1 22 THE BUT TER IND USTR Y IN UNI TED S TA TES [ 346 



became public and such sales as are there made are truly 

 market prices. The wholesale dealer in making a contract 

 for butter need not stipulate a certain price at which he will 

 take the goods, but can contract to receive the goods at the 

 exchange price, below it, or to pay a premium. It will be 

 observed that in this way a great deal of risk in the whole- 

 sale trade has been eliminated. Obviously on a commission 

 basis the dealer takes no such risk, but, as will be pointed 

 out in the next chapter, very little business is now done on 

 a pure commission basis. 



The benefits that accrue from the system of grading of 

 course extend to the other class of dealers — the jobbers 

 and retailers — as well as to the producer; because out of 

 grading, together with the organized market, the means of 

 communication, and the press, there is established every 

 day, a price, that is in harmony with the actual conditions 

 of supply and demand. These benefits, in importance to 

 society, are comparable to improvements in the field of 

 production. 



CLASSIFICATION AND GRADES 



In the standardization of butter the trade makes use of 

 two distinct steps. The first is known as " classification " 

 and the second as " grading ". Both are classifications with 

 regard to quality. The first step, known in the trade as 

 " classification ", aims to segregate large quantities that 

 have a tendency to be more or less alike, or in a general way 

 bear the marks of a distinctive character. The New York 

 Mercantile Exchange classifies butter, according to rules 

 issued October 1, 1914, into Creamery, Process, Ladles, 

 Packing Stock, Grease Butter, and Known Marks. The 

 second step, known to the trade as " grading ", goes into 

 greater detail, and divides the above " classifications " into 

 grades. These " grades ", in use by the New York Mer- 



