy circumstances, a persistent call on the latter would doubtless result in a greatly diminished cor sumption of wheat bread. 7. The argument for an extremely high price of wheat based on an alleged scarcity of farm labor and an extraordinary increase of farm wages, while having some basis in a general way, is unsound as to the actual supply of labor and uncertain in its wage statistics. A memo- randum containing seventeen counts, many from government sources, show ing that there is in this country no scarcity, but simply a maladjust ment, of the labor supply, has been submitted to this Committee. Tables of farm wages presented by the Agricultural Department show, by day, other than harvest, without boai'd, for the United States, an ad- vance from March 1, 1915, to March 1, 1917, of only |1.45 to |1,62. By the month, without beard, the rise in the same two years was from 129.88 to ^32. 83, While claims of $5 to ^10 a day for harvest hands in North Dakota have been made before this Committee, a report from a Fargo daily newspaper, August 5, says "Enough men were found to fill the demands for harvest help: we have had enough to fill every call where $3 was offered. " -8^ 8. Since no classification of wage-workers 3,re enjoying an advanc of even 50 percent above the level of their wages in the five-year period inclusive of 1915, it would be with difficulty that the wage- workers in general could assent to the idea that the 'farm operators could be injured should an advance be granted them of considerably more than 80 percent over their prices for the same period. Wage-worl ers, in their wildest dreams, have not looked for the equivalent to the advance to $2 which the Congress has guaranteed the wheat farmers for 1918. They can see the necessity for such a war measure applicat to a single essential commodity; they cannot see ithe necessity for tolerating for wheat growers the prices fixed in recent months by the wheat speculators. Large numbers of the salaried people of the count: have had little or no increase in Iheir income in this era . of rising prices. The lower grades of employes of the Federal Government, of the States and municipalities - inclusive of clerks and teachers - face constantly rising prices on long-established moderate salaries. 9. In fixing the price for 1917, it is to be kept in mind that Congress has established a minimum guarantee of ;!^3.00 for 1918. If peace comes meantime, releasing a thousand million bushels of whea" upon the world markets from countries now capable of sending only a small part of their supply, perhaps reducing wheat to a $1 per bushe] the farmers of this country will still obtain their $S. Likewise, the price to be set for 1917 will remain to their benefit. 10. Faced vv'ith the disagreements as to price among the wheat rais ers, the undersigned turn to consider the run of the wheat market in a course of years down to about the beginning of 1917. -9- For the five years 1911-1915, the average farm price per bushel of whe; was 87 cents. Previous five-year averages were, 1901-1905, 73 cents; 1891-1895, 60 cents; 1882-1886, 78 cerits. The statistican of the ^oo6 Administration says that "for the I9l5 crop the average prices receive by the farmer was 98 cents per bushel and for 1914 crop 99 ce^its per DUfehdli" .With ihis run of prices ptevailing, the American farmers con tinued year in and year out to produce wheat enough to feed thisnatioi and to export on the average hundtedfe of millions of bushels. This, to the minds of the undersigned, in deciding upon a pribfe, is the governing and encompassing fact. If such prices, in all the years mentioned, were sufficient to in- duce the American wheat farmer to remain at his occupation, they stand as a fair basis on which, modified by advancing costs in general, the necessities of the government and the allies, and the closing of the free wheat markets, may be fixed the price of the 1917 crop, while we know of no occupation in which there has been a general rise ap- proaching 100 percent in wages or other legitimate returns over previo rates, we are willing, all things considered, to recommend for the American wheat grower a price approximataiig that percentage. Therefor our vote, for the grades usually reported on for wheat at the farm, is fl.75, the resultant differential giving for the higher grade of Number One Northern Spring |1.84, With bakers' grade of wheat at $1.75 per bushel, our advices are that a pound loaf of bread may be sold at a profit by any baker at 5 cents, while the working housewife may prov'ide her family with bread a less than half that price made from flour bought at barrel rates. -10- The undersigned take this occasion to announce that they will recoi mend to the organized wage-workers of America that they ask the Congrei that the flour of the ^2 wheat of the crop of 1918 shall not be sold Gi the basis of that price plus the profits of dealers ;ander th^ regula- tions of the Food Administration. Their proposltj o-n is th?i^, t\3 Ccv--ri raent shall intervene at the stage at which the flour leaves the mill, the farmer and the miller having received their due reward, and shall fix the price of the flour oh the basis of ^1.50 wheat, the loss of fifty cents to the government being made up through general taxation. In this way all the nation will bear the burden of the high price fixec by the Congress for the wheat of 1918. Otherwise, the price of the flour would bear, by an enormously large proportion, chiefly on the poorest classes of the nation. J. W, PULL IVAN, w. N. DOAK. APPENDIX #37 REPORT BY MR. TABER. Chairman and Members of the Committee; President Garfield once said, - "At the head of civili- zation stands not militarism, not commerce, but agriculture, the mother of all industry and the nurture of human life". This is as true today as when uttered because history has taught us that the first essential in national growth and development is an abundant and constant food supply. Thus we are forced to conclude that a remunerative and satisfied agriculture is as vital to our cities as to the country. Without agriculture prosperity, - national prosperity, has always been impossible. The farmers of this country who produce something like 97 per cent of all our food supplies have asked no class treatment, want no special favor or privilege, but do demand a square deal and equal treatment. The farmer asks us that in setting the price of wheat we consider his rights as a producer and present value of his product, but does not ask us to forget that wheat is the keystone in the arch that sustains life. He is willing, - yes, desirous that we shall set this price in harmony with the price of the other necessities of life. The farmer does not want us to forget that the consuming public has a.. vital interest in this question. Wo real farmer desires to make an undue profit from this baptism of blood and -2- tears. The thoughtful farmer is willing to make his sacri- fice along with those in other walks of life, but insists