THE PRICE OF WHEAT 239 



never so tangible a factor as supply. There is always a large 

 "visible supply " of wheat, for the grain consumed during the 

 entire year is produced within a few months. While the Amer- 

 ican producers are now well able to carry their wheat, it is, 

 nevertheless, still largely concentrated at the shipping points. 

 Some of the reasons for this are the active competition of the 

 primary markets to make sure of securing the grain by buying 

 at once, the ample facilities for economically storing and han- 

 dling wheat in great bulk at the terminal markets, and the 

 presence of a class of men who, having capital and commercial 

 capacity, have justified their existence by the manner in which 

 they have handled the reserve supply. As all value is, in its 

 last analysis, a subjective thing, the existence of this great 

 visible supply must have the psychological effect of delaying, 

 and perhaps lessening demand, and thus decreasing price. Since 

 the producer has already thrown the wheat into the market, the 

 distributer must either dispose of it at once, or, if he holds it 

 indefinitely, run the risk of loss from depreciation as the next 

 harvest approaches. This tends to put the consumer in a po- 

 sition to set the final price on wheat, a position that is further 

 strengthened by the fact that competing wheat countries of 

 the southern hemisphere throw their surplus into the world 

 market about midway between North American harvests. Ar- 

 gentina has thus become notorious as a disturber of wheat 

 prices, as have also Australia and India to a lesser extent. 

 During one-fourth of the year, three-fourths of the world's 

 wheat supply comes upon the market. This results in a con- 

 gestion of supply which exerts a powerful influence in deter- 

 mining the price for the remaining three-fourths of the year. 

 While this tends to give stability of price, it favors the con- 

 sumer and not the producer. An increase in the local con- 

 sumption of wheat by milling is decreasing the visible supply. 

 An import duty adds the amount of the duty to the cost of 

 production, and consequently must raise the price of the wheat 

 imported. In the following table are given the import duties on 

 wheat and wheat flour in 1907 in the principal importing 

 countries having such charges. 1 



1 Data furnished by U. S. Dept. of Commerce and Labor. 



