EDITORIAL 



Will There Be A Corn Loan? 

 ( CC/Q OOPERATING farmers have been left holding 

 ^^L the bag again," commented a critic of the AAA 

 \^y who made no pretense of his disappointment 

 at the action of the Secretary of Agriculture in declaring 

 the ever-normal granary not quite full enough to justify a 

 referendum on corn marketing quotas. 



Presumably he had visions of an exciting time this 

 fall attempting to beat the program. 



"What about corn loans to cooperators," we sug- 

 gested. "Ever hear of them.'" 



"There won't be any corn loans," he assured us. "A 

 lot of things have been promised that were not delivered." 

 How do we know there will be a corn loan this fall? 

 Uncle Sam has never failed to deliver on a promise spelled 

 out in legislation. Here is the authority as enacted by the 

 75th Congress and set forth on page 15, section 302 of 

 H. R. 8505, otherwise known as The Agricultural Adjust- 

 ment Act of 1938: 



"(d) The Corporation (Commodity Credit) is 

 directed to make available loans on corn during 

 any marketing year beginning in the calendar 

 year in which the November crop estimate for 

 corn is in excess of a normal year's domestic con- 

 sumption and exports, or in any marketing year 

 when on November 15 the farm price of corn is 

 below 75 per centum of the parity price, at the 

 following rates." 



Next follows the loan schedule which begins at 75 

 per cent of parity, if the estimate does not exceed a normal 

 year's consumption and exports, and on down through six 

 brackets to 52 per cent of parity when the estimate exceeds 

 a normal year's domestic consumption and exports by more 

 than 25 per cent. 



"Loans shall be made to cooperators in the commer- 

 cial corn-producing area at the applicable rate of the above 

 schedule. Loans shall^ be made to non-cooperators within 

 such commercial corn producing area but only during a 

 marketing year in which corn marketing quotas are in effect 

 and only on corn stored under seal pursuant to section 324, 

 and the rate of such loans shall be 60 per centum of the 

 applicable rate under the above schedule. " 



The present outlook is for a corn loan to cooperators 

 this fall of about 57 cents a bushel. 



Wheat and Com and the AAA 



>^F ANY further evidence is needed to drive home 

 ^w the necessity of surplus control measures, the pres- 

 y_^ ent wheat and corn markets provide it. There was 

 no acreage adjustment plan operating in wheat last year. 

 The result is well nigh a billion bushel crop, far too great 

 a supply for the demand at anything like reasonable price 

 levels. 



Says the New York Times, "There is an exportable 

 surplus of approximately 550,000,000 bushels, or about 10 

 per cent in excess of probable takings by importing coun- 

 tries throughout the current crop year without additional 

 supplies likely to be furnished by the southern hemisphere, 

 Russia or other countries." 



26 



Recently wheat prices have dropped to the lowest 

 period in 30 years with the exception of the 1932-'33 de- 

 pression period. All this in spite of the fact that the U. S. 

 has depreciated the dollar to 59 per cent of its former gold 

 value. i 



Reports from Washington indicate that consideration 

 is being given a plan to sell abroad as much as 100,000,000 

 bu. of surplus wheat by means of an export subsidy if nec- 

 essary. The wheat loan of 59 to 60 cents a bu. in this area 

 has had little if any effect on prices; first, because few farm- 

 ers are equipped to store wheat properly; and secondly be- 

 cause there has not been enough difference between the 

 country price and the loan price to bother about. 



The 31 per cent wheat acreage adjustment program 

 announced by Secretary Wallace for next year should be 

 effective in bolstering prices, but here, too, buyers have 

 been doubtful as to how many farmers will cooperate. The 

 announcement this week that adjustment payments of 26 

 to 30 cents per bushel would be paid wheat cooperators 

 next year may change this situation. 



The corn market has been in the doldrums along with 

 wheat. Here again the fly in the ointment is the large 

 carry-over of 640,861,000 bu. as of July 1 from last year's 

 bumper crop when there was no adjustment program in 

 operation. The big wheat surplus and low price, like- 

 wise, have a bearish influence on corn prices. A bushel of 

 wheat is still as good as a bushel of com in the feed lot. 



Despite unprecedented corn exports (estimated at 

 120,000,000 bu. in the year ending Sept. 30, 1938) which 

 obviated the necessity of a marketing quota referendum, 

 recent prices for corn at country points have been under 45 

 cents a bu. That there will be a corn loan for cooperators 

 this fall is a foregone conclusion. Nothing but a sharp 

 rise in price to 75 per cent of parity can prevent it. 



It becomes increasingly clear that if farmers really 

 want to get prices back toward parity levels it will be neces- 

 sary to think in terms of how to make the program we now 

 have workable on nearly every, if not every, farm. Let's 

 think of ways to correct weaknesses in the program rather 

 than to permit ourselves to become unduly critical at least 

 until such time as we have something better to suggest. 



Organized farmers have fought long and hard to 

 place surplus control legislation on the federal statutes. 

 While no program man can put together will suit every- 

 one, what we have is much better than the "do nothing 

 policy" of our opponents. 



Thinking farmers will be exceedingly reluctant to 

 withhold their support from the AAA of 1938. 



Production Control By Low 



The Texas Railroad Commission recently ordered that 

 all oil wells in that state shut down each Saturday and Sun- 

 day. The oil prorating order carries out the national policy 

 supported by government to limit production of crude 

 oil so as to maintain reasonable price levels. Questions for 

 opponents of crop surplus control: "Are fair price levels 

 in agriculture, the nation's basic industry, as important to 

 the national welfare as a profitable oil industry?" 



L A. A. RECORD 



