anaheim-gazette 1924-09-04

FEDERAL SUPERVISION OF MARKETING NEEDED Wheat was one of the crops the production of which was greatly stimulated during the war period from patriotic as well as selfish reasons. Before the war the normal acreage planted to wheat in the United States was around forty seven millions. It reached a peak of seventy million acres at the close of the war. During the last two years, however, this acreage has been reduced. In 1922, it was reduced to sixty-two million and in 1923 to fifty-eight million and it will probably not exceed fifty-five million in 1924. Within two more years I hope it will not exceed fifty million acres which will take care of our home needs. Our wreat problem will be eliminated when we cease to be exporter of wheat in competition with such new wheat producing countries as Canada, Australia and Argentina. Then, and only then, will our forty two cent a bushel tariff wall work in the interest of all the wheat producers. At the present time the farmers who produce the wheat containing a high per centage of protien are getting the benefit of the tariff because we are producing less high protein wheat in the United States than is required to fill the demands; hence high protein wheat is on an import basis. Our exportable surplus consists of soft, semi-soft wheat and low grade hard winter wheat. They must be sold on the world's market in competition with Canada's excellent wheat and Australian wheat, also with Argentine wheat, wheat that is being produced at less cost because of cheaper land, cheaper labor in some cases lower production costs and cheaper transportation. increasing the cost of manufacture. Thus exports of non-agricultural products would break over the tariff wall and a serious wave of unemployment would be created. This would reduce the consumption of agricultural products, and we would be lucky if we escape a general panic. And in such a situation the farmer as usual would be worse off than anyone else. The plan would stimulate production, when what agriculture needs is not more production, but less The script system proposed in the bill would mean flat money, and the script hawked back and forth would lose its original value resulting in a loss to the corporation of the fee provided. An army of 50,000 men would be needed by the government to prevent corruption. There is a measure now before congress which proposes to create a federal marketing board. It was introduced in the House by Mr. Williams of Michigan, and into the Senate by Mr. Capper of Kansas. I have examined this measure critically and I have had others, in whom I have confidence, examine it carefully; and I think it to be the soundest proposal that I have had the opportunity to examine for the assistance of agriculture. It proposes for agriculture a type of government action which is being successfully taken for other interests by several analogous agencies, such as the Interstate Commerce Commission, the Federal Trade Commission, the flour or automakers than fourteen years dertook effective utility companies rates, investments companies are no public agency. To regulation and subservience would be even those who assume has failed cannot improve a new pointed like the R by the Governor efficiently restructured the taxpayers' armies of employees. Private initiative opened California. People is usually wasteful to compel taxpayer amounts of money from the financing of us by a plitical machine disaster. The voters should majority than any agitators who refusal of the poor expressed. Repeat such measures is all tends to bring initiation. WASHINGT (From Our ReguIf one may judge fury and anguish wu suing from Democritic quarters and viole Democratic leaders nothing has so co Democratic goat, nor Dawes definition in the field. With nass with which he ropean situation which all Europe has Dawes declared tha paign to be a congressive conservative. Our exportable surplus consists of soft, semi-soft wheat and low grade hard winter wheat. They must be sold on the world’s market in competition with Canada’s excellent wheat and Australian wheat, also with Argentine wheat, wheat that is being produced at less cost because of cheaper land, cheaper labor in some cases lower production costs and cheaper transportation. We have passed the day in America when we can grow wheat for export in competition with these countries and the sooner we turn to the production of other crops, the better it will be. Fifty million acres properly prepared, planted to good seed and properly cared for in the harvesting and marketing, will make wheat goering profitable in the United States and at the same time supply our domestic need with the kind of wheat demanded in the trade. Canada, Argentina and Australia have an almost unlimited acreage of virgin prairies adapted to wheat production and for many years to come will be able to produce an ample world’s supply of wheat. Our only hope is to cease to be an exporter of wheat. The farmers are filled up on advice from the outside. They only want to be left alone to work out their own problems. They would like business men and others who have been strong on advice the last few years to turn their attention to a plan whereby the farmer may purchase a plow, a set of harness, a binder and other implements and supplies at a cost compensate with what he is able to get for his wheat. They think that business men