!74 THE BUTTER INDUSTRY IN UNITED STATES [ 3g g 



the interests of the producers on the whole are in conflict 

 with the dealers, and that the interests of certain groups of 

 the producing class are also in conflict. 



It is very difficult to determine just how far a quotation 

 committee can fix prices above or below free competitive 

 values. If it were possible to secure sufficient information 

 concerning premiums paid by dealers, this might form a 

 basis by showing how much too low the quotations of a mid- 

 dlemen's market are, or whether they are correct. As pre- 

 viously stated, premiums of a cent or more above the quota- 

 tions are not alone paid for the reason that the dealer is 

 anxious to get all the business he can, but for the reason 

 that some butter has exceptional quality and will enable 

 him to sell it at a high price and make a profit. Other con- 

 siderations also enter in, such as risk and credit. Both of 

 these items are expenses that can be paid for in the form 

 of premiums. Paying for quality, risk, and credit, there- 

 fore, is the usual business practice in every trade and 

 must not be confused with premiums paid by dealers with- 

 out any regard to legitimate returns. Premiums of the 

 latter type are paid because of the keen competition among 

 dealers to secure the business of producers. According to 

 the Elgin Dairy Report of September 14, 1903, premiums of 

 from \Y% cents to iy 2 cents were very generally paid at 

 that time. Since that time they seem to have risen as high 

 as three cents above the market price. 1 The Elgin Dairy 

 Report makes the statement that a " man who pays a pre- 

 mium, even if he is a member of the quotation committee, 

 pays that premium secretly, and is not going to make it 

 public for the benefit of the quotation committee ". As 

 the greater part of the trading is at private sale based on 



1 According to a complaint made in the Elgin Dairy Report and 

 copied by the New York Produce Review and American Creamery, 

 Aug. 12, 1914. 



