Mr. Gilluray, They Are Literally Coming for Your Food.

Arrowhead Models is now taking pre-orders for One Hundred Ghosts, An Exposition of Rural Grain Elevators.

This book is a photographic look at rural grain elevators, and it uses contemporary photographs to tell the grain elevator story. Like this one from page 63.



"The Facts About Communism and Our Churches was published in 1962. It rests undisturbed in an elevator office on the Montana plain. The last loading report in the adjacent paperwork is dated Feb. 17, 1963. 91,040 lbs. were loaded into Milwaukee Road boxcar #29182 by agent Hugh M. Gilluray--assuming I've read the signature correctly. The boxcar was destined for the Gallatin Valley Milling Co. in Lewistown, MT.

About the time that Gilluray was reading about the Communist threat to religious freedom, the Soviet Union was making an actual hard right into the imports market of the grain trade--a trade so familiar to Hugh that he literally wore its dust upon his boots. But, Hugh would not have seen this coming. No one did. However, the impact of this turn was cataclysmically vast in its dimensions.

Following World War II, the United States emerged as the de facto grain superpower. Between 1945 and 1949, the U.S. alone supplied half of the global wheat trade. Into the 1960s, the Dept. of Agriculture (USDA) had become a planning agency of daunting proportions. USDA farm programs dictated yield volumes, return rates, and it guaranteed those rates regardless of market conditions. They provided credit, crop insurance, and scientific advice. Agriculture had become a public utility.

Heads up, Mr. Gilluray.

The project of regulating the world's food supply was, according to Ezra Taft Bensen, the Secretary of Agriculture from 1953-1961, a sordid mess. On one hand, the U.S. was locked into a system in which U.S. farmers consistently produced too much grain; they were paid with subsidies for which the government held the financial risk, and the world had too little money to absorb the excess. But, on the other hand, control of world food reserves had such profound and economic implications that it was a yoke the government was not going to leave entirely to the free market.

In general terms, the U.S. strategy was to grow demand among international markets so that global demand would better match U.S. supply capacity. If a new equilibrium in the world marketplace would obtain, it could serve as an avenue to back the government away from the risks of subsidizing grain in a market of eternal surplus.

In a few years hence, American would inadvertently subsidize a Russian-led run on U.S. stockpiles that would affect every American. Food prices would surge to its highest level since the global food scares of the first World War. Nations would panic hoard. In the aftermath, there would be CIA investigations, allegations of criminal collusion between the U.S. Government, Russians and the grain companies. And, the event would go a long way to lay bare the vast economic might of international traders to weld capital and asymmetrically control trade routes. 

The stage for a run on American grain was partially set by the Soviet's posture of extreme economic isolation. Policymakers lacked the inclination to develop import trade relationships with the West. In their view, dependence upon food imports was to attach strings to Soviet sovereignty. And from their perspective, they weren't wrong. After all, the Cuban Missile Crisis had just happened. For numerous reasons, the U.S. was not going to sell grain to the Soviet Union without strings. The issue is: If a nation-state is in need of grain, from where does one buy? Grain markets may be a political lever, but where it grows is a matter of ecology. The number of exporters was so finite that there was no way to buy grain in quantity around the U.S.

Or was there?

The grain internationals swam among the political fish, but simultaneously, they operated outside of them--above them. Even by corporate standards, they have been described by many as among the most opaque firms in modern history--so much so that oil executives watch with adoration. Was there a path here? In the early summer of 1963, the director of the Soviet grain trading monopoly Exportkhleb, Leonid Matveev, placed a call to a grain man at Ross T. Smythe Co. in London, Patrick Meyhew. But, instead of selling Russian wheat to Meyhew, has asked if Meyhew would like to sell.

And so it would begin. Mr. Gilluray, the Russians aren't coming for your religion; they are literally coming for your food."

1 comment

  • Very interesting story and a fascinating glimpse into the history of the 1960s. The world is indeed a small place when one considers how some happenings on the other side of the world had tangible results in our heartland.

    CE Hunt

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