that in considering the interests of the consumer we think not primarily of the very poor in the congested centers of population, "but rather the average of the cons^uming public. The problem of the very poor cannot be solved by reducing the price of wheat to their level. It would pen- alize and destapoy agriculture. Their problem must be worked out by the public in other ways. The farmer also asks you to remember that through his organizations for a half century the farmer has in- sisted that transportation and distribution were levying too heavy a tribute on the products of the soil. For a quarter of a century the farmer has received on an average from 35 to 40 cents of the consumer's dollar. In the pro- ducts of wheat he receives even less. The puffed wheat that the consumer buys will retail at- $36.00 for 60 pounds, and yet the farmer receives little more than fS.OO for that same 60 pounds of wheat. Along other lines the parallel is equally striking. The producer and consumer must come closer togeth- er and. reduce the cost between them. All the farmer has to sell is largely the product of his toil of head and hand, so the farmer rightfully contends that the same amount of brain ajid brawn exerted in tilling *3- the soil should bring equal return per hour with the game amount of brain and brawn exerted in the average of other occupations. That the farmer has not been so rewarded is positively testified to by the constant and increasing drift from country to city. To those who say that if the farmer asks a fair re- muneration in this ctisis he is deficient in patriotism, - we reply: The farmer, like the laborer or business man, works not primarily because of patriotism or philanthropy but because of the necessity to earn a living for those ilear and dear to him. To those who cha3klenge the patriotism of the farmer, we would refer to the many blood-stained battle fields from Lexington to Appomatox which testify to the valor and courage of the men from the farm. For more than a century the farmers of America have l>een. forced to sell the products of the soil on a market reg- ulated by supply and demand and adjusted to the needs of the export trade. At the same time the farmer has been compelled to buy in a market stimulated by protective tariff. During the past two years, for the first t'iJtte-in the history of the American farmer, the law of supply and demand and export trade has been working in his favor, and now the Federal Government steps in and stops the workings of the law. -4- The action that we are about to take ir ^^ttins th^ prio^ ror wheat, the product of the labor of the millions of men and women who live in the open country, will have the most far-reaching effect upon agriculture of any action during our generation, if we set that price in harmony with the high ideals set forth to this Committee, realizing the interests of all, we will set a price that will not do vio- lence to agriculture. We must make the boys and giiMs of today who will be the farmers of tomorrow feel that their government is not discriminating against the men and women who till the soil. If we do this we will have rendered a real constructive service for agriculture and for civiliza- tion that will be in the end a blessing to all consumers. (Signed) L. J. Taber. APPENDIX 38 » REPORT BY MR. FUNK. August 28, 1917. Mr, Chairman and Gentlemen of the Committee: Mr. Chairman: I will endeavor to give to you and the Com- mittee my idea as to why I suggest that the price of the 1917 crop of wheat be placed at $3«25 per bushel. First, 1 want to say that I have in so far as possible forgotten what my own name is. I have endeavored to study and carefully weigh every angle that has bfeen presented and discussed before this Com- mittee, with the one thought of what is best for my country now and for the future. I own no grain elevator stock and my ovm farm produced very little wheat this year, so I have practically no personal interest that could lead me to a selfish motive in my calculations. Having eaid the above, I believe I shoxild say just a word perhaps as to who and what I represent- on this Com- mittee. Some of you already know, I don't know who it was who suggested my name for this Committee. I was told by Mr, Hoover when first introduced to him about two months ago that he knew perhaps as much about each member of the Committees he was appointing as the members did themselves, so none of us I take it are personally responsible, in any way for being on this Price Fixing Committee. For almost twenty years I have been with others endeavoring to preach the doctrine of cooperation along conservative lines in agricxilture, principally throxogh conducting agricultural, educational expositions. (Chicago, 1907; Omaha, 1908-1909; Columbus, Ohio, 1910,; Columbia, S.C., -2- Corn Association which put on these expositions to try to show to the farmer virhere and how he coxold by a little extra effort and through modern methods better his own condition, morally, physically, financially and socially. Replying to the gentleman who made the statement last week in which he charged the manufacturing interests of this country of what I consider a very grave offense, I will say that I too have also experienced the dominating influence of large corpora- tions who bitterly oppose the advancement of the association which I represent, I have also had the experience of having had our expositions boycotted and so labelled on literature sent to me through the mails, because there was among our exhibitors one firm that was not at that time in good standing with the organi- zation that boycotted us, and yet we were entirely innocent and knew nothing of the charges or proceedings until after the ex- position closed, I am in favor of organization, gentlemen, sane, constructive organization, but we have among us a class of radical farmers just the same as organized labor or organized capital has a following of radicals who would go to the limit. Frequently this class of men are the loudest talkers and the greatest calamity howlers. Human natiore is so constituted that a man who will lambast and rave over the poor down-trodden farmer, merchant, miner or laborer will be able to secure an audience on almost any corner, while the man who is trying to teach cooperation, educa- tion or advancement will more often entertain the smaller audience. We are at war, and above all things at this most oritir- cal time we must have peace and harmony within our ranks -3* throughout this entire United States. It has been said that we are threatened with ddssention and lawlessness in the coming winter, in a few localities already we have unfavorable reports Hunger and cold will aid internal dissatisfaction* We must be prepared to meet an emergency; We must secure for this country',- needs and at the same time help as far as possible to supply oxir allies with food. Our farmers are with us» They are patriotic and willing to sacrifice anything that is within reason. It is essential