How to Get a Breakthrough in Ukraine
The Case Against Incrementalism
AMERICAN farmers have shown a keen interest in the foreign policy of the United States ever since that fateful summer day in 1914 when a war-crazed German Government sent its armies marching across the border into unhappy Belgium. This naturally continued until the war ended, and more recently the sub-normal price levels for agricultural products have brought the economic side of foreign markets into the foreground. These foreign markets have been helpful in taking some of our surplus, especially of grains. Without them it is likely that the abnormal decline in the purchasing power of American farmers would have been still more evident.
Taking world-wide conditions into full consideration, I should say that our foreign trade in farm products has held up very well. We sent abroad more agricultural produce last year than ever before in our history, with the single exception of the preceding year, 1921. We are exporting now more than twice as much in farm products as in any year in the decade preceding the World War. So far as the demand from Europe goes, it is possible that this will have some tendency to decline, for reasons I will outline presently, but I hope we will make gains in other directions.
It is well to keep in mind that our sales of farm products in foreign markets--more than 16,351,000 tons in 1922--are only a small part of our agricultural production. In 1922 they amounted to but 6 per cent measured in tons, and only about 12 to 15 per cent when measured in dollars. The other 94 per cent of our products is consumed right here in America, in the markets close at home, which in the long run are likely to be the best. But it is not easy to regulate production, because of the variation in the acreages and the yields, and there doubtless will always be times when we will have a surplus to export, although there are some students of American agriculture who think that we will in time become a food importing nation.
If this occurs I presume American farmers will lose some of the present intelligent interest they have in foreign markets. And I might remark in passing that if they encounter many more such "hard-boiled" periods of deflation as that following the war so many folks may leave the farms that we will actually have a food shortage. Without question this recent period of depression has had the effect of driving hundreds of thousands of people off the farms and into the cities, most of whom will never return. What happened is indicated in a terribly real way by the index price of farm products. Measured on the 1913 averages, this stood at 238 in May of 1920; in a year and a half it had declined to 94. This brought ruin to tens of thousands of farmers; many were absolutely unable to pay their living expenses. They were still struggling with abnormal labor and material costs, and were unable, quite generally, to meet them. Without the foreign markets the price levels in this time of surplus production doubtless would have been much lower.
It was under conditions of this kind that the Farm Bloc came into being. Its members believed they could render the best service to the country in general if they made a real effort to help out the business--agriculture--which was in the worst condition. The Departments of Agriculture and Commerce did a great deal of efficient work with the foreign market situation, with the idea of moving as much of the surplus produce abroad as possible, which naturally would have a beneficial effect on price levels. I am sure that without all of this effort the situation would have been much worse than it was.
I am rather inclined to the belief that the agriculture of Europe will continue to improve, just as it has been doing. Certainly the farmers there have been doing a much better job of producing than have the workers of the cities--which, by the way, usually is the rule in periods of trial. The industrial life of Russia especially has declined until it has almost vanished. The farmers there, on the other hand, actually have grown some food for export, although it probably could all have been used in some of the famine-stricken areas.
An interesting agricultural evolution has been taking place in Central Europe and in Russia in the breaking up of the large estates and the placing of the land in the hands of the peasants. The first effect of this great change, extending over tens of thousands of square miles, may be but little--in fact in some cases it is possible that production may decline. But ultimately I am quite sure that the peasants will greatly increase it, and by just that much the American market for farm produce will be injured. I believe it would be well for the American farmers to keep in mind the fact that it is likely that the European demand may be very light ten years from now, and this seems to be generally understood; at least I hear more or less talk about it. These calculations are of course based on the idea that Europe will settle down, and also show more of a tendency than it is indicating just now to "settle up".
Here is where we encounter the big stumbling block in any of our calculations in regard to the folks over in Europe. The racial feuds, fanned through generations of strife, are not helpful in working out methods which are economically sound. Take the present dead-lock in the Ruhr Basin for example; it is difficult to see just where France and Germany are to "get off." American farmers "got off" in a hurry, however; they have been met with an immediate decline in the export of food to Germany. Doubtless this will be continued, and it is one reason why I think it is probable that our agricultural exports will be somewhat less this year than they were in 1922.
But if Europe will place itself on a sane basis, and get to work, giving its farmers a chance, it will take less American food. This will be especially true when Russia becomes economically sane and gets its national life on a logical basis. And Russia will do it; perhaps this will take ten years, or more, but it is coming, and when it comes the Russian farmers will pile food into the rest of Europe on a scale that may all but place the American farmers out of business in that section of the world.
In the meantime, however, we have a brief period in which to do several things. One is to find other foreign markets, and some progress is being made in the Far East. Then American farmers also have been making some gains in exporting special produce, such as purebred live-stock to South America. This is a high class type of business that is helpful to both sides, perhaps especially in that it leads to a better understanding of the problems of the other fellow.
