COLLECTIVE BARGAINING BY CALIFORNIA GROWERS 231 



mission representing the consumer. Thus the Dairymen's League, 

 in the New York City territory, has for some years fixed the price 

 of liquid milk by bargaining with the large distributors. The 

 Wisconsin Milk Commission of October 1917 fixed the price of 

 milk for the Chicago-Milwaukee district. In most efforts at 

 price fixing cost of production is assumed to be the correct basis 

 of price. But in practice it is found impossible to ignore the de- 

 mand side of the question.- Furthermore the cost of production 

 varies so much from farm to farm and from year to year on the 

 same farm that it is not a definite and clear-cut item. One of 

 the sanest discussions of this complex matter is that of Professor 

 H. C. Taylor of the University of Wisconsin, in his bulletin en- 

 titled " Price Fixing and the Cost of Farm Products." 8 In this 

 he develops the theory of joint costs for farm crops, showing that 

 certain crops have a joint cost like gasoline and kerosene and 

 that the selling price varies as the demand varies just as the 

 price of gasoline in 1918 was nearly twice as high as that of kero- 

 sene although the two were produced at a common cost. Professor 

 Taylor's conclusions are that when Price Commissions attack the 

 problem of price fixing they ought to consider the demand side 

 along with the price side and thus endeavor to keep supply and 

 demand balanced, that is, they ought to aim at an "equilibrium 

 price." Ought not the farmer to ask for an " equilibrium price" 

 rather than a "just price"? Professor Taylor further concludes 

 that a Price Commission might function wisely as a mere medium 

 for collective bargaining. Illustrating the principle of collective 

 price fixing, and its relation to cost-of-production and to demand, 

 two examples from California may be cited. 



Collective Price Fixing by California Walnut Growers. 9 Fixing the 

 "Offering Price." "The prices of the various grades of walnuts produced 

 by the California growers must necessarily be based upon the law of supply 

 and demand. If prices are set so high as to prevent normal consumption a 

 carryover must necessarily result, which always tends to demoralize the market 

 and makes necessary a material price reduction. In order to move an entire 

 crop valued at from five to seven million dollars within a period of two months, 

 and to move it as fast as the goods are packed and ready for shipment and at 

 an absolutely uniform price, it is necessary that that price be a trifle under 

 what is absolutely justified by the laws of supply and demand, for if the whole- 

 sale purchaser cannot figure on a slight advance in price as the season wears 

 on he will purchase only his minimum requirements and will not stock up 

 with several months' supply, but will purchase lightly at first, forcing the 

 growers to store such goods as are not necessary for immediate consumption, 



8 Agricultural Experiment Station, University of Wisconsin, Madison, 

 Wisconsin, Bulletin 292, May, 1918. 



9 California Walnut Growers Association, General Report, April 30, 1918, 

 pp. 34, 35. 



