Hanna and Hoover — and Their Task
Agnes C. Laut
Who wrote "The Canadian Commonwealth," etc
EDITOR’S Note.—The food problem in Canada is not exactly the same as in the United States ■where Hoover is striving to bring order out of chaos. In the main, however, Hanna's task is the same as Hoover's. Miss Laut establishes in this article the fact that to tamper with the food question is a dangerous thing— for the Food Controller, but more particularly for the public. The article gives a clear view of the magnitude of the problem and of the many issues growing out of it.
IF Hoover, the Food Administrator of the United States, survives his present job, it will be interesting to know whether he found the red tape of Prussianism in Belgium or the wire pulling of food manipulators in America the more vexatious; for let it be frankly acknowledged that price-fixing as a regulator of food supplies has proved a total failure in the United States. No man ever came to a wiser decision than Mr. Hanna when he refused to launch a price-fixing campaign in Canada. The pity is that Mr. Hoover should have been misled into trying to regulate food prices through the howls of consumers, on the one hand, for lower cost of living, and the howls of producers, on the other, for higher prices for produce.
Hoover’s job wasn’t price-fixing at all. It was to help to win the war by ensuring an ample food supply to a hundred million people in the country, and forty-five million people in the British Isles, and
eighty to a hundred million people in Belgium, France, Italy and the lesser Allies; for Russia can look after her own food supply. His job was the same job he had in Belgium, only multiplied a hundred-fold. His job was distribution, not price-fixing; for price-fixing has
failed in wheat, in milk, in meat, in coal, in copper, in steel—in everything to which a price has been fixed. It has not lowered the price to the consumer. It has increased it It has not increased the price to the farmer. It has decreased it in every single case compared to the prices a year ago.
Hoover realizes this too late; for when the fight on milk prices was put up to him, he shunted the deputations of dairymen and milk companies from committee head to committee head, and finally came out with the sententious advice to the public to use less milk — such advice was spread broadcast in tens of thousands of circulars—with the result that the demand for milk decreased and the farmers began selling their dairy herds in tens of thousands for beef, so that the milk supply visibly and appallingly decreased to such an extent that the milk dealers jumped the price of milk to city consumers to 14 cents a quart— an increase of 5 cents in three years. On the other hand, paying extortionate prices for feed and offered fabulous prices for beef, the farmers demanded a higher price for milk, so that the interference with the laws of supply and demand have simply ground the consumer between the upper and lower mill stones, decreased supplies and increased prices. So Hoover refused to set a price on milk and ended by asking the dairymen not to demand longer contracts on milk supply than two months at a period. This is bound to work still greater loss to the milk supply; for the farmer must know approximately
what price he is going to receive for milk for six months before he can lay in his dairy feeds. Meantime, the price of beef is 40 to 50 cents a pound ; and the farmer can realize big prices by selling his milk cows for beef. In Chicago, 100,000 more cows have been sold in 1917 than in 1916. In the East the farmer has, in fact, sold 26% of his heifers in the last year for beef, and 71,000 cows in the dairy section tributary to New York alone. It will be four years before this decrease can be made up by natural increase. Meanwhile, what becomes of the supplies of raw milk, condensed milk, butter, cheese, meat for a hungry world? What becomes of hides for shoe leather?
HOOVER’S excuse for a short-time contract was that he thought he could reduce the price of dairy feeds; and that brought him straight back to the price fixed for wheat, $2.20 a bushel. At $2.20
a bushel, wheat products for dairy feeds stand at a basic cost price of $73 plus a ton; and if it is objected that only the bran, the shorts, the middlings are used for stock feeds, the answer is that the wholesale cost of these stock feeds to-day is $.r>0 to $65 a ton. In fact, when the dairy farmers got together to buy feeds at manufacturer’s cost, the lowest price they could get on grain feeds was $50 a ton, freight to be added. In other words, Hoover could not guarantee cheap feeds to produce milk and meat because he, himself, or rather Congress, had fixed a price for wheat. When the price-fixers turned back to put things to rights for meat and milk, they found their feet in their own trap—fixed prices for wheat. The vicious circle had run its round and brought them back just where they had begun—stumped by a shortage of supplies, and confronted by the ugly fact—and you can’t argue a fact away—that fixed prices do not and cannot increase supplies.
