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TARIFF DEMANDS
No plan could be devised to curtail crude oil production and an accumulation of stocks. There were uneasy demands for a higher tariff. Finally the pleasant harmony of mutual felicitation between corporation presidents was drowned by a yawp of discord from the farmers. Good harvests had built up a mass of 250,000,000 bushels of wheat to be "carried over" when 1929 opened. By May there was a winter-wheat crop of 560,000,000 bushels ready for harvest in the Mississippi Valley. Such stocks caused a break in wheat prices so heavy that the net incomes of the farming population from wheat were threatened with extinction. Stock markets are always sensitive to the future state of commodity markets and the slump in Wall-street predicted for May by Sir George Paish, arrived on time. In June the position was saved by a severe drought in the Dakotas and the Canadian West, plus unfavorable seed times in Argentina and Eastern Australia. The carry-over would be wanted to fill big gaps in the 1929 world production. Back to the wheat pit crowded the buyers. From 97c. in May wheat went to 1.49 dols. on July 17 at Chicago. When it was seen that at this figure the American farmers, in the mass, would get rather more for their smaller crop than for that of 1928, up went stocks again and from far and wide orders came to buy shares in the profits to come. Then wheat sagged again in August. What was wrong now? It was only old Europe rattling her chains. France was bragging of a magnificent harvest, and so was Mussolini. Neither would need much imported wheat. News of a belated improvement in the Southern Hemisphere's crops came ticking along, too.
WALL-STREET SHIVERS
Early in August another shiver went through Wall-street, but word of cheap stocks brought a fresh rush of "stags," amateur speculators and investors who knew how well business was going under Hoover's presidency. As to the farmers, Congress had voted 100,000,000 dollars for their relief. That would "stabilise" wheat and good times for all. Would it? Did it? Outside the States wheat markets feared that that subsidy would enable the Middle West to pocket contentedly, a lower export price, and so would cause them to unload slackly and soon. The drift in wheat continued in September and gathered way in October. It is now about 1.25 dollars a bushel in Chicago. The rise in London's bank rate, forced by the attraction of European money into the New York boom, was depressing British markets afresh. The falling commodity markets in other countries told upon even American self-confidence. So, this week, the stock markets broke for the third time and for three days defied every effort to stop the haste to sell. The prosper- ity had been too good, too local to last. The 10,000 million dollars by which stocks have dwindled in market value are largely paper losses cancelling the paper gains of Wall-street professionals, manoeuvring for financial control of big businesses. More significant are the losses, probably much smaller, made by "stags" who rushed in and have lost their antlers. These must be losses on a large scale. For a year New York banks have been trying hard to prevent their loans being used to finance speculation, but in vain. Money, once in circulation is likely to go wherever the demand for it is greatest. It has gone.
https://trove.nla.gov.au/newspaper/article/85141129