that they remain within that same frame of mind, contented and peaceful. Two months ago this Committee could have recommended $1,75 to $1,85 per bushel for the price of wheat and the great majority of our farmers woxild have accepted that as a fair price for their 1917 crop, I know this to be a fact from the reports coming to me from over forty thousand wheat growers at that August time* Since July 1 and during ^the price of cash wheat has been around $2»35 to $2,50 per bushel, Chicago, I have just returned from Chicago and in conversation with the President, Mr, Griffii;, of the Chicago Board of Trade, he said that were it not for the effect of the r\jraored price-fixing by the Government on wheat of $2,00 per bushel that wheat would be selling today at $3,00 or more per bushel with an unrestricted and open market. From printed daily reports of the Chicago market, v/hich I have with me, I note that in spite of the $2,00 rumored, cash wheat sold -4v last week in Chicago from |3.23 to is. 32 per bushel and a wire from Chicago yesterday informed me that No.l hard wheat sold at $2.30 per bushel. Since July 1 we have had our farmer boys drafted and this is among the T^permost thoughts in our minds at this time. We did not realize before how it would affect our business. Harvest, that is threshing of wheat and oats; is not over half finished. Eighty per cent of the 1917 crop of wheat is still in the farmers* hands in Illinois; sixty per cent in Missouri^ and proportionately more farther oppth. Spring wheat has hot started to move. The farm labor sitiiation is growing more and more of a problem every day. I can certify to this statement by presenting telegrams and additional information gained during the last few days. While 02,00 guaranteed minimum named by Congress for the 1918 crop would be an inducement for the com belt farmer to put in a larger acreage this fall xmder normal conditions, or I might say this was the sitioation six or eight weeks ago. Since then conditions have so materially changed, principally on accoxint of labor and the late season of harvest, that many farmers are already changing their plan and talking less wheat acreage. Mr, Hoover has asked that this Committee suggest a price that will be fair to all and at the same time satisfy the farmer in a way that he will be willing to go ahead and increase his wheat acreage for another year, ^2.25 will satisfy the grea majority of farmers. -5- $2.00 wheat will not do so, neither will $2.10, unless he can be assured that other food stuffs, canned goods, clothing, shoes, farm implements and labor is also placed under a like control and reduced in price as his wheat is being reduced from what it undoubtedly would be at this time if allowed to be placed on an open and competitive market. I mean $3.00 per bushel or more. I realize that $2.25 wheat will not entirely satisfy the Northwest and if I were thinking of that section alone I would be willing to suggest a higher price, but gentlemen, this com- mittee is suggesting a price that must affect and govern 100,000,000 of people from the Atlantic to the Pacific oceans as well as those additional millions of our allies. Congress well understood the situation when it passed the food regulation act aind handed the price fixing for the 1917 crop of wheat to this Committee. No Congressman dared to name the price for the crop of 1917 wheat and yet this is a Com- mittee with no other authority than to suggest to the Food Department what in our judgement is a fair price. I say I will be in favor of reducing the price of wheat when the Government decides to control and reduce the price of those commodities which he, the farmer, has now to pay for from fifty to three hundred per cent more than he did before the war, and in- cluding in such regulations all labor. The farmer has been taught and made to believe in years past that he is the most independent, and if you please from the city man's point of view the richest class of people on earth, but careful analysis -6* of the situation will quickly show anyone that assertions of this character are founded either on f^lse or ignorant statements. It has been stated to the Conmittee, and it is- ttue> that the wheat-growing sections have continued to grow wheat for a great many years and the farmer has accepted a price far below a price that this Committee has any idea of suggesting at this time, but the farmer has had no voice in the price of the world^s markets. Like the horse which is tied to the manger and has had his hay or straw placed before him to sustain life, the farmei? is told that such and such is the price for his wheat or other com- modities because he must compete with world* s labor in his farm operations. Because of this fact our American farmers have without even stopping to consider the inevitable results con- tinued to drain his land of soil fertility and placed additional mortgages on his farm in order to keep the wolf from his door. A copy of a letter was submitted to this Committee yesterday. Appendix No. 13, by Mr. Spillman of the Department of Agriculture, in which it was shown that the average annual income from reports of fifteen thousand farmers which were above the average for the country in their earning capacity was $422.00. The total re- ceipts of the average farm family, after deducting expense of conducting the business, was $640,40, Of this amount interest on the investment amounted to $322.18, leaving as a labor income for the year $318.22. This includes the services of his wife and children as well as himself. This also includes what he re- ceives towards his living from the farm, and, therefore, repre- sents the total labor income of the average farm family. -7- ContSast these figures if you will with any other income, I care not what, from the common laborer, the engineet^ the fireman, the miner ^ the dealer, the average clerk or the merchant and show me why it is said the farmer is the most independent per- son on earth. I quote from a man of a large experience in farm labor and a man who has been loaning on an average of about one million dollars a year to the farmers of Iowa and Nebraska during the past ten years; "Unless something is done, gentlemen, to assure prac- tical and permanent relief from the present labor and marketing conditions, the exodus from the farms will continue to grow with eaoh succeeding year. Why should men stay on the farm when the lowest wage earner under the Adamson law, requiring no skill and a mini mam amount of muscle and common sense, is receiving an annual wage in excess of the returns from the average eighty-^ acre farm throughout the corn belt? Figures taken from the Department of Agriculture reports show that the wages of this unskilled labor are about $31. 