could accomplish a great deal more along this line if they would go at it seriously. The farmer believes that he has not been getting a square deal and I believe that he is right. He has had too much to pay for the things he has had to buy. He realizes, of course, as we all realize, that the cost of labor is a large element in this price; that labor, being approximately twice as high as it was before the war naturally makes transportation costs high clothing high, and farm machinery high. He is wondering how long it can last. He is hopeful that it is about over. Personally I think that inside of two years it will be over and that the farmer will come into his own and basis. This measure critically and I have had others, in whom I have confidence, examine it carefully; and I think it to be the soundest proposal that I have had the opportunity to examine for the assistance of agriculture. It proposes for agriculture a type of government action which is being successfully taken for other interests by several analogous agencies, such as the Interstate Commerce Commission, the Federal Trade Commission, the Federal Reserve Board and the Federal Land Bank. The intent and purpose of the act is to create a federal marketing board which would function for the farmers, co-operatives and other organizations handling farmer products, as the Federal Reserve Board, and other bodies functioning for the industries which they represent. The bill does not inject the government into business. The bill provides primarily for governmental action which will serve chiefly to encourage and safeguard intelligent and business like procedure in co-operative marketing of agricultural products. In my opinion it helps to set up market machinery which will enable the farmers to engage in commodity marketing in a fair high class and unobjectionable manner. It deserves the serious consideration of every business. ARGUMENT AGAINST THE WATER AND POWER ACT The pending water and power constitutional amendment is the same measure which the people rejected two years ago by a majority of nearly 354,000 writes A. H Breed, president pro tem of the California Senate. It pledges the State’s credit to an issue of five hundred million dollars of tax free state bonds. A board of five persons, appointed by the Governor would spend the money in acquiring, operating and maintaining such water and power projects as it deemed necessary or inconvenient. This political board would operate the projects from Sacramento, fix rates and determine conditions and quality of service, all without regulation by the Railroad Commission. Consumers and communities would thus be at the mercy of five politicians with a virtually unrestrained control of industry. Should incorrect estimates, inadequate service or political management prevent projects from paying expenses or raising taxes from Democracies quarters and vice versa Democratic leaders nothing has so coined Democratic goat, Dawes definition in the field. Withness with which he ropean situation which all Europe lends Dawes declared that he be a cogressive conservative and dangerous raion to show that there find no escape from lette, the conservative progressive he must no ground for vow Coolidge. This, o wholly out of the what has given him shock, for they know then, to rub it in curately described a party which “in itself from the t suffer only those who try to fight.” It was as and that, no doub as we all realize, that the cost of labor is a large element in this price; that labor, being approximately twice as high as it was before the war naturally makes transportation costs high clothing high, and farm machinery high. He is wondering how long it can last. He is hopeful that it is about over. Personally I think that inside of two years it will be over and that the farmer will come into his own and that the disparity between the purchasing power of a bushel of wheat and the cost of the various articles the farmer will have to buy will be considerably less than it is today. I do not think that the farmer situation is going to be helped through such legislation as is proposed in the McNary-Haugan measure which was before the congress for disposal. They are not asking for charity. They want a square deal. They want our business men and our legislators to make it possible for them to buy the things they need in the operation of their business at a reasonable cost, and they will do the rest. The McNary-Haugan measure, in my judgment, is a very unsound, unsafe measure to be enacted into a law. Generally speaking I believe that the demand for this measure is not coming from the substantial farmers of America but from the distressed merchants and bankers and farmers who are attempting to grow wheat under unfavorable conditions. The plan embodied in the McNary-Haugan bill is said not to be price-fixing, yet it provides that the government buy the farm surplus until the price reaches certain ratios to an "all commodity index". The government thus determines the ratios and consequently the price. The effect of operation of the measure will be to pyramid prices, or inconvenient. This political board would operate the projects from Sacramento, fix rates and determine conditions and quality of service, all without regulation by the Railroad Commission. Consumers and communities would thus be at the mercy of five politicians with a virtually unrestrained control