362

AGRICULTURAL RELIEF
was the Pacific price agreement, in the case of wheat during the
war period or immediately after the armistice. The result of the
investigation, which occupies a good many pages, 1S to show that
despite the very desperate efforts that were made by those who
had entered into the agreements in a preliminary way the agree-
ments broke down. That was true in both the Gulf price and in the
Pacific price case. S0 far as I have been able to learn, there has been
no charge of the existence of a successful price agreement In the
case of wheat.

Mr. MENGES. You say No successful price agreement was reached,
therefore the price of all those fellows is the same, is it not?

Mr. Stewart. Not absolutely the same, but it is a question of the
buying margin. The buying margin as determined for export has
been most graphically presented, I think, in studies which have been
given publicity by the St. Lawrence-Great Lakes people, who have
shown, I believe, for Beardstown, IIL, a normal cost differential
of about 32 cents under the Liverpool price. Now, to be sure, that
is subject to some personal equation as between exporters and to
some fluctuation from one part of a year to another. It is a govern-
ing fact, however, that one exporter must be able to meet the com-
petition of other exporters. In the case of wheat I believe it is
said that there are approximately 40 of the exporters engaged
in the business in this country. In the case of cotton, I believe, it
is alleged that in the Memphis market alone there are 170. I am
not sure of that.

Mr. Mences. 1 am asking about that, because 1 have had a little
experience in that connection.

Mr. Stewart. Is it your experience?

Mr. Menges. My experience has been that what one pays they
all pay. And so your proposition would not be any different to my
way of thinking.

Mr. Stewart. In other words, the presence of an export premium
or even the presence of an export tax, which of course is the oppo-
site, would make no substantial difference so far as the possibility
for a price agreement or the impossibility of a price agreement is
concerned.

Mr. Forr. Doctor Stewart, is it not a fact that the actual compe-
tition between the exporters is not upon the cash wheat but on the
exchange? They do their buying generally on the exchange in
futures, and, of course, will not pay more than the exchange price:
is not that the fact?

‘Mr. Stewart. Yes; they contribute their share in the competitive
bidding which determines prices in our markets. Turning now to

the case of cotton, I have it directly from an exporter in Memphis
that his buying margin and the buying margins he has to face con-
stantly on the part of the others in the Memphis market is 3 cents
a pound under Liverpool; and that he stood no chance month In
and month out of cutting that margin, and that if he did so he
would have to go out of business; that that figure prevails so far
as that market is concerned.
The point I want to reach is that the higher price which would
be made possible by the presence of an export premium would pre-
v with respect to those portions of the product which