406 TO INCREASE HOME-GROWN WHEAT 



Practically the whole expenditure incurred in giving a bonus 

 would be productive, and would directly increase, not merely 

 the production of the United Kingdom, but the world's production. 

 Beyond a small cost of administration there would be no expendi- 

 ture for buildings, for interest on capital, to cover loss from 

 deterioration, or to cover loss from market manipulations. It 

 would be to the grower's interest to prevent damage by vermin 

 or weather, as the more sound wheat he marketed the greater 

 would be his return. These are other reasons for the bonus being 

 paid per quarter, and not per acre. 



Wheat improves in quality by keeping it in the stack for six 

 months, whereas the most that can be said for keeping it under 

 any other condition is that it may be prevented from deteriorating 

 for a period, at a considerable cost. 



A bonus would benefit consumers because it would increase 

 the world's production, and so tend to prevent the price going 

 too high. 



There is only one thing to be said for the proposal to store 

 wheat in granaries, viz., that it would give the Government that 

 amount of visible stock, and so far would tend to allay panic 

 for the first week or two. On the other hand, the public would 

 be better informed when the stocks were depleted, and the panic 

 might ultimately be greater.* 



There are also the following considerations : 



Firstly, that there is no excess of wheat in the world, and it 

 would take many years to accumulate a large enough stock to be 

 of any use. If several million quarters were withdrawn at once 

 for storage purposes it would create a shortage, and the price 

 would go up to an unknown point. The community would thus 

 have to pay the cost of the storage scheme and a higher price for 

 their bread. 



Secondly, the whole expenditure would be quite unproductive. 

 The capital expenditure on buildings, the interest on capital, 

 the loss by deterioration, are all dead loss. Some labour would 

 be employed to keep the wheat moving, and some dealers would 

 make profits by market manipulations, which a storage scheme 

 would facilitate. But the chief loss would be incurred through 

 buying wheat at the top price (since the purchase of wheat for 

 storage would send up the price) and selling it at a lower price ; 

 this lower price being due partly because it had (or soon would 

 be) deteriorated in quality, and partly because the sale would 

 bear the market. 



In view of the uncertainty regarding the possible capture of 

 food in vessels on the high seas, the necessity of increasing the 

 quantity of home-grown food supplies will be apparent ; while 

 such an increase must be much more effective than the payment of 

 a national indemnity for ships and cargoes lost during war time. 

 As was clearly recognised in the Minority Report of the Royal 



* Since this report was presented another factor has been intro- 

 duced, viz., hostile aircraft. 



