RETAIL AND WHOLESALE PRICES 



has been much outcry in recent years against the 

 JL retailer. Unquestionably, the retailer is working under a 

 cumbersome distributive system which burdens the consumer with 

 prices fully 20 per cent too high. It is commonly recognized that 

 this extra 20 per cent does not represent retailers' profits, but that 

 it is used simply to perpetuate a system which will cater most 

 effectively to the whims of indolent housewives. The cure for the 

 system is for consumers to organize themselves into co-operative 

 buying associations. When consumers arc willing to band them- 

 selves together in such associations, to anticipate their needs of 

 staple products by ordering ahead, it will be possible to furnish 

 such products at very little above wholesale prices. In fact, it is 

 conceivable that under such a regime co-operative consumers might 

 buy of co-operative producers. All this, however, involves infi- 

 nitely more foresight than the average citizen or his wife cares to 

 exercise. Also it involves putting a vast number of small grocery- 

 men out of business. In the long run, this will be a good thing for 

 every one, but the immediate effect will be a great outcry against 

 interfering with legitimate business, and the issue will be obscured 

 by the customary smoke screen used by scared business men. 



As long as we cling to our present retail system, it is worth 

 while to know the standard differential between retail prices on 

 the one hand and wholesale prices and farmers' prices, on the other 

 hand. For instance, in 1913, ham quite customarily retailed at 

 around 26 or 27 cents a pound, whereas the wholesale price at the 

 same time was around 16 or 17 cents a pound, and farmers were 

 selling their hogs at around 8 cents a pound. It was a fairly 

 normal state of affairs, previous to the war, for ham to sell retail 

 at 10 cents a pound above the wholesale price, or 18 cents or 19 

 cents a pound above the price of hogs. Just what the normal 

 differential will be, now that the war is over, can not be foretold 

 with accuracy. As long as we are on a price level twice as high 

 as in 1914, it is obvious that the differential between retail and 

 wholesale prices will be just about twice as great. The retailer 

 may not pay quite twice as much to his labor, and he may not pay 

 quite twice as much rent, but he will have to have twice as much 

 operating capital, and his bad debts will probably be twice as 

 great. At this writing, early in 1920, it seems obvious that the 

 retailers should be allowed to have a differential fully 80 per cent 