of industry. Should incorrect estimates, inadequate service or political management prevent projects from paying expenses or meeting interest charges or requirements for repayment of principal out of artes, explicit provision is made to meet deficits and losses out of the general funds of the state. The Board is empowered to appoint such employees as it may require and fix their compensation. These employees are exempted from the state civil service law, so that the Board can build up a great political machine through patronage. This year, advocates of the measure seek to take political advantage of the drought by making the water and power amendment as a water conservation plan, but public ownership will not increase rainfall. Behind the existing dams the storage basins are almost dry. What California needs is more rain, no more empty reservoirs. There is no public need for the state to embark in the power business, and no good reason for adding half a billion dollars of tax free bonds to the huge volume of such securities outstanding. Many advocates of the water and power measure, undismayed by the failure of North Dakota in the wheat and banking businesses, favor the act as a first step in California toward the taking over by government of essential industries and the redistribution of private wealth through taxation. There is no more reason why the State should adventure into the power business than into ANAHEIM GAZETTE the flour or automobile business. Less than fourteen years ago the State undertook effective regulation of public utility companies. As a result, the rates, investments and service of such companies are now controlled by a public agency. To scrap the policy of regulation and substitute public ownership would be unjust and foolish. Even those who assert that regulation has failed cannot logically offer as an improvement a new commission appointed like the Railroad Commission by the Governor and given the insufficiently restricted power of expending the taxpayers' money and hiring armies of employees. Private initiative and effort developed California. Political management is usually wasteful and inefficient and to compel taxpayers to provide enormous amounts of borrowed money for the financing of unspecified ventures by a plitical machine would be to invite disaster. The voters should rebuke by a larger majority than before the restless agitators who refuse to accept the decision of the people so emphatically expressed. Repeated submission of such measures is a public nuance and tends to bring initiative into disrepute. WASHINGTON LETTER (From Our Regular Correspondent) If one may judge by the howls of fury and anguish which have been issuing from Democratic National Headquarters and vicariously uttered by Democratic leaders in all sections, nothing has so completely gotten the Democratic goat, not donkey, as Chas. Dawes definition of the three parties in the field. With that same inciseness with which he diagnosed the European situation and devised a plan which all Europe is now praising, Gen. Dawes declared the presidential campaign to be a contest between "progressive conservatism" and untried supporters are so angry. The Democrats had hoped to advocate radicalism in the west and conservatism in the east, to play both ends against the middle, and now the General exposes their hand; shows up their game and no Democrat knows how to answer him. Bryan told the Democratic convention. What Davis is, William Jennings "Mr. Davis' present employment would be a fatal handicap in a presidential race," said the once Peerless One. "He would not carry a single state west of Pennsylvania, and as no Democrat is likely to carry an eastern state against Coolidge, this would leave only the south, which has not enough votes to elect a president." The N. Y. Times, a leading Democratic organ, tells why Bryan was picked for vice-president. It says, "It is by this time pretty plain that Governor Bryan was chosen as Democratic candidate for the Vice Presidency with one clearly defined object. He was to hold the vote of the farmers and the laboring men in certain strategic western states against the assaults of Senator La Follette." And now the inevitable result of that sort of straddle is becoming obvious. Davis, seeking to endear himself to the western states, is becoming too radical for the east, and Bryan is becoming too conservative for the west, and the Democratic leaders are in a terrible funk because they foresee the prediction of their peerless leader coming true. According to Senator Ed Smith of New Jersey, there is another occasion of gravest anxiety to the Democrats. They have learned that a considerable number of Bryan Democrats are trying to deliberately defeat Davits. That is, they are urging the La Follette-ites to make a fight which will throw the election into the Senate, the House is obviously deadlocked, so as to insure Taxes more reductions mean The measure of success in railroads dollar earned does not cover the cost with a margin over the business. THE SANTA FE Maintenance of trucks, buildings, etc. Maintenance of impounded trains, freight trains, station and switching, and other traffic agencies. Fuel Salaries and expenses of clerks and other legal, valuation, general officers, post-depreciation and retirement, equipment loss, damage and casualties. Rent of equipment, list facilities, water interest on bonds and