Mr. THOMSON. It would just be a wild guess, Senator; one would have to go over the spring-wheat territory and arrive at the yields for each district.

Senator NORRIS. If you exclude the winter wheat in the northwest territory, where they produce one-twelfth of the winter wheat, and take the balance of the country as a whole, what proportion of the wheat has it cost them $2.50 a bushel to produce?

Mr. THOMSON. I would say offhand a very small proportion.
Senator NORRIS. Would you say a third?

Mr. THOMSON. No; I would not make it nearly that high.
Senator NORRIS. Would you say a fifth?

Mr. THOMSON. I would not make it over 10 per cent. That is just a guess.

Senator NORRIS. That is the actual cost, excluding profit, of course? That is involved in my question.

Mr. THOMSON. Yes; that is the actual cost to the farmer.

The CHAIRMAN. And that is in Kentucky and Tennessee?

Mr. THOMSON. Yes. That is the cost for those farmers who are the most inefficient producers; it is on the small farms-the farms least able to produce wheat.

Senator NORRIS. But if we are going to stimulate production we have to consider those farmers?

Mr. THOMSON. You have to bring all those in.

Senator NORRIS. Assuming that the production increases the coming year as it has increased in the past, what proportion of the 'winter wheat of the country can be produced at a profit at $2.20 a bushel? Mr. THOMSON. You mean for the 1919 crop?

Senator NORRIS. Yes, sir.

The CHAIRMAN. Would you mind my asking him a question preliminary to that?

Senator NORRIS. Certainly not.

The CHAIRMAN. Mr. Thomson, including the Pacific Northwest, where the cost of production is low, what percentage.of the crops harvested in 1918 cost as much as $2.20 on an average? Have you any data showing that?

Mr. THOMSON. No, Senator.

The CHAIRMAN. You could work that out, could you not, and put it in your statement?

Mr. THOMSON. We could make just a wild approximation.

The CHAIRMAN. Well, I think it would be something more than that; I could take your own figures here and work it out myself. Mr. THOMSON. We could work it out as near as possible with data at hand.

The CHAIRMAN. I wish that you would work out how much of the total wheat crop in the United States, including the Pacific Northwest, where the cost is low, cost as much as $2.20 to produce in 1918. Then figure out, excluding the Pacific Northwest, how much of the crop for 1918 cost $2.20 or more to produce. Then please figure out the same thing, including the Pacific Northwest, on the basis of $2, and excluding the Pacific Northwest on the basis of $2. I think I could take your figures and work it out myself. Senator Norris's figure would be, I assume, for 1919. I would like to have that based on the same figures.

(The data referred to above was subsequently furnished by Mr. Thomson and is here printed in full, as follows:)

SUPPLEMENTAL STATEMENT REGARDING COST OF PRODUCTION DATA ON 1917-18 WHEAT CROP.

This year's wheat crop, as estimated by the Department of Agriculture under date of September 1, promises to be 899,000,000 bushels. This is the second largest wheat crop in the history of the country.

Owing to the wide variation in conditions and practices governing the production of wheat, it is desirable to divide the wheat-growing area into at least five districts as follows:

Atlanta.-Maine, Vermont, New York, New Jersey, Pennsylvania, Delaware, Maryland, Virginia, West Virginia, North Carolina, South Carolina, and Georgia.

North central.-Ohio, Indiana, Illinois, Michigan, Wisconsin, Missouri, Iowa, Arkansas, and the winter-wheat production of Minnesota.

Plains region.-North Dakota, South Dakota, Nebraska, Kansas, Texas, Oklahoma, Wyoming, Colorado, New Mexico, and the spring-wheat production of Montana and Minnesota.

Pacific and northwest.-Arizona, Utah, Nevada, Idaho, Washington, Oregon, California, and the winter-wheat production of Montana.

South central.-Kentucky, Tennessee, Alabama, Mississippi, and Louisiana. The Great Plains areas and the North Central States are the two most important areas in which over three-fourths of the total wheat crop was grown in 1918.

TABLE NO. 1.-Estimated cost of 1917-1918 wheat crop, based on total production as given in Sept. 1, report.

Total production, 1918 (million bushels).

Per cent of total wheat crop of United States (1918).

90,510,000 457, 455,000 237,968, 000 22,250,000 85,041, 000 899, 224, 000

Average yield, 1918...
Normal yield for region..
Approximate cost per bushel

based on normal yield..... Approximate cost per bushel based on 1918 yield.... Estimated per cent of 1918

crop produced at cost of $2

or less..

Estimated per cent of 1918 crop, excluding Pacific Northwest, produced at $2 or less...

Estimated per cent of 1918 crop, excluding Pacific and Northwest, produced at cost of less than $2.20... Estimated cost of 1919 crop. Increase (per cent)..

