SUPPLY AND DEMAND 21 



the organized farmers, should be familiar with the normal, math- 

 ematical working of the law of supply and demand. They should 

 know not only when prices are lower than warranted by the supply, 

 but just how much too low. Exact measurement is necessary in 

 order to perceive when unusual factors are at work. The price 

 indicated by a mathematical interpretation of supply and demand 

 may be $1.25 for corn, whereas the actual price, because of a purely 

 speculative drive, may be only $1. It is wise to measure prices to 

 some extent by purely mathematical considerations, in order that 

 we may perceive more clearly when extraordinary forces are at 

 work. 



After having arrived at a price based on a mathematical inter- 

 pretation of supply and demand, the problem is to determine to 

 what extent extraordinary forces are at work and to what extent 

 it may be worth while to combat them by extraordinary measures. 

 If corn is 15 cents a bushel below the mathematically justified 

 price, will it be advisable for farmers generally to hold their corn 

 and cause a shortage at the terminal markets? Will it be advis- 

 able to put out newspaper propaganda showing the public how 

 the market price of corn is below cost of production, or put on an 

 advertising campaign to increase the demand? These matters of 

 larger policy are mostly outside the field of mathematics. They 

 are largely matters of strategy. How much bargaining force do 

 the farmers represent? To what extent will they follow directions? 

 At what season of the year is it best to strike? 



Generally speaking, a farmers' drive for higher prices would 

 best begin about January 1st, and should reach its greatest inten- 

 sity about March 1st. After March 1st, seasonal scarcity begins, 

 and no further propaganda is needed. A consumers' drive for 

 lower prices best begins about August 15th, and reaches its great- 

 est intensity about October 15th. After October 15th the seasonal 

 surplus, especially of corn and hogs, begins, and there is no fur- 

 ther need for consumers to bring artificial propaganda to bear. 

 It is interesting to note in this connection that the "bear" campaign 

 engineered by the governments of the world in 1919 began in late 

 July and continued until about October 15th, at which time the 

 weight of the season's marketings was sufficient to hold prices 

 down without additional use of newspaper space. 



After a mathematical study of prices, the leaders of farm or- 

 ganizations, in so far as they attempt to influence prices, must 

 consider the state of the export trade, rate of foreign exchange, 

 ocean freights, world crop conditions, business conditions at home 

 and abroad, and, in fact, all the factors which the trained specu- 



