Race to Market

While the Senate pothered over future crop production (see above), in other quarters of the capital the more realistic and troublesome problem of last year's wheat crop came forward and was met with a temporary solution. The 1928 crop was a bumper, close to 900 million bushels. On March 1, there still remained 355,563,000 bushels undisposed of, bulging in elevators and farm bins. It was the largest surplus since 1919, To make matters worse, the 1929 crop promises to surpass 1928's to run well above the 900 million bushel mark.

Canada had an 8 cent freight rate advantage over the U. S. to the world market. The U. S. surplus could be moved only at a loss. It was not moving, yet estimates showed that some 200 billion bushels must move before the next harvest.

Last week the Kansas City Southern R. R. cut its wheat rate 7 cents per 100 Ib. from midwest points to gulf ports. Wheat exporters were ready to leap with joy. Then eastern railroad executives (New York Central, Pennsylvania, Baltimore & Ohio, Reading, Lehigh Valley) met in Washington, recognized "an emergency of national proportions," volunteered to cut their freight rates from the Mississippi Valley to North Atlantic seaports on wheat for export. The reductions per bushel (60 Ib.) would be: 2 cents from Buffalo, 4 cents from Chicago, 5 cents from St. Louis.

Western railroad executives then met in Washington to consider similar reductions which, if added to those by the eastern carriers, would move each bushel out of the glutted midwest to Atlantic seaports at about 9 cents per bushel cheaper than at present. The Shipping Board was approached to establish emergency freight rates on wheat to European ports as an additional means of increasing the outflow from the U.S.

President Hoover commended this voluntary action of the carriers as "a fine act of co-operation."

Canada has no less of a surplus wheat problem than the U. S. and it was by action in that quarter that U. S. relief plans may yet be nullified. The Canadian wheat surplus on April 1 was 246 million bushels which also had to be moved out before the new crop came in. The Port of Montreal was congested with surplus grain. Eleven vessels with large wheat cargoes cleared last week, starting the flow to Europe. To retain Canada's present 8 cent freight advantage to the world market, its railroad executives prepared to discuss rate reductions correspondingly below the new U. S. rates.

As an oldtime Chicago wheat trader put it: "It's a footrace to Market -and a pretty poor market at that." Europe, whither Canada and the U. S. are racing to dump their surplus wheat, already has surplus wheat of its own and more surpluses pouring in from Australia and the Argentine.