576 IOWA DEPARTMENT OF AGRICULTURE 



satisfaction what the trouble was. There was on hand then about eight 

 or nine months' supply of wool more than the world normally has on 

 hand. Normally we carry about six or eight months' supply of wool 

 ahead. It takes about that much surplus to last the country over a given 

 period. And we learned that we have in the world today about a year and 

 a half supply of wool, and that supply has been accumulated since the 

 war, and that accumulation is due to the fact that the world has not 

 consumed anything. 



The same condition that I have related with reference to wool also 

 applies to cotton. Before the war the world consumed 18,000,000 bales 

 of cotton a year; that was the world's annual consumption of cotton 

 before the war. During the war the demand came down to 15,000,000 

 bales, and last year, due to the fact that there was starting up a great 

 many mills, an enormous demand during the first half of the year was 

 created and the demand came to 17,500,000 bales, while this year we are 

 down to 15,000,000 bales. For the first three months of this cotton year, 

 we are on a 10,000,000 bale basis. We are not producing more things of 

 this kind today than we did before the war; we are not producing as 

 much cotton as before the war; we are producing about the same amount 

 of wool, aixd if you exclude from consideration Poland and Russia and 

 the Balkan districts, we are producing just about the same amount of 

 breadstuff s; it is not an overproduction of these things, but the con- 

 sumption of the great markets of Eurc>^e is below the average. 



What Can Be Done? 



And that brings up before us a great question for our farmers to 

 consider, and I do not know what the solution is. I know this, that if we 

 had, in a manufacturing business, an oversupply of steel or any other 

 commodity, we would shut down two or three units of the plant until 

 we had disposed of the surplus and got back on a supply-and-demand 

 basis. But you farmers are not on a supply-and-demand basis — you are 

 asked to continue production just the same. Whenever you have a sur- 

 plus that is visible and very large, you are expected to continue produc- 

 tion at a reduced return, and the trouble is we have a surplus in most 

 of those things. I don't know what we are going to do. I had hoped that 

 the time would come when we would find some way in agriculture of 

 adjusting to these changing conditions without the hardships that agri- 

 culture has faced thruout all history. 



This situation we are now facing is not new. Take Europe, or any 

 other agricultural country, and in looking over its agricultural history 

 you will find that this depreciation in demand for agricultural products 

 has always caused a drop in price, and when the supply has diminished 

 the price advances proportionately. Prices would stay down until the 

 marginal men were forced out of production and the supply had again 

 caught up, and then we were on a supply-and-demand basis again. 



Market Information Needed. 



It seems to me we should get a better way of adjusting world de- 

 mands. Two things are to be considered all the time. One is production 

 and one is demand. But demand has changed. Demand may pick up 



