397] PRESENT ORGANIZATION OF BUTTER MARKET ^3 



of Trade is a producers' exchange and its body of members 

 as a whole are interested in maintaining high prices at all 

 times. This was the principal object for which the Board 

 was organized and has been its aim for many years. But 

 since the introduction of the hand separator and the growth 

 of the " centralizers " the situation has changed consider- 

 ably. These large producers are interested in maintaining 

 low prices for the reason that the butter fat which they buy 

 from the farmers fluctuates with the price of butter, and is 

 contracted by them to be paid for on the basis of the Elgin 

 butter quotations. In addition to this fact it is charged by 

 the Federal Government, in the investigation that led to the 

 issue of the decree already referred to, that the " central- 

 izers " are also large buyers of butter produced by small 

 creameries throughout the middle west. This is bought in 

 the summer when prices are low and held in cold storage 

 to be sold in the winter. They are therefore interested, it 

 is charged, in maintaining low prices during the summer 

 and high prices during the winter when many of the small 

 creameries are shut down and production generally has 

 fallen off. Whether or not this latter inference is correct, 

 it is plain that the interests of these large producers who 

 buy the butter fat on the basis of the Elgin butter quota- 

 tions and dispose of it very largely at a cent or a cent and 

 a half above the quotations of some eastern market, are 

 opposed to the interests of the farmers selling the cream 

 as well as to the interests of the cooperative creameries 

 whose total profits go to the farmers and are dependent 

 upon high prices for butter. These large producers have 

 command of large amounts of capital and are therefore in 

 a position to do a great deal of speculative buying in the 

 summer. To the extent that this is done they are of course 

 in conflict with the interests of the small creamery that must 

 sell as a rule as the butter is produced. Thus it is seen that 



