602 IOWA DEPARTMENT OF AGRICULTURE 



Mr. Rittgers : I would like to ask if that strategic arrange- 

 ment has been carried out with regard to other commodities than 

 what farmers have to sell? 



Mr. Wallace : It has not been noticeable within the past six 

 months. Of course, in February of 1919 there was an attempt 

 to beat down industrial prices, and at that time the Steel Cor- 

 poration entered into an agreement with the Fair Price Board, 

 which was then in operation, to hold down pig-iron prices to $29 

 a ton, but Mr. Hines, of the Railroad Administration, said that 

 was altogether too high, and wanted to buy it lower, so that the 

 whole thing fell through. Since then there has been no apparent 

 effort to use strategic manipulation to force down pig-iron or 

 print-cloth or any other industrial product. ' 



Voice : In other words, the manufacturers were able through 

 their organizations to defeat that kind of a move? 



Mr. Wallace : I don't know how they did it. At any rate, 

 pig-iron is higher now than it has been for a long time. 



Mr. Browning: Who is it that makes the price? Some people 

 think that the merchant makes the price, and some people think 

 that the buyer makes the price. That is a question that I have 

 never heard discussed, but it just occurs to me that the buyer 

 makes the price, and if he doesn't want to pay the price he can 

 buy something cheaper if he wants to. 



Mr. Wallace : I might say that there are two schools of econo- 

 mists based on this diversity of reasoning. One holds to the 

 theory that the buyer makes the price, and the other that the 

 seller makes it. You can approach it from either angle, to suit 

 yourself. I have had a lot of fun doing this, taking bank clear- 

 ings to represent demand and hog receipts to represent supply. 

 There is a beautiful correlation between hog prices and bank 

 clearings. Supply and demand have about equal effect if you 

 measure them mathematically, and I think that is the most satis- 

 factory way. If you tr}^ to measure things in words, you don't 

 get very far. 



The Chairman : Mr. Wallace has certainly given us some- 

 thing to think about, and something that we can carry home with 

 us. We are now going to listen to a man that we feel is one 

 among us. He has been associated Avith us for the past thirteen 

 or fourteen years ; he is a man that has done more to secure fair 

 railroad rates for Iowa farmers (I can say this without any 

 hesitation or qualification) than any other man in the state. Un- 

 fortunately we have lost him. in one sense, although he is still 



