18 AjStnual reports of department of agriculture. 



The proposal in question contemplates the setting up of a Govern- 

 ment export commission charged with the duty of disposing of the 

 surplus in the form of wheat or flour in such a manner that the 

 domestic price may rise behind an adequate tariff barrier to the 

 point of restoring the pre-war purchasing power of wheat in the 

 domestic market. Such an agency would need money with which 

 to operate, and it is proposed to start it with a working capital 

 of, say 5 $50,000,000, that being the approximate sum which the 

 Government made in the way of profit by its war-time handling 

 of wheat and flour when the price of wheat was arbitrarily con- 

 trolled and held below the price at which it would have sold 

 without such control. In case losses P.liould be incurred because of 

 the character of its operations, it is proposed to recover the losses 

 through the levy of an excise tax on the crop of wheat itself. In 

 the end the cost would be paid, not out of the Public Treasury but 

 from assessment on the growers benefited and should not be large. 



That in briefest form is the essence of the plan suggested. It is 

 not a proposal for price fixing, as that is generally understood. It 

 might be described as a plan to give the wheat grower the measure of 

 protection which is given to so many other groups by making fully 

 effective the principle of the protective tariff on a commodity of 

 which we produce a surplus and which is suffering from destructive 

 competition in a depressed foreign market. Or it may be described 

 as a plan by which the Government, without material loss to itself, 

 undertakes to do for the wheat growers what they can not now do for 

 themselves — ^bring them into a general wheat pool through the opera- 

 tion of which they may secure a fair price. 



The proponents of this plan suggest that it avoids the stimulus to 

 overproduction which is a serious objection to arbitrary price fixing, 

 and that the mechanism of marketing wheat now existent need not be 

 seriously interfered with, assuming that exporters evidenced a will- 

 ingness to cooperate with the export corporation. This is impor- 

 tant, because the reason for the corporation should gradually disap- 

 pear as the reestablishment of normal conditions through natural 

 economic forces restore normal price ratios. 



'V^Hiile the plan proposed could be applied more easily to wheat 

 than to some other agricultural products, obviously if favorably con- 

 sidered it should not be confined to dealing in wheat alone. It should 



