SUPPLY AND DEMAND 



BOTH farmers and city consumers have expressed much dis- 

 satisfaction in recent years with the methods of price deter- 

 mination as used by the boards of trade and packing houses. The 

 representatives of the boards of trade and packing houses have 

 answered these complaints with the simple formula, "supply and 

 demand." 



During the war, many people announced that prices in the 

 United States were no longer the result of supply and demand. 

 For a period of two and a half years, wheat prices were held at 

 approximately $2.20 a bushel, in spite of the fact that both supply 

 and demand conditions were varying constantly during this period, 

 and in spite of the fact that under supply-and-demand conditions 

 as they ordinarily work, prices might have been expected to have 

 gone as high as $4* and as low as $1.50, at different times during 

 this period of two and one-half years. Social workers and others 

 of idealistic temperament who have always been pained with the 

 rather heartless way in which the law of supply and demand has 

 worked, were much pleased with the stabilized wheat price, and re- 

 ferred to it as an instance of the repeal of the law of supply and 

 demand. 



Of course, the law of supply and demand never has been re- 

 pealed, and never will be repealed. Instead of trying to repeal 

 it, we should try to secure the best type of price-fixing machinery 

 thru which this law may work. Man has not repealed the law of 

 gravitation, but has devised such machines as automobiles, air- 

 planes, etc., thru which he accomplishes his purposes notwith- 

 standing. 



Our city friends who favor government attempts to repeal the 

 law of supply and demand and to fix uniform and relatively cheap 

 prices should direct their efforts toward the search for a new price- 

 fixing machinery. For arbitrary interference with this law in- 

 variably brings penalties in the form of conditions w r hich often are 

 more severe than the condition which it was hoped to improve. 



What we should strive for rather is a better understanding of 

 the law of supply and demand, in the hope that we may be able 

 to modify the severity of its operation and thus avoid periods of 

 feast and famine, with their unreasonably low prices and unreason- 

 ably high prices." 



Thousands of men in the corn belt, especially the leaders of 



