EDITORIAL. 107 



in disaster to the producers and to the large distributors. The con- 

 chision is that " until we have a more complete system of information 

 and a better adjustment of production to market requirements, this 

 problem will continue to be with us." As usual, the slump in prices 

 was not reflected in the retail trade, consumers paying practically as 

 much as in a year of scarcity, while the surplus went to the dump. 



Cooperation was not regarded as necessarily the panacea for mar- 

 keting troubles. Organization was favored, but alone it is not suf- 

 ficient; it must be accompanied by skillful and intelligent manage- 

 ment. To protect shippers from imposition and misrepresentation 

 at the large markets and terminals, a licensed inspection system 

 was suggested, to examine into and report upon the condition of 

 the products as received, prices at which sold, and otherwise to 

 look after the interests of the shipper. 



The distinction between efficiency in production and efficiency in 

 bargaining was brought out in an interesting way by Dr. T. N. 

 Carver, of Harvard University. He explained that every legitimate 

 business is made up of two parts, one of which may be called pro- 

 ducing, including any handling of the material which renders it 

 more usable or useful, and the other bargaining — i. e., buying and 

 selling, borrowing and lending. Many of the supposed economies of 

 large scale business turn out upon examination to be advantages in 

 bargaining rather than economies in production. In most lines of 

 business there is a certain size which gives the maximum efficiency 

 in production, and also in bargaining. These do not necessarily 

 coincide, but as a rule the size which gives the maximum efficiency 

 in bargaining is larger than that for production. 



In agriculture the most efficient producing unit was said to be 

 the one-famil}^ farm, provided with the best teams, tools, and gen- 

 eral equipment. This gives the highest average product, man for 

 man. If the large farmer is able to command some special advan- 

 tages in securing cheap labor, he may beat the small farmer in 

 competition with him, but this is advantage in bargaining. His 

 profit may be larger in spite of the lower average productivity 

 of the persons engaged. The foisting upon the rural districts of a 

 large supply of cheap labor results in giving the large farmer an 

 advantage in purchasing his labor. 



Again, it was pointed out that in buying his supplies and in sell- 

 ing his products, especially if they are perishable, the large farmer 

 usually has an advantage. " The small farmer of the present day 

 is the only large class which regularly buys its raw material at 

 retail and sells its finished product at wholesale." This can be over- 

 come by " collective bargaining " or "cooperation, which may give 

 the small farmer the same advantages which the large farmer 



75575°— No. 2—15 2 



