530 



IOWA DEPARTMENT OF AGRICULTURE 



the store, but rather to the volume of business per capital invested — in 

 other words, to the amount of turn-over. 



The following chart illustrating some of the possibilities of turn-over, 

 will perhaps make this more clear. 



CHART ILLUSTRATING SOME OF THE POSSIBILITIES OF 



TURNOVER 



1 TURNOVER 



Total Per Unit 



Cost of goods sold $ 

 Overhead expense 

 Direct expense 

 Net profit 

 Net sales 



6,500$ .65 



!.(«,) .10 



l.nOO .15 



1,000 .10 



lO.IKM) 1.00 



2 TURNOVERS 

 Total (Per Unit 



13,000$ 

 1.000^ 

 L.'iOO 

 3.200 



19,000 



.65 

 .05 

 .09 

 .16 

 .95 



8 TURNOVERS 



Total iPer Unit 



$ 52,0001$ 



l.OCKIj 



4,700! 



6.300 



64.0 Oi 



.65 

 1.25 

 5,875 

 7.875 



80. 



20 TURNOVERS 

 Total Per Unit 



130,000:$ 



2,00Oi 



10,700| 



7,300 



150,000l 



.65 



1.00 



5.35 



3.65 



75.00 



PEROKXTAGES 



Overhead 

 Direct expense 

 Net profit 

 Mark-up 



Total 

 E^xpense 



5.26 



9.47 



16.84 



31.. 57 



14.73 



Total 

 Expense 



1.56 



7.34 



9.85 



18.75 



8.90% 



Total 

 Expense 



1.33 



7 13 



4.87 



13.33 



8.46% 



I have only one purpose in quoting these figures, i. e.. to show that the 

 consumer may buy at almost any price he wishes and that the general 

 public would complain less if it studied price lists more closely and was 

 less inclined to make a "bluff." 



From the foregoing it will not be difficult to see where I place most 

 of the responsibility for the present high prices and for this reason it is 

 easy to see that I am none too sanguine of any permanent beneficial effects 

 being brought about through legislation. Prices will be lowered only by 

 (1) reducing consumption, (2) increasing production and (3) reducing the 

 quantity of money in circulation, and any legislation not affecting one or 

 more of these remedies will be wasted. Perhaps it might be well to 

 qualify this statement by saying that legislation intended to bring about 

 a more equitable distribution, especially of food products, through the 

 establishment of a State Market Bureau, would undoubtedly prove of 

 great benefit to all concerned. 



It is not my purpose at this time to outline any definite working 

 plan for such a bureau. I wish merely to point out the fact that, even 

 with our modern facilities for rapid transportation and the rapid dis- 

 semination of news, surprising inequalities of distribution exist and 

 shortages of certain commodities in one place and over-abundance in 

 others are found to be frequent. Obviously, if some agency such as a 

 State Marketing Bureau was created to eliminate this condition, all 

 would be benefited. I believe that the establishment of this Bureau 

 would be of material assistance in curbing high prices. 



More than any other factor in lowering price, however, will be the 

 action of the consumer himself. In entering a store where he believes 

 the prices to be exorbitant, if instead of paying the price demanded, he 

 would state firmly, "I won't pay it" and seek another and perhaps less 

 pretentious establishment, he would be benefiting not only himself but 

 everyone else. If the housewife, instead of demanding elaborate service 



