fjr "^. Cornell IHniverslti^ OF THE IWewl^orft State Colleac of agriculture 9iJ^Ll^.. Cornell University Library HD 9006.A55 Marketing perishable farm products. 3 1924 013 805 779 Cornell University Library The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924013805779 STUDIES IN HISTORY, ECONOMICS AND PUBLIC LAW EDITED BY THE FACULTY OF POLITICAL SCIENCE OF COLUMBIA UNIVERSITY Volume LXXII] - [Number 3 Whole Number 170 MARKETING PERISHABLE FARM PRODUCTS BY ARTHUR B. ADAMS, A. M. FeUow in Economics, Columbia University Assistant Professor of Economics at the University of OUahoma COLUMBIA UNIVERSITY LONGMANS, GREEN & CO., AGENTS London : P. S. King & Son, Ltd. 1916 FACULTY OF POLITI CAL SCIENCE nicholas Murray Butler, LL.D., President. Ilunroe Smith, LL.D., Professor of Roman Law and Comparative Jurisprudence. E. R. A. Seligman, LL.D., Profes- sor o( Political Economy and Finance. H. L. Osgood, LL.D., Professor of History. W. A. Dunning, LL.D., Professor of History and Political Philosophy. J. B. Moore, LL.D., Professor of International Law. F. H. Giddings, LL.D., Professor of Sociology. J. B. Clark, LL.D., Professor of Political Economy. J. H. Robinson, Ph.D., Professor o( History. W. M Sloane, L.H.D., Professor of History. H. H. Seager, Ph.D., Profes- sor of Political Economy. H. L. Moore, Ph.D., Professor of Political Economy. W. R. Shepherd, Ph.D., Professor of History. J. T. Shotwell, Ph.D., Professor of His- tory. G. W. Botsford, Ph.D., Professor of History. V. G. Simkhovitch, Ph.D., Professor of Economic History. E. T. Devine, LL.D., Professor of Social Economy. H. Johnson, Ph.D., Professor of History. S. McC. Lindsay, LL.D., Professor of Social Legislation. C. A. Beard, Ph.D., Professor of Politics. W. D. Guthrie, A.M., Pro- fessor of Constitutional Law. H. R. Mussey, Ph.D., Associate Professor of Economics. C. H Hayes, Ph.D., Associate Professor of History. A. A. Tenney, Ph.D., Assist- ant Professor of Sociology. E. M. Salt, Ph.D., Assistant Professor of Public Law. R. L. Schuyler, Ph.D., Assistant Professor of Histoiy. R. E. Chaddock, Ph.D., Associate Professor of Statistics. T, R. Powell, Ph.D., A.ssociite Professor of Constitutional Law. D. S. Muzzey, Ph.D., Associate Professor of History. W. C. Mitchell, Ph.D., Pro- fessor of Economics. E. C. Stowell, D en D., Associate Professor of International Law. H. L. McBain, Ph.D., Assistant Professor of Municipal Science. B. F. Kendrick, Ph.D., Assistant Professor of History. L. D, Hazen, PhD., Professor of History. SCHEME OF INSTRUCTION GROUP I. HISTORY AND POLITICAL PHILOSOPHY. Subject A. Ancient and Oriental History, fourteen courses. Subject B. Mediaeval History, twenty-one courses. Subject C. Modern European History, twenty-one courses. Subject D. American History, twenty courses. Subject E. History of Thought and Culture, thirty-five courses. Courses in Church Ilistory given at the Union Seminary are open to the students of the School of Political Science. GROUP II. PUBLIC LAW AND COMPARATIVE JURISPRUDENCE. Subject A. Politics, twelve courses. Subject B. Constitutional and Administrative Law, eight courses. Subject C. International Law, nine courses. Subject D. Roman Law and Comparative Jurisprudence, seven courses. Courses in Law given in the Colum- Bia Law School are open to the students of the School of Political Science. GROUP III. ECONOMICS AND SOCIAL SCIENCE. Subject A. Political Economy and Finance, twenty-two courses. Applied Econom- ics, sixteen courses. Subject B. Sociology and Statistics, twenty-three courses. Sub- ject C. Social Economy, twelve courses. Courses in Social Economy given in the School of Philanthropy are open to students in the School of Political Science. The greater number of the courses consist of lectures ; a. smaller number take the form of research under the direction of a professor. The degrees of A.M. and Ph.D. are given to students who fulfil the requirements prescribed. (For particulars, see Columbia University Bulletins of Information, Faculty of Political Science.) Any person not a candidate for a degree may attend any of the courses at any time by payment of a propor- tional fee. Ten or more Cutting fellowships of $1000 each or more, four University fellowships of $650 each, two or three Gilder fellowships of $650 — SSoo each, the Schiff f ellovirship of ?6oo, the Curtis fellowship of J600, the Garth fellowship of P650, and a number of University scholarships of J{Si50 each are awarded to applicants who give evidence of special fitness to pursue advanced studies. Several prizes of from Js° to $250 are awarded. The library contains over 600,000 volumes and students have access to other great collections in the city. 3 MAEKETING PERISHABLE FARM PRODUCTS STUDIES IN BISTORT, ECONOMICS AND P17BIJC LAW EDITED BY THE FACULTY OF POLITICAL SCIENCE OF COLUMBIA UNIVERSITY V' ' 'U,/,) Volume LXXn] [Number 3 Whole Hamber 170 MARKETING PERISHABLE ' FARM PRODUCTS BY ARTHUR B. ADAMS, A. M. Fellow in Economics, Chlumbia Univer*ity Astistant Profesaor of Economics at the University of Oklahoma JJ'tro Work COLUMBIA UNIVERSITY LONGMANS, GREEN & CO., AGENTS London : P. S. King & Son, Ltd. 1916 1 V, Copyright, 1916 BY ARTHUR B. ADAMS PREFACE The work here offered is a study in the field of marketing agricultural products. Though I hope, in the near future, to expand this study so as to include the marketing of all farm products, this little volume is concerned only with the marketing of one class of these goods. The commodities selected are fruits, vegetables, dairy and poultry products which, for want of a better term, are called Perishables. From the marketing standpoint these products constitute a fairly homogeneous class, and the problems connected with marketing them are, in the main, very different from those connected with marketing Staples (wheat, corn, oats), or the Semi-staples (hay, live stock, tobacco, etc.). The attempt is made to point out the fundamental eco- nomic forces which underlie the marketing of these goods and to suggest methods of controlling these forces so that the cost of passing the goods through the market pro- cesses- may be reduced. It is hoped that the work may be of some value to men who are actually engagedjn carry- ing on the trade, to public officials whose work is con- cerned with marketing, as well as to students who are inter- ested in the problem. In submitting the work it is realized that some of the conclusions as to remedies which should be applied are at variance with those of certain recent writers on the subject as well as with the position taken by some public officials. This is particularly true in regard to the advisability of encouraging a rapid and widespread development of direct marketing and of cooperative marketing. 367] S 6 PREFACE [368 In the preparation of this work my thanks are due to Mr. Brand and other officials of the Office of Markets and Rural Organization for their kindness in furnishing the bulletins and pamphlets of that Office which touch on the subject. I am also indebted to many " middlemen " en- gaged in carrying on the trade, for the practical information which they have furnished on special problems. Mr. Urner of the Urner-Barry Co., publishers of the New York Producer^ Price-Current, was very courteous in di- recting me to sources of information. Credit has been given in the foot-notes to various individuals and to govern- ment bodies that have suggested some of the ideas contained in the book. I am under great indebtedness to the members of the Department of Economics of Columbia University and par- ticularly to Professors Seligman and Mitchell. Both have offered valuable and constructive criticisms during the pro- gress of the work. Professor Seligman made the publica- tion of the study possible and Professor Mitchell kindly consented to read the proofs. Arthur B. Adams. Columbia UNivERSiTy, Apwl, 1916. CONTENTS rAGK CHAPTER I Character and Significance of the Problem The Scope of the Investigation ii Extent of Trade in Perishable Produce 13 Seasonal Fluctuations in Prices of Perishables 16 Sectional Fluctuations in Prices of Perishables 18 Cost of getting Perishables from Producers to Consumers 20 Losses from Decay of Perishables 24 - Summary of the Social Costs incident to the Marketing of this Class of Goods 26 Causes of the Demand for a Reduction in the Cost of Marketing these Products 26 What Has Been Done to improve the Marketing of Perishables. . 30 Statistical Tables 35 CHAPTER n The Present System of Marketing Perishables Outline of the Machinery of the Market 44 Complications and Lack of Uniformity in Marketing Operations . 48 Cost-factors of the Middleman System 56 Distinction between the Middleman Machinery and its Operators. 72 Tables of Transportation Rates 74 CHAPTER III Why the System is a Burden to Society — "" Reasons for Wide Fluctuations in Prices in Each Market 76 The Fundamental Economic Forces which Regulate Prices. ... 76 How these Forces Regulate the Prices of Perishables 83 Sectional Margins in Prices: Causes 8g Causes of Losses from Deterioration gi 369] 7 8 CONTENTS [370 PAGE Causes for Wide Margins Between Farm Prices and Consumers' Prices 97 Summary of Factors to be Dealt With in Reducing the Social Costs of Marketing Perishables loi CHAPTER IV Reform of the Marketing Processes or Machinery Suggested Programs of Reform 103 Limitations of Direct Marketing 105 Finding Consumers 105 Transferring the goods to Consumers 115 Economic Value of Marketing Machinery for Perishables 116 Reduction of the Cost of Marketing through Simplification of the Processes 118 Sales by Producers • • 118 Sales by Professi6nal Shippers 123 Purchases by Retailers 125 Simplification of Marketing Processes through Cooperation and Municipal Markets 127 Farmers' Cooperative Marketing Associations 127 Consumers' Cooperative Stores 128 Municipal Markets 129 Summary 129 CHAPTER V Reduction of Costs of Performing the Marketing Processes Through Government Market Departments or Bureaus 131 Standardization of Grades and Packages 132 Elimination of Unfair Business Practices 135 Organizing Market Information 138 Regulation of Transportation, Refrigeration and Terminal Facilities 143 Investigative and Educational Work 145 Getting Efificient Market Departments 148 Reduction of the Costs Through Cooperative Associations 150 Reduction of Costs through Competition 157 Among Shippers 157 In the Wholesale Trade 158 In the Retail Trade 159 CHAPTER VI Reduction of the Burdens of Marketing by Changing the Nature of the Goods and Area of Production Reduction of the Perishability of the Goods 164 Cold-storage 165 371 J CONTENTS g FACE Manufacturing i68 Producing Hardier Varieties 169 Reduction of Seasonal Production 170 Development of Varieties which have a Long Season of Harvesting 170 Widening the Area of Production for Dififerent Goods 171 Development of Centralized Producing Sections 171 APPENDIX A. The National Law for the Standardization of Apple Grades and Containers 175 B. Market Information of Peach Movement for One Day as given out by the Office of Markets of the U. S. Department of Agri- culture 177 CHAPTER I Character and Significance of the Problem I. scope From the marketing standpoint, agricultural products may be divided into three classes, as follows: (i) The Staples; (2) The Semi-staples; and (3) The Perishable Food Products. There can be no question as to which com- modities belong in the first class, as only those which are dealt in on the great produce exchanges are included. They are wheat, com, oats, barley and cotton. These are called staples because they are comparatively non-perishable and have a continuous organized market.^ The second class comprises those products, other than the staples, which are used for further production either on the farm or in the factory, such as grains, seeds, hay, tobacco and wool ; also, some food products which are not highly perishable, such as cattle, hogs and nuts. These commodities are sold in a more or less organized market though none of them are sold on the great produce exchanges. The third class includes, as its name indicates, all the perishable foods which are sold in practically unorganized markets — such as vegetables, fruits, dairy and poultry products. An attempt to enumer- ate the commodities which belong in each class has been made in Table I, p. 35. We are, however, concerned in this investigation with the perishables only. 1 Huebner, " Functions of Produce Exchanges," Annak of Amer. Aead. of Pol. and Soc. Sci., Sept. 191 1, pp. 1-35. 373] II 12 MARKETING PERISHABLE FARM PRODUCTS [374 Men who receive an income from buying and selling goods are ordinarily called "middlemen," and goods which pass through the hands of one or more middlemen in course of being marketed are said to be marketed through the " middleman system." ^ Our study will not only be con- fined to the marketing of those agricultural products which fall under the head of perishables but will be further limited to the marketing of those perishables which pass from producer to consumer through, the middleman system. It will not be our aim either to defend or condemn this system : but to discover, if possible, the economic weaknesses con- nected with middleman methods and processes of market- ing perishables and to suggest ways in which the system may be improved. Neither is it to be inferred from the limitations which we set on our study that we mean to ignore entirely co- operative marketing and municipal markets. There are two reasons, other than time and space, for not considering either separately in our discussion: (i) to-day as much as 95 per cent of the perishables which enter into trade in the United States are marketed through the middleman system,^ and it is believed that for a long time to come the larger pro- portion of such produce will be so marketed; (2) it is also believed that both cooperation and municipal markets will better serve society by complementing the middleman sys- tem than by supplanting it. So, cooperation will be dis- cussed in so far as it can be made to improve on the middle- man system, and municipal markets and direct marketing will receive the same consideration. Before discussing the technical problems connected with the present practices and methods of marketing perishables, ' The Middleman System will be fully discussed in chap. ii. '' Opinion of writer from general observation. 375] CHARACTER AND SIGNIFICANCE OF PROBLEM 13 we- should get a dear conception of the bigness of the ques- tion as a whole and its importance to industrial society. Therefore, this chapter will treat of the development of com- merce in perishables, present fluctuations in their prices, cost of marketing them, amount of product wasted by the sys- tem, reasons why improvements are now being so vigorously demanded, and what has been done to meet these demands. II. EXTENT OF TRADE IN PERISHABLE PRODUCE So long as we were an individualistic agricultural nation there were few problems connected with the marketing of agricultural products, because there was little to be mar- keted except the surplus of a few staples and semi-staples such as cotton, wheat and cattle. Each farm was prac- tically sufficient unto itself, producing most of what it con- sumed and consuming the larger part of what it produced.^ But our rapid development of manufacturing, transporta- tion and trade has brought forth extensive commerce in all kinds of agricultural products. Our industrial development has so greatly affected the farming industry that it is, to- day, no longer an individualistic self -"Sufficing industry, but is, like mining and manufacturing, a highly commercial- ized one.'' The demand for farm produce on the part of towns and cities needing food and raw materials, together with the farmer's need for manufactured goods has caused him to produce largely for the market instead of producing for direct consumption. So the bigness and significance of the marketing of farm products has developed pari passu with our great change to an industrial nation and the re- sulting shifting of a large proportion of the population from the farms to the towns and cities. ' Coman, Industrial Hist, of U. S., pp. 214-216. ' 'Carver, U. S. Dept. of Agri., Yearbook 1913, p. 239. 14 MARKETING PERISHABLE FARM PRODUCTS [376 This recent change of agriculture from an individualistic to a commercial industry had a much greater effect on the problems connected with marketing perishables than on those connected with marketing either of the other two classes of agricultural products. This has been due in a great measure to the rapid growth of trade in this class of commodities. Perishable food products have always made up a large percentage of the food consumed by the ordinary family. The Bureau of Labor Statistics estimates that about forty per cent of the money paid for food by the Ameri- can workman goes to buy perishable farm produce.^ So long as our population was largely rural there was of course little trade in this class of goods because each family pro- duced about all it consumed. Even in 1880 when our urban population had grown so that 29.5 per cent was concen- trated in towns and cities of 2,500 inhabitants or more,* extensive commerce in farm perishables was comparatively unimportant. Then the towns and cities were small enough to produce their own perishables or to secure them from the nearby farms. /But the rapid development of trans- portation facilities and the great growth of the cities since that time has changed the whole situa:tion. To-day more than fifty per cent of our population is centered in towns and cities,* many of which are so large that they are unable to get their perishable food from the immediate territory surrounding them, but are compelled to depend on farms hundreds of miles away. The following extract from the Report of the Mayor's Market Commission of New York City will give an idea of the source of the perishable food supply of a large American city * * Bureau of Labor Statistics, Bulletin No. 156, p. 361. * United States Census 1910, vol. v, p. 17. ' Ibid., p. 17. * Report of Mayor's Market Commission of New York City, p. 11. 377] CHARACTER AND SIGNIFICANCE OF PROBLEM 15 To-day the development of railroad and steamship has brought the farms of South Carolina and Kansas as near New York City as were those of Long Island and Westchester County one hundred years ago. It has removed any limita- tions on the growth of the city imposed by the difficulty of getting an adequate food supply, and as a consequence, the city has grown until it is dependent upon the production of a very wide area for its continued existence. The commonest articles of food are often brought great distances ; potatoes, for instance, are brought to the New York market from Maine, from the Western States, from Bermuda, Scotland, Ireland, and Belgium; onions, from the South — Virginia, South Carolina and Texas, from the Western States, and from Italy and Spain ; green vegetables of all kinds are brought from nearby farms and in very large quantities from the South and West — in the flush seasons one railroad bring- ing over three hundred cars a day, and one steamship line running two steamers daily in the busy season between New York and Virginia . . . apples come from New England and New York, the Middle West, Oregon and Washington . . . melons from California, Colorado and the South . . . and so on. The source of New York's dairy and poultry supply would show even a greater area of origin than the fruits and vege- tables above mentioned. It is estimated that at the present time the average haul to the City of New York of the food stuffs it eats would require four days of fast freight.^ As the time and space between the producer and consumer of perishable foods became greater, it was, of course, im- possible for them to deal directly with each other, so some kind of machinery for handling the rapidly growing trade had to be devised. As the task was too great for either producer or consumer and as all other classes of foods had heretofore been handled through the middleman system, it was only natural that the same system should be applied 1 Report of Mayor's Market Commission of New York City, p. 252. 1 6 MARKETING PERISHABLE FARM PRODUCTS [378 largely to the marketing of perishables. Consequently there are to-day great armies of country shippers, commission men, wholesale men, jobbers and other middlemen engaged in handling perishables.^ And the machinery and methods of performing the task have become the most complicated, and probably the most inefficient, of all marketing machin- ery in the world. III. SEASONAL FLUCTUATIONS IN PRICES OF PERISHABLES It is considered almost an axiom that the prices of agri- cultural commodities fluctuate more violently than do those of manufactured goods. The annual fluctuations in the price of wheat, the most stable of all agricultural commodi- ties, have, since 1902, been very much greater than those of pig iron, the basic commodity upon which manufacturing depends.^ The great variations in the prices of agricultural produce as compared with the fluctuations in prices of manu- factured goods and natural-resource products becomes more striking when short period changes (daily or weekly fluctu- ations) are noted. It is hot uncommon for cotton to change ten per cent in price within a day or so, or even within a few hours, whereas the rise or fall in prices of manufactured or natural-resource goods ocpur, as a rule, very gradually and over a long period of time.^ There is a marked difference between the fluctuations in prices of the three classes of agricultural commodities. The prices of the staples are much more uniform than those of the other two classes, whereas, the variations in prices of perishables are far more violent than with other agricul- tural products.* While the price of cotton may change ten ' Report of Mayor's Market Commission of New York City, p. 11. ' Statistical Atlas 191 3, pp. 495-496. ' Mitchell, W. C, Lectures on Business Cycles. * Wholesale prices are here referred to. 379] CHARACTER AND SIGNIFICANCE OF PROBLEM 17 per cent in a few hours the price of almost any fruit or vegetable may, in the same time, fall eighty per cent or rise 400 per cent.^ By comparing the weekly quotations of the staples, as given in any newspaper, with the weekly quota- tions of the perishables given in Tables II and III,^ one will readily see the extreme irregularity in the prices of the latter as opposed to the former. The fluctuations in the prices of the semi-staples will range between those of the Staples and the Perishables.^ It will be noticed from the tables referred to above that, on the whole, poultry products fluctuate less violently than do any other class of perishables, and that eggs are the most variable commodity of this class. In order of per- centage of fluctuation poultry products are followed by dairy products. Cheese varies less than do either butter or milk. Fruit follows dairy products in order of variation of price, and, as will be noticed, is far more variable than dairy products. Among the fruits, peaches and cantaloupes are the most changeable. The second week of July, 19 14, peaches sold in the New York wholesale market from fifty cents to four dollars per bushel, and cantaloupes the same week sold from fifteen cents to three dollars and fifty cents per crate. But of all perishables, fresh vegetables are the most unsteady in price; though on an average, the range of daily or weekly prices is no greater than for peaches or cantaloupes. Tomatoes and cabbage are more violent in their fluctuations than other vegetables. The retail prices of all products vary less than the whole- sale prices.* In the case of a product which fluctuates vio- lently in wholesale price, as most perishables do, the retail 1 Table no. ii, p. 36. ' Pp. 36-37. ' Prices of semi-staples given in Yearbooks of Dept. of Agri. ■* Mitchell, W. C, Lectures on Business Cycles. l8 MARKETING PERISHABLE FARM PRODUCTS [380 price is fixed at a point which will give the retailer a profit even when, he buys his goods at the highest wholesale price. So the great fluctuations in the wholesale prices of perish- ables injures the producer greatly, because he often has to sell his produce far below cost of production ; ^ and the con- sumer is benefited very little, as the price he has to pay remains comparatively high.' Therefore, the great vari- ations in the prices of perishables cause the producer to re- ceive less for the product, and the consumer to pay more than where a steady price is maintained. In short, fluctu- ations add greatly to the cost of the system. IV. SECTIONAL FLUCTUATIONS IN PRICES OF PERISHABLES Table No. IV ' shows the estimated farm price of selected commodities in different states at the same time. It will be noticed that on July i, 1914 the price of wheat varied from sixty cents in Oklahoma to one dollar and twenty-three cents in Georgia. But the farm prices in the great wheat-produc- ing states of the West varied little, having a range of from sixty cents to eighty-six cents, with an average of about seventy-five cents. The variation in hay was much greater, selling on September i, 1914 at five dollars per ton in North Dakota and at twenty-two dollars and fifty cents in Connec- ticut, with a price of about six dollars in the great hay- producing states. The extreme variations in the prices of butter and eggs are shown to be no greater than those of wheat. June 15, 1914 the farmers were selling eggs in Missouri at fourteen cents while Massachusetts farmers were getting twenty-eight cents, and Arizona farmers thirty- one cents. September i, 191 4 butter was bringing thirty- ' United States Department of Agriculture, Report No. 106, pp. 43-58, ' See Discussion of Retail Price-Making, chap. iii. » P. 39. 38l] CHARACTER AND SIGNIFICANCE OF PROBLEM ig six cents in Massachusetts and only eighteen cents in Ten- nessee, but with a general high range in the East and a low range in the West. When we turn to cabbage and tomatoes we find greater discrepancies in farm prices than in any of the commodities already considered. On October 15, 1 9 14 the Arkansas farmers who had cabbage to sell were, on the average, able to get three dollars per hundred pounds, while the farmers of New York were selling them at forty-five cents per hundred pounds. Without exception the price of cabbages on this date was low in the states where they were being harvested and high where there were few for the market. The price range for tomatoes was about as great as that for cabbage. It will be noticed from the table that perishables as a class vary in price from place to place much more than do the other classes of farm produce. A full discussion of the reasons for the great sectional variations in prices of perishables will be given in Chapter III ; it is sufiicient to say here that they are due either to the impossibility, or the exceptionally high cost, of getting the produce from the places where it is lowest in price to the place where it is highest. In other words, the more easily and cheaply a farm commodity can be made to flow to the point of greatest demand, the more uniform will be the price received by the farmers throughout the country. It is clear that under our present .system of marketing perish- ables they do not flow very readily from place to place — at least not at a reasonable cost. This great discrepancy in sectional prices of perishables is very expensive to both producers and consumers. The farmer in one place will not be able to sell his surplus pro- duce at cost of production, while the consumer in another will have to pay very high prices for the same produce be- cause there is a scarcity of the article in his section. 20 MARKETING PERISHABLE FARM PRODUCTS [382 V. COST OF GETTING PERISHABLES FROM PRODUCER TO CONSUMER From the business standpoint "cost of marketing" is the cost in terms of dollars and cents of getting a commodity from the producer into the possession of the one who con- sumes it. It is from this viewpoint that the cost of market- ing is here discussed. In the case of manufactured con- sumers' goods the producer is the manufacturer and the consumer is the household ; in the case of agricultural pro- ducts the producer is the farmer and the consumer is either the factory or the household. Where an agricultural pro- duct goes through a process of manufacture before it is ready for human consumption, as cotton is made into cloth, the factory is regarded as the consumer, but where one is consumed by the household without changing its form, as most fruits and vegetables are, the household is the con- sumer. The greater proportion of Staples and Semi-staples are consumed by factories, whereas, most perishables pass from producer to household without going through a process of manufacture. An examination of cost of marketing is a difficult task.^ It is seldom possible to ascertain the exact cost of market- ing even a standardized manufactured commodity, as has been proved by the investigations of the Tariff Commission into the cost of marketing cotton and woolen cloths,^ and by Harvard University in its studies of marketing shoes.^ It is far more difficult to ascertain the cost of marketing agricultural products than that of marketing manufactured goods. t'This is true, because of the great seasonal and sectional variations in prices of farm commodities, and 1 Martin, Prof., Amer. Econ. Rev., vol. v, p. 145. ' Reports of Tariff Commission on Woolen and on Cotton Schedule. ' Bulletins of the Bureau of Business 'Research, Harvard University. 383] CHARACTER AND SIGNIFICANCE OF PROBLEM 21 because of the additional fact, which we shall discuss in Chapter II, that there is little uniformity of method in marketing them. Consequently the figures of cost of mar- keting which are given below are to be taken only as estimates. It is not to be understood, however, that no im- portance is to be attached to them, for it is believed that they very closely represent the average cost in each case and that they give a true picture of the relative cost of marketing each class of commodities discussed. The average cost of marketing farm produce is much greater relatively than that of marketing manufactured goods. In the latter class the cost varies greatly between different classes, being lowest with the standardized, trust- controlled goods such as kerosene oil and Arrow Collars, and highest with the novelties which are subject to change in style like women's hats and men's cravats. Considering the whole field of manufactured goods the cost of market- ing ranges from 10 to 70 per cent of the consumer's price with an average of from 30 to 40 per cent.^ Whereas, the average cost of marketing agricultural products as a class is from 40 to 50 per cent of what the consumer pays for them, with a very much wider range of cost for different commodities and classes of commodities than with manu- factured goods.' The average for the three great classes of farm products is about as follows: Staple Products 20 to 25 per cent of consumers' price; Semi-staples 35 to 40 per cent; and Perishable Foods 60 to 65 per cent.' It will be noticed that it costs a great deed more to market the perishables than to market either of the other two classes of agricultural products. The exceptionally high cost for ' Martin, Prof., Amer. Econ. Rev., vol. v, p. 145. ' WeW, Univ. of Minn. Bui. No. 4, Soc. Sci. Studies, p. 7. ' Table v, p. 40, and table vi, pp. 41-42. 22 MARKETING PERISHABLE FARM PRODUCTS [384 many commodities in the perishable class stands out clearly when we divide them into sub-classes. The cost for dairy produce is from 45 to 50 per cent; for poultry produce 50 to 55 per cent; while that for fruits and vegetables is from 65 to 75 per cent.* A close examination of Table VI, which gives the average cost of marketing certain selected perish- ables, will show that there is little uniformity in the cost for the different products, but that the lowest cost is much higher than for most Semi-staples or any Staples. There has been a considerable increase in the cost of marketing most classes of " consumers' goods " in recent years.^ The margin between wholesale and retail prices has gradually grown wider. From 1900 to 19 13 whole- sale prices of foods increased 27 per cent, while retail prices increased 58.6 per cent' There are no reliable index num- bers for perishable foods as a class either for farm, whole- sale, or retail prices, but the data which we have available indicate that the cost of marketing them has increased more rapidly than the cost for any other class of consumers' goods. According to Dun's figures wholesale prices of dairy and garden products rose 59 per cent between 1900 and 1 913,* and as poultry and fruit products belong to the same class it is probable that, in the same period, the wholesale prices of perishables as a class rose between 55 and 60 per cent. It is certain that the retail prices of perish- ables more than kept pace with the wholesale prices. But the farm prices, as given in the Farmers' Bulletins of the United States Department of Agriculture, indicate that the farmer received very little more for them in 191 3 than in 1 Table v, p. 40, and table vi, pp. 41-42. 2 Mitchell, W. C, Lectures on Business Cycles. 3 Bureau of Labor Statistics, Bui. No. 173, p. 73, and Bui. No. 156, p. 382. */6«d., pp. 151-52. 385] CHARACTER AND SIGNIFICANCE OF PROBLEM 23 1900. The farm prices of dairy and poultry products have risen 35 to 40 per cent since 1900, while the prices of fruits and vegetables have risen much less, so it is prob- able that the average farm prices for perishables now is not more than 30 per cent higher than the farm price in 1900. Therefore, since this time, the cost of marketing this class of products has greatly increased. The marketing of all classes of goods in European coun- tries seems to be less expensive than in America. The investigations of the Tariff Commission show very con- clusively that the cost of marketing cotton and woolen goods is very much less there than here.^ That American-made- goods sell more cheaply in the shops of London and Paris than in those of New York and Chicago is due, not so much to the American Tariff, as to the difference between the cost of marketing here and abroad. Agricultural products as a class are marketed far more cheaply in Europe than in America.^ This is particularly true of perishables. The European farmers receive a higher average price,' and the consumer pays less for this class of goods than in America.* On the average, the retail price of potatoes in the European cities, as shown in Table VII,° is about one-half of what it is here. The price of butter and milk is from one-half to two-thirds of that in America, and chickens and eggs are also cheaper. There is little doubt that the price of vegetables and fruits in the ' Reports of the Tariff Commission on Woolen and Cotton Schedules. ' Plunkett, Sir Horace, Senate Doc. No. 214, 63 Cong., ist ses., p. 839. ' Testimony before the American Commission on Cooperative Mar- keting in Europe, Senate Doc. No. 214, 63d Cong,, i ses. * Price of Food Products in Europe, June, 1914, in the various tables given in Bui. 170 of the Bureau of Labor Statistics compared with American prices. These were prices which prevailed in Europe prior to the outbreak of the war. « Infra, p. 43. 24 MARKETING PERISHABLE FARM PRODUCTS [386 European cities is one-half what it is here, though there are no statistics on this point. Meat and flour are higher than in America, but this is not due to the high cost of market- ing but to the fact that these goods are produced at a much higher cost there than here, and that a great part of the supply is imported from abroad.^ VI. LOSSES FROM DECAY OF PERISHABLES The greatest social losses which occur in connection with marketing perishables lie, neither in the wide fluctuation or sectional variation in the prices of the same commodities nor in the actual expense of getting those goods from pro- ducers to consumers — though, as we have seen, these factors make the marketing system very burdensome. The great- est burden of all lies in the fact that a very large proportion of the perishables which are produced for market never reach consumers at all, but are completely lost by being allowed to decay. Part of this decay occurs on the farms (before the goods have a chance to enter the market) and the other part occurs after the goods are turned over to the marketing agencies.^ An exceptionally large percentage of the fruits and vege- tables raised for market decay on the farmers' hands before a market can be found for them. The proportion of dairy and poultry products which perish on the farms is smaller than for fruits and vegetables, but still it is considerable. It ^ Report of the Secretary of Agriculture 1914, p. 8. * The value of the losses from decay which occur after the goods have entered the hands of the middlemen is included in the statistics of the "Cost of Getting Perishables from Producers to Consumers" given in the preceding section. A discussion of these losses is given in this section so that the " expense of running the marketing system " and the losses from decay may be distinguished. The " cost of mar- keting" includes both factors. 