I look for the greatest increase in the demand for our farm products to come from the industrial life of America. There is, in my judgment, a great future before American manufacturing, commerce and trade, which will absorb millions of additional workers. When these workers are employed at good wages, as at present, they will buy farm products in a liberal way. The proportion of the American people engaged in industrial life doubtless will continue to increase, just as it has been doing. At the first census 90 per cent of our people were rural; now only 30 per cent live on farms. This proportion may decline until every farm family is feeding four or five city families. The American farmer is the most efficient farm worker in the world, or this would not be possible; an American will produce four or five times as much as a farmer in Germany or France. The American does this with broad, fertile fields, big machinery and brains.
Yes, the American farmer has made the greatest records in production ever achieved in this world. In general he has been a better producer than salesman--but he is learning fast. Largely through the power of cooperative effort he is making it possible for salesmanship to be applied in the handling of his products. Some excellent pioneering in this way has been done by the cooperative raisin growers of California in foreign fields, especially in England and in the Far East.
But inasmuch as the American farmer does have a high productive power, it is evident, also, that his scale of living must be maintained on a higher plane than that of the farmers of other lands. This brings up before us another angle of this complex matter of our relationship to other countries, that of the tariff on products which are imported. It is not possible for us to let the American farmer down very long to a subnormal standard of living, although it seems we have been trying our best to do it for the last three years. No--thank God--when the returns in any industry in America become inadequate it is possible for the men in it to shift into some other business. This, by the way, is one of the very real benefits of the system of life which we have here in America. One can see this process working right now, in the shifting of hundreds of thousands of people from the farms to the cities. And this process will go on until the farmer's dollar has as high a purchasing power as that of the city man. There is an especially good illustration of this movement within a radius of 150 miles of Detroit, to which the farm workers have been attracted by the offer of high wages in the automobile plants.
When we take these facts into consideration it seems to me that the average farmer's position ought to become evident even to a "hard-boiled" manufacturer who is concerned with getting food for his workers as cheaply as possible. All that the farmer asks in the way of tariff protection is the same as that which the industrial life of the nation gets. Now that is simple, isn't it? From the standpoint of justice it seems to me that it is reasonable enough. And if the farmer doesn't get it he will leave the farm and go into other lines, and then in time food will become abnormally high. All that is logical. But there are people to whom God evidently didn't give the mental equipment required to grasp this thought, or else they don't wish to see it. Therefore we have a considerable procession of men who journey to Washington insisting that the manufacturing interests should have adequate protection but that agriculture should not. All of which I think is "bunk".
I have been much impressed in my experience at Washington, by the way, with the infernal selfishness which is so evident at the hearings on the tariff questions. Too many of our people are "after theirs" in the tariff problems, but equally insistent that other lines of business--producing materials they must buy--should get out on the free trade limb. After seeing so much of that in Washington, it has been a great source of personal pride to me, coming from a great farming state, that the agricultural interests have shown such a sensible attitude. They are not asking for excessive rates on farm products, all they are insisting on is that they get the same protection other folks have. It has been mighty fine to see the way the great farmers' organizations have lined up on this.
I fancy that in this sugar steal which is now attracting so much of the attention of the people of the country we are seeing an excellent illustration of what might happen if we allow agriculture to decline and depend on other countries for much of our food. America does have a sugar industry, but it is not in a very happy condition, from the standpoint of either the sugar manufacturer or the grower of beets or cane. I regret to say that we are still depending to a large extent on the producers of Cuba, who evidently have a most cordial and cooperative feeling toward working together, when they can cooperate in putting their hands a little deeper into the pockets of the average American family. Don't forget that these folks live in another nation, thus escaping from our laws, and also that we use about 11/2 billion dollars' worth of sugar a year.
Just think what would occur if something like this were going on in most other lines of food. Isn't the necessity for keeping a real American agriculture alive evident? Remember you can't make a peasant out of the American farmer, for he will merely quit and go to town, and you can't feed the city workers at the minimum cost unless you have an efficient and contented agriculture to back them up. Is it any wonder that the Farm Bloc has worked so hard to salvage the wreck of our greatest business from the slough into which the deflation period dropped it?
Another thing which Congress can do to help agriculture, and which is vital from the standpoint of national defense, is that of getting an adequate supply of nitrates, our most expensive fertilizer. I will confess that the delay over Muscle Shoals has made me very weary, and the farmers in general are getting impatient over the lack of action which has been so evident over this extremely important matter. A farmer from another state, a graduate of an agricultural college and a leader in one of the important farmers' organizations, told me a few days ago that "if some of our alleged representatives in Congress don't do something on this matter next session we'll shove over a brick wall on someone." I know that the feeling among many of the leaders in farm organizations is extremely bitter over the way this matter has been allowed to drag along.
The cost of nitrates used in fertilizer is altogether too high. This is commonly admitted. We have been paying tribute for years and years to the country which has the only large source of this essential commodity, Chile. Most of the revenue of that government for a generation has come from an export tax, something which America has never had, on this supply. And yet, despite that fact, in those dark days of March, 1918--when the German drive had started on the Western Front, and the destiny of civilization hung, in the balances of Fate, on our power to get our American sons on that grim line of hate and woe and machinery and death that we called the front, quickly and completely equipped--Chile shut down the mines. We were already paying three times a normal price for their nitrates, and still we were slapped thoroughly in the face right at a time when our very existence was at stake. It required, by the way, some very fine work on the part of that great head of the War Industries Board, Bernard Baruch, to get this extremely difficult situation straightened out. Doubtless this incident has had something to do with the enthusiasm which Mr. Baruch has had for the development of the Muscle Shoals proposition; that and his sincere interest in American farmers, and his desire to see them get fertilizers at fair prices.