5Q greater than the gross income from the average eighty-acre farm, without making any allowances whatever for interest on the investment to the extent of twelve to fifteen thousand dollars, depreciation of soil, working ani- mals and machinery. In Heaven's name why should any seine young man go to the farm? They are not going, as Doctor Spillman told us yesterday, but on the contrary the very best class of farmers are leaving the farms by tens of thousands. With proper labor -8- and marketing conditions the price'of food stuffs to the consumer could be very largely reduced and still have a profit instead of a loss in operating a farm on business principlest- . Gentlemen, the farmers of this country are watching the action of this Committee as no other Committee has ever re- ceived their attention before in the history of this Government. If we want to force the farmers into an organization that means to them self-protection, if we want agitators and radical or- ganizations among our farmers, then let's suggest that the price of wheat be lower than what will reasonably satisfy the majority of these farmers. You may say that they will not organize. Believe me v^fhen the farmers are forced to do a thing they will rise to the occasion. For my part, I hope forced organization in agricultural ranks will never take place, God help the laboring class, as well as the manufacturers, and people in our large cities should the farmers of this country ever under- take to dictate the policies of this country! $2.35 v/heat, Chicago, if I understand Mr. Barnes^ figures correctly would mean about |10.75 to $11.00 per barrel flour, allowing fair profits to dealers, commissions, warehouses, railroads and millers. l/Phere I came from best grades of flour are selling retail at $4.00 per sack, or $16,00 per barrel. Allowing fifteen per cent profit to the retailer and the same to the jobber, we have the present price of flour selling at $12.30 per barrel from the mill with wheat selling from $2.23 to $2.32 per bushel on a restricted market. I am placing $2,25 per bushel as a fair price for the crop of 1917 wheat, fully T-^o 1 T i7. -incp a.R I do that that ■orice is 50-8 np.T ofint above the -9- average price for wheat for the past three years, but at the same time I realize that it is asking the farmers to accept at least seventy-five cents per bushel less for their wheat if they were allowed to have an open and unrestricted market. At the same time let us not lose sight of zhe fact that there are millions of overworked farmers' wives v/ho would welcome those sisters who are reported to be in poverty-stricken condition in the congested cities in their homes on the farms and. furnish them with pure food, as comfortable quarters as the farmer has the means to provide for himself, and in addition a reasonable wage proportionate to the amount of labor performed in the household* Be it not also lost sight of the fact when suggesting this price on wheat that under the 'draft system the farmer's boy and the city boy who is most physically fit for hard work, these are the boys that the army is taking from us and under most favorable circumstances, and as it has been ac- cepted as a fact by this Committee, it requires the labor of from two to three men from the city to equal one good skilled fatm hand* I understand that a movement is under way through the Department of Labor and labor organizations to furnish men and boys to assist the farmer to put in, take care of and harvest his crop. This is welcomed news, and I heartily agree with the idea, provided that in some way the price of such labor furnished by the Government be regulated by the Government, Having studied •10- theee agricultural conditions for many years and observed the development and the gradual and inevitable transformation of farm life and farm operations, I feel compelled to say at this critical time some things that under ordinary or normal condi- tions would probably be unv/ise, I desire to add in addition to this report a copy of an editorial by one of the leading agricultural editors in the middle west. Respectfully submitted, EUGENE D. FUNK. President, National Corn Association, Washington, D.C, Appendix 39 Department of agriculture washington- August 27, 1917. Hon» Hi A» Gat field, United Staies Food Adjnini^tration, Washington, D, d Dear Mr. Garfield: I have your letter of August 21st (H-SO)^ in which you ask if we could give you an approximate idea of the number of farmers engaged in wheat production in the United States. The Department of Agriculture has never investigated the subject of the total niomber of farmers who produce' wheat. The Census Report of 1900 states that wheat was produced in 1899 on 2,053,912 farms, equivalent to 35.8 per cent of all farms. The Census of 1910 reports 1,458,667 farms growing wheat, equivalent to 22.9 per cent of all farms. The average number of acres of wheat per farm reporting was 25.6 in 1899 and 30.3 in 1909, Taking into consideration the changes which have occurred in agriculture since 1909, we believe that the number of farms which grew wheat in the past year is approximately 2,000,000, or slightly more than 30 per cent of all the farms in the country. The Department of Agriculture has made no investigation for purpose of classifying wheat farmers by size of farms. The Census Report of 1900, Volume VI, page 34, contains a tabulation of farms reporting wheat, classified by farm area, in acres. I can find no similar tabulation in the 1910 Census Report. Using the tabulation referred to as a basis, we would classify the farms having wheat the past year about as follows: *3- Estimated. Distribution of Wheat Acreage by Sizes of Farms . Farms with : wheat : Size of : wheat farms: Average acreage: in wheat per farm: Total acreage in wheat Numbers ; 15,000 : 40,000 ' Acres ; Under 10 ! acres; 10 to 19 : Acres : 3 i 5 : Acres 60 i 000 300,000 375,000 ! , 30 to 39 i 8 ; 3,100,000 550,000 ■ ! 50 to 99 ! 14 ■ 7,600,000 670,000 • 100 to 174 : 36 : 17,000,000 325,000 ! 175 to 359 : 40 ; 9,100,000 175,000 : 360 to 499 : 79 5 13,800,000 40,000 : 500 to 999 i 156 : 6,350,000 10,000 : 1,000 i 300 : 3,000,000 3,000,000 ! 30 : 59,100,000 Very truly yours, (Signed) C. F, Marvin Acting Secretary, Appendix #40 " ■ THE BASIS OF ASCERTAINING A REASONABLE PRICE FOR THE 1917 CROP. Memorandum submitted to the Wheat Price Committee by H.J. Waters, Au 28, .1917 . The wheat producer feels that under unrestrained trading con- ditions the wheat he harvested in 1917 is, worth at least $3.00 a bu el. The farmer feels that if the Government establishes a lower pr than $3. 