1 Impossible to estimate closely.

It is noted from Table No. 1 that the yield as obtained in 1918 in each of these districts is below the normal for the Pacific and Northwest, the South Central and the Atlantic, and above the normal for the North Central States. This fact makes an important difference in approximating the cost of growing wheat in each of the areas, for, as previously shown in the testimony, the cost per bushel is directly dependent upon the yield and this cost may vary widely even on adjoining farms the same year or on the same farm during a series of years. The data given in Table 1 present, first, the approximate cost per bushel as obtained on the average farm under 1917-18 conditions in each region but as

suming a normal yield, and, second, the cost as based on the yield obtained in each region for 1918.

The cost per bushel for the Pacific and Northwestern States was largely increased by the low yield obtained from the spring-wheat crop in the State of Washington. In the plains area certain districts were adversely affected by weather conditions and obtained low yields, while in others, the yield was above the normal, so that on the whole the region had about a normal yield. In the North Central States conditions were more favorable, which resulted in a yield of 3 bushels above the normal, hence a lowering of cost in this region. In the South Central and Middle Atlantic conditions were unfavorable and resulted in very high costs.

With reference to the amount of the 1918 crop produced at a cost of $2 or less, it is difficult to estimate at all closely. Investigations indicate that when the average cost of a crop is obtained, using the farm as a unit, from 70 to 75 per cent of the crop is produced at less than the average figure, and from 55 to 65 per cent of the growers have costs below the average. This is readily explained by the fact that the range between the minimum cost that any grower may obtain and the average for all farmers in the region is much less than the range between the maximum cost that may be found on certain farms and the average of all the growers in the region. Thus, one individual having a very high cost would offset several individuals having moderately low costs. Another influencing factor is that the bulk of the crop is produced on the larger farms and on the more efficient farms, where the cost per unit is less than on the small farms or those less efficiently managed.

It should be noted, therefore, that the approximate cost (an average of all farms) for the 1918 wheat crop is given at $1.93 per bushel, whereas 72.5 per cent of all the wheat was produced at less than $2 per bushel; and, further, that 83.2 per cent was produced at $2.20 or less per bushel. This is largely accounted for by the fact that favorable conditions prevailed in the Great Plains States and the North Central States, the regions where over three-fourths of the total crop was grown, and to the fact that the majority of growers, as heretofore mentioned, have costs less than the average.

Supplemental studies made on a number of farms in selected areas in the important wheat belt confirm the above estimate. For instance, in Garfield County, Okla., 73 per cent of all the wheat grown on a number of farms cost less than $1.95. Ninety-three per cent cost less than $2.20 per bushel. Of individual farmers 63 per cent had costs less than $1.95, while over 90 per cent had costs of $2.20 or less. It was found that all farmers having costs per bushel of $1.95 or less obtained yields of 13 or more bushels per acre. All those farmers having costs above $2.20 per bushel obtained yields of 11 bushels or less per acre.

Another study in Barton County, Kans., yielded the same conclusion. Seventy-eight and three-tenths per cent of all the wheat grown on a number of farms was produced at less than $1.95. Eighty-nine per cent of the wheat was produced at less than $2.20. Sixty-five per cent of the farmers had costs below $1.95 and 83 per cent had costs of $2.20 or less. All growers having a cost of $1.95 or less obtained a yield of 12 bushels or more. All growers who had costs above $2.20 obtained yields of 10 bushels or less. The variation in the costs found on the farms in Barton County, Kans., was from $1.20 per bushel up to $4.36 per bushel.

Another instance was in Adams County, Nebr., where 82.8 per cent of the wheat was grown at a cost below $1.95 and no farmers were found who had costs above $2.20.

Another study, in Thomas County, Kans., situated in the western margin of the plains area, shows that 85 per cent of the wheat produced on the farms studied cost less than $1.95. Three farmers had costs exceeding $2.50 per bushel. Each of these men had a yield of 4 bushels per acre.

These data only serve to further indicate that there is no such figure as absolute cost of production for wheat or any other farm crop, and that the yield is the chief factor in determining the cost per unit, which factor is largely governed by weather conditions, at least in the case of the wheat crop.

It is impossible to give even an approximate cost for the 1919 crop due to the many varying conditions as to labor and other items, the cost of which can not be determined until the crop is nearly harvested. An approximation is given in the last line of Table No. 1, showing an increase in the cost per bushel of $0.21 or $0.15 above the 1918 cost, which increase is based on the assumption of normal yields for each of the districts outlined and a production as indicated in

the last five-year average for each of these regions. The percentage increase in cost is indicatd from 10 to 20, the higher costs being assigned to the South Central and Middle Atlantic States.

Mr. THOMSON. Senator Norris, the working out of this data which the chairman has just asked for would give a basis for an answer to your question.

Senator NORRIS. All right; you can answer it then if you want to. I will ask you another question or two about that.

This cost you mention is the cost to the farmer who produces the wheat?