387] CHARACTER AND SIGNIFICANCE OF PROBLEM 2$. is estimated that between 20 and 30 per cent of perishables as a class decay on the farms before they can be sold.^ At least 25 per cent of the perishables which arrive at the wholesale markets is hauled to the dump-pile because it is. unfit for human consumption." In the year 191 1 the New York Board of Health condemned and destroyed 6,500,000 pounds of fruit and 2,500,000 pounds of vegetables because of decay.* In warm weather Florida oranges lose 30 per cent in transportation alone,* and if we add the decay after- the fruit reaches the consuming center the total loss would be astounding. There is a loss of 17 per cent in eggs from producer to consumer, due to breakage, decay, etc.,' but butter has an equally great loss. The greater proportion of the perishables which are consumed in the cities are much in- ferior, because of partial deterioration, to what they were when they left the farms. It is not an over-estimate, there- fore, to say that between 30 and 40 per cent of the perish- ables which are raised on the farms are never consumed at all, but are a complete social loss. That this decay of perishables works a great hardship upon both producers and consumers is too evident to re- quire much discussion. It often happens that farmers in one section are unable to sell their peaches, tomatoes or other perishables because they decay before a market is found for them while at the same time consumers in some cities are unable to buy the same produce at a reasonable price because the available supply in their market is very 'U. S. Dept. of Agri., Report 98, pp. 166-284, and Report 106, pp. 43-59.- ' Estimation made up from conversation with wholesale men in sev- eral cities. 3 Pennington, Report of Mayor's Market Commission of New York- City, p. 252. * Bureau of Plant Industry, Circular No. 19, p. i. * Farmers' Bulletin No. 517, p. 13. a6 MARKETING PERISHABLE FARM PRODUCTS [388 small.^ So the farmers lose part of their crops, while con- sumers are unable to get as much of the same crops as they would like and must pay high prices for what they do get. It is the business of a market to bring supply and demand together, and something is radically wrong if it fails to accomplish this. VII. SUMMARY OF THE WHOLE PROBLEM We may summarize the whole problem as follows: Farmers produce far more perishables than they are able to market. Those which they succeed in market- ing fluctuate so violently in price from day to day that the growers cannot approximate one day what they will receive for their goods the next. The average price which the farmer receives for his goods is very low as compared with what the consumer pays for the same class of goods. Con- sumers are paying higher prices for perishables than the -consumers of Europe pay for them, and the supply which they are able to get is very irregular. Between the pro- ducer and the consumer we find a great deterioration or decay of goods, and an expensive method of getting the ;goods from one to the other. VIII. CAUSES OF THE DEMAND FOR A REDUCTION IN THE COST OF MARKETING PERISHABLES Even though the waste and inefficiency in the system of marketing perishables has been great enough to attract pub- lic attention, it is due to underlying economic changes in our industrial society that great interest has been^ aroused in the problem. Probably the most important of these changes is the diminishing power of wage-earners and fanners to buy ihe necessities of life. From 1896 to 1907 wages in the ' Brooks, J. T., Markets and Rural Economics, pp. 189-190. 389] CHARACTER AND SIGNIFICANCE OF PROBLEM 27 United States rose 27 per cent/ but food and clothing in the same period rose in wholesale price 40 per cent,^ and in retail price about 50 per cent.* Again from 1907 to 1913 wages rose 11.6 per cent,* while wholesale prices of food increased 17 per cent/ and retail prices 20 per cent. The position of the day-laborer is therefore becoming more undesirable and he has begun to demand a change. His fight for a further increase of his wages has not been suc- cessful enough to satisfy him, so he now demands cheaper living. On the other hand, the farmer's purchasing power has also shown appreciable signs of diminishing in recent years. As long as there was plenty of cheap fertile land he was able to increase his income so easily by increasing his produc- tion that he was not vitally interested in the price he received per unit. But the days of cheap land are now gone. In 1900 to 19 10 the value of farm land in the United States as a whole more than doubled per acre.° This was a gain to those who owned the land during the rise in value, but it is an added burden to non-land owning farmers and to those who have recently purchased land. The problem now is to increase returns on a limited number of acres and this cannot be done by increase of production beyond a certain point. It is a well-known economic principle that after a certain limit of intensive cultivation is reached the returns from the land do not increase in proportion to the labor and capital expended upon it. It is certain that in ' Mitchell, Business Cycles, p. 133. ' Bureau of Labor Statistics, Bui. 173, p. 126. * Supra, p. 22. ' Statistical Abstract 1913, pp. 249-251. * Bureau of Labor Statistics, Bui. 173, p. 126. • U. S. Census 1910, vol. v, p. 27. 28 MARKETING PERISHABLE FARM PRODUCTS [390 some sections of the country we have already reached the point of diminishing returns for laljor on our land. As we approach this stage the tiller of the ^il, in order to maintain his standard of real income, must receive more for the products he raises or buy his necessities at a lower price. But prices of farmer's necessities are not falling but con- tinually rising, and rising faster than the prices he receives for his products; so his purchasing power has been decreas- ing for the past few years. According to the estimates of Mr. Nat C. Murrah, Assistant Chief of the Bureau of Crop Estimates, the farmer's purchasing power decreased five per cent between 1909 and 1914.^ So the farmer is be- ginning to demand a better price for his products, and par- ticularly for his perishables. Another economic change in our industrial life which has brought the perishable food problem to the forefront is our increasing dependence on this class of commodities as a source of food supply. Indications are that we as a nation must depend less and less upon beef and pork as our main diet and more and more upon vegetables, fruits and domestic fowls. The per capita number of animals raised on our farms has greatly decreased since 1900. In that year the number of cattle per capita for the country was .89 while in 1914 it was only .57; the figures for swine are .83 for 1900 and .60 for 1914; and for sheep, .81 in 1900 and .50 in 1914.'^ Not only has the per capita number of these animals de- creased greatly but in each case the actual number for the period has decreased. This is not the place to enter upon a detailed discussion of the causes for the decrease, it is suf- ficient to say that it has been largely due to the rapid rise in the price of land. Cattle- hog- and sheep-raising is a * Farmers' Bulletin No. 645, p. 18. ' Farmers^ Bulletin No. 575, p. 8. 391 J CHARACTER AND SIGNIFICANCE OF PROBLEM 29 frontier industry and as the country is more thickly settled it is driven out by more intensive crops.^ The important fact for us to note here is that if we, as a nation, are to have a cheap food supply in the future it must come largely from the plant kingdom rather than from the animal. More human food can be raised on a given area of land by the production of plant than of animal crops. As has already been shown, forty per cent of the money paid for food by the ordinary workman goes to buy perishables. This percentage is a great deal higher to-day than it was ten years ago because the price of meat has risen so rapidly in the past few years. As the cost of producing meat will, in the future, continue to rise higher and higher the work- man will consume less meat and more perishables. Day- laborers will not be the only ones affected; all except the very rich will feel the strain. Our people, then, will de- pend more and more upon perishables for their food supply. This is why consumers, as a class, are becoming so intensely interested in the marketing of these goods. Because of the rapid rise in the price of land, and the increased demand for perishables on the part of the cities and towns, the dependence of farmers upon them as a money crop is growing very rapidly. According to the census estimates of 1910, given in Table I,^ perishables con- stituted twenty-three per cent of the total value of the out- put of the agricultural industry, and, as explained in the table, were greatly under-estimated so that their value is probably twenty-five to thirty per cent of the total. As agriculture becomes more intensive and the urban popula- tion grows to greater proportions the farmer will depend ' Carver, Principles of Rural Economics, pp. 157-162. ^ P. 35. 30 MARKETING PERISHABLE FARM PRODUCTS [392 more and more upon perishables as his money-crop. So he has become greatly interested in the marketing of perishables. When we take into consideration the social losses con- nected with the system of marketing perishables, the rapidly decreasing purchasing power of laborers and farmers, to- gether with the increasing dependence of both rural and urban population on these commodities, we not only see why the problem has become one of general interest, but we can also appreciate its far-reaching importance to the nation as a whole. When the country was new and population scarce in proportion to the natural resources, the marginal pro- duction of labor in the factory and on the farm was so high, and the possibility of increasing this production so great, that attention was naturally centered on increasing the out- put. A greater national income could be secured by produc- ing a larger quantity than by utilizing what was produced to the best social advantage. Waste was not extravagance because more could be gotten by spending energy to aug- ment the output than by spending it in conserving and utiliz- ing the smaller production more advantageously. But the situation has changed and waste is now becoming a burden and a great burden in regard to perishable foods. It is now difficult for the farmer to increase output except at an increasing expense per unit of produce, the laborer can rarely succeed in augmenting his wage except at a great increase of efifort, so both are demanding the elimination of waste connected with the exchange between them in order to increase their real incomes. IX. WHAT HAS BEEN DONE TO IMPROVE THE MARKETING OF PERISHABLES Farmers have made many efforts through cooperative associations to reform the methods of marketing perishables. There have been a few such associations which have made 393] CHARACTER AND SIGNIFICANCE OF PROBLEM 31 signal successes,^ but the greater number so far organized have "been pronounced failures. They have neither ad- vanced the personal welfare of the cooperators nor improved marketing. It is a generally conceded fact that such or- ganizations have, up to this time, had little appreciable ef- fect on the general problem.^ There has also been much talk recently of consumers' co- operation in this country, but as yet the supporters of the plan have largely confined themselves to pointing out the great successes cooperative stores have made in Europe, particularly in England. The Right Relationship League has organized 150 such stores in the United States since 1903,* but the success of these stores has not been so very encouraging. It might be said that as yet consumers' co- operation in this country is only a hope — ^not an accom- plished fact. The effect which such cooperation has had on the general problems of marketing perishables is far less- than that accomplished by farmers' cooperative organiza- tions. There are about two dozen American cities which claimi to have municipal markets of some character, but there is. not one where a very large proportion of the perishables consumed by the city goes through the municipal markets.* However, great improvements have been made in many of these American municipal markets in the past few years and' there is little doubt that at least in some of the cities they have enabled a portion of the population to secure cheaper ' Description of Farmers' Cooperation in U. S. ; U. S. Dept. of Agri., Report No. 98, pp. 166-284. ^ Tousley, E. M., Annals of Amer. Acad, of Pol. and Soc, Set,, vol. l, p. 230. *Ibid., pp. 231-233. * Public Markets in American Cities, Report of Mayor's Market Com- mission of New York City, p. 67. 32 MARKETING PERISHABLE FARM PRODUCTS [394 food. But up to this time it cannot be said that even these public markets have had an appreciable influence on the .general system of marketing perishables. There are evidences that the middlemen themselves have become interested in improving their methods of handling perishables.^ Their associations have studied some of the problems and have passed resolutions calling for certain reforms. They have, however, accomplished less than noth- ing in the way of evident improvements and the system has constantly grown worse in their hands. Yet, in the face of the general failure on all sides to re- form the system, it is not believed that the problem is a -hopeless one. The greater part of the past discussion of the question and not a few of the moves made to improve conditions have been only the hysterical efforts of people unacquainted with the true economic complications and un- able to grapple with this big economic problem which has appeared on the horizon. So far, little scientific investiga- tion or discussion has been devoted to the marketing of perishables. There are, however, indications that many 'economists and trained experts will, in the future, give their time to the problem. Wisconsin, New York and a few other states have es- tablished commissions or bureaus to study the marketing of farm produce. These state commissions are too new for us to tell as yet just what they will be able to accomplish in the way of bringing about constructive reforms, but the work now being done by the New York State Department of Foods and Markets and by the Wisconsin University Extension Department is indeed encouraging. A few cities have appointed market and food commissions to study the local problems, and the Report of the Mayor's Market Com- jnission of New York City is a valuable one. ' Weld, Univ. of Minn., Bui. in Soc. Set. No. 4, p. 10. 395] CHARACTER AND SIGNIFICANCE OF PROBLEM 33 As the result of a conference held under the auspices of the Department of Agriculture at Washington in April 1913,^ Congress created in this Department the Office of Markets, which, a year later, was combined with the Office of Rural Organization. It is the object of the Office of Markets and Rural Organization to collect and distribute useful information on " subjects relating to the marketing and distribution of farm products." Though the office of markets is yet young, connected with it is a corps of experts in marketing who have already made invaluable studies in special phases of the problem.^ If Congress sees fit further to increase the appropriations of this office it will in time become the chief clearing house for scientific information on all questions connected with marketing agri- cultural products, particularly perishables, for as shown by the Reports of the Chief of the Office the larger part of its work is concerned with marketing this class of produce. The economic societies of the country have lately shown not a little interest in the marketing of perishables. In 1913 a whole meeting of the American Academy of Political and Social Science was taken up in discussing problems connected with " Reducing the Cost of Food Dis- tribution," ' and since that time many separate articles on this problem have appeared in the annals of this organiza- tion. The American Economic Association has not neglected the question, for a whole session of its annual meeting in 1914 was taken up with the problems of marketing.* Aside from these two large scientific organizations many of the smaller ones have devoted much of their space and time to problems ' Report of Conference issued by Dept. of Agri. * The various reports will be mentioned in later chapters. * Annals for November, 1913. * American Econ. Rev., Papers and Proceedings of 1914 meeting. 34 MARKETING PERISHABLE FARM PRODUCTS [396 of marketing perishables. Also many individual economists have very recently turned their attention to questions of marketing agricultural products.* So it is likely that the problem will receive sufficient scientific study within a short time to justify a constructive program for reorganizing the system of marketing perishables. It is hoped that the discussion of the problem which is found in the following pages will contribute something to that scientific basis for the reform. ■ Weld of Yale, Taylor of Wisconsin, Coulter of Peabody, Carver of Harvard. 397] CHARACTER AND SIGNIFICANCE OF PROBLEM 35 TABLE I The Three Groups of Farm Products — ^Value of Each' STAPLE CROPS Commodity Value, Annual Com «M38.5S3.9'9 Cotton 703.619.303 Wheat 657,656,801 Oa's 414.697.244 Barley 92.458.57' Total. $3,306,985,638 SEMI-STAPLE CROPS* Commodity Value, Annual Cereals 162,173,001 Othei grains and seeds. . 97,636,085 Hay and forage 824,004,877 Tobacco 104,302,856 Cotton Seed 121 ,076,984 Sugar Crops 61,648,942 Other minor crops 18,068,658 Nuts 4.447.674 Domestic Animals i .833. 1 75,487 Wool 54,964,020 Honey and Wax 5.992,083 Total l3.'2S.377.S66 PERISHABLE FOOD CROPS ' Commodity Value, Annual Dairy products >755>78o,93i Poultry products .... 709,195,232 Vegetables 418,1 10,154 Fruits 217,576,542 Total 12,100,662,869 ALL CROPS* Staples S3.3o6,98s,638 Semi-staples 3,1 25,377,666 Perishable Foods.... 2,100,662,869 Grand total {$8,533,026,173 •Census of 1910 : Vol. V. pp. 474, 505, 517, 519, 532. ' There is much duplication in the estimated values of the Semi-Staple Crops because much of one product is used in producing another. For example, bay and forage are used in producing live-stock but the full value of each is here given. Then too, a great part of the Staple Crops, such as corn and oats, is consumed in the production of live-stock. ' The perishable foods are very probably greatly underestimated because such a large percentage of the crops is consumed or wasted on the farm and the farmers have no way of estimating the true value. * The grand total is probably near the value of the annual production of the agricultural industry because the over-estimates and under-estimates tend to equalize each other. 36 MARKETING PERISHABLE FARM PRODUCTS [398 TABLE II Fluctuation in the Prices of Fruits and Vegetables yuly^ A«gust September October November Dteember Apples (barrels) : Receipts' i,SS7 »6.°38 28,537 '24,071 79,620 40,101 Wholesale price'. . .J0.s0@S2.s0 Ji.2S@$3.ao J1.so@iS3.so Jo.7S@$3.oo JS1.00@J4.00 Ji.oo@J4/)o N.Y. Farm Price' S1.63 $l-SO J1.00 Jo.gs Jl.2S U.S. Farm Price*.. J2.15 J1.70 Jl.S3 J1.40 Jl-43 t^^S Pears (barrel) : Receipts S>446 '.537 3,692 4,6i8 1,130 1,734 Wholesale Price J2.00@JS4.00 J0.60@J4.S0 Ji.2S@Js.oo Ji,oo@J6.oo Jl.oo@Js.oo $i.yi@$^S30 N. Y. Farm Price Ji.9S JS2.13 J2.C0 U.S. Farm Price J247 J2.33 J2.00 J1.94 J2.06 Peaches (bushels) : Wholesale Price J0.s0@J4.00 Jo.so@Js.oo Jo,30@j2.oo J0.2s@J2.00 U. S. Farm Price .. . J1.20 J1.05 J1.37 J1.0S Cantaloups (crate) Wholesale Price. . . .Jo.15@J3.so J0.12@Jl.7sJ 0.25@J2.00 Jo.6o@Ji.so Cabbage (100 pounds) Wholesale Price. . ..J0.s0@J2.00 J0.2s@J3.00 J2.00@J3.00 J2.SO@J3.SO J1.S0@J2.00 J2.SO@J3.50 U.S. Farm Price... J2.66 J1.74 Ji.S© J1.31 J1.14 J1.25 Tomatoes (box) Wholesale Price . . . .J0.20@J2.50 J0.10@J0.3s J0.15@J1.00 J0.50@J1.00 Jo.so@Ji.so J0.40@J1.00 Celery (doz. bunches) Wholesale Price Jo.io@Jo.so J0.10@J0.2s Jo.io@Jo40 Jo.lo(gJo.35 Jo.io(gJo.2S J0.10@J0.50 Lettuce (basket) Wholesale Price. . ..J0.10@Jo.7s J0.10@J0.30 J0.2s@J1.25 J0.15@J0.7s Jo.2S(gJl.oo fo.2S@Jl.50 Spinach (basket) Wholesale Price J0.25@J5.00 Jo.30(gJo.so J0.2s@J0.3s Jo.is@Jo.M Green Peas (bushel) Wholesale Price Jo.5o@Ji,2S J040@J1.so Jo.so@J1.75 Jl.s0@J2.so J0.7s@J1.7s ' For the City of New York for the second week in each month. Receipts were estimated from the current issues of The Producers' Price-Current of N. Y., and are to be taken only as estimates. ' Wholesale prices of New York City according to quotations given by The Producers' Price-Current ' The average price which the New York farmer receives for the commodity on the 15th of the month referred to. These prices were secured from Farmers' Bulletins Nos. 61 1, 620, 629, 641, 6451 651. They also are to be considered as estimates. 'The average price which the farmers of the United States receive for the commodity on the istb of the month designated. The figures were taken from the Farmers' Bulletins referred to in note 3. ' The prices quoted are only those of the second week of each month. 399] CHARACTER AND SIGNIFICANCE OF PROBLEM 37 TABLE m Monthly Receipts and Wholesale Fkices of Dairy and Poultry Products IN New York City for 1914 Months January. . Februi^. March ■ • ■ . April . . . . ' May June July August.. ■< September October. . November December . Receipts (pkgs.) 171,768 149.053 202,222 192,101 234.894 344.75° 286,071 222,793 222,250 178,629 152,197 156,108 Creamery Extra (per lb.)- Cents 1 26 (3 >37J^ 2bkHfl )32 HHifl 32 24j^(a )26J^ 25>^te 27 26J4(a )28 26%(a ).30 28^(a 32 30 (a 32j^ 29j^.(a /33J^ 33^(a 36 33 (S )3<'}i Held Cream. Extra (per lb.) Cents 25>^@33 26 @30>^ 23 @30 22j^@23 29>^@32 29 ©32 3i>^@32>^ 32 (®33 cheese Receipts (pkgs.) Fresh Average Fancy (per lb.) Cents 23,066 l6M@l7Ji 21,301 I6J4@I7M 28,732 i6yMi7}4 48,417 '3 @l6>^ 62,161 I2M@I3M 97.197 I3K@'5 91,402 i3X@H}4 72,207 i4>g@i6Ji 65,984 15 @i6 74.796 i^misH 44,164 I4>^@IS 35.293 I4M@I5 DRESSED POULTRY Months Receipts (pkgs.) January February March 132,908 75."9 100,941 87.537 74.362 71.294 52.257 46,430 60,249 66,867 98,713 188,169 May Tuly August September .... October November December Fresh Killed Fowls (per lb.) Cents 12 @I9 14 @19 14 @I9 15 @I9K i3Ji@i9M i3^mS}4 I2>^@I9j^ 12)^@19>^ 13 @20 13 @20 li>^®i8>^ 12 @I7>^ Frozen Fowls (per lb.) Cents I5>^@i9 14 (§19 13 13 J3 12 12 12 J19 ^19 M9 ^«9)^ P9hi ^I9K LIVE POULTRY Receipts Fowls (car loads) (per lb.) Cents 477 14>^@I6 382 l61^@20 443 iS>^@23 517 i6>^@23 424 15 @'9 460 i4K@i9>^ 492 i6M@i9 504 IS @i8K 736 16 @i9 686 12 @20 670 iiK@i6 748 ii>^@i6>^ 38 MARKETING PERISHABLE FARM PRODUCTS [400 TABLE III— Concluded Months January. . . February . . March • ■ • . April May June July August . . . . September. October, .. November. December, 188,287 269,552 466,452 SSS.953 778.391 587,840 386,845 365,261 349.73» 277,88r 176,366 I59.S'7 Western Finest (per doz.) Cents 32>^@ i37 28 ^ )33 25 @ 34 19^1 :22>^ 20j^W 22 21 M ,22>^ 22 )2S 24 & 128 26 & 129 27 M )33 32 & 40 38 @ )44 Refrigerator First to Finest (per doz.) Cents 29>^@32>^ 25 @30 27>^@28 23>^@2SM 25 @27 23>^@27 23>^@26 23>^@27 From prices and receipts quoted by TAe Producer's Price' Current of New York . 40I ] CHARACTER AND SIGNIFICANCE OF PROBLEM 39 TABLE IV Discrepancies between the Prices of the same Commodity in different States on the same Date in 1914. Maine New Hampshire • Vermont Rhode Island . . . Massachusetts • • • Connecticut New York New Jersey Pennsylvania.... Delaware Maryland Virginia West Virginia. . . North Carolina • . South Carolina ■ . Georgia Florida Ohio Indiana Illinois Michigan Wisconsin Minnesota Iowa Missouri North Dakota. . . South Dakota. . . Nebraska Kansas Kentucky Tennessee Alabama Louisiana . . . Texas Oklahoma . . . Arkansas . . . . Montana . . . . Wyoming . . . Colorado . • • . New Mexico. Arizona Utah Nevada Idaho Washington • Oregon California . . . Wheat (per bu.) July I $1.0$ 1. 00 .98 I.OI .92 •fs •8S •95 1.00 1.05 1.14 1.23 •^1 .76 .72 .86 .85 .78 •77 •71 .78 •77 .70 .70 .78 •85 •77 .60 .86 •75 .90 •77 1. 10 1.20 .80 .90 .72 •73 •77 •94 Hay (per ton) Sept. I *i3-70 18.60 15.90 21.00 19.00 21.50 14.90 19.20 14.40 15.00 i5^30 17.10 17.60 18.00 18.00 17-3° 18.70 14.50 14.70 14.80 12.20 9.40 6.30 10.30 14.10 5.00 5.80 7.10 8.40 17.40 18.60 14.80 12.70 12.50 9.80 8.90 12.90 7.80 9.20 8.40 10.30 12.60 8.00 10.30 6.50 9.70 9.00 7.20 Eggs (per doz.) June 15 ito.24 .24 .20 •27 .28 •25 .22 .26 .22 .21 .19 .18 ■19 .18 .20 .18 .21 .18 •17 .16 .19 •17 .16 .16 .14 •15 •15 •15 •15 •15 :;i .16 .18 •15 .14 .16 .22 •23 .21 .24 •31 .20 •30 •19 .22 •23 .24 Butter (per lb.) Sept. I 10.31 •33 •31 •35 •36 •34 •31 33 ■30 .26 •23 .25 .24 .25 .24 •33 .27 .24 ■27 .26 .29 .27 .26 .23 •23 .20 •23 •24 .21 .18 .23 .22 .29 •23 •23 •23 .30 •27 .28 .34 ■34 .30 .36 .27 .31 •33 •29 Cabbage (per 100 lb.) Oct. 15 Tomatoes (per bu.) Oct. 15 $1.00 1.30 .75 .90 1.50 •45 •75 1.40 1.50 1.25 1.90 1.60 1.70 2.00 2.00 3.10 1.40 1.40 1.60 1.20 1.25 1.95 '•95 1.80 2.7s 2-35 1.80 1.50 2.00 2.00 2.30 2,70 2.50 2.60 2.25 3.00 1-55 2.21; .60 1.90 2.50 2.20 2.50 1.80 1.50 2.00 1.40 ^.90 •85 1.00 .80 1.00 .65 •5' .40 .67 ■29 •47 .60 •65 .90 I.IO* I.2S I.I8 .50 .50 .68 .50 .80 1. 00 •75 •75 1.50 1.05 •95 1. 10 •55 .50 .80 1.00 1.40 1.30 .70 1. 00 1.50 •95 1.30 2.05 .80 1.65 1.80 1. 00 1. 00 .60 These figures were taken from the price quotations in Farmer^ Bulletins Nos. 61 1 » 620, 641. They are Farm Prices. 40 MARKETING PERISHABLE FARM PRODUCTS [402 TABLE V Cow OF MAWCEriNG Agwcultdral Staples Commodity Wheat Com. • Oats . . Cotton From fanner to factory Per cent of factory price 10' 12' 12' 9* From farmer to individual consumers Per cent of individual con- sumers' price 20' 30 » Cost of Marketing Semi-staples Commodity Cattle, hogs and sheep Horses, mules and asses Tobacco Hay and forage .... Grains and cereals.. • From farmer to factory Per cent of factory price 4 to 6" 6 to 10' 10 to 12° From farmer to individual consumers Per cent of individual con- sumers' price 30 to 35 » 35 to 40 • 40 to 50 ' 35 '040* Cost of Marketing Perishable Foods Commodity Poultry Produce. Dairy Produce . . Fruits Vegetables From farmer to the individual consumers.. Per cent of individual consumers' price 50 to 55 » 45 to 50'" 70 to 75 " 70 to 80" > Bureau of Lab. Statistics, Bui. No. 130, pp. 70-102. ' The cost of marketing corn to the manufacturer is a little higher than for wheat because of its lower specific value and greater shrinkage. Cost to consumer is gotten by comparing farm prices in the West with farm prices in the South and East on the same date as given in Farmers' Bulletin No. 611, p. 27. * The cost of marketing oats is gotten the same way as for corn. * Spot price in N. Y. compared with Southern farm price on same date. ' Warren — Univ. of Minn. Studies., Bui. No. 4. p. 35. * Selling price in horse-raising states vs. prices in other states. U. S. Census 1910, Vol. V, p. 368. ' Bureau of Plant Industry, Bnl. 268. ' Gotten by same methods as in footnote ('). * Table VI, p. 41. ^'> IHd. " Table VI, p. 42. "/Wrf., p. 4a. 403] CHARACTER AND SIGNIFICANCE OF PROBLEM 41 TABLE VI Cost of Marketing Perishables Commodity Farm Price Wholesale Price Retail Price Cost of Marketing. Poultry Produce fC) Eggs (per doz.)..- (») $0,176 JS0.2S $0.38 Per cent of consum- ers' price 54 3» 72 55 54-5 42 30 25 23 48 55 59 55 .11 •«5 .40 Chickens (per lb.) ( 5) U') Dairy Produce Butter (per lb.) ... ( ,) 10°) Cheese (per lb.).. (") Milk (per qt.)...{[I^^ .091 .127 •253 .16 •17s •25 .20 .22 •36 .185 .12 .032 .24 .145 .0633 .36 •27 •0733 ' Average farm price for July 15, 1914 estimated by the Dept. of Agri. Whole- sale price for same date at New York as quoted by The Producer^ Price-Current.. Retail price same date in New York as estimated by Bureau of Labor Statistics. Bui. 156, p. 146. ' Weld — Univ. of Minn. Studies in Soc. Sci., Bui. No. 4, p. 7. This refers only to Minnesota eggs. * King — Philadelphia Markets in their bearing on the Cost of Farm Produce p.. 13. In reference only to eggs produced near Philadelphia and marketed in Fhila.. * Weld, op. cit., p. 7. In reference to Minnesota Poultry. ' Thomson — Univ. of Minn. Studies, Bui. No. 4, p. 72. Poultry marketed in' the Twin Cities. ° Average farm price for Sept. 12, 19 14 estimated by the Dept. of Agri. Farm- ers' Bulletin No. 611, p. 32. Wholesale price for same date at New York as quoted by the Producers' Price-Current. Retail price at New York on July 15,. as estimated by Bureau of Labor Statistics Bui. No. 156, p. 146. ' Secured the same way as prices for (6). ' Bureau of Lab. Statistics, Bui. No. 164, p. 11. ' Weld, op. cit., p. 8. Marketing Minnesota butter in New York. '"King, op. cit., p. 13. Pennsylvania butter marketed in Philadelphia. " Univ. of Wis. Bui. 232, p. 30. Wisconsin cheese marketed in U. S. " Calvert — Univ. of Minn., Bui. No. 4. p. 86. Cost of distributing milk by- Minneapolis Milk Company, I9i2-'i3. " Weld, op. cit., p. 7. Average for milk of Minnesota. 42 MARKETING PERISHABLE FARM PRODUCTS [404 TABLE VI— {Concluded) The Cost of Marketing Perishables Commodity Farm Price Wholesale Price Retail Price Cost of Marketing Fruits f(') Apples (per bbl.)- ( ') Pears (per bu.) ••••(*) Peaches (per bu.) . . ( 5) Berries ( •) Vegetables f(') Potatoes (per bu.) ■ ( *| Cabbage (per 100 f ('») lb.)..... Ic Tomatoes (per/ (") pk.) .........U'») Asparagus, lettuce, spinach, celery ••.('*) Per cent of consum- ers' price 70 72 63 74 f 65 70 45 55 67 60 80 80 jSi.66 I.4S 2.16 1.17 II2.16 2.75 3-04 1.82 «5-9S . S.46 .815 •53 1-39 1.00 Hi 1.50 1.20 4.17 ;?i .40 .40 .80 .80 ' Weld, op. cit., p. 7. Average for Minn, fruits. 'Farm price secured by taking average of farm prices given by Dept. of Agri. July to Dec, 1914. Wholesale price is gotten by taking average for Nevr York for same period. Retail price is for New York in July as ascertained by personal investigation. ' Bui. 302, p. 8 of Dept. of Agri. For apples distributed through the five and -ten cent stores. * Different prices gotten same way as those for (2). ' Different prices gotten same way as those for (2) and (4). ' King, op. cit., p. 13. For berries grown in Pennsylvania marketed in Phila- delphia. Berries shipped from other states would show a much higher cost. ' Weld, op. cit., p. 7. Average cost for marketing Minnesota vegetables. ^Farm and wholesale prices gotten as in (2), (4), and (5). Retail price is the one for New York July 15, 1914 as given by Bureau of Lab. Statistics, Bui. 156 p. 140. ' King, op. cit., p. 13. For local potatoes marketed in Philadelphia. '"Prices gotteii in same way as in (2) and (4). " Peterson — ^Univ. of Minn., Bui. 4, p. 94. Local cabbage marketed in the Central Market of Minneapolis. " King, op. cit., p. 13. For local tomatoes marketed in Philadelphia. "Average price for U. S. summer of 1914. Farmers' Bui. 620, p. 33. Com- bined with Philadelphia prices. '* It is not possible to get figures because of the great fluctuation in the cost, but wholesale and retail men assert that the cost is much higher for this class of vegetable than any other. 405] CHARACTER AND SIGNIFICANCE OF PROBLEM 43 TABLE Vn Retail Pkices of Food Products in American Cities Compared with those in European Cities, July 1914 American Cities European cities Commodity New York City" St Louis' Rheims, France ' Hamburg, Germany* Edinburgh Scotland' Genoa. Italy' Nor- way' Sirloin Steak (per lb.) .... Round Steak (per lb.) Rib roast (per lb.) Chuck Roast (per lb.) Pork Chops (per lb.) Bacon, Smoked (per lb.) ■ . Ham, Smoked (per lb.) ... Lard, Pure (per b.) Leg of Lamb (per lb.) .... Hens, not drawn (per lb.) . . Flour, wheat (25 lbs.) Eggs, strictly fresh(per doz.) Butter creamery (per lb.) . . Potatoes, Irish (per lb.) . . . |0.27 ■27 .22 .16 .22 .25 ■30 ■.\l .21 .80 .36 •34 •03 •054 .09 i!!o.30 .25 .20 •>75 .20 •30 .30 ■15 .20 .20 .80 •23 •35 .02 ".16 •357 .171 .26 .16 •24 .20 •\v •333 .16 .22 •19 •24 I.37S .24 •32 .02 .07 •OS .238 .18 1.185 .312 •32 .01 .057 .067 .181 •87s •23 •30 .01 .06 iL .28 .015 .071 •043 •36 •30 •05 MUk, fresh (per qt.) 'From Bulletin of the United States Bureau of Labor Statistics, Whole Number 156 pp. I39-I45^ ' lUii., pp. 169-171. ' Bulletin of the United States Bureau of Labor Statistics, Whole Number 170, p. 34. • /6iti., p. 40. «yw7 .18 •19 .20 .21 .22 .23 .24 .25 .26 •27 .28 .29 •30 •31 •32 •33 •34 ■36 •37 .38 •39 .40 .41 .42 •43 ■44 •45 .46 •47 .48 •49 •50 •SI •52 •S3 •54 miles $0.06 .08 miles S0.07 .II 10 •15 12 • 19 14 •23 .16 .27 18 •31 20 •35 22 •39 24 •43 26 •47 28 •51 ■30 •55 32 •59 •34 •63 •36 .67 •38 •71 40 •75 42 •79 44 •83 miles ;^.o8 .14 .20 .26 •32 •38 •44 .56 .62 .68 •74 .80 .86 .92 •98 1.04 1. 10 1.16 1.22 miles iSo.09 •17 •25 •33 .41 •49 •57 ■65 ■73 .81 .89 •97 I. OS I-I3 1.21 1.29 1^37 1.45 1^53 1.61 miles JSO.II .21 •31 .41 •51 .61 •71 .81 .91 I.OI I. II I.2I I-3I I.4I I.5I I.6I I.7I I.8I I.9I 2.01 miles JSO.12 .24 •36 .48 .60 .72 •84 .96 1.08 1.20 1.32 1.44 1.56 1.68 1.80 1.92 2.04 2.16 2.28 2.40 Zones— Parcel Post Guide and Maps. — For parcel post purposes the United States is divided into units of area thirty minutes square. To ascertain in which zone a post office is located from the office of mailing, a parcel post guide, costing 55 cents, and map, costing 20 cents, are jointly used. The guide applies to all offices, but a separate map is required for each unit. A zone key is furnished with the guide for use in the units of area in which some of the largest post offices are located, and makes the map for those units unnecessary. The guide and maps may be purchased by sending a money order to the Third Assistant Postmaster General, Wash- ington, D, C, Stamps are not accepted. 437] PRESENT SYSTEM OF MARKETING PERISHABLES 75 o I— t O Q o en .S S 5 *-i .a ^ § < c4 3 .2 i- en \£ Q < a < o i-i Pi ■a! U s '3 5a„ r>' O\00 »~ 00 Tl- O O 00 « r»> vnoo 1- « « « « M M Ti-ON«00QOOO^»A u t3 ■a a - o pa & o o o o o O O O loS ro m fo rn -^ o o to Tf O O O Q O Q o o 3 5 o _ o o o 5 5 d'a'f'fcfcJ'do''*'"?'? 18- 2; >; 01 « PhPh O O 9 * si r3 r3 fig J3JS 0.0. It "v ■a-a MJ3 ■a _M ja .M •?■ ^ .* i-i S '«K°'3>2 J- a a « o -a -g TjtHTjP- « 54 O S Mg O P4;z;ii,;zOMcn:aJuiflai CUD s e "Ski t3 -O i§ i § £ o,JJ o.fefi< H O B O IH V^ (fl ^^ Ul ^^HH «M u n o n d d A A 3555 5 'at c ' GO 13 B •a ■a 3 1* « rt ^y c4 o ja •— u ^ - •a mS « ex, S o 3 o 3 3 O.P. in tn a B o o S S B .2 a IS .2 bIi:B '•£ ?, 0) u B O ■■g 01 U OJ 4) Ji *i ^ ac 60 no M >,'5 "2 >.'g o o 66^ 6 a V > u en 0) QJ u .■ .« o o rt ed (U V PM PhQQPLiPM "H'S d d ■93 "> >" n .2j p3j -M ■p.'B.a CHAPTER III Why the System is a Burden to Society It was pointed out in Chapter I that the social costs con- nected with the marketing of perishables are to be found in the great fluctuation in prices, wide margins between prices in different sections, losses from decay of the goods, and the great average difference between what farmers receive per unit and what consumers pay per unit for the same pro- ducts. The problem before us now is to determine why these factors are so large. In other words, we must locate the specific economic forces which will have to be dealt with in bringing about a constructive reform of marketing methods and practices. I. REASONS FOR WIDE FLUCTUATIONS IN PRICES IN EACH MARKET The same fundamental economic forces govern the prices of perishables that govern the prices of all other commodi- ties. So, in order to understand fully the extraordinarily great changes in the prices of perishables in a particular market it is first necessary for us to get clearly in mind the fundamental forces which control the prices of any com- modity or all commodities. A. The Fundamental Economic Forces Which Regulate Prices The price of a commodity in a particular market is con- trolled by two great forces. One of these forces originates on the side of supply, the other on that of demand. On the supply side the price-controlling force is the physical 76 [438 439] SYSTEM IS A BURDEN TO SOCIETY yy supply offered the market within the period considered. On the demand side it is the market schedide of demand prices.