00 on wheat fC'J? the present season and does not lower the price on other products of the farm, forest, mine and factory corre pondingly, the special tax has been levied upon him for the benefit of the rest of mankind It is also true that this special tax will be imposed in a season wnen production costs are excessive and wher returns from wheat have peen generally low. The farmer has coopjsrated fully and cheerfully with the Goverr ment in its efforts to secure an adequate food supply for the Unit€ States and the Allies. He has made large expenditures for extra labor, seed and machinery for this purpose. If the Government sho\ now enforce a price on the products thus secured that is in any ser confiscatory, or is materially lower than the price at which the product would sell in the open market, the farmer will consider such treatment as being unjust. The farmer feels that the price for the 1917 wheat crop shoulc be approximately the market price at which it was selling in the o} market at the time announcement was made of the determination of t] Government to establish a fixed price. At that time wheat was flo^ ing freely in obedience to the laws of supply and demand; it was at the opening of the new harvest v«hen ^-heat -vvould normally be lov/er than at any other period of the year. Or the farmer would be satis^ fied to take the averaged market price of wheat for the months of May, June, July and up to August 10, when announcement of Government control was made; or indeed, any other reasonable pqyiod of unre- stricted selling. Without a doubt, a price thus established would appear to be high and in the minds oi' many it woulA be excessive, but it must be borne in mind that the cost of producing wheat in 1917 v;as on the average wery high and in many parts of the United States, excessive. It is estimated by competent authorities that the cost of rais- ing wheat has advanced as much as seventy-five (75) per cent in the principal wheat-growing regions Vifithin the year. Moreover, in the leading wheat regions the season, of 1917 was a most unfavorable one for this crop. Nearly a third of the winter wheat sown was abandoned because o winter killing. This is the largest loss from this cause ever suSr- tained. In the average season, the loss from winter killing is ap- proximately nine (9) per cent as compared with thirty- two (32) per cent of this year. Of the fifty-nine million (59,000,000) acres of winter and spring wheat sown, fourteen and five tbnths million acres were abandoned entailing a loss bo the farmer of not less than #4,50 an acre for seed and labor. This is a total loss of $65,250,000 or ten cents (10^) a bushel on the entire wheat orop harvested this yea -3- The remair;d,er of the wheat was so affected by dry weather in those states which grow the greater part of our wheat as to produce a com- paratively low yield. Under these circumstances the cost of producin a bushel of wheat in 1917, taking the United States as a whole, was abnormally high. The increase in cost, however, has not been unifor throughout the country. It is in the great wheat regions that labor costs have increased more rapidly than elsewhere. The loss from vvinter Kxiling and drought has fallen almost entirely upon these regions. Because of these facts, there is an unusual variation in the cost of production of wheat in 1917 between different parts of t country. In some states, such as North Dakota and Kansas, the wheat harvested this year has cost the farmer no less than $2.50 a bushel, allowing for the loss due to drought and winter killing. In other states, such aSyQhio, New York and Pennsylvania, where the season has been favorabl^ and the yield high, the cost per bushel i;e::^eiati^ ly low in spite of the rise in cost of fertilizer, labor and machine If We had been asked to determine regional prices for wheat, as Was determined for coal, instead of one price for the United States, based on Chicago, the problem would be very much less complex. In a normal state of the wheat market regional prices are common, based on the local supply and demand. The price in a given region may be Chicago prices less freight and commission at one time, and Chicago prices with freight and commission charges added at another. Wq are asked, however, to determine a price for one grade of wheat, No. 1 Northern Spring, at one market, Chicago. Wo are asked to fix a price which, after the differentials for all grades and classes of wheat and for the principal primary markets are established, will be a reasonable price for each of the prin- . cipal producing and consuming regions of the country. It is not, we are told, the duty of this Committee to determine these differentials. It is, therefore, the average bushel-cost of wheat for the entire United States in 1917 which we must seek as the basis for the establishment of a fair price at which this wheat is to be sold. It can not be said that because the season of 1917 was exceptionally unfavorable that the production cost for the 1917 crop should be estimated on the basis of the average of several seasons. In fixing the price of coal, if an earthquake had occurre last JanuarjT', the results of which had so interfered with mining operation as to double the cost of coal production, without doubt this condition would have had as muc?i consideration and been given as much weight as was the cost of labor, royalties or mine props. The Chairman of this Committee, ?;ith commendable wisdom, foresight and fairness soxxght, through the Office of Farm Managemer Of -5- the United States Department of Agriculture, information as to the cost of producing the 1917 wheat crop. Telegraphic inquiries were sent by that office to every comity agent in a county which produce as much as 10,000 but^.hels of wheat a year, requesting the agent to submit a certain li^t of questions pertaining to the cost of produo ing wheat to ten (10) farmers, average the estimates thus secured and telegraph the summary to the Farm Management office. It was also requested that the original reports of the individual farmers in each case be mailed to the office. The telegraphic summaries of the County Agents and the individual reports of the farmers repre- senting nineteen (19.) states have been submitted to the Committee by prof. W. J. Spillman, chief of the Office of Farm Management, together with his own summary of the report and a statement of his conolusioiis. The average of these figures shows the cost to be $1.71 a bush- el on the farm for the entire united states, prof. Spillman has called the attention of the committee to the fact that in his experience of more than twenty (20) years in determining cost of production, estimates secured in this way are uniformly too low. After a detailed study of the returns and a consideration of the items of cost, which were omitted from these estimates, prof. Spill- man stated to the Committee that in his judgment the 1917 wheat croj cost the farmers of ~6- the United States about $2.10 a bushel delivered at his local ship- ping station. Based on estimates furnished the Committee by farmers and busi- ness men in letters ard teDegrams and by representative delegations of growers who have submitted statements to us, the figures obtained by the County Agents are too low. It should be said, however, that the estimate furnished by Prof. Spillman's office is the only one tt Committee received which has included the Middle and Eastern states where the yield has been above normal, and the production cost rela- tively low. It should also be kept in mind that the number of county agents is relatively greater in the Eastern and Middle states than