Mr. THOMSON. Yes, sir.

Senator NORRIS. And the price is what he receives at the elevator? Mr. THOMSON. Yes, sir. The cost to the farmer that I have been talking about is the cost on board cars or at the elevator.

Senator NORRIS. Fixing the price at $2.20 at Chicago and basing all the other markets on that would mean that the money the farmer in the Central West and plains country would get for his wheat would be $2 net, would it not?

Mr. THOMSON. I believe that in the recent proclamation by the President fixing the 1919 price the variation or differential was from $2 in the extreme Northwest to $2.38 in New York.

Senator NORRIS. I just talked this morning with a wheat producer from western Nebraska who has already sold his wheat at $2.28 a bushel, the price being fixed, and he got at the elevator an average of $1.90 a bushel.

The CHAIRMAN. The prices suggested by Mr. Thomson as having been announced in the President's proclamation, $2 up to $2.38, are the prices fixed in the principal interior primary markets.

Senator NORRIS. I understand that.

The CHAIRMAN. That would mean Spokane, Pocatello, Salt Lake, and Great Falls, Mont., on the $2 basis. Now, the farmers in their vicinity would get $2, less the freight.

Senator NORRIS. That is the point. That is what I want to bring

out.

Mr. THOMSON. That would be true of your Nebraska farmer.

Senator NORRIS. That would be true of the Kansas farmer, and it would be true, in fact, of every farmer, the price depending somewhat on the distance at which he has to market his wheat from the primary market.

Mr. THOMSON. And on the grade of his wheat.

Senator NORRIS. Yes, sir. A grade of No. 1 would mean a less price event at the primary market for the greater bulk of the wheat that is sold there, would it not?

Mr. THOMSON. Naturally so, because the farms are off on side lines

Senator NORRIS. No; I am speaking of the grade. For instance if the price is $2.20 at Chicago, and if a man raises his wheat right within sight of the city he would not, as a matter of fact, for wheat produced there, get $2.20, would he? Because he does not produce No. 1 wheat.

Mr. THOMSON. No; he does not produce No. 1 wheat.

Senator NORRIS. There is not any such thing as No. 1 grade in the Central West, is there?

Mr. THOMSON. I believe not. I am not an expert on wheat grades, but I believe that No. 1 grade is mostly grown in the other districts.

Senator NORRIS. Now, then, I would like to call your attention to the fact that these figures you are giving are what the farmer gets. The price that I am asking you about is a price fixed by the President at the interior primary markets. Now, I want to know this: If the price is fixed as it is now for the 1919 crop in the winter wheat belt, through Kansas, Oklahoma, Nebraska, and Iowa, taking into consideration that the price is on No. 1, and that the farmers do not produce No. 1, and they all have to pay freight, what would be the average price that the farmer would actually get on the basis of the price fixed by the President in his proclamation?

Mr. THOMSON. There ought to be information obtainable that would show just what the farmer received this year at these interior points.

Senator NORRIS. But it is not at interior points.

Mr. THOMSON. By "interior points " I mean out in the small rural districts, where there is extra transportation.

Senator NORRIS. Yes. Is it not true, now, that when the price has been fixed as it has been fixed by the President, the farmer actually gets from 10 to 20 cents less than that fixed price?

Mr. THOMSON. Yes.

Senator NORRIS. Taking into consideration the grade and the freight?

Mr. THOMSON. Taking into consideration the grade and the freight. Senator NORRIS. What proportion of the present crop of winter wheat in that district that you designate as the central plains— Nebraska, Kansas, and Oklahoma-was produced by the farmer at such a cost that he could make a profit on it in selling it for $1.90 a bushel?

Mr. THOMSON. That is practically the same question you asked me before, with the exception of the difference between $2.20 and $1.90. Senator NORRIS. Yes. I am assuming in this question that the farmer gets about $1.90 for his wheat.

Mr. THOMSON. A much larger number would make a profit at $2.20 than at $1.90. That $1.90 would probably come near the border line of the cost.

Senator NORRIS. The border line of actual cost.

Mr. THOMSON. And cut off some farmers.

The CHAIRMAN. I would like to say this: The price is $2.20 at Chicago. It is $2.05 at Oklahoma City. The farmers in Oklahoma have been selling at from $1.80 to $1.95, and in Idaho on the same basis last year they sold as low as $1.65.

Senator NORRIS. Mr. Thomson, can wheat in this section of the country that I am speaking of be produced at a profit, using Chicago as a basis, with the price of No. 1 wheat at $2.20 a bushel.

Mr. THOMSON. You mean in the central plains area?

Senator NORRIS. Yes.

Mr. THOMSON. In central Kansas and central Nebraska?

Senator NORRIS. Yes; western Oklahoma, western Kansas, and western Nebraska-and eastern, too. Take that whole country. And if it can be produced at a profit, what proportion is produced at a profit?