^ A change in either of these forces will affect the ^ At any one time each buyer has a schedule of demand prices for each good desired by him. E. g., A's schedule of demand prices for his week's supply of apples may be represented as follows: he would ' buy one-fourth of a dozen if he had to give 20 cents per dozen ; three- fourths of a dozen at 15 cents per dozen; two dozen at 10 cents; three dozen at 6 cents ; four dozen at 5 cents ; and not more than four dozen no matter how much lower the price might go. No matter what the price of apples may be, this is his purchase schedide for them, and he will not change his schedule because of a change in the price — ^though a change in the price will cause him to purchase a greater or a smaller amount according to this relatively fixed Schedule of Demand Prices. So an individual's Schedule of Demand Prices for a particular good is the number of its units he would buy in a given length of time (a week, a month, or a year) at different prices per unit. It is not the price he would pay for an additional unit of the good at a particular time; it is the average number of units of the good he would buy during each successive unit of time at each price in a scale of prices; it is the size of the continuous stream he is willing to take at different prices. The number of units of a commodity which a buyer actually takes in a given length of time at a particular price shows exactly what his demand is at that price, but it does not show what his demand would be at any other price. What the demand would be at other prices is seldom consciously present in his own mind, but it may be approxi- mately estimated' from a knowledge of his habits and customs. A dor- mant, or potential, demand at a particular price becomes actively con- scious, or effective, only when the market price changes to coincide with that particular price. It is conceivable that by a systematic shift- ing of the price of an article through a scale of prices a buyer's whole schedule of demand prices for that article could be secured by re- cording the amount which he bought in a given length of time at each price. But, as we shall see, a buyer's schedule of demand prices for each article constantly undergoes changes, so the record of past de- mands at different prices will not necessarily give the present schedule of demand prices for it. So, even though an individual's schedule of demand prices for an article were a very definite factor in every detail, it could not be quantitatively measured with absolute accuracy, because it exists as a potential force. If the sums of the amount of the good which each buyer will take 78 MARKETING PERISHABLE FARM PRODUCTS [440 price, and, as we shall attempt to point out, they are the only forces which regulate the price. But before discussing how the physical supply offered the market and the market schedule of demand prices for a commodity regulate its price, let us first see how they themselves may be affected. The physical supply of a good offered a market at a par- ticular time may be changed by one of several factors, the principal ones of which are: the relation of the prevailing price per unit to the cost of production per unit ; the nature and the character of the good; seasonal variation in pro- duction ; and abundance or lack of information in regard to other markets. If the price is such as to offer producers great profits they will be tempted to increase their produc- tion for the market and thus increase the physical supply, or if the price offers no profit on production many of them will decrease their output and thus decrease the physical supply offered. Again, it may be that the peculiar character of the goods (perishable or subject to style changes) is such that the sellers are not able to hold a part of the physical quantity of the goods off the market even though the price does not suit them, so that the physical supply offered the market always varies directly with the produc- tion of the good. Seasonal variation in production (even though the goods are not subject to deterioration) may have a great deal to do with a change in the physical supply offered the market. During the season when production is at a definite price could be obtained, it would give the market demand at that price, and so, by going through the whole scale of prices and adding the quantities all buyers will take at each, we would get the Market Schedule of Demand Prices for that market. Though the de- mand of each buyer at each price is a definite factor, the sum of their demands cannot be definitely stated because, as we have shown, the demand of each buyer at each price exists only within the buyers. Even though the market schedule of demand prices cannot be meas- ured accurately, it is at any one time a definite force. 441 ] SYSTEM IS A BURDEN TO SOCIETY yg heaviest a larger physical supply will be thrown on the market because many producers will not want to " hold ", or can not hold the goods (for financial reasons). As the physical output becomes smaller the amount offered the market will also become smaller. Lack of information con- cerning prices in other markets, or, perhaps, the gaining of such information will sometimes cause sellers in a particu- lar market to change the physical supply they are offering to that market; for if they find they can get more by trans- ferring some of their goods to those other markets they will do so. As a market's schedule of demand prices is dependent upon the schedule of demand prices of the individual buyers in the market anything which affects the individual buyer's schedule will affect the market schedule. The individual's schedule of demand prices for a particular commodity may be changed by any of the following factors : a change in money income; a change in the prices of other goods bought; or changes in customs and habits which affect his desire for the goods. When a decrease in the money income of an individual occurs (granting that the prices of the goods he is buying remain the same) it will become necessary for him to buy fewer units of all goods, or a very much smaller number of units of one or more particular goods. If the particular good we have in mind is less of a necessity to him than any of the other goods which he is buying at that time he will greatly decrease his demand prices for that good ^ — in short, he will buy a smaller quantity at the prevailing price. If this same thing happens to a great number of buyers the total amount of that product which will be sold 1 Because a smaller physical supply of it would not increase his marginal utility for additional units of it as much as his marginal utility for other goods would be increased by a smaller supply of them. 8o MARKETING PERISHABLE FARM PRODUCTS [442 at the prevailing price will be greatly reduced; in other words, the market schedule of demand prices will be re- duced. On the other hand, an increase in the buyers' money income will have the opposite effect on the demand prices for this good. Granting that the price of A, the particular commodity which we have in mind, remains the same, a change in the prices of other goods (B, C, and D) taken by buyers will affect their demand prices for A. An4ncrease in the prices of B, C, or D (if they are necessities) will cause the buyer to spend a greater proportion of his money for them and leave less to spend for A (if it is a luxury). Thus, his de- mand prices for A are decreased. On the other hand, an increase in the prices of B, C, or D (if they are luxuries) may cause the individual to spend less of his income for them and consequently have more to spend for A — which is another way of saying that his demand prices for A rise. What is true of one buyer will probably be true of several buyers, so that a change in the prices of other commodities will affect the market schedule of demand prices for the particular good we have in mind — ^though a change in its own price will not affect the market schedule of demand prices for it. A change in the habits and customs of an individual which affects his desire for a particular commodity will alter his schedule of demand prices for that commodity. If for social or psychological reasons he increases his desire for a certain number of units of the commodity in a given length of time he will consequently raise his demand prices for it. If his habits and desires change so that he decreases his want for it he accordingly decreases his demand prices. Any change in the fashions will illustrate this point. No matter what factor brings about a change in the market schedule of demand prices for a good in a particu- 443] SYSTEM IS A BURDEN TO SOCIETY 8l lar market, the change will afifect the price of that commo- ■dity. If this schedule rises, the price will likewise go up (granting that there is not a corresponding increase in the physical supply offered the market). This will be true because the amount of the good that buyers would take at the. then prevailing price with their higher schedules of demand prices will more than equal the physical supply of- fered. As the physical supply begins to be reduced sellers will realize that buyers have increased their schedules of demand prices for the good, and they will accordingly raise the price. The theoretical limit to the rise would be the point in the market schedule of demand prices that would equal the physical supply offered, but the price may actually go higher than this, because sellers may put it high enough to prevent a complete exhaustion of the physical stock on hand. A fall in the market schedule of demand prices for the good would lower its price, because then buyers would not take as large a proportion of the physical supply as formerly. In order to get rid of their surplus goods com- petition between sellers would tend to make them low^ their price-offers. An increase in the physical supply offered the market will tend to reduce the price of the good ; buyers are already taking as large quantities as their demands, at the pre- vailing price, will permit; a surplus will accumulate on the market, and, in order to get rid of, or reduce, this surplus, competition between sellers will again cause them to lower their price. The limit to the reduction in the price is con- trolled by two factors. First, the price will never go lower than the point where the demand price of the market will take the total physical supply available to the market — ^we have seen that it would seldom, if ever, reach that point. There is another important factor, called sellers' reservation prices, which tends to uphold falling prices. The seller's 82 MARKETING PERISHABLE FARM PRODUCTS [444 reservation price is the price at which he will refuse to put his goods on the market. The point at which sellers will fix their reservation prices will depend upon the char- acter of the good (whether or not it deteriorates from being held off the market), the financial strength of the sellers (ability to hold), the cost of storage, and the sellers' estimation of the trend of future prices. So the reservation prices of some goods are necessarily very low and of others very high. In the case of low reservation prices, an in- crease in available physical supply will tend to reduce the price to the point where the market-demand price equals the physical supply available. But if the available physical supply happens to be greater than the maximum amount which will be taken by the market at the lowest prices (according to the market schedule of demand prices) there will be no limit to the fall in the price — this is called a " glut ". A reduction in the physical supply will have the opposite effect on the price — that is, will tend tO' raise it. Buyers will want to get the same stream of goods at the prevail- ing price and many of them will succeed in doing so at first. This will further decrease the physical supply avail- able to the other buyers, who also want their accustomed stream of goods at the prevailing price. The sellers, per- ceiving this shortage of physical supply in relation to the demand prices of buyers, will raise the price per unit. We have already discussed the theoretical limit to the rise in the price in case of a discrepancy between the physical supply and the demand prices of buyers. So the price of an article in a particular market con- stantly tends toward a point in the market schedule of de- mand at which the amount bought equals the total physical supply available for the market. Any change in the market schedule of demand prices for the article, or any change in 445] SYSTEM IS A BURDEN TO SOCIETY 83 the physical supply offered the market will influence the price. Unless one or the other of these factors does change there will be no fluctuation in the price. B. How These Forces Regulate the Prices of Perishables That the physical supply of perishables thrown on each market yaries greatly from season to season is too well known to require much discussion. Table II ^ shows that the New York wholesale market received a greater total quantity of eggs in the four months of March, April, May and June of 1914 than in all the other eight months of the year. The receipts of butter in the summer months of June, July and August were nearly as great as the total receipts for the remainder of the twelve months. If it were possible to get the figures for fruits and vegetables they would show that the receipts for the summer months are even greater proportionately than for butter and eggs. The seasonal variation in the receipts of perishables in the New York market, as shown above, is very great; the var- iation in the receipts of smaller towns and cities is rela- tively much larger than for New York, because New York gets perishables from a much wider market than do the smaller cities. If we study the changes in the physical supply received by any wholesale market from day to day or from week to week, we find that they are far greater than are the seasonal changes. It is not uncommon for the receipts on one day of a particular perishable in the New York market to be ten times larger than they were the preceding day." And it often happens that two or three times as much fruit or vegetables will be received one week as in the preceding or 1 Cf. supra, p. 36. 2 See the current issues of the New York Price-Current Sheet. 84 MARKETING PERISHABLE FARM PRODUCTS [446 succeeding weeks. Again, this short-time fluctuation in physical supply in New York City is not as great relatively as it is for the smaller cities because the former receives a large enough quantity for the law of averages to make it more constant. The seasonal changes in the physical supply received by each market are due largely to the following causes : (a) the seasonal production of the goods; (b) their natural per- ishableness. (a) As matters stand to-day, the harvesting (or produc- tion) of each perishable either lasts only a part of the year or is much greater in some months than in others. Of course, the harvesting season for fruits and vegetables in any one section lasts only a few months — for strawberries the season is measured by weeks, but for peaches and beans it is longer. Because of our large area in the United States, the harvesting season for each widely-grown pro- duct is very much longer for the country as a whole than for any one particular section, so there is a new supply of some products for the general market over quite a long period of time — the potato harvest illustrates this point. But, notwithstanding the wide area over which many per- ishables are now produced, a far larger proportion of them is harvested from May to October than in the winter months. This is true of dairy and poultry products as well as of fruits and vegetables. (b) Because they are subject to rapid decay, perishables are sent to the primary and wholesale markets as soon as possible after they are harvested. And, for the same rea- son, these markets generally offer them as quickly to the retail markets. Wheat, cotton and other staples are ordi- narily sold by farmers pretty soon after they are produced, just as perishables are — ^but because staples do not deter- iorate from one harvesting season to another the men who 447] SYSTEM IS A BURDEN TO SOCIETY 85 buy them from farmers (middlemen) do not immediately offer the total supply to the market, but hold a large part of it in reserve, anticipating a shorter future supply and higher prices. The risk of holding perishables for a con- siderable length of time is too great for middlemen, so they offer whatever supply of the goods they may have at any time at the prevailing price. Consequently, the physical supply of perishables offered the primary, wholesale and retail markets varies according to the harvesting season. The short-time (daily and weekly) variations in the physical supply offered different markets is primarily due to the lack of accurate market information on the part of sellers. In the busy shipping seasons we often have the situation where one wholesale market will be getting extra- ordinarily large shipments of certain fruits or vegetables while at the same time other wholesale markets, just as close to the shippers, will be receiving an exceedingly small quantity of the same kind of fruits and vegetables. This is due to the fact that shippers who are sending to the glutted market have little or no information in regard to the quantities of goods which are being shipped to either of these markets. In other words, there is no market in- formation for this class of goods as there is for staples. Whatever information shippers get as to daily receipts, prices, etc., in the different markets is not only very inac- curate, but exceedingly costly as well. So most perishables are shipped to wholesale markets on faith or by guess. When buying in wholesale markets the retailer's demand prices are regulated by his estimation of the demand prices of his customers. The wholesaler's demand prices are in turn determined by his estimation of the demand-price schedules of retailers. In other words, the schedule of de- mand prices of each middleman is determined by his esti- mate of the demand prices of those to whom he expects to 86 MARKETING PERISHABLE FARM PRODUCTS [448 sell the goods, and, in the last analysis, all demand-price schedules are based on those of the consumers. Consumers' schedules of demand prices for perishables are relatively stable because the goods are food necessities and as such are the last goods to be affected by a change in the money income of consumers. For the same reason, a change in the prices of other goods will have Httle weight in influencing the consumers' demand prices for perish- ables, and a change in the habits of consumers is not likely to affect their demand prices for these goods. Therefore, consumers' schedules of demand prices for perishables as a class change very little. But because of the opportunity for substitution between different commodities in this class of goods, a change in the price of one is very likely to upset the old schedule of de- mand prices for another. For example, if the price of oranges goes down the consumer may decide to buy a larger quantity of oranges instead of grapefruit (which remain at the same price) . If cabbage goes up in price and beans do not, he may decide to buy a much larger quantity of beans to take the place of cabbage. On the other hand, if peaches go down in price the consumer may buy a much larger quantity of them and a smaller quantity of oranges which remain at the same price. The range of substitution between the various perishables is very great ; but this factor may easily be overestimated as a disturber of the con- sumer's schedule of demand prices for the commodities as a class. Even the substitution between the different pro- ducts in the class is limited by the desire for variety of flavors. It is, then, changes in the physical supply available for the market and not changes in the market schedule of de- mand prices which is the primary cause of the great fluc- tuations in the prices of perishables. But why are the flue- 449] SYSTEM IS A BURDEN TO SOCIETY 87 tuations so great and violent as they are? Of course, the principal reason is that sellers cannot have very definite reservation prices for these goods. When the physical sup- ply in a market increases, sellers reduce their prices in order to get rid of the surplus goods on their hands. They cannot hold these goods oflf the market because the price does not suit them, but must continue to offer them at lower and lower prices until the price reaches the point in the market schedule of demand prices when the current pur- chases about equal the physical supply. The character of consumers' schedules of demand prices for this class of goods must be taken into consideration in order to understand fully the cause of the extreme fluctua- tions. With perishables there is relatively little difference between the quantity (number of units of the goods) which will be taken at high or low prices per unit. For example, if cabbage are selling at 9c per pound a consumer may take seven pounds per week ; and at 6c he will take eight pounds ; at 4c he might buy nine pounds, but he would hardly buy more than this even at >^c per pound. In other words, after a certain low price is reached consumers will buy enough of the good to satisfy all their desire for it and will want no more at any price. This, of course, is due to the fact that the satisfaction of the appetite is a prime neces- sity and after the amount needed fully to satisfy it is secured additional units of the good have no value. And, because the satisfaction of the appetite is a primary want, the con- sumer will buy nearly enough goods to satisfy it fully even at very high prices.^ 1 When prices of perishables are low some urban housewives buy more than their families can immediately consume, and use this surplus for canning and preserving. This practice, of course, tends to increase the quantities purchased at low prices, but domestic canning and pre- serving is not carried on to a very great extent by city families, and is therefore a limited factor in increasing the physical quantities which would be purchased' in the market at lower prices. 88 MARKETING PERISHABLE FARM PRODUCTS [450. That retailers recognize this peculiarity of consumers' schedules of demand prices for perishables is shown by the fact that they rarely reduce their prices below the point where consumers will buy the maximum quanti- ties no matter how low the price might be in the wholesale market. On the other hand, because of the idea of " just prices " in the minds of consumers, retailers are restrained from raising their prices very much even when wholesale prices are highest. Rather than raise their prices to very high points and so get the ill-will of their consumers they often sell below prevailing wholesale prices or refuse alto- gether to handle the perishables. So, for these reasons, we have slight changes in retail prices as compared with the relatively very great changes in wholesale prices. The customs and practices of retailers intensify the price fluctuations in the wholesale markets. When the physical quantity in the wholesale market increases, wholesale deal- ers reduce their prices to get rid of the surplus. But this induces retailers to increase the physical quantity of their purchases very little (because they can only slightly increase the physical quantity of their sales by lower price-offers). The wholesalers cannot have a reserve price; so they must make further reductions. Still the surplus is not taken by retailers; so the wholesale prices go down until much of the produce cannot be sold at any price. On the other hand, when the physical quantity in the wholesale market becomes very small, prices jump to a very high point because retailers will continue to buy about the same physical quantity at higher and higher prices as long as there is a margin between the wholesale prices and the maximum prices they will charge consumers. Of course, the prices that shippers and farmers will receive fluctuate in direct ratio with the changes in wholesale prices. 45 1 J SYSTEM IS A BURDEN TO SOCIETY 89, II. SECTIONAL MARGINS IN PRICES: CAUSES The fact that the farm price of tomatoes in Delaware was 29c per bushel and in Georgia $1.25 per bushel on the same day ^ may have been due to either or both of two factors: The Georgia growers or shippers may have been able to find a market (or markets) which the Delaware growers or shippers were unable to find. Or, because of peculiar circumstances, the cost of getting the Georgia, tomatoes from farmers to the consumers may have been much less than the cost of marketing the Delaware tomatoes. (a) In our discussion of price fluctuations we saw that, because of the lack of market information, it often happens that many sellers do not ship to markets which are in great need of the goods they have to sell, but instead ship to other markets which do not demand their goods. This lack of market information is so complete that sometimes all the shippers of a particular product in a whole state fail to find the best markets, but send to glutted ones instead. It is certain that much of the sectional differences in prices of particular products at any time is due to this fact, and it is very likely that it was a large factor in accounting for the difference between the prices of tomatoes in Georgia and Delaware. In so far as sectional differences in prices^ are due to lack of market information they are a part of the phenomena of short-time price fluctuations. (b) There is no doubt that this margin between the farm- price of tomatoes in the two states referred to above ex- isted partly because the products of Georgia growers could be marketed more cheaply than could those of the Delaware growers. Very likely the Georgia tomatoes, on the aver- age, were marketed more directly than those of Delaware — they passed through the hands of a fewer number of mid- 1 See table iv, p. 39. go MARKETING PERISHABLE FARM PRODUCTS [452 dlemen and so there was less difference between what the producers received and what the consumers paid for them. The above conclusions are based on the following facts : In October, at the time these prices prevailed, the tomato season in Georgia was practically over. The greater part of the crop had been harvested in August and September, whereas, in October the harvesting of this crop in Delaware was in full swing. There was, at that time, a much greater local physical supply in Delaware than was demanded by the local consumers, but the local physical supply in Georgia was far below the local demand. In order to get rid of the great surplus a large part of the Delaware tomatoes had to be shipped to distant markets, while there was a strong local demand for the few Georgia tomatoes. Georgia being a state of many small towns, most of the growers who had tomatoes to sell disposed of them either directly to the local consumers or to the retailers. Under such circum- stances, the Georgia growers did not count the expense of finding a market for their goods as " cost of marketing " (though the work may have been very expensive), but ■cotmted the total receipts as " farm-price." On the other hand the Delaware growers were selling largely to country shippers who sent the produce to different wholesale markets to be distributed by the usual middleman methods. '^ Owing to the expense of passing goods through such a complicated system and to the great deterioration of the goods before they reach the individual consumers, there was a great ' Because of the shortage of the local supply of tomatoes in Georgia there is little doubt that Delaware tomatoes were, to some extent, shipped to Georgia through the middleman system and sold to Georgia consumers at the same prices they were pajring nearby farmers for local tomatoes. In this case, the difference between what the Georgia farmer received for tomatoes and what the Delaware farmer received •exactly equaled the cost of getting Delaware tomatoes to Georgia con- sumers through the marketing system. 453] SYSTEM IS A BURDEN TO SOCIETY gi difference between the prices consumers paid for Dela-ware tomatoes and the prices received for them by growers. An examination of the sectional diif erences of farm prices of every perishable farm product will show, as in the case of tomatoes, that the price will be comparatively high when the amount being harvested will supply only a small pro- portion of the local consumption and comparatively low where the local harvest exceeds the local demand for im- mediate consumption. We find, then, that generally the farm prices of all perishables in each producing section are lowest during the period of greatest harvest, and highest during the season of smallest harvest ; ^ the low prices being due to the cost of disposing of a surplus to distant con- sumers, and the high prices to the cost of supplying a deficit to local consumers. As the harvesting seasons are not the same for different producing sections there is always a con- siderable margin between the prices in different localities. The wholesale and, t-o some extent, the retail prices for each perishable in the consuming centers move up and down di- rectly with the farm prices of the nearby farms. Sectional price differences, then, can be lessened considerably by get- ting goods from farmers to distant consumers. III. CAUSES OF LOSSES FROM DETERIORATION We have seen that deterioration is one of the fundamental causes of fluctuations in the physical supply offered different markets. It is hardly necessary to state that the primary rea- son for the losses from decay of from thirty-five to forty per cent of perishables raised for the market is the natural perishability of the goods. For this reason the name " perishables " was chosen for this class of goods. But, ' This is not always true of farm prices near very large cities where the local supply only constitutes a fraction of the local demand and where farmers rarely sell directly to consumers at any seascm. 92 MARKETING PERISHABLE FARM PRODUCTS [454 aside from the inherent characteristics of the goods, there are two further reasons why these losses are so great under the present system of marketing. The first reason is the comparatively long time it takes to get goods from pro- ducers to consumers (time means deterioration with perish- ables) ; and the second, the poor care which is given the goods from the time they are produced until they can be put in the hands of consumers. I. The average length of time it takes perishables to pass through the marketing system is prolonged by three factors : (a) seasonal production of the goods; (b) the average great physical distance between producers and consumers; and (c) inability of the marketing system to distribute the avail- able goods to the markets where they are most in demand. (a) As has been pointed out, the bulk of perishables in the United States as a whole is harvested in the summer months, while the demand for them is fairly constant throughout the year. The physical surplus of one season must be kept in reserve for some time if it is tO' be con- sumed at all. This, of course, prolongs the average time be- tween production and consumption. The only way this time can be shortened is by making the harvesting season more constant for the country as a whole — a problem which we shall discuss in another chapter. (b) The fact has beefl mentioned that, on the average, the consumers of New York City receive their perishables from producing districts more than 1,000 miles away, or a distance of more than four days of fast freight, and that the goods consumed by other large cities come from sections very little closer.^ Though our transportation facilities are unsurpassed by those of other countries, and though we are constantly accelerating the speed at which all goods move, 1 Page IS. ' 455] SYSTEM IS A BURDEN TO SOCIETY 93 the physical distances perishables have to travel bring in a considerable time element. Because of this distance between producer and consumer the present complicated marketing system has been built up. The extreme complexity of the machinery prevents the rapid passage of goods " from farm to family." There is only one way completely to eliminate losses from this cause, and that is to limit the area of the market so that each section of the country must produce all the goods that it consumes. (c) The fact that at the same time one market will be glutted with certain perishables and another will be ex- periencing a great scarcity of the same products shows that the general available physical supply is not distributed so as to equalize demand in the different markets. Such a condition causes many products to stay in the glutted mar- kets until they decay, whereas, if they had been sent to the other markets they would have been consumed. Again, it often happens that farmers in certain sections will be com- pelled to let their goods rot on their hands because they can not find a market, while consumers will be paying very high prices in not far-distant markets for the same goods because there is not an adequate supply. Such prolonging of the time between production and consumption is due largely to the lack of reliable market information. 2. Many perishables decay because they do not receive the proper care before and after they enter the market. They are unduly exposed to heat and cold, to moist and dry winds, and decay much more rapidly than they would under proper temperature and atmospheric conditions. They are not properly graded; the storage and refrigeration given thern is inadequate ; and they are moved from place to place under unfavorable conditions. These facts can be brought out more clearly by a description of the way perishables are handled before they reach the consumer. 94 MARKETING PERISHABLE FARM PRODUCTS [456 As a rule, farmers take few precautions to protect their perishables from decay. In harvesting they unduly ex- pose the produce to unfavorable weather conditions. In many cases they allow their fruits and vegetables to remain in the fields several days after they are ready for harvesting. The result is that when: they are harvested much has fallen to the ground and is greatly damaged by wind, rain, and sun or by birds and insects. So when they are brought from the fields, a large proportion is already unfit for human consumption. As was shown by the quotation on page 35, eggs receive little more care in gathering than do fruits and vegetables. After the crops are gathered farmers provide few facilities for properly caring for them until they are hauled to the market. The butter is not put on ice, eggs are left in hot pantries, fruits and vegetables are not placed away from germs and insects in storage houses of cool and even temperature. In many cases they do not even separate the decayed produce from the sound, but allow the rot to in- fect the whole. After subjecting the produce to such treat- ment for several days, the ordinary farmer hauls it to market in an open wagon where it is exposed to the natural elements for several hours. So there is little wonder that much of the produce arrives at the primary markets in a very un- sound condition. It is not possible to say just what percentage of decay occurs while the goods are in the hands of country shippers, but it is known to be considerable. Of course, one of the reasons for decay here is the treatment the goods have re- ceived previously at the hands of the farmers. But inade- quate facilities and lack of expert training on the part of many shippers are other reasons for decay. Some of these men possess insufficient capital to provide proper storage and refrigeration, and the scale of business of others is too small to justify adequate expenditures for these facilities. 457] SYSTEM IS A BURDEN TO SOCIETY 95, Again, many shippers have gone into the business with little or no knowledge of how to take care of the goods ; in some cases, as country store-keepers, they have been forced to- take up this work in order to hold the trade of the sur- rounding farmers; in other instances, they have gone into the business because, considering their capital and training, it looked more attractive to them than any other. So the result is that often while the goods are waiting at the shipping point to be sent to the wholesale market they are neither cared for by proper storage, pre-cooling, or refriger- ation, nor are they graded and packed properly, but are started on their way to market in a wretched condition. In discussing transportation we saw that there were twa reasons why goods deteriorate greatly while in the hands of transportation companies. First, the methods by which they are shipped : The small shipments (by parcel-post, ex- press or freight) heretofore have received little protection from heat or cold and consequently have a high percentage- of decay. Many car-lot shipments perish on the road from being sent without ventilation or refrigeration (either be- cause the sender could not get better facilities or because he was not willing to pay for them). The second con- tributing factor is undue delay while en route: slow travel and traffic tiesups through some fault of the transporting companies cause no small amount of losses. The improper handling of perishables at wholesale cen- ters consists of inadequate terminal facilities, excessive and careless cartage over the cities, and faulty re-grading and re-packing. There are few American cities which have adequate terminal facilities for perishable produce. Each railroad and steamboat company has its separate freight terminal, instead of there being one large terminal for all. There are few, if any, facilities connected with these many terminals for loading and unloading perishables. Instead 96 MARKETING PERISHABLE FARM PRODUCTS [458 of being run into a large storage house or shed provided with refrigeration, the cars or boats are unloaded, in the open, onto trucks which carry the produce through the streets to public or private warehouses, sometimes quite distant. When traffic at these terminals is congested the trucks have to stand for several hours with their produce in the open. The goods are thus subjected to all kinds of temperature and weather; they may be taken from an ice-cold car and allowed to lie on an open truck in the broiling sun for several hours, or they may be taken from a fairly warm car out into freezing weather. Naturally, such exposure causes very decided deterioration in the produce. It often happens that, as produce changes from the hands of one wholesale dealer to another, it is carted several times from various public or private warehouses to others across the city, — each haul further exposing the produce to decay. Many wholesale dealers do not have their own storage and refrigeration facilities, but depend on the public warehouse companies for them. Owing to the general inadequacy of public warehouse service, much of the goods cannot be placed in proper storage at all when there is a slight surplus of the goods in the market. A further loss is brought about by improper re-grading of the goods by the wholesale dealers. If that part which is sound is not quickly and thoroughly separated from the decayed produce on arrival the decay will spread. Be- cause they feel that they can sell the decayed produce to some one else, some dealers do not thoroughly re-grade and re-pack the goods when received. Perishables are often further ill-treated after they reach retailers. They are placed in hot store-rooms or on the open streets; roughly handled by prospective customers; and exposed and bruised while being delivered to the •customers. 