other interest charges. Dividends on capital stock. Taxes Balance available for expanding facility. Of the last item 3.02 cents came from so than rates so that a reduction of less than $0 would have wiped out the entire margin of earnings through rates. Even a decline in gross business such as this year inevitably reduces this balance because not many of the cost items can be in proportion. The adjustment between success and failure one in the transportation industry welfare of the country, it should not be light with either by laws or by the various commissions control the main elements of railroad earning. It is particularly notable in the above stated taxes were more than dividends and only. The Santa Fe already has reduced is vital for shippers. It can be furrowed Is Five Cents on the Dollar of Valuation too Much to Earn? If a business worth $10,000 earned $500 net income in a year (or $41 a month), would it be considered an unreasonable profit and proof that its prices were too high? The railroads are in that situation today. The 1923 net return for the whole country was less than 5 per cent. As of December 31, 1919, the Interstate Commerce Commission gave to the railroads a tentative valuation of $18,900,000,000. With actual figures for 1920, 1921, 1922, and with 1923 conservatively estimated as $1,100,000,000, there has been invested in the railways since this tentative valuation a net amount of $2,371,583,000, making the value as of December 31, 1923, $21,271,583,000. On this amount the Railways in 1923 earned an aggregate net operating income of approximately $997,610,000, or 4.69 per cent. The Government guarantee of earnings expired August 31, 1920. If this guarantee had been continued—as repeatedly but erroneously claimed—the Government would owe the railroads more than a billion dollars because they foresee the prediction of their peerless leader coming true. According to Senator Ed Smith of New Jersey, there is another occasion of gravest anxiety to the Democrats. They have learned that a considerable number of Bryan Democrats are trying to deliberately defeat Davis. That is, they are urging the La Follette-lites to make a fight which will throw the election into the Senate, the House is obviously deadlocked, so as to insure too, will themselves vote for La Follette to this end. They regard Davis as inallenably associated with Wall Street. Their views on this subject were strikingly confirmed by Senator Tom Walsh in his speech informing Davis of his nomination. They would prefer a Democrat to La Follette, provided the Democrat was sufficiently radical, and they perceive in the arcic provisions of the constitution a method whereby they can eliminate Davis and put the Democratic radical into the White House without appearing to desert their party. Just how far this movement has gone is known only to the Democratic leaders and they won't tell. But Senator Smith declares it is very extensive in Minnesota and adjacent states. Senator Wheeler, who has just come back to Washington, declares his faith that the election will be thrown successively into the House and Senate with the result that Bryan will be elected president. "In every section outside the South, Davis will run third and a poor third at that," said Wheeler. Wheeler said he regarded Bryan as progressive but added, "The West might be for Bryan for first place, but they won't be for him as running mate for Davis. The West will vote for La Follette as the result of the deadlock in the House, the West will be well satisfied. But they know a vote for Bryan is a vote for The 1923 net return for the whole country was less than 5 per cent. As of December 31, 1919, the Interstate Commerce Commission gave to the railroads a tentative valuation of $18,900,000,000. With actual figures for 1920, 1921, 1922, and with 1923 conservatively estimated as $1,100,000,000, there has been invested in the railways since this tentative valuation a net amount of $2,371,583,000, making the value as of December 31, 1923, $21,271,583,000. On this amount the Railways in 1923 earned an aggregate net operating income of approximately $997,610,000, or 4.69 per cent. The Government guarantee of earnings expired August 31, 1920. If this guarantee had been continued—as repeatedly but erroneously claimed—the Government would owe the railroads more than a billion dollars. Last year the roads handled a record volume of business but could not earn the fair return of 5% per cent to which the Interstate Commerce Commission, under the Transportation Act, has found they are entitled. If the roads cannot earn 5% per cent in a big year, what will they do in a small year? The Transportation Act provides that if a road in any year earns more than 6 per cent it shall pay one-half of the excess to the Government. The Act is, therefore, a limitation rather than a guarantee. GIVE TRANSPORTATION ACT FAIR TRIAL The Transportation Act should be given a fair test and its merits judged by the results of a normal period of reasonable length. The year 1923 was the first since the war under conditions approaching stabilization. What the railroad situation demands just now is not more law but more confidence. The railroads have emerged from the welter of the war, restored their morale, made enormous investments of new money, and in 1923 handled a peak business with universal satisfaction. The Transportation Act is the only