419] BUTTER PRICES ^5 



receipts in the first period than in the second and third 

 periods. This is of course due to the fact that the course 

 of prices is influenced considerably by the amount of butter 

 in cold storage. The first period antedates the extensive 

 use of refrigeration for the preservation of summer-made 

 butter for winter consumption. Diagram VI. shows at a 

 glance how prices fluctuate with variations in the amount 

 of receipts. 



As will be seen later, the amount of receipts is not the 

 only important influence upon prices. Business depressions 

 also very materially affect butter prices. When these occur 

 the general price level of all commodities falls, and the price 

 of butter is quite sensitive to the movement of prices in 

 general. In 191 1, for instance, as seen in Diagram VI., the 

 supply was not the only cause of the unusual drop in the 

 price. There was a mild depression that year causing a fall 

 in the general price level, and sympathetically causing also 

 a fall in the price of butter. 



Normal seasonal fluctuations are not as wide as they 

 were formerly, due to the fact that speculators now place 

 large quantities of butter in cold storage during the sum- 

 mer and turn it into consumption channels in the winter 

 when production is comparatively low. The change of sea- 

 sonal price fluctuations due to the use of cold storage since 

 1893 may be seen in table no. 21. 



Cold storage was not extensively used during the first 

 period ; and the mean monthly wholesale prices during this 

 period are therefore considerably lower in June and higher 

 in February than the prices for the same month in the 

 second period during which large quantities of butter were 

 stored. 



A glance at Diagram VI. will show that speculators in 

 placing butter in cold storage assume considerable risk. 

 The price during the winter is not always higher than sum- 