459] SYSTEM IS A BURDEN TO SOCIETY 97 IV. CAUSES FOR WIDE MARGINS BETWEEN FARM-PRICES AND consumers' PRICES The main reasons why the average margin between what farmers receive for perishables per unit and the prices con- sumers pay for them per unit is so wide are: (a) losses from decay; (b) fluctuations in prices; (c) the heavy ex- pense per unit for goods passing through the marketing process; and (d) inefficient methods and dishonest business practices of middlemen. (a) From 30 to 40 per cent of the margin between farm prices and retail prices of the goods which pass through the middleman system is due to the great losses from decay — that is, this percentage of the margin goes to pay for goods which are bought from farmers but never reach consumers. Some one must stand the loss, so it is added to the price of the goods which do not decay. Any improvement in the products or in methods of preventing decay will greatly lessen the margin between producers' and consumers' prices. (b) The uncertainty of the price which each middleman will receive causes each when buying goods to allow a large enough margin between the price he pays and the one he expects to receive to insure him against this uncertainty. That is, he will not buy the goods unless he can get them at a low enough price to make him safe, even if the price at which he will be able tO' sell is far below what he expects. This insurance charge will be reduced in proportion to the reduction in price fluctuations. (c) In Chapter II we gave a detailed analysis of the actual expenses of those middlemen who handle perishables. We saw that the average expense per unit for handling these goods was not very great for any except the retailers, but, owing to the fact that the products pass through the haxids of several different middlemen on their way to consumers, 98 MARKETING PERISHABLE FARM PRODUCTS [460 the total expense per unit is considerable. We have often been told that the reason for the great total expense of carrying a perishable through the marketing process, is that the system of marketing is too complicated and that there are too many middlemen. In some cases an excessive num- ber of middlemen does, in fact, add tO' the expense of getting the goods to consumers, but this is not the main reason.^ Whether the goods pass through the hands of a dozen middlemen or only one there are three important economic reasons why the expense of getting them from producers to consumers is necessarily high under the present breadth of the market. They are: first, the great average distance between the producers of these products and the consumers ; second, the fact that they are produced by a small business unit (the farm) and consumed by a smaller business unit (the fainily) ; and third, the relatively high expense of car- ing for the goods. The greater the distance between the producer and the consumer of any article, the greater the cost of getting the article from one tO' the other. The expenses of salesman- ship are necessarily much heavier when great distances must be covered to find buyers. The preparation for shipment, the cost of transportation, and the expenses of making col- lections are likewise much greater under such circumstances. As the market for perishables has recently widened from a local market to a national one, the necessary expenses which go with a wide market must be borne or the breadth of the market lessened. In discussing the reasons for the high expense of getting perishables from producers to consumers the fact is ordin- arily overlooked that these goods must either be handled 1 We shall discuss the possibilities of simplifying the marketing pro- cesses and eliminating middlemen in the next two chapters. 46l] SYSTEM IS A BURDEN TO SOCIETY gg in very small packages ^ by one market man or several times by many middlemen. Even the large individual grower rarely sells more than two or three car lots of a par- ticular perishable in a whole season — and each separate sale is much less. The average family seldom buys more than three or four pounds of a particular perishable at a time. So for one man (the producer) to get a given quantity of perishables to consumers (granting that the market can be found easily) it is necessary to grade, pack and ship the goods in very small packages. If the goods are marketed by several middlemen through a " system " they must be gathered in comparatively small quantities from producers, made into large shipments, and then broken up into small packages for distribution tO' consumers. This re- quires, as we have seen in our study of the work of the middlemen, a good deal of expense — particularly is this true at the retail end where the goods are broken up into very small lots. The expense per unit of getting iron ore from producer to consumers is not so large because it is produced by large business units (the mines) and sold to large business units (the mills) — it is never broken up into small lots. The expense of taking care of perishables while they are being marketed is great, for they must have storage and refrigeration and must be carefully graded by hand and packed in small packages. As it is to-day, not enough care is given these goods and the expense is not as great as it would otherwise be, but nevertheless, the cost of getting perishables from producers to consumers is much heavier than for goods which do not require such tender care and handling. If pig iron were produced by farmers and con- ' Packages which contain the quantity of perishables which are ordi- narily purchased at one time by the average family. lOO MARKETING PERISHABLE FARM PRODUCTS [462 sumed by families and marketed by the same marketing ma- chinery as are perishables, the expense of passing it through the system would be much less because there would be little or no charge for taking care of it. (d) Because of the ignorance of many shippers as to the best methods of grading and packing, their goods have to be re-graded and re-packed by the wholesalers. The abso- lute lack of uniformity in grades and packages causes un- told work in the wholesale centers in reducing the goods to uniformity in grades and packages. The failure of many shippers to follow recognized business methods in finding a market for their goods is another factor which adds toi the expense of moving the goods. The amount of business carried on by many shippers and wholesalers is so small that their cost of doing business is very large, per unit of goods handled. Of course, it has long been recognized that the average corner grocer, who retails the bulk of the perish- ables in the United States, has a far too^ high cost of doing business, owing to his lack of business methods and the small size of his business unit. There is little doubt that if each middleman had a thorough knowledge of how best to run his business, or if efficient business men were sub- stituted for those of the middlemen who are incompetent, the total expense of the whole middleman machinery would be greatly reduced. The deliberately dishonest business practices of many middlemen swell their receipts and add to the margin be- tween producers' and consumers' prices. There is little government regulation or inspection of the business prac- tices of middlemen engaged in marketing perishables. Some country shippers get a monopoly of the shipping business in their section and pay the farmers ruinously low prices for produce in order to swell their own profits. Commission men charge commissions varying from two to twenty-five per 463] SYSTEM IS A BURDEN TO SOCIETY jqi cent. They often return to shippers " account of sales " at far below the figure they actually received for the goods, and " pocket " the difference. And occasionally they report sales (at low figures) before they have actually sold the goods. — expecting tO' receive higher prices for them. It is possible for wholesale men willingly to give out inaccurate price quotations to induce shippers to send tO' their market, that they themselves might buy at very low prices. Because shippers are not represented in the wholesale markets, those who inspect and buy their goods often give false reports in regard to the extent of decay of the shipments in order to get the goods at prices below their market values. Other forms of price manipulations and " comers " have been occasionally practised in the wholesale markets.^ It is not possible to say just how much effect these different dishonest practices on the part of wholesale men have in adding tO' the margin between producers' and consumers' prices, though it is certain that they are, in particular instances, of exceed- ingly great importance. V. SUMMARY OF FACTORS TO BE DEALT WITH IN REDUCING THE SOCIAL COSTS OF MARKETING PERISHABLES The social burdens incident to the marketing of perish- ables are due to two main causes : First, to the inherent char- acteristics of the goods themselves; Second, to the imper- fections in the methods and processes by which they are marketed. Because of the natural perishability of the goods, many of them become unfit for consumption before they can be offered to consumers. The natural seasonal production of ^ These are accusations which are commonly brought against all middlemen who deal in perishables. Certainly, under the present sys- tem their opportunities to engage in " sharp practices " without being " caught " are very great. I02 MARKETING PERISHABLE FARM PRODUCTS [464 the goods creates temporary surpluses in the available physi- cal supply which adds greatly to the decay of the goods by lengthening the average time between their harvest and consumption. The burden of marketing them is further in- creased because they are goods which must be produced by a small business unit (the farm) and consumed by a smaller one (the family). No matter what marketing system or marketing processes or practices might be used, these natural characteristics of the goods would make the marketing of them expensive and burdensome. After taking into consideration the natural characteristics of the goods we have found the following main defects in the marketing methods and processes: very poor care is given the commodities before and after they enter the market; market information which is available is so in- adequate and the cost of assembling it so great that those who are engaged in marketing the goods are unable to ad- just, in the general market, immediate physical supply and actual demand; the complicated marketing machinery seems to be too expensively run, either because it is too complicated or because the operators are not efficient; and the middlemen (or operators) are not always honest and fair in their dealings. The last chapter (Chapter VI) of this book will be taken up with a brief discussion of the possibilities of changing the natural characteristics of perishables. But the prin- cipal question with which we are concerned in this study is : How can the marketing methods and processes be reformed, or the marketing system changed so that the costs of market- ing the goods will be reduced? Let us now turn to this task. In pursuing it we shall assume that the nature of the goods is in every way unchangeable. CHAPTER IV Reform of thp Marketing Processes or Machinery i. suggested programs of reform No question has aroused a more widespread discussion than that of the economic value and functions of the whole middleman system, through which perishables are now almost exclusively marketed. It is clear from most of the discussion that there is no problem on which there is wider diversity of opinion, or one which is more generally mis- understood.^ The critics of the middleman system may be divided into three classes : Those who would abolish the whole system — ■ both the middleman and the machinery; those who would retain the essential features of the machinery or methods of the system, but would abolish all private middlemen; those whO' would retain both the machinery and the private middlemen, but would reform the machinery in many respects, eliminate some private middlemen, add others (either private or cooperative) according to the cir- cumstances, and regulate the practices of all middlemen of whatever character.'' The critics of the first class would institute direct market- ing between all producers and consumers. They believe that the entire system is, at present, a burden to society; 1 " Not fully understood by any of us.'' Stillman, Annals of Amer. Acad, of Pol. and Soc. Sci., vol. lix, p. 65. 2 Classification made from general criticism of various writers. 46s] • 103 I04 MARKETING PERISHABLE FARM PRODUCTS [466 that all middlemen are parasites who collect a heavy toll from both producers and consumers; that the machinery of the system is worse than useless ; and that all perishables could be marketed more efficiently and cheaply by direct dealings between producers and consumers. Those of the second class alsO' see quite a useless compli- cation in the whole marketing system, but they hold private middlemen responsible for most of its shortcomings. They would, therefore, eliminate all these and have the work they now perform carried on by cooperative associations with less machinery. Those who hold this view either be- lieve that private middlemen, as a class, are irredeemably dishonest and inefficient, or that there is something inher- ently good in cooperative marketing associations which would make them far superior to private middlemen as marketing agents. The third class of critics are more conservative. They see something good in both the complicated machinery of the system and in the private middlemen. They recognize that in many cases the methods or processes of marketing can be improved — that in some instances the processes are too complicated, while in others too simple, to be efficient. They do not hold the private middlemen directly responsible for all the defects that are found in the present system of mar- keting, but recognize that there are some dishonest men in the trade together with a great many others who do not efficiently do their work. Neither do they believe that there is anything inherently superior in cooperative marketing. They would advocate both cooperative marketing and muni- cipal markets (and even direct marketing) in certain cases and under certain circumstances, while in other instances they would prefer to have the work performed by private middlemen. They advocate a program neither for the aboli- tion of the present marketing machinery nor for the doing 467] REFORM OF THE MARKETING PROCESSES 105 \ away with all private middlemen; but one for reform and regulation of the present system. Each of these suggested programs aims to accomplish either one or both of two things : ( i ) the reduction of the costs of marketing perishables by the establishment of less complicated machinery or processes; (2) the reduction of the costs of marketing them by reducing the costs of per- forming the marketing processes — or of running the mar- keting machinery. Before accepting or rejecting any of the proposed programs let us see, first, under what condi- tions, and how, the marketing processes can be reformed; second, how the costs of performing the necessary market- ing processes can be reduced. This chapter will be taken up with a discussion of the simplification of the marketing processes. II. LIMITATIONS OF DIRECT MARKETING Whether a particular good is marked through a "system" where the work of getting it to the consumer is divided between several men, or whether the total process is per-" formed by only one man without the aid of a " system ", the work itself consists (a) of finding a consumer who will buy the good, and (b) of delivering it to the consumer and receiving payment. We have already seen that if per- ishables are to be marketed efficiently they must be sold to consumers at reasonable, uniform prices pretty quickly after they are harvested, and the cost of performing the operation must be reasonable. Uiider present industrial conditions, how efficiently and cheaply can consumers be found for these goods by using direct marketing methods ? What if any are the limitations of direct marketing? A. Finding Consumers There are three modern ways of finding buyers for Io6 MARKETING PERISHABLE FARM PRODUCTS [468 goods : ^ ( I ) The seller may display his goods before the eyes of the prospective buyers and thus induce them to take the goods — ^the ordinary retailer sells by this method. (2) Goods may be sold through samples either by the owner or by his agent — selling through " drummers " or solicitors is a good example of this method of finding buyers. (3) , Goods may be sold through advertisement either in news- papers and magazines or in catalogues — ^the mail-order business illustrates this type of sale- Whichever method is used in finding buyers, the following conditions must be satis- fied before the sale can be consummated: The seller must find an individual who is not only able, but desires, to buy the particular article he has to sell. The prospective .buyer must know something of the quality and quantity of the good ofifered him, as well as at what price other sellers are offering the same grade of good. The seller also must know something of the competitive offerings in order to be able to set the price on his goods to his advantage. By which of these methods of sale are the individual peach growers of Georgia or the poultry raisers of Okla- homa to sell their produce to individual consumers in St. Louis, Philadelphia, New York and other cities ? How are the fruit and vegetable producers of California, Oregon, Louisiana and Texas to find individual consumers who will buy their goods in Washington, Pittsburgh, Atlanta and New Orleans? It is certain they cannot meet these city dwellers face to face and display their goods as does the local retailer — distance alone would prohibit the employ- ment of such a method. The second practice of selling by sample through house-to-house canvassers or agents may be a little less expensive than the first method, but hardly more practical. The agent's commissions would about 1 Shaw, A. W., Quart. lour, of Econ., vol. xxvi, pp. 721-751. 469] REFORM OF THE MARKETING PROCESSES 107 equal the total cost of marketing through the middleman system, to say nothing of the losses from lack of adequate market demand, decay of goods and cost of grading, pack- ing and shipping. However, many believe that it is prac- ticable for farmers to find a market with distant individual consumers through the third method — that of advertising. Doubtless this method is more feasible than either of the other two, but there are many drawbacks to its extensive application to perishables : (a) perishables are not generally bought by consumers until desired for immediate use; (b) the goods are not sufficiently standardized to be sold exten- sively by advertisement; (c) the expense of advertising would be too great; and, (d) customers could not be held because of the seasonal supply of each farmer. Individual families do not generally keep a large supply of food on hand. Few have storage room to do so if they desired, so practically all of them buy food from day to day according to their immediate desires or appetites. They buy perishables in smaller quantities because of rapid deter- ioration, and keep on hand a smaller supply of these than of any other class of food products. To " order " such goods from distant producers would necessitate buying at least several days ahead, and in larger quantities. In other words, they would have to estimate what their future appe- tites would desire, invest money for future consumption, and run greater risks of losses from decay. In order to induce them to go to this great trouble the price would cer- tainly have to be much lower than it is under the present system. To buy on the basis of an advertisement or a catalogue is like buying " a pig in a bag ". There is little objection to this with well-known, standardized manufactured goods. In such cases if you have seen one article you know what you are buying, because all of them are alike — ^made from I08 MARKETING PERISHABLE FARM PRODUCTS [470 the same raw materials, by the same processes, machines or moulds, and by the same producers. Few producers of standardized goods would willingly sell an inferior article or misrepresent it because their success depends on keeping their goods up to standard and telling the truth about them. But, as has been pointed out, there are practically no stand- ards for perishables. And, with all due respect to farmers as a class, they have not yet seen the advantage of truthfully representing their goods or giving the quality and quantity they contract to give.^ Until the farmer gets to the point of representing his goods as they are and giving full meas- ure he will have little chance to sell upon his representation of the goods. As yet so little progress has been made in standardizing perishables that selling by advertising is ser- iously handicapped. Even if this were not so, the cost of advertising would be too great for the individual farmer. The cost of adver- tising a particular commodity is measured by the number of dollars worth sold through each dollar spent in advertising it. Whether advertising pays or not depends upon the rela- tion of the money spent for it and the resultant gross sales. As the scale of the business increases, advertising, like manufacturing, is, up to a certain point, subject to a de- creasing cost of production. The modern large shoe factory can make shoes at a much smaller cost per pair than can the individual shoe-maker or the very small factory." The large seller of a widely-used, standardized commodity, like typewriters or smoking tobacco, will get greater proportion- ate results by spending thousands of dollars for advertising than he would by spending a much smaller amount. The ^ The difference in business integrity between the farmer and the manufacturer is not a difference in inherent honesty or dishonesty, but a difference in business experience and education. ' Van iHise, Concentration and Control, pp. 8-9. 47lJ REFORM OF THE MARKETING PROCESSES 109 money spent by the extensive advertiser gives much greater returns proportionately than that spent by the small one — after a certain point is reached the smaller the advertising the smaller the returns per dollar spent for it. The amount of perishables each farmer has to sell is too small and the supply too seasonal to permit him to advertise constantly and extensively. So the advertisement of the producer of this class of goods would be as costly when compared with the large seller's advertisement as is the shoe-maker's cost of producton compared with that of the large shoe factory.^ A seller who cannot hold customers after he has gone to the initial expense of getting them has little chance to suc- ceed. The seasonable supply of perishables would make it practically impossible for the individual farmer to keep cus- tomers. A producer of tomatoes, or any other perishable would be able to supply a particular family with them for only a few weeks or months in the year, then this family would have to find another farmer who could supply the commodity for another period, and so it would go until each family would have to deal with three or four farmers during the year in order to get its supply of tomatoes. The same would be true with all other perishables consumed. This constant shifting of trade relations between farmers and consumers would make it very hard for a farmer to get back his old customers at the beginning of each season — they would have forgotten about him in the meantime ' The U. S. Post Office Department has realized the impracticability of farmers' advertising for customers, so, in order to increase the use of parcel-post, it has offered to advertise for farmers free of charge. This Department gets the names and addresses of farmers who have perishables to sell (with a description of the goods offered) and gives out this information to consumers in the towns and cities. What re- sults this free advertising has had, and the extent to which it has been used, is unknown to the writer, but doubtless it has resulted in some direct selling. It is extremely doubtful, however, if the public benefit equals the cost to the Government. no MARKETING PERISHABLE FARM PRODUCTS [473. or have been attracted by the advertisements of some other farmer. In order to keep customers the seller must be able to supply goods at all the times and seasons they are desired. In spite of the many difficulties which stand in the way, it is not to be maintained that in all cases it is impossible or even impracticable for producers to find distant con- sumers who will buy their produce. In cases where farmers raise a good of special quality and flavor which has gained a reputation among a few select consumers they may be able to sell to such consumers without paying dearly for finding the market. The Albemarle Apple Growers of Vir- ginia sell some of their apples direct to large hotels and restaurants in distant cities ; some of the Long Island vege- tables are sold by the producers direct to families in New York City.^ It is possible to enumerate several individual cases where eggs, chickens, butter, fruits, and vegetables are being sold direct to consumers 100, 200, or 500 miles away. These are all exceptional cases, where, for some special reasons, the buyers and sellers have been brought together. It should be clear, however, from our discussion of the difficulties in the way of finding such a market that these exceptions can never become the rule. We have not yet considered the possibilities of direct trade relations between farmers and nearby consumers. What, if any, are the difficulties in the way of farmers selling their perishables directly to families in the nearby cities ? Why should not the city consumers be directly sup- plied by them with perishables? The answer is that there is already a considerable direct trade carried on between urban families and nearby farmers, especially in the smaller towns and cities, but that there are many very serious ob- stacles in the way of developing this trade to very much larger proportions. ■■ Fuller, Annals of Amer. Acad, of Pol. and Soc. Sci., vol. l, pp. 166-70. 473 J REFORM OF THE MARKETING PROCESSES m The farmers who live on farms near large cities, like New York, Chicago, Philadelphia, or even smaller cities the size of Atlanta, Oklahoma City, or Denver, have little better chances of coming in trade relations with the indi- vidual consumers in those cities than do farmers living hundreds of miles from them. The social and economic habits and customs of city families stand as barriers to neighboring farmers selling goods directly to them. City people perform most of their economic functions in ma- chine-like, uniform fashion through systems and would not take the time and energy to deviate from this way of doing things. They pay their rents to agents of the landlords without, in many cases, ever seeing or hearing of the man who actually owns the house they live in. They buy their groceries from stores conveniently near them either by telephone or by visit to the store — and their other economic activities are just as uniform and systematic. Economic relations in the cities are so complex and the whole social fabric is so dependent on each doing his work efficiently and constantly that " systems " with complicated machinery must be organized to handle their economic wants and activities. The middleman machinery with its permanent wholesalers and retailers is the system on which they de- pend for their perishables. In this way they can get any kind or grade of these goods at any time and, at the same time, buy other necessary groceries. /This takes little energy] or thought on their part, while to buy from " peddling " farmers would require much time and trouble. Nevertheless, many fanners sell some perishables to consumers in the small towns by house-to-house peddling. But this is a very expensive way of finding customers. If all suburban farmers attempted to peddle their goods there would be a useless competition between them and an unnec- essary duplication of work — farmers having the same pro- 112 MARKETING PERISHABLE FARM PRODUCTS [474 ducts to sell would travel over the same streets and try to sell to the same customers. Such peddling is generally car- ried on in the busy seasons when the farmer's time is greatly needed on the farm. If we count the time of a farmer and that of the wagon and team necessary for the peddling at only $3.50 per day, the expense of delivery alone (to say nothing of that of getting the goods ready for market) would be as follows : if he sold only $3.50 worth of goods in a day the cost would be 100 per cent of what he received for the goods; if he sold $6.00 worth the expense of delivery would be over 59 per cent of what he received for the goods ; if he sold $12.00 per day the expenses would be over 29 per cent. Those acquainted with house-to-house peddling will realize that few farmers will sell, on the average, more than $12.00 ' worth per day. So the net price received by the peddling farmer for his goods (even when he can find a ready de- mand among consumers and loses nothing from decay) is hardly above the average price received by the neighboring farmer who sells through the middleman system. In a few exceptional cases where suburban farmers are producing perishables which have a fairly continuous har- vest — like butter, eggs, and chickens — and have established such trade relations that they have regular customers to whom they deliver the goods according to a prearranged schedule, direct dealing may be profitable to both producers and consumers. This kind of trade is not suited to fruits and vegetables however and only a few suburban farmers can secure such a line of regular customers for dairy and poultry products. The only reason that general peddling is now so common in the small towns is that there are no professional shippers who will buy the surplus goods after the local retailers have taken all they can handle. So it is generally the local surplus which is peddled, and the prices 475] REFORM OF THE MARKETING PROCESSES 113 have necessarily been very low to the consumers. This is why many have gotten the idea this is really an economical method of marketing the goods. It may occasionally benefit the consumer who will take the trouble to buy from the farmers, but it is very expensive to the farhier. In recent years there has been a movement in many of our American cities to have the municipal government es- tablish market places where the farmers could drive in with their wagons and sell their perishables directly to consumers who come to the market.^ Such markets, to distinguish them from the municipal retail markets, are generally called "curb-markets." Sometimes towns provide sheds and stalls which farmers can rent for the purpose of displaying their goods and where the goods will be protected from the weather, but generally these markets are held on streets which are set aside for that purpose and the farmers drive in and sell their goods "from the tail ends of their wagons." These markets are intended to eliminate the unnecessary work of peddling and to encourage a larger amount of direct dealings between consumers and nearby farmers than has been carried on in the past. There are many very seri- ous obstacles in the way of the wide success of such curb- markets. It is very hard to induce consumers to go to such markets to buy their perishables even when the price-offers are much lower than the prices for the same goods at the corner grocery or fruit stand. In the small towns there can be only one curb market, and in the very large cities only two or three, so the great majority of the consumers necessarily live a considerable distance from them. The time taken up in going to and from such markets and the cost of the trip prevent most consumers from becoming regular cus- 1 Report of Mayor's Market Commission of New York City, pp. 67-84. 114 MARKETING PERISHABLE FARM PRODUCTS [476 tomers — the housewife will not take up an hour or so of her time each day in making the trips to these markets. It is so much easier and more convenient to telephone the order to the nearby store and have the goods delivered to her kitchen. Where these markets are successful — that is, where farm- ers drive in and offer their goods for sale and where con- sumers patronize them — the success generally lasts for but one harvesting season. They must die during the winter months when the farmers have no perishables to sell. So by the next harvesting season consumers have gotten out of the habit of going to the market and they are less en- thusiastic over the idea.^ In a great number of these markets, which have been recently established in the various cities, farmers have been replaced as sellers by professional retailers who buy the goods from the farmers or from wholesalers.^ The reason for this is not hard to find : It is because professional retailers can sell the goods at a less cost than can the farm- ers themselves. The individual farmer offering his goods in one of these markets is greatly handicapped because of the small variety he can offer. The professional retailer who buys a wide variety of perishables from several farmers and wholesalers is enabled to make a very much greater number of sales in a given^ time than can an individual farmer who is offering only the few products that he has for market. Again, the farmer loses very valuable time from his farm in trying to sell his goods at these markets. He soon realizes that he can make more by selling his pro- • This is certainly true with many of the curb markets of the Middle- Western towns, and, as far as can be learned, of Eastern towns. " This fact is recognized by most of the advocates of curb markets, but few such advocates know the economic reason. (See King, Lower Living Costs in Cities, p. 26.) 477] REFORM OF THE MARKETING PROCESSES nj duce to the professional retailer, whose expense per sale is much less than his own, than by trying tO' sell to- consumers in competition with the professional. So, the curb market, instead of being a market where consimiers can buy directly from farmers generally becomes a market where consumers buy from professional retailers. While the possibilities of establishing direct trade re- lations between nearby producers and consumers are usually greater than where they are widely separated, the cost of bringing them together is, on the average, as great or greater than the total cost of marketing the same goods through the middleman system. Because of this fact such marketing will not develop to a very great extent in the future. About the only good it can ever accomplish is to limit some of the occasional unfair practices of private middlemen, and, as we hope to show, such unfairness could be eliminated by less expensive remedies. B. Transferring the Goods to Consumers: Direct vs. Middlemam, Methods In the exceptional cases where it is possible for farmers to find distant consumers whO' will buy their goods the ex- penses connected with completing the transactions are very heavy. It is necessary for them to grade and pack the commodities in small individual packages; tO' address and deliver each package to the transporting agencies; to pay the enormously high rate for transportation — which, in many cases, equals the total cost of marketing through the middleman system ; ^ — ^to stand the heavy losses from deterioration while the goods are on the -way; and tO' carry on a correspondence by mail in regard to financial settle- ment. So, even if it were possible tO' establish direct trade 1 See Discussion of Express and Parcel-Post Rates, pp. 63-64. Il6 MARKETING PERISHABLE FARM PRODUCTS [478 relations with distant consumers easily, the costs of carrying on the trade would generally be prohibitive. In the case of direct trade between consumers and sub- urban farmers, it is not possible to separate sharply the ex- penses of finding the market and those of transferring the goods to the consumers because the deliveries are made in person by the farmers. However, in this case there are few expenses of grading and packing (as the trade is now carried on) and no expenses of collection, though the losses from decay are generally heavy because of the exposure of the goods and the lack of ready buyers. The time taken to find the market and to make the deliveries, as we have seen, makes this method of marketing very expensive. If it were possible to institute direct marketing on a large scale different prices would have to be set for each separate transaction. The fluctuations in the prices which each farmer would receive and the prices each consumer would have to pay would be much wider and more violent than they are to-day.