AGRICULTURAL RELIEF

549
Can you tell me of a single commercial agency that is engaged in the
merchandising of wheat that will be interfered with in the event
that the board decides to authorize some agency or agencies to take
over the surplus and handle that?

Mr. ANpERsON. Yes; I think they will all be interfered with.

Mr. Apkins. Now, in what way? I can not see it. I know a little
something about the grain business, and maybe you and I can learn
something from one another. You start in on next year’s wheat
crop, with the board taking over the surplus, or as much thereof as
will stabilize the price at a higher level if the theory works as we think
it will.

Mr. AnpeErsoN. That involves, Mr. Adkins, going back into
all the matters I discussed last year with reference to the effect upon
the impact of this bill upon different grades of wheat—the effect of
it upon the operations of those who may still remain in the business
of handling and storing grain; and I would really rather not go back
over all that matter.

Mr. Apkins. Leave that out, then. So far as the milling industry
would be concerned, there would still be machinery enough left
evidently to get the grain from the farmer to the mill.

Mr. ANDERSON. I can point out one thing: One of the necessary
operations under the present methods of handling grain, in order
to accumulate wheat mn advance of flour orders, is to hedge the
accumulated wheat in the futures market.

Mr. Apkins. Yes.

Mr. ANDERSON. You may disagree with me about it, but I can
not see the grain exchanges operating under this bill, and we would
be compelled to find some other way, probably-

Mr. Apkins. In other words, you think the——

Mr. ANDERSON (continuing). Of carrying the risks which are
involved in the accumulation of that wheat, or we would be obliged
to let this agency accumulate it and buy it from the agency which
would mean that they would not only accumulate the actual sur-
plus but they would have to accumulate the temporary surpluses
which arise in the early part of the crop season.

Mr. Apxkins. If I get your idea right, then, Mr. Anderson, you
believe that it would take away the incentives of the men you trade
with, with whom you hedge to protect your future sales?

Mr. ANDERSON. Yes; I do not follow you there. I mean, I can
0 oN ceive how the exchanges could operate in connection with
this bill.

Mr. Apkins. That would virtually have the effect of taking away
your insurance on your purchases.

Mr. ANDERSON. Yes.

Mr. Apkins. If this bill does what the proponents hope it will do,
stabilize the market, one of the things we hope it will do—we do
not know whether it will ‘do it or not—is that it will stabilize the
market so that it will avoid the violent ups and downs. And in that
event there would not be the necessity for hedging or protecting or
insuring your future trades that exist now, would there? You do
that to protect yourselves against the ups and downs of the market?

Mr. ANpERsoN. If there were no ups and downs in the market
there would be no object in hedging whatever.

86160—28—SER KE. PT ——3