108 AGRICULTURAL PRICES 



era try to find a way to regulate the supply with an iron hand, in 

 an endeavor to maintain approximately the cost-of-production 

 price at all times? This means willingness to lower the price of 

 hogs in years when the corn crop is large, as well as ability to raise 

 the price in years of a short corn crop. 



Unquestionably there are vagaries in the consuming demand 

 for pork which might make the payment of a cost-of-production 

 price difficult for a time. It is believed, however, that powerful 

 corn belt farmers' organizations working in co-operation with the 

 packers should be able to educate consumers to the cost-of-produc- 

 Uon idea, and so far as seasonal vagaries in the demand are con- 

 cerned, the farmers and packers should be able to come to an 

 agreement providing for paying rather more than the demand 

 price for hogs in times of poor demand and rather less than the 

 demand price for hogs in times of good demand, in an effort to 

 make price meet cost of production rather than temporary demand 

 idiosyncrasies. 



It is realized that the difficulties in the way of paying cost of 

 production at all times are even greater than here indicated. The 

 idea, in fact, runs counter to the laissez faire, competitive price 

 system under which business is conducted today. It is believed, 

 however, that in the future more and more attention must be paid 

 to production and less and less to price manipulation. To this 

 end, products must be sold at all times as nearly as possible at the 

 cost-of-production price. There must be no prospect of unusual 

 profit or unusual loss in the production of staple products. We 

 are now referring to industries as a whole. It is inevitable, of 

 course, that certain individuals will make great profits and others 

 will incur losses, even in years when the cost-of-productoin or ratio 

 price is paid. Full consideration must always be given to the phy- 

 sical facts and to special emergencies as they arise. Standard 

 ratios representing cost of production for an industry may sud- 

 denly be rendered out-of-date by a new invention. New situations 

 must be recognized frankly, but at all times the guiding motive 

 should be to pay the cost-of-production price, in order that supply 

 and demand may operate more smoothly. 



To give the cost of production price broader sway in our price 

 system does not necessarily involve governmental control. The 

 first step is education in price judging. Even in the grade schools 

 and country schools, ratio methods of price judgment should be 

 taught. In high schools the matter may be carried farther, and 

 it is suggested that not only should the ratio method of price judg- 

 ing be taught in high school, but also the practical use of correla- 



