Memorandum on Price for Government Purchases of Pacific Northwest Wheat

Memorandum on Price for Government Purchases of Pacific Northwest Wheat

United States Food Administration

WWP19183

1917 September 8

Due to the arrangements fixed by the Presidential Committee, the price of wheat grown in the northwestern United States cannot complete with wheat grown in the Mississippi Valley.

Hoover-Wilson Correspondence, Hoover Institution, Hoover Institution Archives, Stanford, California

Woodrow Wilson Presidential Library & Museum

United States--Politics and government--1913-1921

English

During the whole of the past year, and apparently for sometime to come, the cost of ocean freight from Pacific Northwest ports on wheat to Liverpool is higher than the cost of shipping the same wheat from these points by rail to the Atlantic seaboard, and therefore, the Pacific Coast wheat must come directly into competition with the wheat in the Mississippi Valley.

If the President’s Committee had fixed Portland as a base market as well as Chicago, and had placed them on an equivalent basis, the northwest wheat would flow into Portland and would then have to be reshipped back to the Mississippi Valley with an accumulation of freight charges which would make it some fifty cents a bushel higher than the Mississippi Valley wheat. In such case either the Government must take a loss of fifty cents per bushel, or the consumers must pay fifty cents a bushel more for northwestern wheat than for Mississippi Valley wheat. It wou,ld be utterly impossible for a miller purchasing wheat attthis increased price to compete with other millers buying Mississippi Valley wheat on the lower level.

Under the arrangements fixed by the Presidential Committee, the differential simply works out to the actual amounts of mileage from points of departure to Chicago, and varies, of course, with the different points in the Northwest, reaching a maximum of about thirty cents a bushel at certain points.

During the whole of last year and part of the year before, the northwest wheat was marketed upon this very basis. In fact at the beginning of last year’s season, the differential was ever wider than at present. This year the marketing of the northwestern crop is starting at about eighty cents a bushel better than the marketing of last year’s crop started.

The basis of price and method of differentials for Government purchases was determined by the committee appointed by the President and unanimously agreed to by them. All the national farmers associations were represented upon the Committee, and the northwestern situation was fully considered by them.

It does not rest with the Food Administration to alter the findings of the Presidential Committee.

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