^ The losses from decay would also be much heavier because of the difficulty of quickly bringing together immediate physical supply and actual demand, and lack of storage facilities for caring for the goods. C. Economic Value of. Marketing Machinery for Perishaibles If all marketing can not be carried on directly, it follows that we must have some kind of marketing machinery or system to perform this work. Those who have so strenu- ously advocated the abolition of the present complicated machinery have overlooked the great advantages of division of labor in large-scale production.' Just as shoes can be 1 The changes in prices of perishables in the country town to-day will illustrate this point. " " There appears to be no reason why this specialization argument 479] REFORM OF THE MARKETING PROCESSES ny produced more cheaply through the factory system where there is minute division of labor than by the individual cobbler, perishables can be marketed more cheaply through a marketing system which has minute division of labor than through direct marketing. Division of labor in marketing affords constant and specialized occupation for those en- gaged in the work, the continuous use of the capital in- vested, and ac onsequent lo w expense per unit of goods handled. When a farmer attempts to market allEis'perisK?' ables directl y he is fi ghting agaiinstjthej^jactory syst^n^f marketing _just as~the Jndiviiual shoe-maker for a long time fought against the factory system of manufacturing shoes. In order so to widen the market that the immediate physical surplus of one section can be moved to fill a defi- ciency in supply in other sections, the present marketing system with its primary, wholesale and retail markets has been built up. This machinery is now largely in the hands of private middlemen, and that is why we speak of the " middleman system ". Whether we retain this machinery or adopt some other; whether we have the machinery run by private middlemen or by agents of cooperative associa- tions, we must have some kind of marketing machinery run by some kind of marketing operators. It is pretty certain that we shall find it the best policy to retain the essential features of the present machinery because, as has been well said, " The present distributive machinery, with all its strong points and its weaknesses, has been created of neces- sity, and it has weathered the storm of much adverse criti- cism, because every part of the country is now enjoying the perishable products of the most remote districts." ^ should not apply to the creation of time, place, and possession utilities in the marketing process as well as to the creation of form utilities." Weld, Minnespta University Bulletin No. 4, p. 4. ' U. S. Dept. of Agri., Bui. No. 267, p. 3. Il8 MARKETING PERISHABLE FARM PRODUCTS [480 III. REDUCTION OF THE COST OF MARKETING THROUGH SIMPLIFICATION OF THE PROCESSES We now find it advantageous to market some goods more directly than others. — that is, to pass them thrqugh a fewer number of markets, or through the hands of a fewer number of operators — and there is no reason why we should not con- tinue to market different goods by different routes. It is also probable that we shall discover that certain marketing operations which are now carried on can be dispensed with in some cases — for example, commission merchants and brokers might be replaced in small markets, by having car- lot dealers combine this work with their own. However, much of the talk that we so often hear advocating " shorter marketing routes " or " more direct marketing " has little economic justification.^ An examination of the difficulties to be faced in establishing some of these " shorter routes " will make this evident. A. Sales by Producers I. To Local Retailers. Many farmers living near towns sell directly to the retail merchants in those towns. In such cases the farmer delivers the goods by wagon directly to the store of the retailer or the retailer sends his wagon out to the farm, buys the produce and hauls it in. Why cannot this kind of trade be developed to greater pro- portions? Where it is easy and convenient for merchants tO' buy their perishables from wholesale dealers (that is, where wholesale markets are accessible to them) they generally will not buy direct from farmers unless they can get the pro- duce at far below wholesale prices. This is true because ' See ch. viii, "A Shorter Route from Producer to Consumer," of King's Lower Living Costs in Cities, as an example of some of these proposals. 48l] REFORM OF THE MARKETING PROCESSES up such trade is very troublesome and unsatisfactory to the retail merchants. The quality of goods raised by each farmer varies greatly; for example, in one day's gathering of tomatoes every grade from culls to Ai may be found. The trade of the retailer demands one or two fairly definite grades, and, as few farmers ever grade their goods before selling, the retailer who buys must grade them — which means that he will be able to sell only a part of the goods he buys. Again, the merchant who buys his supply of per- ishables from farmers necessarily has to deal with many different ones to get the various kinds of goods which he handles. This entails many small, individual business transactions for him, whereas he can go to the wholesale trade and buy just what he wants in one deal. Consequently, retailers are averse, as a rule, to buying from local farmers — except at bargain prices. In many other respects such trade is very unsatisfactory to both retailers and farmers. In the small towns, where it is carried on to the greatest extent, when the local supply is greater than the local demand the competition between farmers so depresses prices that the trade proves very un- profitable to them. Trade relations, when once established, are not permanent, but must be re-established each season, because between the local harvesting times the merchants have to look elsewhere for their supply. So at the begin- ning of each season the farmers must form new business connections or re-establish the old ones. To-day there are only three conditions under which this kind of trade is carried on to any great extent. First, in the small towns where the farmers have no primary markets for shipping their goods and where there is no wholesale market, or at best a very poor one, on which merchants can depend for their supply of perishables, this trade is tolerated because they have nothing better. It is unsatisfactory to I20 MARKETING PERISHABLE FARM PRODUCTS [482 both merchants and farmers/ Second, where there are very large retail stores, and chain-stores which have a diver- sified trade so that they can aiiford to buy the ungraded goods from farmers, grade and sell them in the many stores. This kind of trade is generally profitable to farmers, mer- chants and consumers. Third, where farmers sell to re- tailers in municipal retail markets — ^the profitableness of which depends on the success of the retail markets. 2. To Distant Retailers. In addition to having to face most of the difficulties of selling to nearby retailers, the farmer who attempts to sell his goods to distant retailers is confronted with several other problems which make this kind of trade practically impossible. He has no better way of forming trade relations with them than with distant con- stmiers; even if he does get in communication with them they will not buy his goods without first seeing them — so he must ship the goods and have a representative at the destination to look after his interest. Where he is not represented in such transactions he must accept the mer- chants' statements as to the condition of the goods on ar- rival. He can not ship in car-lots because very few retailers handle perishables in such quantities. If he sends smaller quantities he has to pay much higher transportation rates. And lastly, the farmer who attempts to sell to distant re- tailers must have expert knowledge of the shipping busi- ness; he must know how to deal with the transportation companies in getting adequate accommodations; he must grade and pack his produce for shipment; and, finally, he must attend to making sales and collections. Under such conditions, this trade can never develop, to any considerable extent. ' Price fluctuations are more violent than for the goods which pass through wholesale markets. 483] REFORM OF THE MARKETING PROCESSES 121 3. To Wholesale Markets. Many individual farmers to-day sell their own goods in the wholesale markets with- out the aid of country shippers or shipping organizations. Such sales are generally made by large producers who can ship in car-lots. If an individual farmer can not ship in car- lots, in most cases it will be to his advantage to turn his goods over to professional shippers or shipping organiza- tions who will send his produce, along with that of other farmers, in car-lots to the wholesale markets. When these sales are made the goods are generally sent to commission men or to brokers who sell for the shipping farmers. Oc- casionally they ship to car-lot dealers under contracts where the price is fixed after the goods arrive at the wholesale market and have been inspected by the dealers. In this case the farmer is compelled to accept the price prevailing in the market upon the arrival of his goods and take the risk of the dealer's making a false report to him as to the current price or the condition of the goods upon arrival. In most cases such risks are too great, so farmers generally ship to brokers or to commission men who act as their repre- sentatives in making the sales. It occasionally happens that car-lot dealers send out their own representatives to buy the goods from farmers, delivered on track at the shipping point. In this case the price is certain and the farmer gets his money immediately without assuming any more risks. However, selling to representatives of wholesale men at the shipping point is limited to a few commodities, like apples and potatoes, and is only possible for farmers living in the principal producing sections — wholesalers can not afford to send representatives to districts that do not ship- several cars per season. There can be no question of the great economic value to each producing section of efficient country shipping agen- cies, to which the majority of the farmers in the community 122 MARKETING PERISHABLE FARM PRODUCTS [484 can turn over their goods for marketing. These agencies, by handling most of the goods of the community, can employ specialists for grading and packing ; they can supply adequate storage facilities ; keep in touch with the market situation; ship in car-lots and deal more advantageously with the railroads and wholesale dealers. When the farmer attempts to sell his goods in the wholesale markets he as- sumes all the functions and risks of the professional coun- try shipper. He generally knows little about this work and his scale of business is so small that the expense per unit of business is very great, consequently he usually finds that his time can be more profitably employed by turning the market- ing over to the professional shipper and devoting himself to production. 4. To "Wholesalers" in Small Towns. There are com- paratively few farmers, or shippers either, for that matter, Tvho sell any perishables to the wholesale dealers in the small towns. These wholesalers, like the jobbers in the large wholesale centers, buy most of the perishables they handle from the car-lot dealers in the larger cities. To many it looks Hke a useless complication and duplication of work to have the produce shipped from the primary markets to the large wholesale markets and then back to some wholesalers in a nearby town. But there are several reasons why this seemingly useless, roundabout method is more economical for the shipping farmers or the professional shippers than selling directly to such wholesalers. The special business of the small-town wholesaler is to sell goods to retailers just as does the jobber in the large city. He can make more through buying all his perishables from a few car-lot dealers in the large centers and devoting most of his time to the selling end of his business than by taking up his time to carry on business relations with many shippers and farmers in many different sections of the coun- 485] REFORM OF THE MARKETING PROCESSES 123 try. He can always buy just the grade of goods and in the quantities he wants at the particular time he wants them from the large wholesale markets, while if he bought from farmers he would have to take the goods at irregular inter- vals and would be uncertain of the grade he would get. Few farmers or shippers could furnish cars of perishables containing the different kinds of perishables demanded by the small wholesalers, and few such wholesalers could handle solid cars of any one perishable — as a care of cab- bage, of peaches, etc. To ship to them in less than car-lots would be too expensive. The larger the wholesale market the more constant will be the prices — ^because of the law of average. The markets of the small towns are so limited in size that, under our present meager marketing information, if shippers at- tempted to supply them directly they would be in a constant state of glut or scarcity and the price uncertainty would make the business very unsatisfactory. B. Sales by Professional Shippers Country shipping agencies would find the same difliculties in selling and shipping their goods direct to retailers as do individual farmers. Seasonal supply and variability in quality of goods handled by shippers, economy of car-lot shipments, the difficulties in the way of establishing busi- ness relations with retailers, and many other business fac- tors will keep this kind of trade from being satisfactory to either shipper or retail merchant. They would also find the same difficulties in selling to country-town wholesalers. In cases where shippers are doing a business sufficient to enable them to have their own representatives in wholesale markets it might happen occasionally that those represen- tatives would be able to sell directly to retailers. On the whole, however, it is more economic for shippers to sell their produce in the wholesale markets. 124 MARKETING PERISHABLE FARM PRODUCTS [486 A larger proportion of shippers to-day are selling their goods to car-lot dealers without the intermediation of brokers and commission men than ever before. This has been made possible for two reasons : First, several perish- ables like butter, poultry, eggs, potatoes and apples have become standardized to the degree that there can be little question as to their condition and grade when they enter the wholesale market and their price quotations are fairly definite and easily ascertained by the shipper. Under such conditions there is little chance for car-lot dealers to make false statements to the shippers as to condition of goods upon arrival or as to the current price quotations in order to get the goods at a sacrifice price. Second, many shipping agencies have become so large that they are enabled to sta- tion their own representatives at the wholesale markets to look after their own interests when they make sales to car- lot dealers. However, the great majority of perishables are far from being standardized and only a few shipping agencies are large enough to station their own representa- tive in the wholesale markets, so it is still necessary for many of them to continue to sell through brokers and com- mission men who are supposed to represent their interest. The not infrequent failure of commission men actually to represent the interest of shippers (by making fictitious sales, giving false returns as to prices received, and padding ex- pense accounts) has been a large factor in decreasing the amount of business done through them. The organization of public auction markets where shippers send fruits and vegetables to be sold under licensed auctioneers has also had some weight in supplanting commission men and brokers. Nevertheless, a very large proportion of shippers still need some one to represent them in the wholesale markets and the commission men, unsatisfactory as they often are, are the best representatives now available. 487] REFORM OF THE MARKETING PROCESSES 125 Besides representing the interests of shippers, brokers and commission men perform the additional economic ser- vice of receiving mixed and less-than-car-lot shipments of perishables. They separate these goods from each other and sell each kind to the car-lot dealer who specializes in that particular produce. Many producers make such ship- ments, as they do not have enough of any one commodity for a car load, but they can not send these to car-lot dealers because each dealer only handles certain perishables. C. Purchases by Retailers We have seen that only in special cases is it possible for farmers to sell directly to retailers and that when such trade is carried on it is generally unprofitable to either one or both of them. It was also shown, that, for the same reason, trade between professional shippers and retailers can never develop to great proportions. As to whether it would be more economical for retailers to buy their perishables from auctioneers, commission men, car-lot dealers, or jobbers will depend (i) on the character and size of the business of the retailer, (2) on the size of the town in which he is doing business. I. From Auctioneers. Of course, merchants in small towns cannot buy from auctioneers because such markets exist only in the large wholesale centers. In these markets the goods are generally sold in very large lots (car-lots, 100 bbls., cartons, or cases, 1,000 lbs., etc.) so that only the big retailers can afford to buy goods in such quantities. Where goods are sold in smaller lots it is hard for merchants to be sure that they are buying the grade of goods demanded by their trade — ^much of the perishables auctioned off in small lots are damaged goods which large wholesale dealers do not care to handle. Again, visiting auction markets (which are generally a considerable distance away) requires a great 126 MARKETING PERISHABLE FARM PRODUCTS [488 deal of the retailer's time which could be spent profitably at his store — unless the auction is held before the opening hours of the stores, as most fruit auctions are now held. So there are only three classes of merchants in the large cities who find it profitable to buy from auctioneers. First, the large chain-stores which can afford to buy in great quan- tities, re-grade and sell the different grades in the stores which handle such. Second, the fruit and vegetable huck- sters who handle only a few unclassified perishables and whose time is not needed at an established place of busi- ness. Third, the dealers in the municipal retail markets which are situated in close proximity to the auction markets. Most other merchants find it more economical to buy from the jobbers or other wholesale men. 2. From Commission Men and Car-lot Dealers. The merchant in the large city who buys from commission men or car-lot dealers must buy in large quantities (because these dealers sell only in large lots) ; and he must buy from several different dealers (because they specialize in the var- iety of goods they handle). Few retailers have time, or a large enough business to form trade relations with more than a half-dozen different dealers. They can buy from the jobbers, who solicit their business, not only the exact amount and grade of each product they desire, but in one transaction with one jobber they can buy all the different kinds of perishables they handle. Most retailers buy on a credit and in buying from one or two jobbers they find it easier to arrange for this than they would if they bought from a dozen or so commission men and car-lot dealers. Of course, it is even harder for retailers in the small towns to buY from car-lot dealers than for those in cities, because they are so far removed from the large wholesale centers. Therefore, most country retailers must buy from local wholesalers ju.st as city retailers buy from jobbers. 489] REFORM OF THE MARKETING PROCESSES 127 rv. SIMPLIFICATION OF MARKETING PROCESSES THROUGH CO-OPERATION AND MUNICIPAL MARKETS A. Farmers' Co-operative Marketing Associations Many enthusiastic advocates of farmers' cooperative marketing associations have the impression that marketing processes can be greatly simplified and goods made to pass much more directly between producers and consumers through these associations. A little analysis of the propo- sition in the light of the immediately preceding discussion will show that such associations can do little to simplify marketing processes or to bring the producers much nearer consumers. If we think of direct marketing in terms of the number of " middlemen " through whose hands the goods pass on meir way to consumers, instead of the number of marketing- processes through which they pass, it is clearly evident that marketing through farmers' cooperative associations is one step toward direct marketing because it eliminates the private country shipper. But it does not do away with the work which is now performed by the private shipper; it only transfers those processes to a different agency. In other words, the cooperative association carries on the work of the private shipper — ^that of disposing of the farm- ers' products at the highest net price possible. There is no reason to believe that a farmers' cooperative marketing association handling the same amoimt of perish- ables as a private country shipper, would be able to sell its goods more directly to consumers than would the private shipper. The same markets and the same market facilities are equally available to both, and if it would be advan- tageous for the cooperative association to market its goods in a direct fashion it certainly would be just as advan- tageous for the private shipper to market by similar pro- .128 MARKETING PERISHABLE FARM PRODUCTS [490 cesses. We have seen that in a great majority of cases the shipping agencies find it more economical to sell their goods in the wholesale markets — ^this principle will apply regard- less of the character of the shipper. We have seen that shipping agencies which do a very large business are enabled to dispense with the employment of private brokers and commission men because they can sell through their own representatives in the large whole- sale markets. The California Fruit Growers' Exchange and several other large cooperative shipping associations now sell through their own representatives in New York, Chicago and other large markets.^ This, of course, is not a simplification of the marketing processes, it is only substi- tuting one agency for the other in performing the same work^'And such substitutions can be made only when very large cooperative associations are organized to take over the work now performed by several small private country shippers. So, on the whole, we find that farmers' co- operative marketing associations can do little or nothing in the way of simplifying the marketing processes — they find it more economical to adopt the same methods as are used by the private middlemen. B. Consumers' Cooperative Stores It is easy to see that if consumers' cooperative stores could be developed to the extent to which they have been in England and in Scotland they would be able to organize their own wholesale associations and thus eliminate the private wholesalers.^ Even if they did not organize their own wholesale markets the very large cooperative associa- tions would, like the large private chain-stores at present, be able to buy more directly — either from farmers, shippers, 1 Proceedings of U. S. Dept. of Agri. Marketing Conference, p. S. ^ Senate Doc. No. 214, 63d Cong., ist ses., pp. 787-90. 49 1 ] REFORM OF THE MARKETING PROCESSES 129 or car-lot dealers. But they could affect the marketing processes only in proportion to their ability to become larger business units than are the present private retail stores. There is no reason to believe that a cooperative store the same size as a private store would be able to buy any more directly. Even in the cases where the large cooperative stores would be able to buy more directly, they would not simplify the marketing processes, but would only substitute their own agents for the present private agents. So, grant- ing that there are no difficulties in the way of organizing such associations, it is hard to see that they would be able to do much to simplify marketing. C. Municipal Markets In discussing the limitations of direct dealings between producers and consumers we pointed out the serious limita- tions which confront the municipal curb-stone market as an institution for shortening the route between the producers and consumers. In the ordinary municipal retail market where professional retailers are licensed to carry on busi- ness, they will generally buy their goods in the same ways as the ordinary comer grocer does to-day — from jobbers, principally. The wholesale municipal markets are not even intended to shorten the route between producer and con- sumer, their object is to regulate the methods of performing the ordinary marketing processes. IV. SUMMARY The present division of labor and complicated processes of marketing perishables have developed because, as the trade in these commodities grew and as the market ex- panded, it was found that the goods could be marketed more cheaply and efficiently by division of labor and special- ization than by the simpler and more direct methods which 130 MARKETING PERISHABLE FARM PRODUCTS [492 were used when the trade was seasonal and local. On the whole, we find that these processes cannot now be very much simplified either by producers, consumers, private middlemen or cooperative associations — ^that is, simplifica- tion of the processes will not lessen the social burden en- tailed in marketing the goods. If we are to reduce the social costs of marketing perish- ables through a reform in the system of marketing, it must be done by finding cheaper and morie efficient ways of per- forming the complicated processes — not by reducing the number of those processes. The next chapter will deal with the possibilities of this reform — ^that is, with other methods of running the marketing machinery. CHAPTER V Reduction of the Costs of Performing the Market- ing Processes Even though we do not find it possible to greatly reduce the social costs of marketing perishables by reducing the processes or simplifying the machinery, we may find that the desired results can be accomplished by the adoption of cheaper and more efficient ways of carrying on the com- plicated marketing processes. In attempting to accomplish these results there are three general lines of action which may be followed. First, the national, state and municipal governments may, through marketing departments or bureaus, cooperate with, and regulate the methods and practices of, those engaged dn the marketing business. Second, private middlemen may be supplanted by cooper- ative associations which carry on the work at less cost. Third, the costs may be reduced by the elimination of in- efficient practices through competition between the market- ing agencies. Let us see to what extent the costs of market- ing perishables may be reduced by the adoption of each of these lines of action. I. THROUGH government MARKET DEPARTMENTS OR BUREAUS We will suppose that the powers of the present Office of Markets of the Department of Agriculture are extended over the interstate commerce in perishables so that this office will have somewhat the same powers over trade in 493] 131 132 MARKETING PERISHABLE FARM PRODUCTS [494 these goods that the Interstate Commerce Commission now has over the interstate transportation business. Let us suppose further that each state and each municipality has established a department of markets to regulate the local and the state trade in these goods, just as the public service commissions regulate the public service corporations. What could, or what should, such government agencies do to improve marketing and reduce its costs? This question can be answered only by a discussion of the influence of government regulation on some of thfc present defective business methods and practices of the trade. A. Standardisation of. Grades and Packages It has been shown that if we had more imiform grades for different perishables and that if they were shipped in more uniform-sized containers much of the loss from decay would be eliminated and the expense of re-grading and re- packing would be greatly reduced. Again, as has been pointed out, we can never get accurate market information from the different wholesale markets as to receipts and prices until we reduce these commodities to uniform units of commerce — at present it is not possible to get the in- formation as to the daily receipts of most perishables in the wholesale markets because they arrive in so many dif- ferent-sized packages and grades. -^It goes without saying that we can never hope to get much uniformity in grades and packages unless it is forced on the trade by govern- ment action. So the only question which faces us in this regard is the possibility of establishing national uniform grades and packages for these goods, that is, whether the government experts would be able to prescribe uniform standards which would be of much service. There is no reason why uniform-sized packages can not be made for each perishable which enters commerce. At 495] REDUCTION OF THE COSTS 133 the present time we have a national law which requires a standard barrel for all apples which enter interstate com- merce.^ Five or six of our states have regulations con- cerning unifomi packages for some perishables.^ These state regulations are of some service within the state, but, as the packages of one state differ from those of the others, they do little to bring about uniformity in packages of inter- state commerce. After investigating the subject of the most desirable size of package for each perishable, it would be easy for the Office of Markets, if given the power to do so, to formulate and enforce the use of a national standard package for each perishable — in some cases it would be best to make the unit a quart, in others a bushel, or 100 or 1000 pounds. The standard packages which are prescribed by the Office of Markets for interstate commerce should then be adopted by the state and municipal departments of markets and enforced for state and local trade. It would not be as easy to establish uniform grades for all perishables as it would be to establish uniform-sised packages for them. Still we have many perishables, such as butter, milk, eggs, chickens, potatoes, apples, oranges and some others, which can be divided into fairly definite grades. As a matter of fact, each wholesale market now has its own grades for these goods and many shippers have their grades for them. The difficulty is that there is little or no uniformity among the grades adopted by different shippers and wholesale markets.* We need a national schedule of grades for each of these products so that re-grading will 1 A copy of the law is to be found in Appendix A. ' Washington, Oregon, California, Illinois, Texas and Virginia all provide that the Secretary of Agriculture or Horticulture shall formu- late standard packages for certain perishables. ' Some of the Pacific States have adopted uniform state grades for a few articles — ^this is true of Washingrton and Oregon. 134 MARKETING PERISHABLE FARM PRODUCTS [496 not be necessary as they pass from one market to another or from one middleman to another. If the Office of Markets were given the power to prescribe and enforce standard grades for all these goods which enter interstate commerce and if the national grades were accepted and enforced by the state and municipal departments of markeits for local commerce, their marketing would be much improved and millions of dollars would be saved in re-grading. When we come to such fruits and vegetables as peaches, celery, watermelons and many other highly perishable com- modities the question of uniform grades is a much more difficult one. There are so many varieties of each of these goods, their quality varies so greatly from season to season and from section to section, and they are so highly perish- able that it would be very hard to establish exact grades for any one of them. However, this does not mean that much progress can not be made along this line. Each can be graded at the shipping point according to size, soundness, color, variety and so on, so that fairly definite grades for each will be recognized in the markets. These grades could be worked out by the Office of Markets in cooperation with state and municipal departments of markets and the men engaged in the marketing business. Like the grades for eggs, butter and the other goods already discussed these national grades should be adopted by the state and municipal departments of markets. It might be argued that the establishment of standard grades for such highly perishable goods would be of little practical value because their deterioration is so rapid that they must continue to be re-graded as they pass from one market to another. No one package would have to be re- graded more than once — whereas now they are sometimes re-graded two or three times by various wholesalers. The only question for dispute between shipper and wholesale 497] REDUCTION OF THE COSTS 135 receiver which could arise in regard to the goods, would be as to the amount of deterioration; and this question would not prove a difficult one with the proper regulation and inspection of middlemen by the Office of Markets and departments of markets. B. Elimination of Unfair Business Practices There has been a recent tendency in a few states to pass laws to regulate the business practices of middlemen en- gaged in marketing perishables. Washington, Oregon, California, Ohio, Virginia, Illinois, New York, and Texas have passed laws providing for either the bonding or the licensing of commission men and jobbing houses. Most of these laws contain provisions which are intended to eliminate certain abuses practised by these middlemen. The main points of these state regulations have been summarized by Professor King as follows : ^ 1. Specific definitions as to embezzlement and fraud with definite punishments therefor. 2. A provision that all persons, firms and corporations en- gaged in selling agricultural produce on commission should take out a license from the secretary of agriculture or some ■other specific state official. 3. A stipulation that each of these persons, firms or cor- porations so licensed should file a bond for a stated sum con- ditioned upon the payment of all moneys owing to farmers who have consigned agricultural produce to them. 4. Provisions prescribing the forms for the books to be kept by such commission merchants, and requiring these books to be open for inspection both by the shipper and by a particular state official such as the secretary of agriculture, or his duly authorized agent. 5. Provisions requiring detailed reports to be submitted to ' Lower Living Costs in Cities, p. 64. 