4^4 AGRICULTURAL DISCONTENT 



Several reasons were suggested for this action. One was that the au- 

 thorities believed that the current prices were lower than the conditions 

 of supply and demand had warranted. The situation was abnormal also 

 in the sense that the farmers were bringing their crops to market earlier 

 and in larger quantities than usual. Another reason, by implication, was 

 that the Board would be in a better position to get farmers to join co- 

 operatives associated with it. Nonmembers would be encouraged to join 

 because they would be assured of ready cash and minimum prices. A third 

 reason was that the Board would be better situated to discourage specula- 

 tion. It was felt that since the incentive to speculate would be removed, the 

 farmers would be in a better position to get prices equal to those paid on 

 the market. 30 



It was shortly after this that the Farmers' National Grain Corporation 

 was incorporated with an authorized capital stock of $10,000,000. It was 

 to handle wheat, oats, barley, corn, buckwheat, flax, and grain sorghums 

 in order "to centralize . . . cooperative marketing efforts, to unify the 

 activities of all farmer-owned grain agencies, to minimize speculation, to 

 avoid duplication of marketing machinery, to eliminate competition 

 among grain cooperatives, and to enable grain producers to exert a 

 stronger stabilizing influence on market prices." 



The individual farmer linked himself with the Farmers' National by 

 becoming a member of a pool, a grain dealers' association, or a terminal 

 marketing agency which owned stock in the corporation. The Farmers' 

 National lent money to cooperatives which it, in turn, had obtained 

 from the Federal Farm Board, other government agencies, or private 

 sources. Cooperatives were to lend money to the locals, which in turn lent 

 it to the individual farmers; but in the case of the regional pool, the 

 money was lent directly to the farmer. 31 



But extending loans was merely the beginning. After a further demorali- 

 zation of wheat prices, the Farmers' National offered to buy wheat at 

 loan prices. On December 21, at the start of the trading day, the bid of 

 $1.18 for No. i hard winter wheat in Chicago was accompanied with rises 

 of three and four cents on all markets; but despite this, there was little 



30. "The Farm Board Takes a Chance," Business Wee\ (November 2, 1929). 



31. Federal Farm Board, "Farmers Build Their Own Marketing Machinery, 

 Bulletin 3 (Washington, 1930), pp. 7-10. 