But this was not the worst of the
vicious circle on price-fixing of wheat. The welkin has resounded with complaints that the farmers are not delivering their wheat. They are not. Why should they? To be frank, a great many haven’t it to deliver. They had big crops in 1916 and got from $2 up a bushel. They had big crops in 1915 and got from $1 up a bushel. These are not the Board of Trade figures; but they are the averages which the farmers received. This year, they have had to plow their crops in; and they will be unlikely to put in big crops for 1918. Why? Because even with the loss of 1917, they are ahead of the game; but if they put in a big crop for 1918, and suffered a second bad year, they would be bankrupt; and in a year of dreadful financial uncertainty, they no more dare take that risk in their business than you dare in yours. If prices had worked up to $3 plus as they were last year, or as they were during the Crimean War, they
would have taken a gambler’s risk for a gambler’s chance of enormous gain. (We are not dealing with people as they ought to be, but people as they are.) And even if sudden peace, or an abnormally large crop, had smashed prices down to pre-war levels so that the gambling wheat man might really lose enormously, the faet remains the world would hare been assured an enormous and cheap supply of wheat— which was what the food administrators were appointed to do
AS to the farmers, who have some 600,000,000 bushels in the United States this year, they are not coming across with deliveries for equally valid reasons. To begin with, the harvest season was very late and winter weather has set in six weeks earlier than usual—the earliest for 46 years. The farmers are still worked off their hands and feet to save, thresh, and house their crop, and to plow for next year’s crop. Also, frankly, they are not keen on this price fixing. Many of them went in debt to pay $4.50 for seed. By selling now, they can get slightly under the fixed price of $2.20—there are differentials on points West of Chicago— but by feeding that wheat now they can get $4 to $4.20 a cwt. for unscreened chicken feed, or $3 to $4 for unscreened pig feed. Now I don’t know and do not intend to look up, though the data can be found in scientific tables, how many pounds of wheat it takes to make a pound of chicken, or turkey, or pork, or beef, but I do know from experience on my own farm when you change a pound of wheat into a pound of chicken, or turkey, or pork, or beef, the pound of wheat fixed in price at 3 1-3 cents is worth 38 cents a pound as poultry, or 40 cents as turkey, or 35 to 40 as pork, or 40 to 50 as beef. (I give the prices within a radius of 100 miles of New York.) And I do not know of any power on earth, the Kaiser’s, or the President’s, that can prevent the producers transforming 3 1-3 cent wheat into from 38 to 50-cent meat. Right here, please note and smile, if the subject is not too tragic for smiling, that Hoover has flatly and utterly refused to fix the price of meat. He couldn’t fix the prices of meat, any more than he could of milk, and not un-fix the price of wheat. Price-fixing had led round and back in the same vicious circle of seeming to go forward and really leading you back—where you had begun.
