280 ECONOMIC ESSAYS IN HONOR OF JOHN BATES CLARK 
were formed for the purpose of holding till prices should recover. 
The grain was put in storage unhedged and against it the farmers 
were given credit based on what were considered conservative 
prices. However, the price continued to decline and the wheat 
was finally disposed of at prices greatly below those on which the 
advances to the growers had been based, with the result that the 
pools collapsed and the holding farmers suffered very severe 
losses: Undeterred by this experience, the advocates of pooling 
have continued to increase in number and much wheat has been 
pooled in the northwest and the southwest, with about the same 
outcome as in 1920." In this connection is to be noted that the 
difficulties encountered in increasing the price of coffee, sugar and 
raisins above the market are as nothing compared to. the difficul- 
ties of securing a super-market price for a staple crop like wheat. 
Wheat is a prime necessity. It is grown and consumed over 
practically the entire civilized world. Its consumption is not 
materially affected by either sentiment or agitation. It is grown 
in almost all climes by a vast number of farmers; and any slight 
stimulant, such as an increase in price, readily brings about an 
increased production. It is non-perishable and lends itself easily 
to transportation. It is bought and sold freely on the exchanges 
of the world. Every shred of information concerning existing 
supplies, prospects for future supplies, condition of growing crops, 
strength of demand, etec., is eagerly sought; and an army of 
experts are constantly at work supplying this information. In a 
word, wheat is grown and consumed in all parts of the world and 
its price is fixed in a world market. Therefore, when an attempt 
is made to raise the price above the market, difficulties of all 
sorts are met at every turn. The domestic price, if it be above 
the market, can be maintained in the face of foreign grain only 
by a high tariff. The resulting exportable surplus must be sold 
at a loss on the markets of the world and since, from the very 
nature of things, the undertaking is too great for private enter- 
prise, such a scheme cannot be put into operation except by the 
1 The advocates of the Holding Movement have finally been forced to 
take cognizance of the enormous losses suffered by cooperatives in holding 
unhedged crops for higher prices and they were able to have included in 
the late Haugen-McNary Bill (Sec. 12) a section which provided that the 
Government should insure any cooperative holding association “for peri- 
ods of twelve months against decline in the market price of such commodity 
at the time of sale by the association from the market price of such com- 
modity at the time of delivery to the association.”