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THE WHEAT PROBLEM D. A. MACGIBBON T HE wheat problem is one of the greater peaks in the vast mountain range of problems thrown up by the Great Depression. The mass of literature dealing with wheat that has accumulated during the last five years is almost as great as the wheat surplus. Wheat prices, wheat carry--overs, wheat-growers' distresses , methods of wheat-marketing, and kindred subjects , with the advent of the depression, quickly exacted attention from statesmen the world over. Many projects of state, such as stabilization boards, preference in tariffs, bonus distributions, import boards, quotas and embargoes , have been inaugurated, all aimed at coping with the difficulties of wheat-growers. Three international conferences have wrestled with the problem, and to .the agreement signed last summer in London twenty-two nations attached their signatures-striking testimony to the world-wide importance of wheat. In a short article it is quite impossible to review all phases of the wheat problem. A more useful service can be performed in endeavouring to lily bare its fundamental elements, to make clear the theories implicit in the soluti9ns that are advocated or are being attempted, and, finally, to indicate the bearing of the world situation upon Canada and the Canadian wheat-grower. The,fundamental fact is that, in the summer of 1929, the trend of wheat prices turned sharply downwards and continued in that direction until about the end of 1932. On July 29, 1929, No. 1 Northern Manitoba wheat was quoted in store at Fort William at $I.78i per·bushel. On December 16, 1932, the price for the same 228 THE WHEAT PROBLEM grade in the same position reached the low level for all time of 39i cents per bushel. These Canadian prices are taken as illustrative, for a similar downward trend occurred in the price of wheat in other countries on an export basis. In the United States and in some of the net deficiency countries of Europe, prices of wheat were bolstered in various ways to protect the national wheatgrower . But while this policy partially concealed the situation as indicated by domestic wheat priCeS, it did not really alter the basic facts. . It is true that, with the onset of the depression, prices of other commodities also fell to new lows, but the prices of the various fabricated articles that the wheat-grower must purchase did not fall so fast nor so far as did the price of wheat. For instance, in Canada the general index of wholesale prices, based on the year 1926 taken as 100, in December of 1932 was down to 64.0, while on the same basis the wheat-index was down to 28.3. Wholesale prices had register.ed a decline of thirty-six per cent., but prices of wheat had fallen by sixty-two per cent. Thus it has become a commonplace that the wheatgrower has had to contend not only with the repayment of debts and of interest upon debts contracted during the period of high prices, but that he has had also to face a widened discrepancy between the price-level of goods sold and goods purchased. Explanations of this catastrophic fall in wheat prices have run chiefly upon two lines. There are those who hold that the present situation has been produced by the under-eonsumption of wheat and those who believe it is due to over-production. Both groups are equally positive that they are correct. Moreover, their disagreement about the cause of the evil naturally leads· them to offer different solutions to remedy it. 229 THE UNIVERSITY OF TORONTO QUARTERLY Before analysing the nature of the theories of underconsumption and over-production, it is Ilecessary to put the reader in possession of the facts that these theories seek to explain. To do so we must turn to statistics. It is difficult to keep these within limits, but the writer believes that the following tables,' helped out by some incidental comment, are sufficient to expose the problem in its main outlines. 1. WHEAT STATISTICS Between 1910 and 1914, the years immediately preceding the war, the average world production of wheat amounted in round numbers to approximately 3,800 million bushels...


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