4 | 254 | 246
Last Quarter 1918 | 206 | 204 | 223 | 220 | 258 | 246
First Quarter 1919 | 200 | 202 | 225 | 228 | 264 | 215
Last Quarter 1919 | 230 | 206 | 178 | 216 | 277 | 268
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For the moment, what I wish to establish is only that the farmer's
prices are not based upon any conception of the cost of production, but
upon forces in which he has no voice. He can never organize to put his
industry in a "cost plus" basis as industrial producers do, and remedy
must be found elsewhere.

THE TWO MARGINS

As stated, the margin between the farmer and consumer falls into two
divisions--one of which predominantly affects the farmer and the other
the consumer. It is really the wholesale prices that govern the farmer,
rather than retail prices, for it is in wholesale prices that the farmer
competes with the world. As the prices paid by the wholesaler are mostly
fixed by overseas trade at the datum point on the Atlantic seaboard or
in Europe, then if the margins between the wholesaler and the farmer are
unduly large, or increase, it is mostly to the farmer's detriment. For
instance, as the price of the farmer's wheat in normal times is made in
Liverpool, any increase in handling comes out of the farmer's price.
Likewise, as the wholesale price of butter is made by the import of
Danish butter into New York, any increase in the numbers or charges
between our farmer and the wholesale buyer comes, to a considerable
degree, out of the farmer.

As the datum point of determining prices is at the wholesaler, the
accretion by the charges for distribution from that point forward to the
consumer's door will not affect the farmer, but will affect the
consumer. When competition decreases through shortage the consumer pays
the added profits of these trades.

Studies of the cost of our distribution system, made by the Food
Administration during the war, established two prime conditions. The
first is that the margins between our farmers and the wholesaler in
commodities other than grain in some instances, are, even in normal
times, the highest in any civilized state--fully 25 per cent higher than
in most European countries. The expensiveness of our chain of
distribution in most commodities in normal times, as compared to
Continental countries, is due partly to the wide distances of the
producing areas from the dominating consuming areas, but there are other
contributing causes that