345] GRADING AND JUDGING BUTTER I2 i 



BENEFITS OF GRADING 



Naturally the motive that actuated the members of the 

 Exchange in the establishment of grades was the desire to 

 realize certain benefits. One of these benefits is the main- 

 tenance of high prices for the best class of goods. It need 

 not be pointed out that greater profits accrue to the trade 

 when fairly high prices prevail. At the time these grades 

 were established the wholesale butter trade was done on a 

 commission basis more largely than now, and the loss in 

 commission charges resulting from low prices was con- 

 siderable. But the wholesale dealer who bought his goods 

 outright at a stipulated price, was also interested in main- 

 taining high prices, because he was threatened with failure 

 on a falling market. The speculator likewise was interested 

 in maintaining high prices. It is seen throughout the his- 

 tory of the butter trade that butter was very frequently 

 bought during the summer when prices were low with the 

 purpose of holding it for a rise in price. And it is very 

 natural to suppose that the establishment of grades which 

 aimed at maintaining high prices for the better qualities 

 of butter had the support of the speculator, because of the 

 greater profits coming to him. 



The greatest gain, however, comes from the fact that the 

 price of each grade is socialized. This saves a great deal 

 of time to the individual dealer, and eliminates considerable 

 risk. Butter prices are determined daily in all the big cities. 

 Before the existence of the system of grading and the 

 present market machinery it was necessary for each dealer 

 to confer every morning with numerous other dealers before 

 beginning trading in order to ascertain the market price. 

 This entailed a great deal of work, and at the same time in- 

 volved a great deal of risk, because the information he re- 

 ceived was quite unreliable. But with the system of selling 

 by grade under the " call " of the Exchange, these prices 