in the Western States where most of the wheat of the United States is grown Also it is true, as a rule, that those counties which have agents ar not the principal wheat counties but are the counties in which a mi35 ed husbandry, particularly dairying, prevails, HiTieat, therefore, in such counties as are reported on by county agents is only an inciden tal crop, and is not grovm primarily for profit but as the most con- venient means of securing a stand of clover, and to provide a supply of bedding for the live stock. Production cost, under such circumstanoes, when some other phase of farming carries the overhead expense and receives the principal attention, is certain to be materially lov\?er than in the regions where wheat production is the main industry. It is safe to sa.y, therefore, that the cost of pro- ^7- ducing wheat In 1917 was well above ill. 71 a bushel on the farm. Prof. Spillman's estimate of t3, 10 at the farmer's station is probal ly not far v-i^ong. Taking ill. 71 a bushel as the basis, however, and adding the present market price bf the raw material, plant food, entering into the product ion of wheat, 35 cents; alloviing a labor charge of six • (6) cents, a bushel for hauling the wheat to the local shipping sta- tion and a ten (10) per cent profit, the oOst delivered atthefaraer' elevator would be |2.33 a bushel. Add ten (10) cents on the average to bring this wheat to the primary market; seven (7) cents for dif- ferential between primary market and CUcago, including shrinkage and interest J and sik (6) events ^ bushel as differential between No. 1 Northern Spring and No ^, the grade which the farmer for the most pa2?t produces, and we have the figures of !^3.54 as a price for No. 1 Northern Spring vTheat basis Chicago. If the price for No. 1 Northern Spring was fixed at $3.54 Chicago, the farmer would not receive on the average more than the cost of production plus ten (10) per cent profit for the whole United States, In some of the principal lAiieat states, the farmer would not receive actual cost of production. Appendix # 41 THE iNFLUEKtJ? OF AMERICAN PRICES ON THE WHEAT SUPPlt AVAILABLE FOR THE ALLIES, — '-ooOoo Memorandum submitted by H. J, Waters to the Wheat Price Committee , Aug> 28, 1917. The people of the United States consume about five hundred and forty million (540,000,000) bushels of wheat a year and will need about ninety million (90,000,000) bushels with which to seed the acreage recommended by the Government to be sown for next year's crop, We harvested this year six hundred and fifty- three million (653,000,000) bushels and had a carry over from last year of about fifty million (50,000,000) bushels. It is not possible to use all the wheat of one harvest by the time another is ready. The lowest reserve that is possible without creating a famine is perhaps not less than twenty-five million (25,000,000) bushels. After meeting home requirements, we shall have about fifty million (50,000,000) bushels for the use of the Allies. Mr, Hoover estimates that we should furnish at least two hun- dred million (200,000,000) bushels to the Allies, and that even at that rate the allowance will be one hundred and fifty million (150,000,000) bushels short of their absolute needs. The only possible way in which we may stretch our export balance from fifty (50) to two hundred million (200,000,000) bushels is by us- ing less wheat at home. No saving can be made in the seed re- -2- quirements if we prepare Adequately for next year. It was Napoleon who said that "in time of war care must be taken not to grind the seed ooirn, « The only economy we can exercise, therefore^ is in the amount of wheat oonsvuned. To meet the requirements 06t by Mr, Hoover it will be necessary for us to eat a fourth less wheat bread than usual and increase our consumption of corn, oats, barley, rye and potatoes «o«tespondingly. This can only be ac- complished through the voluntary cooperation of the people and the most forceful argument thai; can be used is that these satisfac- i tory substitutes are cheaper than wheat* i There is litt^-e hope of reducing' the consumption of wheat materially if bread continues to be one of the cheapest articles of diet on the ma:|:kef. A member of this Committee, Mr, Shorthill, has submitted t<|> the Committee a table summarizing the results of a study he made of the Washington retail markets, in which it is shown that wheat flour is cheaper than beans, rice, batley, potatoes, or any other similar food, excepting corn and oats. The substitutes for wheat will be abundant and caifr- paratively cheap this year. We have just harvested the second largest crop of oats in our history, the largest crop of rye, and the third largest crop barley. There is every reasonable prom- ise of a record corn crop and a record potato crop. If the prices of flour be forced to low, the consumer will be encouraged to neglect potatoes, which have been produced this year at an unusiaa^ -3- expense, and at the urgent request of the Government, thus en- tailing a loss to the farmer, and an economic waste in our dietary. Professor W, J. Spillman, Chief of the Office of Farm Management df the U< S* Department of Agriculture, stated before this Committee that wheat consumption in this country had fallen to 4.6 bushels per capita in 1917 as compared with the normal consumption of 5.2 bushels. This decline in wheat coit- sumption was doubtless due to the high prices which prevailed for flour during that period. This reduction in wheat consumption occurred during a period when the prices for corn, potatoes, and other wheat substitutes were the highest on record. The economy in wheat consumption already secured will if continued enable us to increase our exports to the Allies by sixty million (60,000,000) bushels this year. Another saving, larger than this one, must be made, however, if we are to send abroad as much wheat as is demanded of us. With the wide spread and active campaign for econ- omy being made by the Food Department and under the influence of lower prices for potatoes, corn, oats, rye and barley, this fur- ther reduction in wheat consumption can be secured if proper price relations are maintained. We must not overlook the effect of price on pro- duction. Low prices discouraLge production, increase home con- sumption and waste and reduce the supply available for export. High prices stimulate production, curtail consumption and increase supplies available for export . THE EDINBtJRGH REVIEW for July -4- 1917, under the title "Foundations of Food Policy," summed up the experience of Great Britain in food control in these words: "High prices have in practice oheoked consumption and stimulated production and import ; forced low prices have in praClJioe encouraged consumption and diminished supplies, " #1 — lOfo 2 — 40% 3 — 25fo 4 — lOf. 5 — lOf. Sampli a — . 