I COULD give practically the same details of copper and coal and steel. Steel and copper prices have reacted on output less because the prices were finally fixed at what were really the market levels of supply and demand. Coal was fixed low with the result that coal is now $8.50 that was $7.50 in June; and there will be many coal-less homes in this country this winter. Canada is in much better condition on this question of food than the United States. She still has more people on the land than in towns. She still raises more food than she consumes. When she raises a 200,000,000 or 300,000,000 bushel crop of wheat, she needs only 6 bushels a head, or 50,000,000 bushels for herself; but when this country raises 654,000,000 bushels, she needs 600,000,000 bushels for herself. To put it differently, Canada can export enough wheat to pay her current war costs. When this country’s total war exports—exclusive of non-war sales—are $2,000,000,000 for 1917, her war costs promise to be close on $20,000,000,000. With chicken feed at $4.15 a bushel,
eggs promise to rank with Klondike gold nuggets. They are 60 cents a dozen now in October with every prospect of being a dollar by Christmas. With cows decreasing by the hundreds of thousands a year, we need not be surprised to see butter at $1 a pound. It is now 46c. a lb.; and farmers do not “threaten to slaughter cattle,” as the foolish news head lines have put it. Farmers sell off their cattle because they cannot afford to buy the feeds to keep them alive. What is happening through price-fixing is what happened in Germany with pork. The hogs were slaughtered to save feeds for human food. Suddenly, the whole empire was starvation-hungry for pork fats. All sorts of wild remedies are being suggested. “Restock eastern farms with dairy and beef cows.” Restock from where, and feed with what, when you have restocked? “Fix wages?” Well— the anthracite coal miners “fixed” wages; and many of the miners simply moved away to more paying vocations, while those, who remained, demanded increases from 50 to 70%. The Government fixed coal prices, and the small operators simply stopped. They stopped for the same reasons the farmers sold cattle. They could not go on.
T HAVE gone into the situation in some -*■ detail for two reasons: because Canada has seemed on the verge of repeating the mistakes made here; and because the situation impending here gives Canada the most advantageous position she has ever had in her history towards American markets. What profit she is to reap from her advantage is for her people to work out, and not for any onlooker to say; but tf Canada had them to-day, she could ship 400,000,000 bushels of wheat to the United States at $2.20 a bushel, and $90,000,000 of such dairy feeds as beet pulp, for a car load of which I have just contracted today at $45 a ton (there are 45,000 dairy farmers in the East alone needing from 20 to 40 tons each year). Fruits, milk, butter, cheese, meat, vegetables, grains— all are inadequate here to-day.
All this, of course, is not Hoover’s fault. We were headed towards food scarcity ten years ago, though Jim Hill and Jim Wilson and others were hooted as Cassandras for predicting exactly what is happening to-day. The war has hastened our pace to the scarcity—that is all. When 30% of the people produce food, and 100% of the people eat food, and 70% of the people produce no food, and four times our own population need food —something is bound to crack and give; and what has cracked and collapsed is our system of food distribution; and that was Hoover’s job, not price-fixing. As to prices, let them soar! The higher prices go, the more men and women xvill go into the xvork of producing food. The more capital will go into the work of producing food. Standard Oil is indirectly behind one of the largest corn concerns in the world and one of the largest semi-dairy concerns in the world, and the dividends on the former run round 19% and on the latter 48%'; but you don’t hear of Standard Oil yet going into the business of producing food as it produces oil and copper, because it can’t make as big returns producing food as it can producing oil and copper.
LJ OW Hoover could have increased food A by directing distribution is best illustrated by the orange growers of California. Years ago, when the orange crop
came on, there was such a glut of fruit in California, oranges rotted unsold on the ground and orange groves were rooted out and burned. Then, when the crop was past, orange prices would leap high as $20 a box. The orange growers formed
their famous co-operative unions to handle, harvest and sell the crop. Oranges never went lower than $2.50 a box, or higher than $7. There was never a glut and there was never a scarcity. The consumer paid prices less by two-thirds and the grower gained prices greater by twothirds. Orange groves multiplied and prospered in California. Now I have seen fruit rotting under the orchards
of New York State because it did not pay to ship apples at 60 cents a barrel, when city people were paying $6 a barrel. I have seen dairymen selling herds because they received only 2 to 3 cents for milk and 6 to 11 cents for beef, when the consumer was paying 10 to 15 cents for milk, and 30 to 40 cents for meat. I have seen big poultry plants disbanded and torn down in New Jersey because the chicken farmer could not get net 20 cents for eggs, when the city man was paying 50 to 60 cents. I have seen potatoes in Minnesota rot in the rows because 15c. a bushel did not pay to pick them, when Chicagto people were paying $1.50 to $2.