136 MARKETING PERISHABLE FARM PRODUCTS [498 farmers and to the secretary of agriculture covering the con- dition in which the produce was received, the state of the market, price received, etc. 6. An informal and inexpensive means by which the farmer can investigate any complaints as to services or prices and secure redress when neglect or fraud seems evident. These laws provide heavy penalties for those who violate any of their provisions. Such laws are very beneficial as far as they go, but they are defective because of their limitations. These laws do not affect the business practices of car-lot dealers, jobbers and retailers, but apply only to one class of middlemen, They also apply only to transactions of brokers or com- mission men with farmers or shippers within the state and not to transactions between parties in different states — whereas the larger part of such business is interstate. In order to eliminate the present dishonest dealings in the trade and to reduce the business practices and customs to uniformity throughout the country, effective government regulation must be applied to all classes of middlemen from shipper to retailer. The Office of Markets should be given regulative power over all kinds of interstate transactions in perishables similar to those given the state secretary of agriculture over the intrastate transactions of brokers and commission men in the laws outlined above. The state departments of markets (or the state secretary of agricul- ture) should not only exercise regulation over the intra- state business of brokers and commission men, but they should have the same control over the business of car-lot dealers and jobbers. The municipal departments of mar- kets should have regulative control over the business of re- tailers in regard to weights, measures and the soundness of the goods sold. These municipal markets should publish 499] REDUCTION OF THE COSTS 13;- the wholesale prices from day to day to let the people know what the retailers are paying for the goods they are selling. The Ofifice of Markets and each state and municipal de- partment of markets must have sufficient appropriations and assistants properly to enforce the regulative powers which are given them. Each state and local department should work in harmony with the Office of Markets — ^their work should be complementary, not conflicting. The powers of the different state departments should be the- same in each state, and so should those of the municipal departments. With such regulation the misquoting of prices, false reports as to condition of goods upon receipt, bogus sales, cornering of the market and other unfair practices would become negligible. The middlemen would gain greater confidence of both farmers and consumers, while, not least of all, the business practices and customs of the trade would be reduced to uniformity — and uniformity generally means efficiency. As a rule, middlemen object to government regulation of their business just as the railroads objected to being controlled by the Interstate Commerce Commission. It is almost inevitable that when a man is making money in a business under certain conditions (no matter how bad those conditions may be) he objects to any interference or regulation which will affect that business. The action of the country bankers in convention at Boston, just prior to the passage of the present Federal Reserve Act, in passing a resolution condemning the provisions of that act, is a good illustration of the attitude business men take toward any legislation affecting their business, even though the legislation may be very helpful to the business. In the states where regulation has been applied to commission men and jobbers, they agree that, as a whole, it has been 138 MARKETING PERISHABLE FARM PRODUCTS [500 helpful to the trade. ^ There is little reason to believe that a more comprehensive regulation of the practices of all middlemen will not be beneficial to the whole trade in perish- ables just as regulation has been helpful to the transpor- tation business. C. Organising Market Information At the conference on markets held by the Secretary of Agriculture in Washington on April 29, 1913, the question -of a market reporting system for perishables being organized by the Department of Agriculture received much discussion. Again, in Report p8 of the Secretary's OMce the question is taken up in more detail. It was the prevailing opinion at the conference that the problem was too great for the department to tackle at that time, and some doubts were ■expressed as to whether such a reporting system would be of great value to the trade. Upon the cost of organizing and maintaining a thorough reporting system Report p8 says : ^ If the Department were to take charge of any feature of the marketing of farm products, if it were to perform the duty of finding customers or markets, if it were to perform the duty ■of ascertaining market conditions and prices every day in all principal markets and undertake to make the information ser- viceable to farmers throughout the country, the expense of such undertakings would be practically prohibitive. Take the matter of trade news at trade centers. To main- tain a service of this sort it would be necessary to employ men •at trade centers to be in constant touch with their markets and to report by telegraph daily or oftener the prices of farm pro- >ducts and the state of the market with regard to supplies. 1 King, Lower Living Costs in Cities, p. 69. " Page 19. 50l] REDUCTION OF THE COSTS 139 The cost of this service would be enormous. There is a farmers' cooperative association for marketing vegetables on the eastern shore of Virginia that expends $25,000 a year for telegraphing, and yet this association covers only two counties of ordinary size. The great association of California citrus fruit growers for marketing oranges and lemons spends $75,- 000 a year for telegrams. Telegraphic Service If a Division of Markets were to do telegraphic service for principal farm products and for the whole country, it seems certain that the cost would be a million dollars or more yearly. This is thte conclusion that is indicated by the experience of the two associations just mentioned. In regard to the practicability of such a reporting system the same report continues : ^ The matter of performing a telegraphic service has con- sequences which must inevitably follow. Suppose, for in- stance, that a Division of Markets were collecting information by telegraph concerning prices and market conditions at trade centers and were to publish the report that there was a scarcity of a certain product in a certain market and that prices were high enough to be extremely profitable to producers. It is likely that producers having no market associations, who were able to reach the market reported as being in a state of scarcity and high prices, would send to that market quantities of the products sufficient to create a state of glut. The individual producers and shippers would not be under the control of any coordinating power, and in order that news supplied to them by the Department might be made useful it would be necessary for the Department to perfgrm the duties of a director of shipments in order that markets might not be glutted. As will be observed in reading the descriptions of the systems • Page 19. 140 MARKETING PERISHABLE FARM PRODUCTS [502 of marketing by cooperative associations on subsequent pages, these associations are in no need of a telegraphic service per- formed by the government. The above statements would indicate that the writer did not have a correct conception of how marketing is carried on at the shipping points at present. He speaks as if most of the goods are shipped by individual farmers, but as a matter of fact, only a very small percentage of them are thus shipped — at least 90 per cent of the perishables which arrive at the wholesale markets are sent by private shippers or co- operative associations. He seems to think that because these large associations and private shippers taken together spend hundreds of thousands of dollars to get their present meager and inaccurate market information, they do not need any better and cheaper service along this line — that only the individual farmer, who rarely ships for him- self, needs the information. If the government can furnish better and cheaper service to the shippers than they now get, there is little reason why it should not do so. He further assumes that government information of re- ceipts, prices and market conditions at wholesale centers would only tend to cause those markets reported favorably to be glutted by the shipping farmers, and that the govern- ment would have to direct shipments in order to make the information serviceable. If the government report fur- nished only information as to wholesale markets and did not give an account of the shipments and intended destina- tion of goods sent from the shipping points, there might at first be a tendency, as he suggests, to over-supply the favorably reported markets. But if the report is complete (giving daily receipts, prices and shipments made to each market) there is little reason why the government would have to direct shipments, or why the report would not be very valuable to the trade as a whole. 503] REDUCTION OF THE COSTS 141 In spite of the previous official mistrust of the advisable- ness and practicability of the department's furnishing any market information, the Office of Markets last year organ- ized a market-information service for strawberries, canta- loups and peaches. In Appendix B is given a copy of one of the daily reports issued by this Office on peach move- ments for one day. On the whole this experiment on the part of the Office was successful, but it was very much ham- pered because of its newness and lack of sufficient funds. A few wholesale men in the large centers were displeased with the service because it upset some of their established prac- tices, but the majority of producers and shippers were well pleased with the results. There is, however, one very serious problem in regard to furnishing a complete market-reporting service for all per- ishables — such service, as has been suggested, would be quite expensive and hard to organize. But, through the cooperation of the Office of Markets with the state and muni- cipal departments of markets, it would be possible to furnish complete market information, in regard to this class of goods, at a reasonable cost. It might be done somewhat as follows: The information as to prices and receipts in the whole- sale markets could be gathered by the combined work of the representatives of the Office of Markets, and of the state and municipal market departments. At the shipping centers the daily amount of shipments and their intended destination could be reported through the cooperation of state depart- ments and the Office of Markets. For its part, the Office of Markets might use the county farm demonstrator whom the Department of Agriculture now keeps in practically every county in the United States. These men could gather this information in addition to performing their regular work. After the information is gathered it should not be neces- 142 MARKETING PERISHABLE FARM PRODUCTS [504 sary for the reporters at the various markets to telegraph it directly to Washington. All reporters in each state should send their information to a central market in that state — either to the office of the state department of agriculture or, in case the state does not have such a department, to the state agricultural college. At this office the information should be tabulated and telegraphed to the Office of Markets at Washington. Here the report for the nation would be made-up and a copy sent by wire to the different state offices. From these state offices the information could be distributed to the shipping, wholesale and retail markets. Representatives of the Office of Markets and of the state and municipal market departments (where such departments exist) should be kept at the wholesale markets as inspectors and administrators, as has already been mentioned, and it would add no extra expense to have these men gather the material for the market report. As far as the primary markets are concerned, it would cost little or nothing extra to have the county demonstrators gather the market infor- mation there. The reports from the different markets could be transmitted to the central state offices by telephone, mail and, occasionally, telegraph, according to the distance and circumstances. Only forty-eight telegrams would need to be sent to Washington — one from each state office — and Washington would have to send only one telegram to each of those offices. The problem of distributing the market reports from the different state offices to those engaged in the trade would not be very difficult. It would be given to the daily press of the state for publication, many of the different markets could be reached quickly by mail and, in some cases, the telephone and telegraph would have to be used. As a whole, the service should not cost much more than one and one-half millions per year. It may be maintained that the above outline of a market 505] REDUCTION OF THE COSTS 14^ reporting system is visionary because it depends upon the cooperation of state and municipal market departments which are not yet estabhshed ; and further, that if such mar- ket departments were established, they probably would not cooperate along this line with the Office of Markets at Wash- ington. It is true it would take some time to establish such governmental machinery, but, for other reasons than market reporting, we should have a department of markets for each state and a municipal department for all large cities. The laws creating them should be uniform in all states and should be drawn in such a way that they would not only have to cooperate with the Office of Markets in getting up the market reports, but in many other ways. In the meantime, before these state and municipal depart- ments are established, the Office of Markets should be given' the power and funds to furnish the best market-reporting services it can devise. With the help of county demon- strators and by the addition of a few more representatives in the wholesale markets, it can furnish complete market information from day to day for the principal perishables. At present it could use the state agricultural colleges as the main state offices for the gathering and dissemination of the information. D. Regulation of Transportation, Refrigeration, and Terminal Facilities The Interstate Commerce Commission and the different state railway commissions now have regulative power over the refrigerated and ventilated car service as well as over rates and other services furnished by transportation com- panies. This control should stay in the hands of the railway commissions, but the Office of Markets and state departments of markets should be given the power to represent before the railway commissions all shippers who have complaints 144 MARKETING PERISHABLE FARM PRODUCTS [506 against the railroads in regard to the shipment of perish- ables or other agricultural products. Then, all a shipper would have to do if he thought that a railroad had treated him unfairly in regard to car service, rates, damages for -exposing the goods, etc., would be to turn his case over to the market department. If, after investigation, this de- partment found that the shipper had a just complaint it would, without cost to, the shipper, represent him before the railroad commissi, or in the courts, if the case went that far. At the present time the small shippers find it too much trouble aa^too expensive to carry their cases against the railroa)^ to the railway commissions, whereas under the above plan all they would have to do would be to turn the fnatter over to the local representative of the market de- partment or Office of Markets. This plan would cause the railroads to be more careful in handling this class of goods and to treat the shippers with greater consideration. All individuals and companies furnishing commercic^ storage or refrigeration should be licensed by the state de- partment of markets and should have their business prac- tices regulated just as the business of the commission man should be regulated. They should be subject to frequent inspection by the officials of the department of markets, and rshould furnish regular reports of amounts of goods in their care, rates charged, etc. In this way the storage and re- frigeration business could be standardized and fair treat- ment insured to all. We have already pointed out that perishables are greatly •exposed after they reach our wholesale markets because of inadequate and decentralized terminal and wholesale market facilities. Municipal market departments could be of great service if they were given the powers to force the railroads to furnish better and more centralized terminal facilities for these goods and to establish municipal wholesale market buildings in connection with these railroad terminals. 507] REDUCTION OF THE COSTS 145 All the railroads entering each wholesale market should be compelled to come together and furnish one central ter- minal (possibly two or three for New York City) for un- loading all the perishables which enter those markets. These terminals should be equipped with large refrigerated sheds into which the cars should be run for unloading. In connection with them the cities should build modern whole- sale market buildings on plans similar to those of the whole- sale market buildings of Paris, Berlin and other European cities.^ Where such a market building is constructed all the wholesale dealers in the city should be compelled to trans- act their business in it, and the renting of the quarters and the regulation of the building should be in the hands of the municipal market departmSiE There is little doubt that in many of our large cities wholesale market buildings will not be constructed for a long time to come — they can come only after a campaign of education. But even now the railroads should be forced to furnish centralized terminal facilities around which the wholesale trade would grow up, instead of being scattered all over the city as it is in most cases. Such centralization of the wholesale market within a small area near the terminal would eliminate the present undue ex- posure of the goods and expense in carting and re-carting the goods over and across the city. E. Investigative and Educationai Work The Office of Markets, since its organization in 1913, has devoted its whole time to investigative and educational work. In fact, the law which created this office limits its work to this field. On this point Mr. Charles J. Brand, the Chief of the Office, says : The authority conferred by Congress in appropriating funds 1 Amer. Acad, of Pol. and Soc. Sci., vol. 1, pp. 153-165. 146 MARKETING PERISHABLE FARM PRODUCTS [508 for the maintenance of this Office provides for the collection and distribution of useful information on subjects relating to the marketing and distribution of farm products, and the study of cooperation among farmers in the United States. So far as marketing work is concerned, the activities of the Office, therefore, are limited to the collection and distribution of in- formation. For example, it has no authority in cases of al- leged dishonesty on the part of producers, carriers, dealers, or buyers,^ According to Mr. Brand's report, the Office of Markets is now working on the following problems in regard to market- ing perishables : ( i ) A study of cOSperative purchasing and marketing — investigation of the methods of the successful associations. (2) Marketing business practices^ — the essen- tials in the conduct of the business, as competent manage- ment, accurate records and accounts, proper equipment, etc. (3) Market surveys — supply and demand in different mar- kets, advisability of news service and the cost of same. (4) Market grades and standards — study of the present methods of grading and packing — ^investigations to deter- mine the advisability of national standardization of grades, weights, measures and packages or containers — lack of uni- formity of state laws in this respect. (5) City markets and distribution — commercial methods of distribution in the city — advisability of municipally owned wholesale and retail markets. (6) Transportation and storage — how best to render assistance to individual shippers and to associations — terminal and transfer facilities — transit and ot-her privi- leges — car supply — freight rates — minimum car-load weights — commercial storage, etc. (7) Marketing by parcel-post and express — experiments in these methods. Because of inadequate appropriations much of the work ^Report of the Chief of the OfUce of Markets, July 31, 1915. 509] REDUCTION OF THE COSTS 147 outlined by Mr. Brand has not been pushed to a very great extent. But the office has done excellent work in investi- gating many of the special questions connected with the marketing problem. It has issued several bulletins on the bases of these investigations, some of which have been referred to in this work, and other bulletins are now be- ing prepared for issue. All this information will be of great aid to both shippers and wholesale men and may result in decreasing the total costs of marketing. We can not hope to make much progress in improving the market- ing system until we get the detailed facts in regard to each problem. It has been the practice of the office in carrying on its work to send experts out in the field to give advice to ship- pers and cooperative associations as to the best means of carrying on their business. These experts have been sent to the cities to study the marketing problems there and to advise with the city officials in regard to handling their marketing problems. The few state bureaus and departments which have been established to deal with the marketing problems have also rendered much advice to producers and middlemen in regard to methods and practices of marketing and their work has been of some educational value, and, probably, of some practical value. Mr. John J. Dillon, head of the New York State Department of Foods and Markets, has attracted much attention from the farmers of that state and the pub- lic in general by establishing in New York City an auction market under his department. So far the state auction market has not been a very great success, but it will prob- ably cause some of the up-state shippers to improve their business practices in dealing with farmers. The investigative and educational work of the Office of Markets and of the different state and local market departments, though very valuable, has serious limita- 148 MARKETING PERISHABLE FARM PRODUCTS [510 tions. It may result m improving some business methods and practices, and doubtless will be a potent agency in in- creasing the number of cooperative marketing associations and the establishment of many municipal markets. But it is only by active governmental regulation of the business of those who carry on the marketing that the commerce in the goods can be standardized and the present inefficiency and abuses eliminated. F. Getting Efficient Market Departments There can be, then, no question as tO' the advisability of having the powers of the Office of Markets increased, and of creating departments of markets in each state and city to cooperate with each other and with the national office in regulating the marketing of perishables. But to get such government agencies is not an easy task. The Mayor's Food Commission of New York City, of which Mr. George W. Perkins was chairman, submitted to the legislature of that state a bill for the creation of a state department of markets with powers and appropriations equal to those of other departments of the state government, but the bill failed largely because the wholesale men in New York City were opposed to it.^ They defeated the bill be- cause they did not want any interference with their busi- ness, — just as the railroads did not want the Interstate Com- merce Commission to interfere with theirs. In most states we will find the same kind of opposition on the part of the middlemen, and, at the same time, there is no strong public opinion in favor of such departments because people gener- ally are unacquainted with the nature of the problems of marketing. Consequently, it is now easy for the middle- men to defeat such legislation. But when the public be- 1 Statement by Mr. Perkins in a speech made before the Men's Asso- ciation of the Brick Church of New York City. 51 1 ] REDUCTION OF THE COSTS j^g comes convinced that such departments are needed this opposition will no longer be effective. Even if the Office of Markets were given regulative au- thority and each state and each municipality should establish a department of markets with adequate powers, such laws would not ordinarily be uniform in the different states and there would be no cooperation between the national, state, and local departments. About. the only way to attain the desired uniformity and cooperation would be to have the bills providing for such legislation drawn by a national organization or association which would fight for their adop- tion by the national government and by all the states and cities. It would be well if we had a national marketing commission, composed of men well acquainted with the marketing problem, to draw bills defining the powers and duties of the Office of Markets and state and municipal de- partments of markets.^ After these bills are presented, if the conference of governors should adopt a resolution in favor of departments of markets with uniform powers for all the states, there would be a fair chance of getting such legislation. If it is not possible to create a national marketing com- mission, some national private organization, like the Na- tional Chamber of Commerce or the Southern Commercial ' Mr. David Lubin, Delegate of the United States to the International Institute of Agriculture at Rome, has recommended to Congress the creation of a National Marketing Commission. A copy of the bill, together with Mr. Lubin's speech in support of it, are to be found in Hearings before the Committee on Agriculture, House of Representa- tives, 63rd Congress, ist, 2nd and 3rd Sessions, Vol. II., pp. 131 1- 1326. It will- be noted that this National Marketing Commission was to be a permanent one and was to have many duties other than investi- gating marketing problems and recommending legislation. Such a national commission is not advocated in. this chapter, but one similar to our American iCommission on (Rural Credits — one to study the problem and recommend uniforih legislation. Ijo MARKETING PERISHABLE FARM PRODUCTS [512 Congress, should take up the question and formulate uni- form legislation to be submitted to the various law-making bodies. II. REDUCTION OF THE COSTS THROUGH COOPERATIVE ASSOCIATIONS It is not our aim, here, to enter into a detailed discussion of the principles upon which cooperative associations rest. There have been several volumes written on this subject, and the Office of Markets has recently published several bulletins explaining the cooperative principles and how to run cooperative associations successfully. However, it would not be out of place for us to discuss briefly the fundamental advantages and disadvantages of farmers' co- operative marketing associations. The principal advantages claimed for these associations over private shippers — that is, the advantages to the farm- ers and to the trade — are: (i) Improvement in standards and grades; (2) more constant prices to farmers for their products; (3) reduction of the waste of competition and the elimination of unfair practices at the shipping point; and (4) the elimination of profits made by private shippers. (i) An efficient manager of a marketing association would educate the farmer-members as to the best quality and variety of goods to produce, and, on the whole, he would help them to turn over to the market a superior prod- uct. The association would adopt standard packages and grades for all the goods it ships (with its own trade-mark stamped on them) and, if it allowed the farmer-members to grade their own products, they would have standards to go by— but such associations have found that the grading must be done by the employees of the association in order to insure honest and efficient grading. This would be a much better situation than where several different private 513] REDUCTION OF THE COSTS 151 shippers have their own grades and standards and do not encourage the farmers to produce better products. How- ever, as we have pointed out, if the grades and standards are to become uniform for the trade as a whole they must be formulated and enforced by government agencies. (2) Each cooperative association could "pool " its sales for each week or month and pay all the members the same prices for the same grade of goods. This would eliminate the disadvantage of the daily fluctuations in the prices of each shipment in the wholesale markets, or would insure each farmer a fair average price for each lot of produce he turns over to the association; whereas, if he sells to private shippers, he is paid according to the market condi- tions at that particular time. (3) The cooperative association, of course, would elimi- nate unfair treatment of the farmers by the private shipper ; such as misrepresenting the state of the market, or the grade of the goods, and in getting a monopoly of the ship- ping business in his community. Such an association would also eliminate the useless competition between small shippers and, if it had the support of all the farmers in the community with goods to sell, it would drive the private shipper from business altogether. If not supported by all, the cooperative association would have to compete with the private shipper. But if it were large and were managed efficiently such competition might not be detrimental to it. (4) The one point in regard to cooperative associations of all kinds that has been made more of than any other is that they are run solely for the benefit of those who do business with them and not for profit for those who furnish the capital or run the association. The services are ren- dered at exactly what it costs to perform the work and there are no profits for any one. The object of the market- ing association is to enable those who do business through 152 MARKETING PERISHABLE FARM PRODUCTS [514 it to get a higher price for theif goods. When an asso- ciation is efficiently run and can market the goods at a less cost than could the supplanted shippers, there is no doubt that the no-profit feature of the organization is of great value to the sellers. Even in a case where the association can not perform the work as cheaply as the private agency, but is enabled to pay the farmers a higher price because it takes no profits while the private agency took large profits, the organization is of value to the farmers. The main difficulties and disadvantages which confront cooperative marketing associations are: (i) unwillingness of farmers to submit to cooperative principles; (2) ineffi- cient management; (3) seasonal character of the business; and (4) unfair competitive methods of private middlemen. ( I ) It is claimed that one of the principal causes for the frequent failures of cooperative associations in this country has been the failure on the part of the cooperators actively to accept the true principles of cooperation. The " one man one vote" principle has never proved popular, but where co- operative associations have been organized on the principle of " one share one vote " the control of the policies of the organization has generally gone to a few stockholders and many of the original cooperators have lost both control and interest in the business — in short, the cooperative associa- tions have been converted into corporations run, like all other corporations, for the benefit of the few stockholders. Many of those who have had money to invest have been averse to putting it into cooperative associations where the return is to be only nominal in case the business succeeds, and nothing in case it fails — in fact, the non-profit feature of cooperation has been popular with those who have had little or no money to invest. So, in most cases, it has been very hard to get sufficient working capital for cooperative associations of any kind. 515] REDUCTION OF THE COSTS 153 (2) The cooperators in marketing associations have usu- ally been men who were ignorant of general business prin- ciples and particularly so of the technical problems of mar- keting. In spite of this, however, they have either gone on the principle that they could run the business themselves or that they would be able to get a competent manager for a small salary. The result has been that in many cases one of the farmers, or one of the farmers' sons, has been put in charge of the business, only to let it fail because of bad management. Sometimes they have hired inefficient man- agers for a small salary with equally disastrous results. It is only in the past few years that many of the new associa- tions have come to realize that the success of such an under- taking depends on efficient and expert management, just as does that of any other business. Even when some associa- tions have employed expert managers they have been averse to turning over the running of the business to these man- agers. Where all try to determine the policies of the as- sociation there is bound to be disagreement, " lost motion " and, eventually, failure. A good deal of freedom of action must be centralized in the manager, the executive head. (3) Not a few cooperative marketing associations have failed because the members have not remained loyal to them. Some have become dissatisfied because they felt that their neighbors were getting more good from the association than they were themselves. They have broken off because they did not like certain rules adopted by the association, or cer- tain policies followed. The seasonal character of the busi- ness itself has been no small factor in contributing to the loss of interest in the organizations. During the harvesting and shipping season it is easy to keep up interest in the busi- ness — each farmer feels that he is getting something out of it. But between seasons the enthusiasm dies down and with 154 MARKETING PERISHABLE FARM PRODUCTS [516 each new season the association has to be reorganized and rejuvenated. (4) The competition of private shippers has been, in a great many instances, the cause of the death of cooperative associations. In not a few cases this competition has been unfair. Where new associations have been organized, private shippers have raised their price-offers to the farmers to a point at which they would actually lose money on the business in order to " break " the cooperative association or to make the farmer-members desert it so that it would die for lack of business. In order to prevent this, many associations compel their members to sign contracts to give all their business to the associations — this they call enforc- ing loyalty.^ But many farmers object to the enforced loyalty clauses and refuse to be members of the associations. After we consider the points for and against cooperative associations about the only clear conclusion we can arrive at is, that after an association is organized its success or failure depends on whether it is able to give the farmers a higher average price for their goods than they would get by selling to, or through private shippers. The determina- tion of this question depends very largely upon whether the association can carry on the business as efficiently and at as small a cost as can the private shipper. In order that a shipping agency, whether private or co- operative, may market its goods at a very low cost per unit it must possess the following characteristics and advan- tages : Have a large amount of goods to ship so that it can ship in car-lots and keep its capital and employees constantly at work during the shipping season ; be managed by an ex- pert manager — a man who has had experience in both the business and technical side of the undertaking ; be honestly, 1 Brooks, Markets and Rural Economics, p. 129. 517] REDUCTION OP. THE COSTS 155 as well as efficiently, managed; and have sufficient credit and circulating capital to carry on the business. As to whether farmers' cooperative shipping associations would have these characteristics and advantages to a greater degree than private agencies can not be decided upon general principles, but will depend on the peculiar circumstance? surrounding each case. That is, whether cooperative asso- ciations can pay farmers larger prices for goods than can private shippers will depend on the state of the business and on social conditions which exist at that particular shipping point. In a community where several well-to-do, intelligent farmers are producing a large amount of a particular per- ishable or class of perishables for the market, and where the shipping business is in the hands of several small, ineffi- cient, competitive private shippers, the organization of a co- operative marketing association would very probably be beneficial to the farmers. Under such circumstances it prob- ably would not be very hard to get a sufficient amount of capital subscribed, the cooperators would realize the neces- sity for having efficient management, and the private ship- pers would be too small and weak and the cooperators too intelligent for the shippers to induce the farmers to leave their association. By combining the business of the several small shippers such an association would be large enough to ship in car-lots, keep its capital and employees constantly employed, have its representatives in the wholesale markets, and get the other advantages of large-scale business which go to make up a low cost per unit of business carried on. On the other hand, at a shipping point where the producers are small farmers who have little or no community spirit and who carry to the market a great variety of perishables, but small quantities of each one, and where the shipping business is in the hands of one or two fairly efficient private 156 MARKETING PERISHABLE FARM PRODUCTS [518 shippers it would be very hard to organize a successful co- operative marketing association. Here it would be difficult to get sufficient capital for an association and the cooper- ators would probably disagree among themselves as to poli- cies, management, etc. The business of the association would not be large enough to get a low cost per unit and the competition of the private shippers would likely take the business away from the association and drive it to the wall. We now have over 10,000 cooperative marketing associa- tions in the United States,^ most of which are successful. But it is probable that two or three times that number have been organized and failed. Many new ones are being started each year, a large percentage of which have failed or will fail. However, it is probable that a smaller per- centage of unsuccessful ones have been organized recently than heretofore, because the Office of Markets has done much to educate cooperators as to the best plans of organi- zation and business methods. It has sent men into the field to study the economic and social situation in communities before advocating the organization of particular associa- tions. In short, it is the opinion of the officials of that Office that under certain conditions cooperative associations should not be encouraged, while under others they should — they realize that an association's success depends on the surrounding conditions. In many instances it would be more economical to retain a very large percentage of the private shippers than to try to supplant them by cooper- ative associations. It is not necessary to give much consideration to the pos- sibilities of reducing the costs of marketing through co- operative stores. They are confronted with most of the I 1 OfBce of Markets, Doc. I, p. 2. 