really constructive railroad legislation of a generation. Previous acts were almost solely repressive. In framing the Act the public interest was paramount. The Act directs the Interstate Commerce Commission to "give due consideration to the transportation needs of the country and the necessity of enlarging railway facilities in order to provide the people of the United States with adequate transportation." Give the Act a chance. Don't amend it. If the roads are let alone they should make as good a record for efficiency this year as last. Constructive suggestions are always welcome. C. R. GRAY President. Omaha, Nebraska. April 1, 1924. UNION PACIFIC SYSTEM HOW The Santa Fe dollar was spent in 1923 rates more than dividends. Rate reductions more than taxes of success in railroad business is the relation of costs to returns. If the rate does not cover the cost of earning it, the business fails. If it covers the margin over, the business succeeds. THE SANTA FE DOLLAR IN 1923 WENT AS FOLLOWS: Maintenance of truck, buildings, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.37 cents Maintenance of leases, freight and passenger cars . . . . . . . . . . . . . . . . . . . . . . 19.36 * Station and switching, and other transportation agencies . . . . . . . . . . . . . . 19.68 * Series and expenses of clerks and other general office employees. . . . . . 1.69 * Valuation, general officers, pensions and death benefits and miscellaneous. 8.49 * Vacation and retirement, equipment and ice plants. 9.66 * Damage and casualties. 1.04 * Equipment, joint facilities, etc. 3.69 * Invest on bonds and other interest charges. 1.07 * Deduces on capital stock. 4.60 * Balance available for expanding facilities. 8.14 * 100.00 cents Item 3.02 cents came from sources other than a reduction of less than 6% in rates applied out the entire margin of safety from high rates. Time in gross business such as has occurred usually reduces this balance of 8.79 cents, many of the cost items can be cut down between success and failure is a factor in the transportation industry. For the country, it should not be lightly tampered laws or by the various commissions that in elements of railroad earnings and costs are likely notable in the above statement that more than dividends and only a little less than all the fuel ured for the System. Taxes were $20,316,491. Good service requires ample money for operation and maintenance. Even a rather substantial reduction in rates would benefit individuals so slightly as hardly to be known, while it might readily (because of poor service) cause them tremendous loss which would be quickly and keenly felt. A railroad gets money from its rates and has no other large source of supply, even though attempts seem to be made to have the public believe otherwise. Since 1921 freight rates have been almost continuously in process of reduction. Santa Fe freight earnings were decreased $14,500,000 in 1922 and $23,945,000 in 1923 from what they would have been with 1921 rates. Fe already has reduced freight rates many millions. But adequate service slippers. It can be furnished only when fair rates provide the money needed. W. B. STOREY, President The Atchison, Topeka and Santa Fe Railway System Fe already has reduced freight rates many millions. But adequate service nippers. It can be furnished only when fair rates provide the money needed. W. B. STOREY, President The Atchison, Topeka and Santa Fe Railway System Intensive in Minneates. Who has just come declares his faith will be thrown suchouse and Senate at Bryan will be in every section Davis will run hard at that," Said said he regarded but added, "The Bryan for first not be for him as Davis. The West dette as the result the House, the satisfied. But they van is a vote for Davis. Therefore they are going to vote for La Follette." Wheeler insisted that there was a strong third party sentiment in the New England States and announced his purpose of going to Boston to open the campaign for himself and La Follette. HARBOR ACTIVITIES Harbor activity is not confined to Los Angeles and Orange counties. Word comes to the Harbor Chamber of Commerce that the City of Santa Barbara will soon vote on a bond issue of $775,000 for harbor and pier work. The City Council of Santa Barbara has approved the improvement project and the election will be called in the very near future. Pacific Coast cities which possess harbor facilities should develop same as rapidly as possible, is the suggestion of T. B. Talbert, chairman of the Board of Supervisors who appointed the Committee of Fifty of Orange County Harbor. Continued growth of the favored Southland can be counted upon. Southern California is only beginning its industrial development which will grow enormously as basic industries find the advantages and attractions which the Southern part of California offers in the way of population, climate, raw materials, cheap water and power as well as water and rail transportation. Atwood Home Tract A Beautiful New Development of Richfield Richfield in line S. F. Railroad, two main artery boulevards, acre tracts, gas, lights, water and streets. Adja- $100,000 graded school, store, shops, garage, etc. transit service, good train service to Los Angeles ner cities. all prices far below real value. Seeing is believing. e of our agents to show you this property WAGNER Los Angeles St. 68, Anaheim C. E. McFADDEN Phone 25 W Placentia