5% APPENDIX # 42 Replies to Mr Sullivan's questions on flour grades of wheat. (1) State proportion of each grade in the present crop. Estimate for present crop Report by Mr Duvel by percentages in 1916 Dr. Ladd crop spring wheat New U.S. standard #1 — 4.,66 2. —28, 52 3 —31. .59 4 —12.58 5 —18.81 Sample — 10.63 rejected -^ 3.24 (2) State present grades of wheat made into ordinary flour under new classification. Under the present scale it would be a blend that represents approximately No. 4 Northern plus, under old system No. 3 minus, (3) What price at Chicago would be equivalent to ^1.75 for that price? Price corresponding if this grade were ?5l.75 at Chicago would be 9^ higher, or cl.84 for No, 1 Northern Spring at Chicago. (4) What figure for No. 1 Northern Spring would represent fairly the price of flour wheat? The figure for No. 1 Northern Spring to represent fairly the price of flour wheat would be "^^1.84 at Chicago . Atjpendix #43. Reasons for |2,30 Wheat As Stated by L, J. Taber, Professor Spillman in his estimates to the Committee stated i it as his belief, based on investigations covering every section of the country, that the actual cost of wheat to the farmers of America was |1.71 per bushel, taking the nation as a whole, and adding all omitted costs it would be s^2,10. Allowing a fair pro- fit of 10 per cent we arrived at the price of |2.30. ' 1st. Only the most favorably located farmers with No. 1 wheat could receive this cost plus reasonable profit price. Most of the wheat will grade between 2 and 3, allowing for freight differentials. If the price is placed lower many farmers will be compelled to sell their wheat for less than tZ .00 2nd. Prices of flour at present are now based, on wheat which has cost the miller above ^2,50 per bushel. This price will provide for a substantial reduction in the price ■. of flour of something like ^1,00 per barrel. The economies , of the Grain Corporation and Food Administration should in« crease this reduction materially • 3rd, A price less than $2.30,- or rather the price which will mean little ifiore than $2,00 at the farmers' mar- ket, will cause v;heat to be used largely for poultry and stock feed; something that can only be prevented by holding the price of wheat to a reasonable figure. 4th. The farmers of this country have seen this years' -2* fifteen days of August at a price from |3.50 to $3.00. The farmers will feel that by placing the price at $2,30 every farmer with whea,t to sell is making a direct con- tribution to the welfare of the country of from $20 to $50 on every hundred bushels of wheat he has produced. $2,30 will mean $3,20, or less, for the wheat that goes to the rolls; is the lowest possible price that is fair to the producer, yet it is a price that still is equitable to the consum.er, for without this legislation wheat would be selling today for $5.00 or m.ore-. It is a price that will add to the conservation of T>rheat and assist our nsition in the great struggle for humanity. APPENDIX #44, Statement of Mr. Shorthill on prices of flour and wheat. THE RELATION OF PRICE OF FLOUR AT RETAIL UNDER THE FOOD ADMINISTRATION PLAN WITH WHEAT AT ^2*50 PER BUSHEL, BASED ON CHICAGO, NO, 1 NORTHERN, TO THE PRESENT RETAIL PRICE OF FLOUR. 4^ bushels wheat required to make a barrel of flour at $2.50 $11, 3£ Cost of milling and profit l.OC Freight from Chicago to New York r3C Jobbers' cost »5C Retailers* cost l.OC Total 14. 0£ DEDUCT Differential between price of No. 1 Northern and No. 3 grade at .09 a bushel Value of mill feed per barrel of flour Total deduction Net cost of barrel of flour in New York with wheat at f3,50 Chicago Present retail price of flour Saving Percentage saving to. 39 1.11 1.50 13.55 15.00 3.45 16.3 j APPENDIX #45 Statement by Mr Vail. It seems to me that the members who are insisting on either extremes in fixing the price are - not giving enough considere tion to insurance against the ohanc e s of the future. If the vfar ends the price of wheat will go far below the present prices in all probability. If the ;-var continues it will go far above . In either case it may not go to the extreme that some predict but one forecast is as good as the other, Therefore it would only seem reasonable that we fix on a medium price. Not because it represents a mean of opinions but it might be called a weighted average, • on insurance against either extreme. You will all agree with me that the farmer who speoulAtes sooner or later comes to grief . Therefore it is wisdom to insure against loss on the one hand by not taking the chance of an extreme price when he can get a reasonable price. The medium price represents instirance against either extreme. If we fail to advise the President, as we are in duty bound to do, then the President must fix the price. Is there any probability that he would fix if below the minimum price for next year. Is it likely that he will fix it at the -extreme or for, if any above a price which seems to be a reasonable one conaidering cost and cost of producing. -3- All estimates made on the data collected from different sources seem to point to about mean price as reasonable as a fair price and the President accepts it. By fixing that price we strengthen the hands of the President and assume our share of %lf\@ responsibility and as in duty bound relieve the President of some of his already large overload. We also save ourselves from the liability of being called irreconcilables arid obstructionists, Have we given sufficient consideration to the guarantee for next year, v;hen we consider the cost and price of this years crop, The farmer is guaranteed for next year a minimiom of $2.00, At that price he will be j\istified in planning for a bumper crop. The minimum price fixed on the basis of every estimate We have made for that year warrants the large planting. The price is good because on a larger average farm acreag( on each farm. All the overhead and fixed charges per acre will be reduced and those costs which do not directly increase with acreage will also be less per acre. Under the fixing for the minimum for next and the fixing of a medium price for this year the farmer is insured of two successive years which v;ill be at least fair, with chances for mueh better than fair - and an assurance against that risk which no hioman foresight can foretell. NL statement eubmitted by Mr. Waters THE WHOLESALE PRICE OF BAKERS' PATENT FLOUR AT NEW YORK COMPUTED ON BASIS OF GOVERNMENT PRICE OF WHEAT. (ESTIMATE BAEED ON STATEMENT OF ONE OF THE LEADING MILLERS OF THE SOUTHWEST) , Northern Spring No« 1 at Chicago $2.20 Deduct freight differential between mill and Chicago .15 Deduct differential between #1 and #2 grade '05 «1Q Cost of milling vvheat at uiill 2.02 Cost of flour 4-^ bushels wheat at $2.02 ■ $9.09 Cost and profit of milling per barrel 1*00 Freight to New York, per barrel 'SO Selling commission ilO ^ ^ Total ^10. yy Deduct value of mill feed I'll Deduct differential for bakers' patent i60 — liTl Wholesale price bakers' patent F.O.B. New York 9.28 Such flour is sold on guaranty of 300 14 oz. loaves to the barrel 300 14 oz. loaves at .05 15.00 Cost of flour — ^iS8 Bakers' cost and profits