Fundamentals in Dairying 67 



price in New York City. This was met by an onslaught from 

 the daily press, charging extortion, which resulted in a decreased 

 consumption; a surplus quickly accumulated, and the old price 

 was restored. It is asseirted that the large handlers are receiving 

 more than their share of the profits. The investigation made 

 by Attorney-'General O'Malley for the year 1910 showed that profit 

 came from the volume of business, not from a large margin per 

 quart. Certain it is that under present conditions, most of the 

 time, there is a supply ample for daily requirements. If the 

 price were raised a cent a quart, without providing for control of 

 the surplus, within less than twelve months there would be such 

 an increase in production that the surplus would compel a reduc- 

 tion in price below that at present obtained. Dairymen would 

 feed more liberally, would put on more cows, and many grain 

 farmers would- go into dairying because the business would be 

 profitable. It is a law of trade that no business can for a long 

 period return a profit beyond the average. Witness the fruit 

 business in our state today. 



As an illustration, let me call to your attention conditions 

 existing a few years ago. I chanced to be in a large milk station 

 on the day in March when prices were given out for the next 

 six months. They were from five to ten cents a hundredweight 

 lower than those paid the same month the previous year. I asked 

 why this reduction, with labor as high and feed higher, and the 

 same retail price for milk. I received no adequate reply, but 

 the answer was this: The winter had been favorable for milk 

 production. Cows were coming out satisfactorily. Apparently 

 they could obtain all the milk they needed at the reduced price. 

 Why, then, pay a higher price and stimulate an increased product 

 that they did not want ? Surely, a good business reason. What 

 followed? April and May justified their forecast. By June 

 there was a lack of rainfall; pastures began to fail. By July 1 

 there was a shortage; by the latter part of the month, milk was 

 so scarce as to command a premium. In August the handlers 

 voluntarily increased the price thirty cents a hundred. In early 

 September prices were sent out for the six months beginning 

 with October, which were higher than had ever before been paid. 