519] REDUCTION OF THE COSTS icy difficulties which face cooperative marketing associations. Our experience with them in America has been most dis- couraging. Few such stores have ever been organized in our cities and the experience of the Farmers' Alliance with stores in the rural South and West was disastrous to those who put their money in them. However, if they ever get established on sound business principles here as they have in England they will be a factor in reducing the costs of marketing perishables as well as of all other consumers' goods.^ T III. REDUCTION OF COSTS THROUGH COMPETITION ' A. Among Shippers At many shipping points competition has been a factor in increasing the costs of marketing, while at others it has greatly decreased those costs. The competition between several small shippers at the same shipping point has been costly to the farmers at those places when the business of none of the shippers was large enough to make for efficiency and low costs. But where one or two shippers, by their superior business ability, have driven the small shippers out of business, these large shippers have, on the whole, re- duced the costs of marketing the goods. In California and Florida, large private fruit exchanges, which have established branch offices at various shipping points, have been able to secure a very large percentage of the shipping business.^ In fact, practically all the shipping in both California and Florida is carried on by these large private shipping agencies and the large co- operative societies, leaving only a very srnall amount of business for the smaller individual shippers and community ' Discussion of English Cooperative Associations, Senate Doc. 214, 63d Cong., pp. 7^7-790. ' Dept. of Agri., Office of Sect., Report No. 98, pp. 268-203. 158 MARKETING PERISHABLE FARM PRODUCTS [520 cooperative societies. In the fruit and vegetable sections of Texas, Missouri, Georgia and other states the large private shipping agencies covering great areas with their branch offices are driving the small local shipping agencies (both cooperative and private) either out of business or into com- binations. In other words, the force of competition in this field, as in manufacturing and transportation, is supplanting the small, inefficient business units by larger and more effi- cient ones. This movement must be guarded against. Though it brings lower costs of doing business it brings, at the same time, monopolistic dangers which will be detri- mental to the trade unless the business of the shippers is regulated by the government. B. In the Wholesale Trade We have already noted the fact that, in many instances, car-lot shippers have taken over the work of brokers and commission men when they found it advantageous to do so. In other cases the work formerly carried on by one class of middlemen has been divided and is now carried on by two classes. The force of competition brings about these readjustments in the wholesale business and they generally mean a lowering of the costs of carrying on the business. Though there are no statistics available to prove the point, it is a general observation of those who have studied whole- sale market conditions that the aggregate number of com- peting wholesale men (that is, men in the same business — ■ like car-lot dealers, etc.) are not increasing as fast as the in- crease of trade in perishables. In other words, the business is being carried on by a limited number of larger and larger business units rather than by many small ones. This can be due only to either one of two facts : First, that there is a combination among wholesale dealers to keep new men from going into the wholesale business, or, second, that large 52 1 J REDUCTION OF THE COSTS i^g concerns can carry on the business at less cost than can small ones. Though it is a known fact that different classes of wholesalers have at various times formed agreements among themselves in regard to business practices, still there is little or no evidence that they have ever made agreements among themselves to keep new men from entering the busi- ness. The real reason for this concentration in the business seems to be the superior business efficiency of large-scale business. Competition among wholesalers has caused many im- provements in methods of performing different operations and in taking care of the goods. The concern with the best trucking and storage facilities and the best and cheapest methods of re-grading and re-packing the goods will prob- ably have a lower cost of doing business than its competi- tors. Competition for profits has been a large factor in de- veloping the use of cold-storage, of which we shall speak in the next chapter. So, as time goes on, we may confidently expect that competition will be a material force in reducing the costs of passing perishables through the wholesale markets. C. Competition in the Retail Trade In the retail trade there may be competition between five different types of retailers, besides competition between dif- ferent retailers of the same type. These different types are : hucksters, cooperative stores, municipal retail markets, chain stores and large private markets, and small grocery stores. It is not necessary for us to discuss here the hucksters and cooperative stores as we have already pointed out their use- fulness and limitations. But it will be well to give a brief consideration to the competition between the other types of retailers. The dealers in the municipal retail markets have the fol- lowing advantages over the private stores in regard to costs l6o MARKETING PERISHABLE FARM PRODUCTS [522- of carrying on their business : They generally get low rents from the city; the dealers often combine and make their purchases in large quantities, thus getting the advantage of a low price for the goods they buy; as a rule, they do not deliver the goods they sell, but have the purchasers carry the goods home; they sell for cash and lose nothing from bad debts ; they have no telephone expenses. All these ad- vantages enable dealers in the municipal markets to sell their goods to consumers at lower prices than the corner grocer, whose expenses are much heavier. But the muni- cipal markets have some disadvantages. They are generally a great distance from the majority of the consumers whom they hope to serve. Most American housewives have formed a habit of ordering goods over the telephone, or, in passing by the store, leaving their order to be filled and delivered. Consequently, they are unwilling to go to the trouble and expense of going to a distant municipal market to buy and bring back with them the goods they desire. Not least of all, a very large percentage of families have formed the habit of buying on credit and settling their bills weekly, monthly (or not at all), and many of them now find it either very troublesome or impossible to pay cash with each purchase. The gist of the municipal retail market problem is, that if the consumers will take the extra trouble and expense of buying from the market they can get the goods for less than if they buy from the corner grocer. But there seems to be only one class of consumers who will, to any great extent, make the sacrifice, and they are the housewives in moderate circumstances. The rich do not consider the dif- ference in prices great enough for the extra trouble. The very poor either do not find time to go to the market or are not able to pay cash for the goods.^ The result is that 1 Yearbook of the Dept. of Agriculture for 1914, pp. 160-172. 523] REDUCTION OF THE COSTS 161 a very large number of retail markets which have been es- tablished are not well patronized. Before establishing a municipal market the officials of the municipal department of markets (or other officials who have the work in charge) should study the surrounding conditions carefully and en- deavor to place the market where it will be most accessible to the people who are likely to use it. There is little doubt that under certain circumstances municipal retail markets will be a great factor in reducing the costs of marketing perishables and the cost of living in general, but, unless the habits and customs of consumers undergo a radical change, the part which they will be able to play will be very much more limited than is generally supposed. The chain-store business is growing very rapidly in most of our large American cities. In Philadelphia, which is a good example, about five per cent of the retail stores belong to the chain system,^ and they probably do about ten per cent of the retail business in groceries of all kinds. It has already been pointed out that these chain stores have great advantages in buying more directly and in large quantities. They generally sell for cash and have a very rapid rate of turn-over of their capital. Each chain of stores is managed from a central office by high-grade managers and the clerks and employees of the individual stores are the best that can be secured.^ On the whole, the chain-stores' cost of doing business is much less than the independent grocers', and so they can sell to consumers at a lower price. The chain store, like the independent grocer, is situated near the con- sumers, f tu-nishes telephone and delivery services and so does not interfere with the habits and customs of the people (except where they sell only for cash). ' King, Lower Living Costs in Cities, p. 71. ' Patterson, Annals of Amer. Acad, of Pol. and Soc. ScL, vol. 1, p. 77. l62 MARKETING PERISHABLE FARM PRODUCTS [524 In order to compete with the chain stores, the independent grocers in Philadelphia and other cities have organized wholesale associations of their own through which they are able to buy more directly and in larger quantities than here- tofore. Other independent grocers, in order to cut down expenses of doing business, have combined on a common delivery service. This has been particularly true in some of the Western cities. So, taken as a whole, the chain stores have been a large factor in reducing the costs of re- tailing, and thus reducing the costs of marketing perishables. It is very probable that they will be a much larger factor in the near future than they have been already. There are two types of large private markets. One is where a large market building is owned by private interests and the stalls are rented to retailers who specialize in hand- ling one line of goods — ^as fruit sellers, vegetable dealers, etc. The Astor Market at 95th Street and Broadway, New York City, is a good example of this kind of market. Then there is a second type which is very similar to the chain store. Here an individual or a company will establish market buildings in different parts of the city. In each of these buildings there are departments for each class of food products — a fish department, a meat department, a vege- table department, etc. A good example of this type is Weis- becker's Markets in New York City. There is no special advantage in the first type of private market except that it is sanitary and that it enables the owner of the building to get a large rent for his property. The second type has all the economic advantages which the chain store possesses and is a large factor in giving the people food at a cost lower than the small grocer can give. Many of these private markets maintain no delivery service and fill no telephone orders, but require customers to come to the market just as do the municipal retail markets. But as they are smaller 525] REDUCTION OP THE COSTS 163 they have an advantage over the municipal market in being established nearer the homes of the customers. There is little doubt that the great interest in scientific management which has been awakened in America, and thei establishment of business schools in connection with our high schools, colleges and universities will result in the better education of retailers and of the young men who will enter the retail business. So there is good reason to expect the grocers of the future to do business on a smaller margin. CHAPTER VI Reduction of the burdens of marketing by changing THE nature of the GOODS AND AREA OF PRODUCTION To discuss in detail how the nature and character of per- ishables might be changed so that the costs of rnarketing them would be reduced would carry us far into the fields of chemistry, plant and animal breeding and the general sci- ence of agricultural production. These are problems which belong to specialists in those fields and the writer, like most students of economics, is not competent to discuss them from their technical side. But happily, from the marketing viewpoint, it is not necessary to understand the scientific de- tails of how these changes in the character of the goods are brought about; one only needs to know that certain changes can be accomplished and to understand the influence which they will have on the marketing problem. For example, we know that plant breeders are constantly improving the va- riety, vigor and area of growth of certain plants and that the possibilities of further progress along this line are not even measurable by those scientists. We know that the methods of canning and preserving certain food products are still in their infancy though the industry has developed very rapidly in recent years. How is marketing affected by these changes ? I. REDUCTION OF THE PERISHABILITY OF THE GOODS In Chapter III it was pointed out that one of the greatest causes of the high cost of marketing perishables was the fact that the goods are subject to a very rapid rate of decay 164 . [S26 527] REDUCTION OF THE BURDENS 165 after they are harvested. How can the cost be reduced by making these goods less perishable, and what progress has already been made along this line? They can be made less perishable by the development of cold-storage facilities, by manufacturing the goods, or by producing hardier varieties. A. Cold Storage From the chemical viewpoint cold storage is not a method by which the nature of the goods is to be changed, but a process of preserving their natural qualities. From the marketing viewpoint, however, any change which allows goods to be kept a longer period of time than they can now be kept is a change in the character of the goods — ^without cold-storage facilities the goods are by nature highly per- ishable, whereas cold storage will put them in a class with less perishable ones. To allow a good to decay because of failure to use cold storage after the facilities are developed and are available, would be a failure to prevent preventable decay — and would be a defect in the marketing methods. But the development of new storage processes to stop decay which is now preventable under the present methods, would be a change, from the marketing viewpoint, in the character of the goods. The commercial storage business in the United States started about 1889, and to-day there are approximately 1,000 public and private cold-storage plants in different parts of the country, representing an investment of over $75,000,000.^ Each year there is placed in these storage plants more than $102,000,000 worth of butter and eggs alone,^ and the total value of all goods placed in them amounts to between $500,000,000 and $700,000,000.* ' Home, Annals of Amer. Acad, of Pol. and Sac. Sci., vol. 1, p. 45- ' Holmes, Annals of Amer. Acad, of Pol. and Soc. Sci., vol. 1, p. 49. ' Home, Annals of Amer. Acad, of Pol. and Soc. Sci., vol. 1, p. 45. l66 MARKETING PERISHABLE FARM PRODUCTS [528 Though it has not been the practice to place fruits and vegetables in storage on as large a scale as butter, cheese, poultry and eggs, a larger percentage of these highly-perish- able goods is being placed in storage than ever before. Be- low is given a list of the fruits and vegetables which are commonly placed in storage each year for a longer or shorter period of time.'^ Apples Citrons Lettuce Pineapples Apricots Cherries Limes Plums Asparagus Cranberries Melons Potatoes, Irish Bananas Cucumbers Mushrooms Potatoes, Sweet Beans Currants Mustard Prunes Berries Cymblings Onions Radishes Beets Eggplant Oranges Rhubarb Brussels Sprouts Figs Parsley Spinach Cabbages Fruit Juices Parsnips Strawberries Cantaloups Grapefruit Peaches Tangerines Carrots Grapes Pears Tomatoes Cauliflower Kale Peas Turnips Celery Lemons Peppers Watermelons Practically all these perishables are put in storage during the " flush " season when the physical supply is greater than the demand for consumption, and are taken out in the winter months when there is a shortage of fresh supply. It is estimated that, on the average, eggs are kept in storage 5.9 months; butter, 4.4 months; poultry, 2.4 months.^ There are no statistics as to the length of time various fruits and vegetables are kept there, but it is necessarily a shorter period than for any of the dairy and poultry products enu- merated above. Though only between five and ten per cent of the total an- nual production of butter, cheese, poultry and eggs, and a still smaller percentage of the fruits and vegetables, are now 'Holmes, Annals of Amer. Acad, of Pol. and Soc. Sci., vol. 1, p. SS- ' Home, Annals of Amer. Acad, of Pol. and Soc, Set., vol. 1, p. 47. 529] REDUCTION OF THE BURDENS 167 placed in storage, yet the storage of this small percentage of products is a great factor in conserving periodic sur- pluses for future periodic scarcities. As to the value of refrigeration in conserving the goods, Mary E. Pennington, of the Bureau of Chemistry, United States Department of Agriculture, says : " It is not possible to feed our great cities without the help of these great food depositories. It is not possible to bring perishable foodstuffs to our cities, or to market them, without the help of refrigeration." ^ It is claimed by the cold-storage interests that cold stor- age has made the prices of storage products more constant throughout the year, and, on the whole, has tended to re- duce the prices of those goods to consumers.* But in his investigation of the relation of cold storage to prices, Mr. George K. Holmes, Chief of Division of Production and Distribution, United States Department of Agriculture, says this is true only for certain cold-storage products, whereas there are higher prices and greater fluctuations for others. ' There is no question that as cold-storage methods improve and the cost of performing the work is lessened through more modem and larger plants refrigeration will tend to steady the daily and monthly prices to both producers and consumers and, beyond a doubt, will reduce the costs of marketing such goods. As to whether it will lower the price to the consumer or raise it to the producer will depend wholly on who gets the advantage of the reduced cost of marketing. Again, there can be little question of the great advantage of cold storage to the public health, in spite of the dislike of the average consumer for cold-storage pro- ducts.* • Report of the Market Com. of the Mayor of New York City, p. 137. ' Home, Annals of Amer. Acad, of Pol. and Soc. Sci., vol. 1, p. 46. ' Bui. No. loi, Bureau of Statistics, U. S. Dept. of Agri., pp. 68-69. * Pennington, Report of the Mayor's Market Commission of New York City, p. 136. l68 MARKETING PERISHABLE FARM PRODUCTS [530 B. Manufacturing The possibilities of making perishables less perishable by passing them through various manufacturing processes are very great. Some perishables may be made into beverages, as grapes into wine or apples into cider; from all fruits various conserves may be manufactured ; and practically all perishables may be canned so as to retain in some measure their original flavor and use. It is not possible to say just what percentage of the fruits in this country are consumed by the manufacturers of alco- holic and non-alcoholic beverages, but in many sections the percentage is very great. Much of our " imported " cham- pagne and wine are made from California fruits. A large percentage of the grape growers of Western New York and other lake districts find a ready market for their pro- duct at the grape-juice factories. The apple growers of many sections produce apples for the manufacturers of apple cider and vinegar. Just recently many cider mills have been established to manufacture the surplus supply of apples. Owing to the prohibition laws of the various states there has been a decrease in the consumption of alcoholic liquors in the United States in the past two years, so that the demand for perishables for this purpose will probably decrease. On the other hand, it is probable that the de- mand for non-alcoholic beverages will considerably increase and lead to corresponding increase in the demand for the raw products. There has been a very considerable increase in the can- ning and preserving industries in recent years in the United States. The following table will give an idea of this in- crease •} ' Statistical Abstract of the U. S., 1913, p. 186. 531] REDUCTION OF THE BURDENS i5g Number of Value of Value of Establishments. Raw Material. Finished Products. 1909 3,767 $101,823,000 $157,101,000 1904 3,168 83,147,000 130,466,000 1899 2,570 63,668,000 99,335,000 If Statistics for a more recent date were available they would undoubtedly show that this industry has grown faster since 1909 than it did in the same length of time prior to that date. It is also quite likely that this table does not include a great number of small, private, unincorporated canning and preserving plants. This industry takes, as its raw materials, practically every kind of perishable, but some in very much larger proportions than others. Between five and ten per cent of all perish- ables are sold to this industry, while for tomatoes, peas and beans, peaches and other fruits and vegetables the percent- age is very much larger. As a whole, this industry is in its infancy in the United States. In fact we have been im- porting a very large percentage of the condiments, jellies and preserves we use instead of making them from the products which we have allowed to go to waste.^ There is little doubt that this industry will consume a rapidly increas- ing proportion of our perishables in the future. This industry will take the surplus goods off the market in the flush season and convert them into products which can be used, in the seasons of scarcity, as food substitutes for the fresh goods. So, as it develops to much larger pro- portions, it will be of an incalculable force in lessening the wastes from decay and in reducing the costs of marketing the fresh products. C. Producing Hardier Varieties Burbank, the United States Department of Agriculture ' ! ' * See statistics of imports in the United States. 170 MARKETING PERISHABLE FARM PRODUCTS [532 and other individuals and associations specializing in animal and plant breeding have already done much, not only in giv- ing us better-flavored goods and a greater variety, but also in giving us products which are less perishable. The Cali- fornia fruit growers have continually experimented with their products until they have gotten varieties which will stand shipment across the continent or even to foreign coun- tries. The possibilities along this Ime are very great, and there is no doubt that in the future many products which are now highly perishable will come to be regarded as staples. Such a change will dispel many of our most per- plexing problems in regard to marketing these goods. II. REDUCTION OF SEASONAL PRODUCTION A. Development of Varieties which have a Long Season of Harvesting The plant and animal breeders have already done, and are doing, much to give us varieties of fruits, vegetables, chickens, cows, etc., which have a more constant production, or produce during a longer period of time. The peach season in most sections of the South now runs from June to Oc- tober or November, while some years ago it only lasted for a few weeks. Similar improvements have been made in other fruits and in many vegetables. We now have breeds of chickens which lay almost constantly, both winter and summer, and cows which give almost as much milk in winter as in summer. Such improvements are partly due to the fact that the farmers know better how to care for and cultivate the plants and animals than formerly, but they are largely due to the progress which has been made in pro- ducing improved varieties. Further progress along this line (which is sure to come) will do much to reduce seasonal variations in supply and 533] REDUCTION OF THE BURDENS lyi will thus reduce the cost of marketing the goods. It will also give consumers a more plentiful supply of fresh goods in what is now the short season. B. Widening the Area of Production for Different Goods Of no less significance is the extension of the area of production for different fruits and vegetables. The exten- sion of the area of production of com, of peas, and of cot- ton are familiar to all of us, but some of us do not realize that many fruits and vegetables of high perishability have had their area of production equally extended. Straw- berries are now produced in almost every section of the United States, peaches, cabbage, watermelons and grapes are also to be found in most sections. The area of produc- tion of citrus fruits (oranges, lemons and grapefruit) has been extended so that Texas is becoming a large producing section along with California and Florida. All this has been made possible by the plant breeders who have pro- duced varieties which will thrive in the new areas. Such progress will have two very marked effects on the marketing problem. It will give a more constant yearly supply of each product for the general market. That is, we will not be wholly dependent on the success of the Cali- fornia crop for our oranges, or on Georgia for our peaches. The wider the area of production the more constant will be the national supply. It will also tend to reduce the aver- age distance which some goods now have to be shipped to marke't, because it will enable each consuming center to draw a larger percentage of its supply from the immediately surrounding territory. III. DEVELOPMENT OF CENTRALIZED PRODUCING SECTIONS If the sections of each county and state which are best suited for the production of particular perishables would 172 MARKETING PERISHABLE FARM PRODUCTS [534 Specialize in producing those goods in large quantities the marketing situation would be greatly simplified and the costs reduced. That is, if the vegetable production for market were centralized at fewer shipping points the goods would be gotten to the market at a lower cost. This does not conflict with the extension of the area of produc- tion for different goods. Extension of area means produc- ing the goods in a greater number of states or large areas of the country. Concentrating the production in a state (or any other territorial area) means producing the goods at, or near, a smaller number of shipping points — that is, having a few communities in that state to produce that spe- cific good for the market. This community specialization in production has many advantages from the production side, but we shall discuss them only in so far as they relate to marketing. From the marketing side it has the following advantages : A common interest in the same products will cause the farmers to pro- duce those which are best suited for marketing purposes. There will be enough of such products to be shipped from one shipping point so that they can be sent to the market in car-lots. The business will be big enough to have the best type of shipping agencies (whether private or cooper- ative) — agencies which will have facilities for taking care of the goods, agencies which will know how to keep in touch with the best markets, how to grade, pack and ship the goods. In short, the cost of getting the goods to market will be less and the prices the farmers will receive will be greater in these specialized communities than in the com- munities where the producers of the same goods are few and scattered. The communities for specialization in production of a particular product or class of products should be selected with reference to several factors. They should have the 535] REDUCTION OF THE BURDENS 173 best transportation facilities to be obtained; that is, they should be accessible to the principal markets for shipment of goods. They should be in sections where the climate and soil are best suited for the production of the goods. They should be in sections where the land values are not inflated or very high because of the possibilities of being used for industrial or commercial purposes — that is, the values of the land should be fixed solely by its agricultural productivity. Because of the above requirements for perishable-produc- ing sections the territories immediately surrounding the large cities and towns are not now very large producing sections, and are not likely to become so in the future. The suburban territory has the advantage of being very close to one market and fairly accessible to others. But when we remember that the cost of transportation (even including the losses from decay) is not very great per unit of product (if shipped in car-lots) even for long distances, it is easy to see that this factor might be outweighed by several dis- advantages which the suburban territory might have. Un- fortunately, much of the suburban land near our large East- ern cities, because of the nature of the soil and cUmate, is not well suited to the production of many perishables. Long Island, near New York City, is an exception to this rule, but Mr. George Perkins estimates that, even with this, the suburban farms of New York City do not produce enough perishables the whole year to feed the city three days. Again, practically all the land surrounding all large towns and cities is too high in value for miles out to permit its being used on a large scale for truck, dairy and poultry farming. A large part of it is held by land speculators or by the rich who own country estates, neither of which classes cares to engage in farming for commercial purposes. Any land which a truck farmer might be able to get would 174 MARKETING PERISHABLE FARM PRODUCTS [536 have such high rental charges and his cost of production would be so high that he would find it difficult to compete with the farmers in rural sections many hundred miles away. However, the suburban farms do, in spite of the disad- vantages of their nearness, produce a large percentage of certain perishables which are consumed in the nearby city. Most of the milk supply in the very large cities is produced within a radius of from one to two hundred miles, and for the small cities the radius of supply is much less. Then a large part of the poultry products for the medium-sized towns are produced on the suburban farms. But the suburban territory supplies a very small percentage of the fruits and vegetables, except to the country towns. These are goods which require more land space, are more variable in supply and need a wider market than one town. The great producing communities of most perishables will, in the future, likely be far away from the cities. They will be in rural sections which are eminently suited for such production because of the superiority of their soil and climate and because their land values are regulated solely by agricultural considerations. APPENDIX A The National Law for the Standardization of Apple Grades and Containers (Commonly called "The Sulzer Apple Law.") Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the standard barrel for apples shall be of the following dimensions when measured without distention of its parts : Length of stave, twenty-eight and one-half inches ; diameter of head, seventeen and one-eighth inches; distance between heads, twenty-six inches ; circumference of bulge, sixty-four inches outside meas- urements, representing as nearly as possible seven thousand and fifty-six cubic inches: Provided, That steel barrels containing the interior dimensions provided for in this section shall be construed as a compliance therewith. Sec. 2. That the standard grades for apples when packed in barrels which shall be shipped or delivered for shipment in interstate or foreign commerce, or which shall be sold or offered for sale within the District of Columbia or the Territories of the United States shall be as follows: Apples of one variety, which are well-grown specimens, hand picked, of good color for the variety, normal shape, practically free from insect and fungous injury, bruises, and other defects, except such as are necessarily caused in the operation of packing, or apples of one variety which are not more than ten per centum below the foregoing specifications shall be " Standard grade minimum size two and one-half inches," if the minimum size of the apples is two and one-half inches in transverse diameter; or " Standard grade minimum size two inches," if the mini- mum size of the apples is two inches in transverse diameter. 537] 175 176 APPENDIX A [538 Sec. 3. That the barrels in which apples are packed in accordance with the provision of this act may be branded in accordance with section two of this act. Sec. 4. That all barrels packed with apples shall be deemed to be below standard if the barrel bears any statement, design, or device indicating that the barrel is a standard barrel of apples, as herein defined, and the capacity of the barrel is less than the capacity prescribed by section one of this act, unless the barrel shall be plainly marked on end and side with words or figures showing the fractional relations which the actujd capacity of the barrel bears to the capacity prescribed by section one of this act. The marking required by this paragraph shall be in block letters of size not less than seventy-two point one-inch gothic. Sec. 5. That barrels packed with apples shall be deemed to be misbranded within the meaning of this act — First. If the barrel bears any statement, design, or device indicating that the apples contained therein are " Standard " grade and the apples when packed do not conform to the re- quirements prescribed by section two of this act. Second. If the barrel bears any statement, design, or de- vice indicating that the apples contained therein are "Standard" grade and the barrel fails to bear also a statement of the name of the variety, the name of the locality where grown, and the name of the packer or the person by whose authority the apples were packed and the barrel marked. Sec. 6. That any person, firm, or corporation, or associa- tion who shall knowingly pack or cause to be packed apples in barrels or who shall knowingly sell or offer for sale such barrels in violation of the provisions of this act shall be liable to a penalty of one dollar and costs for each such barrel so sold or offered for sale, to be recovered at the suit of the United States in any court of the United States having jurisdiction. Sec. 7. That this act shall be in force and effect from and after the first day of July, nineteen hundred and thirteen. Approved August 3, 1912. APPENDIX B United States Department of Agriculture- office OF markets and rural organization WASHINGTON, D. C. Sept. 17, 1915 Peach Movement Cars of peaches shipped yesterday were reported destined as follows: TO FROM Conn. IS "i N.J. 9 I 4 14 Penn. 3 I 6 4 "I'e 30 4 10 I I 3 19 Mich. '"e I I s 17 25 I 4 "83 143 N. Y.' 4 5 21 13 2 19 I 4 2 2 2 104 177 Ohio W. Va.» Colo. Wash. .... .... 3 4 Utah I I I "e 6 Total Boston Albany New York Newark 2 47 10 3 ...... I I 32 s 5 I 19 5 S3 2 Philadelphia . . . Baltimore Potomac Yards. Pittsburgh Buffalo Cincinnati Columbus Cleveland Detroit Indianapolis . . . Chicago Milwaukee Minneapolis . • • Sioux City Kansas City . . • St. Louis. . Omaha Denver Various 31 52 22 16 I 21 I II 3 22 20 21 31 3 I I I 6 II 7 323 Total 87 49 II >5 601 ' Includes 2 cars shipped by express. ' Includes 9 cars shipped by express. 