TWENTIETH ANNUAL YEAR BOOK— PART VII 601 



strategic force, I wouldn't be surprised that it is being used as a strategic 

 force against farm product prices. Of course, we are all acquainted with 

 the use of railroad cars as a strategic force. We also have the Federal 

 Reserve Banks with their tremendous possibilities in strategic price mak- 

 ing. The speculative markets are all more or less responsive to the in- 

 terest rates. You have got your car shortages, and then in addition you 

 have ocean freight rates that enter into this strategic proposition. Ocean 

 freight rates are not a fixed thing like railroad rates. Before the war 

 ocean freight rates were twice as high in the fall of the year as in the 

 summer — they were transporting your farm products in the fall. Ocean 

 freight rates have a strategy all their own. 



What shall we do about it? I think we must first recognize that we 

 are living in an age of big business — frankly recognize it. Not neces- 

 sarily kick against it. We are living in an age where things are graded 

 and priced and sold on 'future contracts. We are living in that kind of 

 an age; an age when things are tremendously under the influence of 

 Wall street and the board of trade. I don't recommend tearing down 

 the board of trade or wrecking Wall street. In fact, I think they have 

 a splendid purpose, but we must learn just how this machinery is being 

 used. Under this price system, unfortunately, it often proves of advan- 

 tage to business men to hold down their production. The steel men 

 have held down their production to three-fourths plant capacity during 

 the past year, and pig iron as a consequence has recently increased in 

 price from $29 a ton to $40. It is unfortunate vmder this price system 

 that it is an advantage at strategic moments to hold down production. 

 The laboring men have found out that it is profitable to shirk their work, 

 and to strike for higher wages or for betterment of working conditions — 

 and it is a very unfortunate thing. The cost of the whole thing, un- 

 fortunately, is borne by the only people that are not employing this sa- 

 gacious sabotage, and that is the farmer. The cost of this nasty, dirty 

 work is borne by the farmer. The business men are working under a 

 system where it pays to do this kind of thing. If we don't meet this 

 situation, bolshevism will get us, that's all. 



The great present need, as I see it, so far as we are concerned, is to 

 establish an adequate research department, either as a part of the Na- 

 tional Farm Bureau or our State Farm Bureau — an adequate research 

 department, from which we will not expect any wonderful immediate 

 results. I would have it gather facts and figures and prepare itself to 

 represent us in price matters as efficiently as Clifford Thorne has repre- 

 sented us in railroad matters. 



The Chairman : We will take a few minutes for discussing 

 this subject. That is, if you have any special questions. We 

 don't want any running discussion here, but if there is anything 

 in the minds of any of you that you would like to ask Mr. Wal- 

 lace, we will take a few^ minutes. 