This does not imply that a highway robber intercepted the food from field to city. It simply implies that it was nobody’s business to look after the handling and sale of that food. Some of it came on a glutted market. Some of it rotted as it waited for sale. Some of it went into storage and ran up excess storage charges. Much, very much, .deteriorated and wasted as it waited for sale. Nor does food distribution imply the slaughter of the middleman. The orange growers didn’t slaughter the middleman. They didn’t even lay down the ten commandments to him. They didn’t “regulate” him. Nor did they pass laws on him. What they did was carefully to regulate the flow of their oranges through his hands to the market, so there was never either glut or scarcity—and the price regulated itself so that the grower had a certain and steady profit in returns; and a certain and steady profit in returns is the only way to increase food. The difference between food carefully distributed and food left to distribute itself is the difference between moderate rains and cloud bursts alternating with drought.
Hoover is too practical and able ever to be misled very far by the doctrinaries with whom Wilson has surrounded him. I have reason to believe that he realizes the mistake of price-fixing. The $2.20 for wheat is now being vaguely twisted as a fixed minimum, not a maximum; and when the milk producers besought him to set a price, he flatly refused.
THE situation here as to food is not a good one. I" am no pessimist; but the country has come to the cul de sac towards which it has been headed for forty years. There will be no starvation here. Relieve your mind of that fear! A country with tens of thousands of acres of waste lands will never starve, but we are going to have some hard jolts this winter. Fixed prices are like arbitrary wages. They may be arguments but they are not food for the larder, nor coal for heat. A lot of people will find that no matter how high wages are, wages will not buy food unless the food is produced. There "will be a big reversion back to the land with all its kid glove tragedies and comedies. There will also be a revolution in food distribution, whether that fact be socialism, or any other “ism.” There will be by Christmas what Hill and Wilson predicted—food riots, bread lines, soapbox damnation of the social system and other windy howls from people who will eat but will not work; and there will be great suffering among the children and aged of the poor in this land of plenty; but Hoover is no fool. He is one of the biggest men thrown to the surface of the war’s tumultuous maelstrom; and I predict a complete turnover in Hoover’s policy before Christmas.
WHAT IS FOOD CONTROL DOING IN CANADA?
"The real reason for food control in Great Britain," says Lord Northcliffe, "is not to protect the civil population at all, but to see that the Allied atonies at the front get their full rations. I can imagine no greater selfishness on the part of a democracy than to eat its fill while it allows its soldiers in that dreary land where they have been for three years to go hungry."
What is being done to protect Canadian troops?
Through the institution of beefless and baconless days in public eating places, the consumption of beef has been reduced 40 per cent., of bacon 51 per cent. This indicates a monthly saving of 100 tons of beef and 33 tons of bacon.
To secure more wheat for human food and less for cattle feed all mills are required to manufacture three grades of flour, the highest extraction of the wheat that will make a wholesome loaf. Incidentally the profits of millers have been limited to 25 cents on the milling of enough wheat to make a barrel of flour, or 196 pounds.
On November 5th an Order-in-Council was passed to the effect that no grain of any kind and no substance that can be used for food shall be used for the distillation of potable liquor after November 30th.
The favorite advice of the Food Controller, to eat perishable foods and save the staples for export, was materially strengthened by the embargo on canned joods which lasted from August twentyfourth to October fifteenth, or during the season of fresh vegetables and fruits. It is difficult to estimats just how much food was conserved through this measure.
WAcn it was settled that saving food for the army must be effected chiefly through using substitutes at home, and people grumbled about the high price of substitutes, the Food Controller said, "If you cared about the men who fight for you you'd eat your share of corn and fish instead of wheat and beef, whether they cost more or not." In the meantime he was working for better transportation of fish, to develop inland waters and increase fish production. He was dealing with the complicated situations connected with the importation of corn and sugar.
H’hile the Food Controller is ready to control prices where the restriction will not unbalance the country's whole industrial and social system, he says: "Let those who see only their own immediate interests in the price of, say, eggs, those who find their motors a burden, or their margin for amusements interfered with owing to the price of butter, study for a moment the complexity of connection and cross-connection in the economic fabric. Let them observe not just the first, but the second and third effects of the legislation they