I mention this to show the thin ice on which we are skating with the nitrate supply. Nitrates are essential in making explosives. We have no adequate supply. That means that if a foreign nation were to gain control of the sea we would be out of luck, to say the least, for at once our ammunition supply is cut off. Isn't that a plain enough reason why Muscle Shoals should be developed, and at once? Then we will have a real supply of this essential material, from the air, and produced by power which is now going to waste. But instead of getting right at the business in hand we pile up masses of alleged information about Henry Ford's offer and other offers and produce large amounts of inflated atmosphere, and do nothing. And then one of these days, if war should come again, we will wish that we had registered a little more action.
One of the attractive features of this whole proposition is that the nitrates produced in time of peace can be used on our soils, supplying perhaps one of the best illustrations of the use of war materials for peace purposes known. Nitrogen is the most expensive element in fertilizers, and the available supply is deficient in a large proportion of our soils, especially in the South. I regret to say that the experimental work of our agricultural colleges is indicating year by year an increasing need for more nitrogen even on the great grain-producing soils of the Middle West. I know that one can produce this nitrogen from the air by growing legumes, such as alfalfa and the clovers, and we are doing this more and more, but I know also that we are buying an increasing amount of the commercial form, right here in my own state of Kansas, where we used foolishly to pride ourselves on the fact that we would never need fertilizers. Doubtless this need will increase with the years.
In the Muscle Shoals proposition we have matters of foreign and domestic policy, national defense and highly technical soils problems, all bound up together. Again I feel that the farmers have taken a reasonable attitude on the matter. They believe that the Muscle Shoals plants should be developed as soon as possible. A great many believe, as I do, that Henry Ford is the man to handle this project. It is a matter of common knowledge among our farm leaders that rapid progress has been made in the chemical processes connected with the fixing of nitrogen in metal cylinders by the use of the electric spark, and that this is being done in a big way in Europe, especially in Germany and Norway. We have the power and we certainly have the air. The farmer wants to see this energy now going to waste hooked up and put to work. So far as the problem of who shall do it is concerned goes, he regards this as a minor matter. The average farmer would like to see these nitrate plants developed as a private proposition, as he is somewhat pessimistic toward government ownership in general. It seems to him that it ought to be easy to determine which offer is the best. Then if private capital will not take hold of the proposition on a fair basis, he thinks that the government should do it. Anyhow he wants something done, without any more delay.
All through the whole matter of our foreign policy the farmer takes the same simple, direct and sensible attitude such as I have outlined with the tariff and Muscle Shoals problems. He wants America to be fair and just with other nations. He is proud of the high standard of honor which this nation has always had in its dealings with other peoples. He wishes that maintained.
And he does not want us to become tangled up to the point where we must send American boys away to die in foreign lands to pull the chestnuts out of the fire for some foreign nation. A live and let live policy is his motto. He insists that America shall get justice, and that the nation shall place itself in position, as by providing an adequate supply of nitrates, so that it can protect its rights in case of foreign aggression. He is not interested in maintaining the dignity of foreign kings. And he deplores the tendency, evident at times in the history of our foreign affairs, to use the power of the American Government in backing up the somewhat doubtful claims of American business interests in other lands. In this connection it is well to say that he views the activities of certain American oil interests in other countries with pessimism. He wants justice, no more, no less, for America and for the people with whom this country deals.
And when the dark days of war come, as they did in ′98 and again in ′17, the farmer does his part, and more. The fighting spirit of the young men from the farms has always been a matter of pride with Americans, running down from Lexington to that greatest of all battles in which American troops were ever engaged, the Argonne. And the older people worked in the fields longer and harder and better, and produced more abundantly. Indeed, the fact that American agriculture was geared up so high during the late war perhaps had much to do with the suffering during the deflation period, in that there was an overproduction of agricultural products considered from the basis of peace-time needs.
In the matter of immigration the farmers are inclined to believe in a cautious policy. In general the rural people favor the entrance of desirable folks, from Northern Europe especially, but they are inclined to look with disfavor on making America the dumping ground of the undesirable classes of the Old World. Most farmers believe that laws can be made, perhaps a little better than the one we have now, which will efficiently separate the grain from the chaff, and give us immigrants of the most desirable quality who will in time become real American citizens.
So far as economic conferences go, the farmer is inclined to favor them. He is able to work out many of his problems in community, county, state, and national meetings. He thinks that in gatherings of this kind one gets a better understanding of the views and ideas of the other man, and that from this there can be worked out a settlement which provides justice for both. It is on a basis of justice that the farmer wishes to see our foreign policy conducted.