486 PROCEEDINGS OP SECTION G. 



APPENDIX Til. 



COMMODITY PRICE-SATELLITES. 



Reconciliation of Eccentric Variation in the Selling Prices 

 OF the same Commodity with the Dominating Law of Cost. . 



Many persons object to the theory that the average Exchange 

 value, or Orbit-Price of Commodities is mainly determined by the 

 Nominal Cost and Quantity of the " Composite Labour-hour " 

 services incorporated in the said commodities, on the grounds that 

 in the open market, many articles of the same materials, style, 

 and of equal primary manufacturing cost {e.g., ladies' hats), are 

 often sold at widely differing prices from each other, and also 

 differing widely from the original manufacturing cost-price. But 

 while it is admitted that changes of fashion, differences of taste 

 as regards style or colour, over-stocking, forced sales, &c., involve 

 that a certain proportion of a given consignment shall have to be 

 sacrificed at prices considerably below that of the average or ruling 

 price, yet, it will be found, from a closer investigation of the 

 matter, that such eccentric reductions in price (Price-Satellites) 

 and their proportions are, at the outset, taken carefully into con- 

 sideration by the specially skilled warehousemen, who from long 

 experience in the particular business, are enabled to fix such 

 ■counter-balancing prices upon the major proportion of saleable 

 articles, as will safely cover the total cost of the original consign- 

 ment, together with the importing warehouseman's normal profit 

 and business expenses. The following illustration may afford a 

 clearer comprehension of this most important matter: — 



First, let it be assumed that a particular warehouseman has 

 imported a consignment of 1,000 hats for the new season, at a 

 prime cost of 6s. per hat — £300. Add warehouseman's expenses 

 and normal profit, say, £60. Total amount to be realized from 

 future sales, £360, or 20 per cent. The average selling price 

 should now amount to 7s. 2.40d, per hat. Further, let it be as- 

 sumed, that from the knowledge gained in former years, of the 

 actual average results of sales of similar consignments, that the 

 skilled warehouseman estimates that, of the 1,000 hats to be 

 disposed of, 5 per cent will find no purchaser ; towards close of 

 season 10 per cent, is expected to be sacrificed at a reduction of 

 20 per cent, below average selling price; and at the close of the 

 season, at the final forced sales, 15 per cent, may be expected to 

 be sacrificed at a reduction of 50 per cent, below selling price. 

 The query now is : — 



At what price must the major proportion (70 per cent.) of 

 consignment be fixed, so as to counter-balance anticipated loss from 

 the 30 per cent, forced sales, &c., and yet, on the whole, cover 