Spread between cost of flour and bakers' cost of bread on the basis of .05 loaf ^J-** 5.72 ». , APPENDIX 47. Mo, 1 Report of the Coirmittee on Prices to President Wilson. UNITED STATES FOOD ADMINISTRATION. WASHINGTON, AUGUST 30, 1917. To the President of the United Sta-^-es: The undersigned oomirittee has been asked by you to rec- ommend the price which the Government should pay for the 1917 crop of wheat • In its deliberatioxis the committee has kept constantly in mind the three following factors: First. The fact that the United States is at war. Second. The need of encouraging the producer, Third. The necessity of reducing the cost of living to the consumer* The normal laws of supply and demand have been violently interfered with and Congress has undertaken to offset this disturb- ance by conferring extraordinary powers upon the President to stab- ilize prices. Each of the foregoing factors grows out of condi- tions which have received the careful attention of the committee, Chief among them are: That the wheat yield in a great and important section of the country has this year been below the normal; that over against this situation is the crying need among the whole body of the population, especially the wage earners, that the rising tide of costs shall be stayed and reduced as rapidly as possible con- sistent with the welfare of the producer; that the Government is at the present time engaged in the great task of reducing and stabiliz- ing costs of other staple commodities; that the wheat of the world is abundant f»r its needs even disregarding' Jt he ^tore^s in Russia, but because of lack of Rhip»4_n^-and _war conditions the burden of supplying wheat to the allies and to neutral nations rests for the time being upon the United States and Canada. Your committee has also considered the fact that the rrovernment pric^ for t^e 19:,'' crcp is in effect a continuing guar- anty until tjie KininiuiTj price guaranteed by Congress for the crop of 1918 goes into effect (July 1, 1918). It has considered the rela- tion of the 1918 minimum price guaranty to the price here recommend- ed. It has also considered the effect which an early termination of the war would have upon the wheat markets of the world. In reaching its conclusion the committee has been guided by the principles you have aritiounced, that a fair price should be based upon the cost of production for the entire country, plus a reeisonable profits We have relied upon the cost estimates for the crop of 1917 furnished by the United States Department of Agricul- ture, checked by the results of our independent investigations and the evidence submitted to the committee by producers and their representatives. The committee has considered the regulations recently established by the United States Food Administration Grain Corpora- tion for the different grades of the wheat through* which all trans- actiofta in wheat are to be standardized and speculation to be entirely eliminated. Also that profits to the grain dealer, miller, and flour dealer have beeniegulated and reduced by the Grain Cor- poration, effecting a material reduction in the cost of flour. tn consideration Of the foregoing facts and circusistances, this committee respectfully recommends that the price on No . 1 -3- Nortliexn Spring wheat, or its equivalent, at Chicago, he $2.30 per bushel . Respectfully submitted. !>;, v^< ^/w,, * H. A, Garfield, Chairman. Theo. K. Vail» •^,fi ■■■' 5>,../ J, ¥. Sullivan, E. F. Ladd. , • F. W. Taussig. iiUgene £. f'unic. '-.'J,.' • ,, ■ H. J. Waters, ■ : 0. S. Barrett. ;, j>, : J. W. Shorthill. . • ■' .:■•.,-.;., L. J. Taber, ,v' ; W. N". Doak. ;■' 'h u ' ■if* -.;;i!.i-v-. WHEAT DIFFEREFTIALS. No. 2, The following are differentials between grades and classes of wheat and between the different primary markets of the United States as established by the United States Food Administration upon which the comraibtee on prices based its recommendation of $2, SO for No. 1- Northern Spring v/beat at Chicago, or its equivalent; FRIGES AT IKTERlOft PRIMARy MARKET, No. 1 Red Winter, No, 1 Hard Winter, basic grades, equivalent of No. 1 Northern Spring. Government Price. ■Dark Hard Winter $2 .24 Hard Winter, basic 2.20 Red Winter, basic 2.20 Yellow Hard Winter 2.16 Soft Red Winter 2,18 Dark Northern Spring 2.24 Northern Spring, basic 2,20 Red Spring 2.18 Humpback 2,10 Amber Durum 2 .24 Durum, basic 2.20 Red Durum 2.13 Red Walls • 2,13 Hard T"hite, basic 2.20 Soft White 2,18 IWhite Club 2.16 No. 2 of grade, 3 cents less. No. 3 of grade, 6 cents less. No. 4 of grade, 10 cents less, RELATIVE MARKET BASIS. Kansas City, 5 cents less. Omaha, 5 cents less. Duluth, 3 cents less. Minneapolis, 3 cents less. St. Louis, 2 cents less. Chicago, basis. New Orleans, basis. Galveston, basis. Buffalo, 5 cents more. Baltimore, 9 cents more. Philadelphia, 9 cents more. New York, 10 cents more. No. 1 No. 1 No. 1 No. 1 No. 1 No, 1 No. 1 No. 1 No. 1 No. 1 No. 1 No. 1 No. 1 No. 1 No. 1 No. 1 ANWOUlCTETirENT BY THE PRESIDEUrT, The White House. Washington, August 30, 1917. Section 11 of the food act provides; among other things, for the purchase and sale of whedt and flour by the Government, and appropriates money for the purpose. The purchase of wheat and floui fot our allies, and to a considerable degree for neutral countries alab, has beeii placed utider the oDntrdil of the Food Administration, I h&ve appointed a committee to determine a fair price to be paid ih Government purchases. The price now recomm.ended by that com- mittee -,$2.20 per bushel at Chicago for the basic grade - will be rigidly adhered to by the Food Administration. It is the hope and expectation of the Food Administration, and my own also, that this step will at once stab^^'ize and keep within moderate bounds the price of wheat for all transactions throughout the present crop year, and in consequence the prices of flour and bread also. The food act has given large powers for the control of storage and exchange operations, and these powers will be fully exercised. An inevitable consequence will be that finan- cial dealings can not follow their usual course. Whatever the advantages and disadvantages of the ordinary machinery of trade, it can not function well under such disturbed and abnormal conditions as now exist. In its place the Food Administration fixes for its purchases a fair price, as recommended unanimously by a committee representative of all interests and all sections, and believes that thereby it will eliminate speculation, make possible the conduct of every operation in the full light of day, maintain the publicly stated price for all, and through economies made possible by stab- ilization and control, better the loosition of consumers also. No. 3- r- Mr. Hoover, at his' express wish, has taken no part in the deliberations of the committee on whose recommendation I determine the Government's fair price, nor has he in any way intimated an opinion regarding that price, Woodrow Wilson, V ^*^t!c ■^'A' K^-'S- -KH 1. ^^tH s, *C^ •vjf^