154 I- A. HOURWICH 



fluctuations cannot be adequately accounted for by any other 

 agency but local fluctuations of supply and demand. 



In addition to this study of three important markets, 

 extending over a number of years, the industrial commission 

 has also a contemporaneous survey of over fifteen hundred 

 local markets, representing every state in the union and com- 

 ing from towns of all varieties and size and characteristics. 



The information was received in reply to a schedule of 

 inquiries which had been addressed to retail grocers through- 

 out the United States. Four articles were selected, because 

 of the fairly uniform quality of the product — illuminating 

 oil, sugar, salt, and Royal baking powder, and the grocers 

 were requested to give the prices paid on February 15, 1901, 

 or on the nearest day when purchases of these articles had 

 been made. Taking illuminating oil, variation in price may 

 proceed from one of the following causes: (1) difference in 

 cost of production at different sources of supply, (2) freight 

 rates, (3) cost of distribution, which is likely to be in inverse 

 ratio to the quantity sold in any given market, (4) cartage, 

 which is presumably higher in a great city like New York, 

 than in a small hamlet. The following table is constructed 

 from the data of the commission, with a view to eliminating 

 the first two causes of variation; all cities enumerated in the 

 table are supplied by the Standard Oil company from the 

 same refinery, located at Whiting, Ind. ; the last column shows 

 the net price, after deducting freight charges; the cities are 

 arranged in the order of their population. 



It is evident from this table that neither the size of the 

 market nor the cost of cartage offers a satisfactory explana- 

 tion of the variations in the net price of oil. Here are two 

 cities, Indianapolis and Kansas City, substantially alike in 

 population, and yet the price at the latter is 36 per cent above 

 that at the former. Little Rock, Ark., and Dubuque, Iowa, 

 have also substantially the same population, and yet the price 

 at Little Rock is 1.55 cents per gallon above that at Dubuque. 

 Vicksburg, Miss., and Cheyenne, Wyo., are also equal in rank, 

 and yet there is a difference of 3.1 cents per gallon, or nearly 

 40 per cent. 