539] ' Includes i car shipped by express. 177 178 APPENDIX B [540 Note: The above includes the following shipments reported passed Green River, Pueblo and Denver; Green River — Utah 14; Washington i. Pueblo — Colorado 3; Utah i. Denver — Colorado 8. Shipped Wednesday not previously reported; Ohio 8, des- tined 2 Cleveland, 6 various; Pennsylvania i various, shipped by express. Potomac Yards Reports 3 cars moving south. The telegraphic report relative to conditions in the markets released to-day was based on the following : New York, N Y., Sept. ij. Warm, clear; peaches, two Marylands, two Pennsylvania, six Connecticut; twenty-six New York, five West Virginia, West Marylands, eleven thous- and, nine hundred Delawares, Marylands, Jerseys, New York yellows, whites, baskets twenty five-fifty ; some sales ten-fifteen ; carriers seventy five-dollar quarter, half bushels thirty-f orty ; bushels sixty-dollar ; quality, demand fair. Chicago, III., Sept. 17. Peaches twenty-nine arrivals, heavy receipts from Michigan by boat ; bushels dollar half-sixty for best; some down to twenty; sixes half-sixty five, few fancy higher; fifths seven to fifteen; Colorado boxes sixty-sixty five; Utah fifty-fifty five; market oversupplied ; demand slow and weak. St. Louis, Mo., Sept. ly. Elbertas; one Michigans; bushels seventy-eighty ; slack ; condition medium ; two Michigans job- bing dollar; quality good; one Colorado, same; cleaning half car Utahs dollar dollar-quarter ; locals, various baskets twenty- thirty five; Elbertas seventy five; one late arrival Michigans Engels bushels eighty. Denver, Colo., Sept. 17. Ten cars Utah bushel peaches one dollar. Columbus, O., Sept. ly. Peaches, three Ohio ; bushel double A ninety-dollar ten ; smaller grades and over ripe forty-eighty ; quality good ; demand fair ; cloudy, warm. 541] APPENDIX B lyg Milwaukee, Wis., Sept. 17. Four peaches Michigan, one Indiana; Michigan bushels sixty five-eighty five; Michigan boxes seventy five-dollar; Michigan fifths ten-twelve; Wash- ington boxes sixty-sixty five ; Colorado boxes fifty-sixty ; qual- ity fair, good ; demand light ; dear, warm. Boston, Mass., Sept. 17. Weather, hot, clear ; peaches, three cars, two trains late ; Connecticuts yellows thirty-sixty ; bushels ninety-dollar; demand; quality, fair. Albany, N. Y., Sept. 17. Two peaches ; one Western New York, one New Jersey; bushels quarter-half; halves sixty five-seventy five ; clear, warm ; quality, demand good. Cleveland, 0., Sept. 17. Peaches; twenty six Ohios; bushel half-sixty; oversupply; overripe; rain. St. Paul, Minn., Sept. 17. Five Mixed cars peaches fifty; weather, fine. Baltimore, Md., Sept. 17. Peaches, West Virginia half car express, Maryland three express, seven freight; Pennsylvania four; baskets twenty- forty ; bushels forty-sixty five; carriers forty-seventy five ; extra fancy eighty-ninety ; demand fair, hot. Omaha, Nebr., Sept. 17. Peaches, Colorado four, California two, Utah one; boxes fifty-sixty; bushels seventy five-dollar; quality good, market fair ; clear, warm. Philadelphia, Pa., Sept. 17. Receipts peaches heavy ; baskets fifteen to thirty five; bushels forty to seventy. Buffalo, N. Y., Sept. 17. Peaches New Yorks equal seven- teen car; Niagara Crawfords, Elbertas thirds hampers best fifteen-quarter; bushels forty-seventy five; oversupplied ; de^ mand poor; warm, rain. Kansas City, Mo., Sept. 17. Six arrivals Western boxes fifty five-sixty five; Colorado-Utah bushels jobbing eighty-dollar five ; fair to good slow. Buffalo, N. Y., Sept. 17. Peaches : New Yorks equal seven- teen cars ; Niagara Crawfords, Elbertas thirds hampers fifteen- twenty five for best ; bushels forty-seventy five ; oversupplied ; demand poor; warm, raining. Minneapolis, Minn., Sept. 17. Peaches: one Utah, one Colorado, four Washington ; box sixty-sixty five ; quality f air ; demand slow; weather clear, warm. l8o APPENDIX B [542 Sioux City, la., Sept. ij. Peaches : one Utah ; Washington and Colorado boxes sixty five-seventy; quality good, demand fair; clear, warm. Pittsburgh, Pa., Sept. 17. Peaches: nine arrivals; York state Elbertas double A's eighty five-ninety; A's sixty five- seventy; Craw fords Reeves double A's sixty five-eighty five; overripe soft fruit not moving; weather cloudy, slightly cooler. Detroit, Mich., Sept. 17. Peaches : Ohio four, Michigan one. New York two, Ohios forty five hundred ; bushels half seventy five-dollar; extra fancy dollar quarter; market loaded; warm, bright. Des Moines, la., Sept. ly. No arrivals ; Colorado Utah Elbertas dollar; extras dollar fifteen-quarter; Western boxes fifty-sixty five; quality medium, demand good; fair, warm. STUDIES IN HISTORY ECONOMICS AND PUBLIC LAW EDITED BY THE FACULTY OF POLITICAL SCIENCE OF COLUMBIA UNIVERSITY VOLUME SEVENTY-TWO COLUMBIA UNIVERSITY LONGMANS, GREEN & CO., AGENTS London : P. S. King & Son, Ltd. 1916 CONTENTS FAGB 1. American Men of Letters : Their Nature and Nurture — Edwin Leavitt Clarke, Ph. D i 2. The Tariff Problem IN China— C/4«« Chu, Ph.D. . . .171 3. The Marketing of Perishable Food Products — A. B. Adams, A. M. 363 in m^e mtvi of l^ewr '^ax^ The University includes tlie following; : Columbia College, founded in 1754, and Barnard College, founded in 1889, offering to men and women, respectively, programmes of study which may be begun either in September or February and which lead normally in from three to four years to the degrees of Bachelor of Arts and Bachelor of Science. The programme of study in Columbia College makes it possible for a well qualified student to satisfy the requirements for both the bachelor's degree in arts or science and a professional degree in law, medicine, technology or education In six, five and a half, or five years as the case may be. The Faculties of Political Science, Philosophy and Pure Science, offering advanced programmes of study and investigation leading to the degrees of Master of Arts and Doctor of Philosophy. The professional schools of Law, established in 1858, offering courses of three years leading to the degree of Bachelor of Laws. Medicine. The College of Physicians and Surgeons, established in 1807, offering four-year courses leading to the degree of Doctor of Medi- cine. Mines, founded in 1863, offering courses of three years leading to degrees in Mining, Engineering and in Metallurgy. Chemistry and Engineering, set apart from School of Mines in 1896, offer- ing three-year courses leading to degrees in Chemistry and in Civil, Electrical, Mechanical and Chemical Engineering. Teachers College, founded in 1888, offering in its School of Education courses in the history and philosophy of education and the theory and practice of teaching, leading to appropriate diplomas and the degree of Bachelor of Science in Education ; and in its School of Practical Arts founded in 1912, courses in household and industrial arts, fine arts, music, and physical training leading to the degree of Bachelor of Science in Practical Arts. All the courses in Teachers College are open to men and women. Architecture, offering a programme of indeterminate length leading to a certificate or a degree in Architecture. Journalism, founded in 1912, offering a four-year course in Journalism leading to the degree of Bachelor of Literature. Business, founded in 1916, offering two and three year courses in business training leading to appropriate degrees. Pharmacy. The New York College of Pharmacy, founded in 1831, offer- ing courses of two and three years leading to appropriate certifi- cates and degrees. In the Summer Session the University offers courses giving both gen- eral and professional training which may be taken either with or without regard to an academic degree or diploma. Through its system of Extension Teaching the University offers many courses of study to persons unable otherwise to receive academic training. The Institute of Arts and Sciences provides lectures, concerts, read- ings and recitals— approximately two hundred and fifty in number— in a single season. There are three Residence Halls providing accommodations for 820 men. There are also residence halls for women. The price of the University Catalogue is twenty-five cents postpaid. Detailed information regarding the work in any department will be fur- nished without charge upon application to the Secretary of Colunibia University, New York, N. Y. Early Diplomatic Relations between the United States and Mexico By WILLIAM R. MANNING, Ph.D. Adjunct Profesior of Latin- American History in the University of Texas 418 pages. Cloth, $2.25 This volume is based on a series of lectures delivered at the Johns Hop- kins University in 1913 on the Albert Shaw Foundation. It deals with % period in the diplomatic relations between the United States and Mexico, which has hitherto been largely ignored by historians, whose attention has for the most part been centered on the Texas revolution, the admission of Texas into the Union, and the war between the United States and Mexico. The present volume deals with the beginnings of Mexican diplomacy, and is occupied mainly with the mission of Joel R. Poinsett, the first Ameri- can minister to Mexico. It is based very largely on information derived from unpublished manuscripts in the archives of the Department of State in Washington and of the Ministry of Foreign Relations in Mexico. The writer shows in an interesting way how the British took advantage of our delay in establishing a permanent representative at the Mexican capital to promote British influence over the Mexican government, and how Poinsett's efforts to recover prestige for his government involved him in difficulties and in charges of intermeddling in the internal affairs of the country. The suspicions thus aroused, together with Poinsett's connection with the York Masons, thwarted his efforts to bring to a successful conclu- sion the treaty negotiations with which he was charged. Professor Man- ning shows that in the misunderstandings and differences that arose during the years 1825-1829 are to be found the origin and explanation of the irre- concilable differences which developed during the next two decades and which finally resulted in war between the United States and Mexico. The volume thus constitutes a fitting introduction to Reeves's Diplomatic Rela- tions of the United States under Tyler and Polk and Adams's British Interests and Activities in Texas, 1838-1846, which were originally delivered as lectures on the Albert Shaw Foundation and are likewise published in this collection of works dealing with the different phases of American diplomacy. THE JOHNS HOPKINS PRESS Baltimore, Mar>>'land Columbia University Press Publications OUR CHIEF MAGISTRATE AND HIS POWERS. By William Howard Taft, Twenty- seventh President of the United States. Pp. vii + 165. COHSTITUTIONAL GOVERNMENT IN THE UNITED STATES. By WooDROW Wilson, LL.D., President of the United States. Pp. vii + 236. THE BUSINESS OF CONGRESS. By Samuel W. McCall, late Member ef Congress from Massachusetts. Pp. vii -|- 215. THE COST OF OUR NATIONAL GOVERNMEJTT. By Henry Jones Ford, Professor of Politics in Princeton University. Pp. xv -j- 147. POLITICAL PROBLEMS OF AMERICAN DEVELOPMENT. By Albert "* Shaw, 'LL.D., "Editor of the Umiew of Jlevidws. Pp. vii + 268. THE PRINCIPLES OF POLITICS FROM THE VIEWPOINT OF THE AMERICAN CITIZEN. By Jeremiah W. Jenks, LL.D., Professor of Gov- ernment and Public Administration in New York University. Pp. xviii -|- 187. WORLD ORGANIZATION AS AFFECTED BY THE NATURE OF THE MODERN STATE. By David Jayne Hill, LL.D., late American Ambas- sador to Germany. Pp. ix -f- 214. THE NATURE AND SOURCES OF THE LAW. By John Chipman Gray; LL.D., Royall Professor of Law in Harvard University. Pp. xii + 332. THE GENIUS OF THE COMMON LAW. By the Right Honorable Sir Fred- erick Pollock, Bart., D.C.L., LL.D. Pp. vii-|- 141. THOMAS JEFFERSON. His Permanent Influence on American Institutions^ By John Sharp Williams, U. S. Senator from Mississippi. Pp. ix + 330. THE MECHANICS OF LAW MAKING. By Courtenay Ilbert, G. C. B., Clerk of the House of Commons. Pp. viii + 209. LAW AND ITS ADMINISTRATION. By Harlan F. Stone, LL.D., Dean of the School of Law, Columbia University. Pp. vii + 232. Uiuformly bound, 12mo, cloth. Each, $1.50 net. THE LAW AND THE PRACTICE OF MUNICIPAL HOME RULE. By How- ard Lee McBain, Associate Professor of Municipal Science and Administration in Columbia University. 8vo, cloth, pp. xviii + 724. Price, jSs.oo nei, STUDIES IN SOUTHERN HISTORY AND POLITICS. Inscribed to William Archibald Dunning, Lleber Professor of History and Political Philosophy in Columbia University by his former pupils, the authors. A collection of fifteen essays. 8vo, cloth, pp. viii -)- 294. ^12.50 net. COLUMBIA UNIVERSITY QUARTERLY. An illustrated magazine which, in addition to its record of all official University action, aims to represent that wide variety of literary, philosophic, and scientific activity which focuses at Columbia, and through which the University contributes to the thought and work of the world. The Quarterly is issued in December, March, June and September. Annual subscription, one dollar ; single number thirty cents. 400 pages per volume. COLUMBIA UNIVERSITY PRESS LEMOKE & BUEOHNER, Agents 30-32 West Twenty-Seventh Street, New York Oity Longmans, Green, & Co.'s Publications WORKS by W.J. ASHLEY,M.A., Hon. Ph.D.(Berlin) Professor of Commerce in the University of Birmingham ; formerly Professor at Harvard University. BRITISH DOMINIONS Their Present Commercial and Industrial Condition. A Series of General Reviews for Business Men and Students. Edited by W. J. Ashley. Crown 8vo. jSi.So, net. THE BRITISH DOMINIONS. By the Right Hon. Alfred Lyttleton, M.P., K.C., late Secretary of State for the Colonies. AUSTRALIA. By the Right Hon. Sir George Reid, K.C.M.G., High Com- missioner of the Commonwealth of Australia. AUSTRALIA. By Sir Albert Spicer, Bart, M.P., Chairman of the Congress of Chambers of Commerce of the Empire at Sydney, 1909. NEW ZEALAND. By the Hon. William Pember Reeves, Director of the London School of Economics ; late High Commissioner of New Zealand. SOUTH AFRICA. By the Hon. Sir Walter Hely-Hutchinson, G.C.M.G., Late Governor of Cape Colony ; formerly Governor of Natal. SOUTH AFRICA. By Henry Birchenough, C.M.G., Director of the British South Africa Company ; late Board of Trade Commissioner to South Africa. THE WEST INDIES. By Sir Daniel Morris, K.C.M.G., D. Sc, late Im- perial Commissioner of Agriculture for the West Indies. CANADA. By W. L. GrifiSth, Secretary to the High Commissioner of the Dominion of Canada, TAe Lectures contained in this book were delivered before the University of Birmingham in jgio-ii. THE ADJUSTMENT OF WAGES. A Study on the Coal and Iron Industries of Great Britain and the United States. With Four Maps. 8vo., $4.00, net. BRITISH INDUSTRIES. A Series of General Reviews for Business Men and Students. By various authors. Edited by W. J. Ashley. Crown 8vo., gi.8o, net. THE SCOTTISH STAPLE AT VEERE. A Study in the Economic History of Scotland. By JOHN DAVIDSON, M.A., D.Phil. (Edin.), and ALEXANDER GRAY, M.A. With 13 Illustrations. 84.50, net. THE TRUST MOVEMENT IN BRITISH INDUSTRY. A Study of Business Organisation. By Henry W. Macrosty, B.A. 8v8. {2.50, net. THE ECONOMIC HISTORY OF THE UNITED STATES. By Ernest Ludlow Bogart, Ph.D., Associate Professor of Economics in the University of Illinois. With 26 Maps and 95 Illustrations. Crown 8vo., $1.75- LONGMANS, GREEN, & CO., Publishers, Fourth Avenue and 30th Street, New York. Longmans, Green, & Co.'s Publications Day— A History of Commerce. By Cuve Day, Ph.D., Pro- fessor of Economic History in Yale University. With 34 Maps. 639 pages. {2.00. This book contains the essentials of commeicial progress ; and development with special attention to the relative proportion of subjects. During the nineteenth century, the appor- tionment of space to the different countries has been regulated by their respective commer- cial importance. The first two chapters on the United States are designed to serve both as a summary of colonial history and as an introduction to the commercial development of the national period, l^ter chapters aim to include the essentials of our commercial progress. FoUett— Tlie Speaker of tlie House of Representa- tives. By M. P. FoLLETT. With an Introduction by Albert Bush- NELL Hart, LL.D. Crown 8vo, with Appendices and Index, fl.75. "In few recent works belonging to the field of politics and history do we find so much evi- dence of the conditions which are essential to the making of a good book — a well-chosen theme, grasp of subject, mastery of material, patient, long-continued, wisely directed labor, good sense and g;ood taste . . , the wonder is that in a region so new the author should have succeeded in exploring so far and so well. The work has placed every student of politics and political history under heavy obligations."*-i\7/i]!H;a/ Science Quarterly. Cadbury— Experiments in Industrial Organization. By Edward Cadbury, part author of " Women's Work and Wages " and " Sweating." With a Preface by W, J. Ashley, M. A., Professor of Commerce in the University of Birmingham. Crown 8vo. Sl-6o net Blpley— Railroads. In two Tolumes. By William Z. Ripley, Ph.D., Nathaniel Ropes Professor of Economics in Harvard University, author of "Railway Problems," etc. Vol. I, Rates and Regu- lation, with 41 maps and Diagrams. 8vo, pp. xviii -f- 659, {{$3.00 net. Vol. II, Finance and organization, with 29 maps and diagrams in the text. 8vo, pp. xx+638, ii-oo net. Kowe — United States and Porto Rico. With Special Refer- ence to the Problems arising out of our contact with the Spanish American Civilization. By Leo S. Rowe, Ph.D., Professor of Political Science in the University of Pennsylvania, Chairman of the Porto Rican Commission (1901-1902), etc. Crown 8vo. 2S0 pages. jSi.30 net; by mail, J1.40 Willougliby— Political Theories of tlie Ancient World. By Westel W. Willoughby, Ph.D., Associate Professor of Political Science in the Johns Hopkins University. Author of "The Nature of the State," "Social Justice," "The Rights and Duties of American Citi- zenship," etc. Crown, 8vo. 308 pages, f 2.00. LONGMANS, GREEN, & CO., Publishers, Fourth Avenue and 30th Street, New York. Readings on the Relation of Government to Property and Industry Edited by SAMUEL P. ORTH, CorneU University. 664 pages, $2.25 This is a timely book on n. topic of tlie most vital concern to-day. Many of the important writings on the subject are frequently referred to, yet heretofore the student has been compelled to search the files of the law reviews, the publications of the learned societies, and government documents. Selected Readings in Rural Economics Compiled by THOMAS NIXON CARVER, Harvard University. 947 pages, $2.80 Excellent material ordinarily JiCBcult of access, and representing the authorship of many leading authorities on the subject. Agricultural His- tory, Land Tenure, The Farmer's Business, Agrarian Movements, Rural Organization and Marketing, and Agricultural Policy are among the sub- jects discussed at length. Trusts, Pools and Corporations Edited by WILLIAM Z. RIPLEY, Harvard University. 872 pages, $2.75 About 400 pages of new material have been added to the Revised Edition of this well-known book. Among the recent cases discussed are the National Cash Register Case; the Steel Corporation Case of June, 1915; and the Keystone Watch Decision. The Hague Arbitration Cases By GEORGE GRAFTON WILSON, Harvard University. 525 pages, $3.50 The first book to supply the essential material, hitherto so frequently in demand, yet difficult to find, on the work oi the Hague Court since its establishment in 1899. The Growth of American State Constitutions By JAMES QUAYLE DEALEY, Brown University. 308 pages, $1.40 Part I traces the history of our state constitutions. Part II discusses the provisions of the constitutions now in force. Part III suggests the probable trend of future constitutional changes. GINN AND COMPANY Boston Ne-w Yorh CKicago London Studies in History, Economics and Public Law edited by tbe Faculty of Political Science of Columbia University VOLUME I, 1891-92. 2nd Ed.. 1897. 396 pp. Price, cloth, $3.50. 1. The Divorce Problem. A Study lu Statistics. By Walter F. Willcox, Ph.D. Price, 7s cents. 2. The History of TarlK AdmlnlBtratlon In the United States, Irom Colonial Times to the McKlnley Administrative Bill. By John Dean Goss, Ph.D. Price, $t.oo. 3. History of Municipal Xiand Ownership on Manhattan Island. By George Ashton Black, Ph.D. Price, |i.oo. 4c. Financial History of Massachusetts. _ „ „ By Cbarles H. J. Douglas, Ph.D. Price, Ji.oo^ VOLXTSIE n, 1892-93. (See note on last page.) 1. The Economics of the EusslanYlllage. ByIsAAcA.HooBwicH,Ph.D. (Out oj print.): 8. Bankruptcy. A Study In Comparative lieglslatlon. By Samuel W. Dunscomb, Jr., Ph.D. (Not sold separately.)^ 3. -Special Assessments : A Study In Munlolpal'Flnance. By Victor Rosewater, Ph.D. Second Edition, 1898. Price, $1.00. VOLUME III, 1893. 465 pp. (Sold only in Sets.) 1. 'History of Elections In American Colonies. „, „ „ , ^ By Cortland F. Bishop, Ph.D. Price jSz.oo, cloth. S. The Commercial Policy of England toward the American Colonies. By Gboegb L. Beer, A.M. (Ifot sold separately.) VOLUME IV, 1893-94. 433 pp. (Sold only in Sets.) 1. Financial History of Virginia, By William Z. Ripley, Ph.D. Price, Ji.oo. S. * The Inheritance Tax. By Max West, Ph.D. Second Edition, 1903. Price, J3.00. 8. History of Taxation in Vermont. ByfEEiiEKicKA.WooD, Ph.D. (Notsoldseparuiely^ VOLUME V, 1895-96. 498 pp. Price, clotb, $3.50. 1. Double Taxation in the United States. By Francis Walker, Ph.D. Price, ^i.oo, S. The Separation of Governmental Powers. , _ „ „ By William Bondy, LL.B., Ph.D. Price, ^1.00, 8. Municipal Government in Michigan and Ohio. ^ „, „„«... By Dblos F. Wilcox, Ph.D. Price, $1.00., VOLUME VI, 1896. 601 pp. Price, doth, $4.50; Paper covers, $4.00. History of Proprietary Government in Pennsylvania. By WiLLiAH Robert Shepherd, Ph.D. VOLUME VII, 1896. 512 pp. Price, cloth, $3.50. 1. History of the Transition from Provincial to Commonwealth Govern- ment in Massachusetts. By Harry A. Gushing, Fh.D. Price, $2.00. S. * Speculation on the Stock and Produce Exchanges of the United States. By Hbnby Crosby Euery, Ph.D. Price, f x.so.. VOLUME VIII, 1896-98. 551pp. Price, cloth, $4.00. 1. The Struggle between President Johnson and Congress over Recon- struction. By Cpiarles Ernest Chadsey, Ph.D, Price, |i.ao. %. Becent Centralizing Tendencies in State Educational Administration. By William Clarence Webster, Fh.D. Price, 7s cents. 8. The Abolition of Privateering and the Declaration of Paris. By Francis R. Stark, LL.B., Ph.D. Price, >i.oo. 4. Public Administration in Massachusetts. The Relation of Central to Xiooal Activity. By Robert Habvb? Whitten, Ph,D. Price, f i.co. VOLUME IS, 1897-98, 617 pp. Price, cloth, $4.00. 1. *EuBllsh liocal Government of To-day. A Study of the Belatlons of Cen- tral and Xiocal Government. By Milo Roy Maltbib, Ph.D. Price, iux. iS. German Wage Theories. A History of their Development. By Jambs W. Crook, Ph.D. Price, ^i.co. 5. Tbe Centralization of Administration in New Tork State. By John Archibald FAini.iB. Fh,D. Price, tv^ VOLUME X, 1898-99. 500 pp. Price, cloth, $3.50. 1. Sympathetlo Strikes and Sympathetic liOckouts. By Fred S. Hall, Ph.D. Price, ^i.oo. 3 * Bliode Island aud tlie X'ormatloii of the TTnion. By Frank Greenb Bates, Ph.D. Pries, $i 50. 8. Centralized Administration of lilqnor lya-ws In the American Coinnion- ■wealths. By Clement Moore Lacey Sites, Ph.D. Price, gi.oo. VOLUME XI, 1899. 495 pp. Price, cloth, $4.00; paper covers, $3.50. The Growth of Cities. By Adna Ferein Weber, Ph. D. VOLUME XII, 1899-1900. 586 pp. Price, cloth, $4.00. 1. History and Functions of Central Labor Unions. By William Maxwell Burke, Ph.D. Price, fi.oo, S. Colonial Immigration Xia-ws. By Edward Embekson Proper, A.M. Price, 75 cents. 3. History of Military Pension Legislation in the United States. By William Henry Glasson, Ph.D. Price, $1.00. 4. History of the Theory of Sovereignty since Bonssean, By Charles E. Merbiam, Jr., Ph.D. Price, ^1.50. VOLUME XIII, 1901. 670 pages. Price, cloth, $4.00. 1. The Legal Property Kelatlons of Married Parties. By Isidor Lobe, Ph.D. Price, ^r.50. 3. Political Natlvlsm In New York State. By Louis Dow Scisco, Ph.D. Price, J2.00. 3. The Beoonstmction of Georgia. By Edwin C. Woolley, Ph.D. Price, ^i.oo. VOLUME XIV, 1901-1902. 576 pages. Price, cloth, $4.00, 1. Loyallsm In New York daring the American Bevolntion. By Alexander Clarence Flick, Ph.D. Price, $2.00, 5. The Xlconomlc Theory of Bisk and Insurance. By Allan H. Willett, Ph.D. Price, ((1.50, 3. The Bastern Question : A Study In Diplomacy. By Stephen P. H. Duggan, Ph.D. Price, J1.00. VOLUME XV, 1902. 427 pp. Price, cloth, $3.50 ; paper covers, $3.00. Crime in Its Belatlons to Social Progress. By Arthur Cleveland Hall, Ph.D. VOLUME XVI, 1902-1903. 547 pp. Price, cloth, $4.00. !• The Past and Present of Commerce In Japan. By Yetaro Kinosita, Ph.D. Price, ^r.so. 9. The Kmployment of Women In the Clothing Trade. By Mabel Hueo Willet, Ph.D, Price, $1.50. 8. The Centralization of Admluistration in Ohio. By Samuel P. Orth, Ph.D. Price, $1.50^ VOLUME XVII, 1903. 635 pp. Price, cloth, $4.00. 1. * Centralizing Tendencies in the Administration of Indiana. By William A. Kawles, Ph.D. Price, $2.50. 9. Principles of Justice In Taxation. By Stephen F. Weston, Ph.D. Price, ^2.00. VOLUME XVIII, 1903. 753 pp. Price, cloth, $4.50. 1. The Administration of Iowa. By Harold Martin Bowman, Ph.D. Price, ^1.50, a, Turgot and the Six ^Edicts. By Robert P. Shepherd, Ph.D. Price, I1.50. 3. Hanover and Prussia 1795-1803. By Grv Stanton Ford, Ph.D. Price, J2.00, VOLUME XIX, 1903-1905. 588 pp. Price, cloth, $4.00. 1. Josiah Tucker, Economist. By Walter Ernest Clark, Ph.D. Price, J1.30. S. History and Criticism of the Labor Theory of Value in X^ngllsh Political Economy. By Albert C. Whitaker, Ph.D. Price, jSi. 50, 8. Trade Unions and the Law In New York. By George Gorham Groat, Ph.D. Price, ^i.oo. VOLUME XX, 1904. 514 pp. Price, cloth, $3.50. I. The Office of the Justice of the Peace In England. By Charles Austin Beard, Ph.D. Price, $1.50. S. A History of Military Government In Newly Acquired Territory of the United States. By David Y. Thomas, Ph. D. Price, I2.00. 1. Factory Legislation In Maine. By £. Stagg Wbitin, A.B, Price, ^1.00. 8. * Psychological Interpretations of Society, By Michael M. Davis, Jr., Ph.D. Price, ^2.00. 8. * An Introduction to tbe Sources relating to the Germanic Invasions. By Carlton Huhtlby Hayes, Ph.D. Price, 51.5a VOLUME XXXIV, 1909. 628 pp. Price^ clotli, $4.50. 1. [89] Transportation and Industrial Development In tlie Middle 'West. By William F. Gephakt, Ph.D. Price, ti.o: S. [80] Social Relorm and the Reformation. By Jacob Salwyn Schapiro, Ph.D. Price, ^1.25. S. [91] Responsibility for Crime, By Pbiup A. Parsons, Ph.D. Price, $i.so. VOLUME XXXV. 1909. 568 pp. Price, cloth, $4.50. 1. [93] The Conflict over the Jndlclal Powers In the United States to 1870. By Charles Grove Uaihes, Ph.D. Price, gi. 50. t. [93] A Study of the Population of Manhattan vllle. By Howard Brown Woolstoh, Ph.D. Price, 41.25. S. [94] •Divorce: A Study In Social Causation. By James P. Lichtsnbbbgbk, Ph.D. Price, Ji.so. VOLUME XXXVI, 1910. 542 pp. Price, clotli, $4.00. 1. [95] 'Reconstruction In Texas. By Charles William Ramsdell, Ph.D. Price, ^2.50. S. [96] * The Transition In Virginia from Colony to Commonwealth. By Charles I^mssbll Lingley, Ph.D. Price, ^1.50. VOLUME XXXVII, 1910. 606 pp. Price, clotli, $4.50. 1. [97] Standards of Reasonableness In Local X^elght Discriminations. By John Maurice Clark, Ph.D. Price, I1.35, S. [98] liegral Development In Colonial Massachusetts. By Charles J. Hilkey, Ph.D. Price, Ji. 23. 8. [99] * Social and Mental Traits of the Hegro. By Howard W. Odum, Ph.D. Price, J2.oa. VOLUME XXXVIII, 1910. 463 pp. Price, clotli, $3.50. 1. [lOO] The Public Domain and Democracy. By Robert Tudor Hill, Ph.D. Price, Ji.oo. S. [lOl] Organlsmlo Theories of the State. By Francis W. Coker, Ph.D. Price, Ji.jo. VOLUME XXXIX, 1910-1911. 651 pp. Price, clotli. $4.50. 1. [lOS] The Making of the Balkan States. By William Smith Murray, Ph.D. Price, $1.50. 8. [103] Political History of New York State during the Period of the Civil War, By Sidney David Brummer, Ph. D. Price, 3.00. VOLUME XL, 1911. 633 pp. Price, cloth, $4.50. 1. [104] A Survey of Constitutional Development In China. By Hawkling L. Yen, Ph D. Price, ji.oa. S. [105] Ohio Politics during the Civil War Period. By George H. Porter, Ph.D. Price, $1.75. 3. [106] The Territorial Basis of Government under the State Constitutions. By Alfred Zantzingbr Rbbd, Ph.D. Price,$x.75. VOLUME XLI, 1911. 514 pp. Price, cloth, $3.50; paper covers, $3.00. [107] New Jersey as a Royal Province, By Edgar Jacob Fisher, Ph. D. VOLUME XLII, 1911. 400 pp. Price,cloth, $3.00; paper covers, $2.50. [108] Attitude of American Courts In I.abor Cases. By George Gorham Groat, Ph.D. VOLUME XLIII, 1911. 633 pp. Price, cloth, $4.50. 1. [100] *Industrlal Causes of Congestion of Population In New York City, By Edward Ewing Pratt, Ph.D. Price, $2.00. X. [110] Education and the Mores. By F. Stuart Chapin, Ph.D. Price, 75 ceats. 8. lllll The British Consuls In the Confederacy. „ ,„,„„., By Milledge L. Bonhah, Jr., Ph.D. Fnce,$3.o*. VOLUMES XLIV and XLV, 1911. 745 pp. Price for the two volumes, cloth, $6.00 ; paper covers, $5.00. [118 and 118] The Economic Principles of Confucius and his School. By Chen Huan-Chang, Ph.D. VOLUME XL VI, 1911-1912. 623 pp. Price, cloth, $4.50. ^ 1. [114] The Ricardian Socialists, Bv Esther Lowenthal, Ph.D. Price.$i.oa 9. [115] Ibrahim Pasha, Grand Vizier of Suleiman, the Magnificent. Bv Hester Donaldson Jenkins, Ph.D. Price, fi.oo. 8, [116]*Syndicalisminrranoe. ~t,- j.. . t,-.. By Louis Levike, Ph.D. Second edition, 1914. Price, gi.50. 4. [117] A Hoosier Village. Bv Newell Lerov Sims, Ph.D. Price. I1.50. VOLUME XLVII, 1912. 544 pp. Price, cloth, $4.00. 1. [118] The Politics of MIoMgan, 1865-1878. By Haskihtte M. DiLtA, Ph.D. Price, $2.00. 3. [1 19] *Tlie United States Beet Sngar Industry and the Tariff. By Rov G. Blakhy, Ph.D. Price, $2.00. VOLUME XL VIII, 1912. 493 pp. Price, cloth, $4.00. 1. [ISO] Isldor of Seville. By Eknkst Bkkhaut, Ph. D. Price, Jj.oo. 2. [131] Progress and TTnlfonultylu Chlld-XahorXieglsIatlou. By William Fielding Ogburn, Ph.D. Price, 51.75. VOLUME XLIX, 1912. 592 pp. Price, clotli, $4.50. 1. [1331 British Eadlcallsm 1791-1797. By Walter Phblps Hall. Price, ^a.oo. .8. [133] A' Comparative Study of the La-w of Corporations. By Akthuk K. KuHH, Ph.D. Price, Ji.jo. 8. [184] *The Negro at Work In New York City. By Geosgb E. Hathbs, Fh.D. Price, {1.25. VOLUME L, 1911. 481 pp. Price, cloth, $4.00. 1. [135] *The Spirit of Chinese Philanthropy. By Yai Yuk Tsit, Ph.D. Price, $i.oo. 8. [136] *The Allen In China. By Vi. Kyuin Wellington Koo, Ph.D. Price,$2.5o. VOLUME LI, 1912. 4to. Atlas. Price: cloth, $1.50; paper covers, $1.00. 1. [137] The Sale of l.lQnor in the South. By Lboharo S. Blakey, Ph.D. VOLUIVIE LII. 1912. 489 pp. Price, cloth, $4.00. 1. [138] 'Provincial and ILiOcal Taxation In Canada. By Solomon Vineberg, Ph.D. Price, $1.50. 8. [139] *TheDIstrlbntlouof Income. i. ■ By Frank Hatch Sthbightopf^ Ph.D. Price, $1.50. 8. [130] *The Finances of Vermont. By Frederick A. Wood, Ph.D. Price, ^i.oo, VOLUME LIII, 1913. 789 pp. Price, cloth, $4.50; paper, $4.00. [131] The Civil War and Reconstruction In Florida. '.By W. W. Davis, Ph.D. VOLUME LIV, 1913. 604 pp. Price, cloth, $4.50. 1. [133] * Privileges and Immunities of Citizens of the United States. By Arnold Johnson Lien, Ph.D. Price^ 75 cents. S. [133] The Supreme Court and Unconstitutional liegislation. By Blaine Free AIoore, Ph.D. Price, Ji.oo. 8. [134] *Indlan Slavery In Colonial Times -within the Present Lilmlts of the United States. By Almon WheelbkLauber, Ph.D. Price, {3.00. VOLUME LV, 1913. 665 pp. Price, cloth, $4.50. 1. [185] *A Political History of the State of New Xork. By HoMEK A. Stebbihs, Ph.D. Price, ^oo. 3. [136] *The Early Pepseoutlonsof the Christians. By Leon H. Canpield, Ph.D. Price, $1.50. VOLUME LVI, 1913. 406 pp. Price, cloth, $3.50. 1. [137] Speculation on the New York Stock Exchange, 1904- 19p7. By Algernon Ashburner Osborne. Price, $1.50. S. [ISS] The Policy of the United States towards Industrial' Monopoly. By Oswald Whitman Knautii, Ph.D. Price, $2.00. VOLUME LVII, 1914. 670 pp. Price, cloth, $4.50. 1. [139] *The Civil Service of Great Britain. By Robert Moses, Ph.D. Price, 52.00. 8. [140] The Financial History of New York State. ' ■ ' By Don C, Sowers. Price, J2.50. VOLUME LVIII, 1914. 684 pp. Price, cloth, $4.50; paper, $4.00. [141] Reconstruction in North Carolina. By J. G. DE RouLHAC Hamilton, Ph.D. VOLUME LIX, 1914. 625 pp. Price, cloth, $4.60. 1. [143] The Development of Modern Turkey by means of Its Press. By Ahmed Emin, Ph.D. Price, (i.oo. «. [148] The System of Taxation In China, 1614-1911. By Shao-Kwan Chen, Ph. D. Price, Ji.oc. 3. [144] The Currency Problem In China. By Wen Pin Wei, Ph.D. Price, ^1.25. 4. [14&J *Jewlsh Immlgi'atlon to the United States. By Samuel Joseph, Ph.D. Price, ^1.50- VOLUME LX, 1914. 616 pp. Price, cloth, $4.00. 1. [146] *Constantlne the Great and Christianity. By Chkistopher Bush Coleman, Ph.D. Price, |f2,oo. S. [147] The Establishment or Christianity and the Proscription of Pa- eaulsm. By Mauu Aline Huttmann, Ph.D. Price, fa.oo. VOLUME LXI, 1914. 496 pp. Price, cloth, $4.00. 1. [148] "The Railway Conductors: A Study In Organized Liabor. By EuwiN Clyde Rubbins. Price, $1.50. 8. [140] *The Plnanoes of the City of New York. By Yin-Ch'u Ma, Ph.D. Price, Ja.so. VOLUME LXII, 1914. 414 pp. Price, cloth, $3.60. [150] The Journal of the Joint Committee of Plfteen on Beconstrnotlon, 89th Consress, 1865— 1867. By Benjamin B. KENURiCK.Ph.U, Price, $3.00. VOLUME LXIII, 1915. 561pp. Price, cloth, $4.00. 1. [1511 IBmlle Surkhelm's Contributions to SoclolOBlcal Theory. By Charles Elmer Gehlkb, Ph.D. Price, {1.50. 3. [153] The Nationalization of Railways In Japan. By TosHiHARU Watarai, Ph.D. Price, f 1.S5. 3. [153] Population: A Study In Malthuslanlsm. By Warren S. Thompson, Ph.D. Price I1.75. VOLUME LXIV, 1915. 646 pp. Price, cloth, $4.60. 1. [154] 'Reconstruction In Georgia. By. C. Mildred Thompson, Ph.D. Price, $3.00. 8. [155] *The Review of American Colonial lieglslatlon by the King In Council. By Elmer Bebcher Russell, Ph.D. Price, 1(1.75. VOLUME LXV, 1915. 496 pp. Price, cloth, $4.00. 1. [1S6] *The Sovereign Council of New France. By Raymond Du Bois Cahall, Ph.D. Price, $1.33, ». [157] 'Scientific Management. By Horace Bookwalthr Drury, Ph.D. Price, ^1.75. VOLUME LXVI, 1915. 655 pp. Price, cloth, $4.50. I. [168] *Tbe Recognition Policy of the United States. By Julius Goebel, Jr., Ph.D. Price, $z.oo S. [159] Railway Problems In China. • By Chih Hsu, Ph.D. Price, {z.so. 3. [160] *The Boxer Rebellion. By Paul H. Clements, Ph.D. Price, fa.oo. VOLUME LXVII, 1916. 538 pp. Price, cloth, $4.00. 1. [161] 'Russian Sociology. By Julius F. Heckbr, Ph.D. Price, Ji.so. 8. [168] State Regulation of Railroads In the South. By Maxwell Ferguson, A.M., LL.B.J Price, gi.75. VOLUME LXVIII, 1916. 518 pp. Price, cloth. $4.50. [163] The Origins of the Islamic State. By Philip K. Hitti, Ph.D. Price, ^4.00. VOLUME LXIX, 1916. 489 pp. Price, cloth, $4.00. 1. [164] Railway Monopoly and Rate Regulation. . ,, _ „ „ . By Robert J. McFall, Ph.D. Price, $9.00. 3. [165] The Butter Industry In the United States. By Edward Wibst, Ph.D. Price, (2.00. VOLUME LXX, 1916. 536 pp. Price, cloth, $4.50. ri66] Mohammedan Tbeorles of I'lnanoe. By Nicolas F. Aghnidbs, Ph.D. Price, (4.0a. VOLUME LXXI. 1916. 1. [167] Tbe Commerce of Loalslana dnrlnK tbe French Reelme, 1699—1763. By N. M, MiLLBR Surrey, {/n press), VOLUME LXXIL 1916. 542 pp. Price, cloth, $4.50. 1. [168] American Men of liCtters; Their Natnre and Ifartnre. " By Edwik Lbavitt C;larke, Ph.D. Price, $1.50. 8. [169] The Tariff Problem In China. By Chin Cau, Ph.D. Price, «i.5o. 3. [170] The Marketing of Perishable Food Frodncts. By A. B. Adams, A.M. Price, ^1.50. VOLUME LXXIII. 1916. 1. [171] Tbe Social and Economic Aspects of the Chartist Movement. By Frank F. Rosenblatt, (/npress), a. [173] The Decline of the CbartlstMove:meiit. By Pbbston William Slosson. {/nprtss). 3. [173] Chartism and the Cburotaes. By H. U. Faulkner. (Inpress). VOLUME LXXIV. 1916. 1. [174] The Rise of 'Ecclesiastical Control In Qnebeo. By Walter i^.RiDDBLL. (In press). The price for each separate monograph Is for pa/ier-eoiiered copies; separate monographs marked*, can be supplied bound in cloth, for SOe. additional. All prices are net. Tbe set of seventy volumes, covering monographs 1-166, is offered, bound, for $234: except that Volume n can be supplied only in part, and in paper covers, no. 1 of that volume being out of print. Tolnmes m, IV and XXV, can now be supplied only in connection with complete sets. For further information, apply to Prof. EDWIN R. A. SELIGMAN, Colnmbia University, or to Messrs. LONGMANS. GREEN & CO., New York. London: P. S. KING & SON, Ltd., Orchard House, Westminster. wy^ i.., • \^:^^mtM:^,y