EIGHTH ANNUAL YEAR BOOK-PART VII. 327 



found one of the steps that led to the destructive premium system which 

 has been such a stumbling block to the trade. 



But changes were coming in the methods of distribution and rapidly 

 the business was drifting from commission to merchandise. The men 

 who were buying or contracting for the goods felt that however much de- 

 pendence could be placed upon this published report of the market, there 

 was too much at stake to leave the matter entirely to the investigation 

 and judgment of any one man. Along with this was the apparent need of 

 establishing a price early in the day, as the jobbing trade had come to 

 depend upon a quotation for the settlement of both their buying and selling 

 prices. The next step in this movement was the appointment by the 

 New York Mercantile Exchange of a quotation committee composed of 

 eleven members of the Exchange, and later increased to fifteen. It was 

 my privilege to be a member of that committee, with a voice in all its 

 discussions, but not a vote. 



For four years quotations in New York were established by that com- 

 mittee. The record of its work is so well known that no extended review 

 is necessary now. During the first year the figures given out each day 

 were very closely in line with selling values, but as competition in the 

 trade became stronger and the premiums paid shippers increased a 

 tendency to more conservative quotations was apparent and by slow but 

 sure steps the committee drifted away from the current selling prices 

 on the street to a merely settling basis. Sometimes this was a rate at 

 which the finest goods could be bought on the market, but more gener- 

 ally one-half cent, and at times one cent or even more below what buyers 

 had to pay. You will recall the fact that when you picked up your morn- 

 ing paper to see what the market for butter was in New York you would 

 read: "Official price 25 cents; street price, 25 1^ to 26 cents." The daily 

 press gave their reporters notice not to follow the official figures only 

 as they reflected the actual situation, and the Associated Press wires in- 

 cluded both the official and street prices. 



Now the men who made these quotations had not the slightest inten- 

 tion of being dishonest. Under the peculiar methods of doing business 

 they felt justified in fixing quotations in accordance with the premium 

 system under which they were working, and in most instances the ship- 

 pers of butter got every dollar they were entitled to. Some of us knew 

 the system was wrong and we could not therefore get reconciled to it. 

 But the persistent underquoting of the market finally aroused the jobr 

 bing interest, which is equally as strong on the Exchange as the receiving 

 interest, and the opposition to these methods culminated in the famous 

 Martin suit, a supreme court injunction restraining the Exchange from 

 issuing quotations that are not based upon actual selling values, and the 

 disbanding of all quotation committees. These steps followed in rapid suc- 

 cession and they left the trade in almost as chaotic condition as was this 

 old world when the Almighty called it into form. Immediately on the 

 suspension of the official quotations the work was taken up by the re- 

 porters who had previously had the matter in charge and the Producers' 

 Price Current again became the recognized authority on the market. 



But I would not pass from the methods that were in vogue during 

 those four years without saying that I believe it quite possible for a rep- 



