206 THL LU'l TER INDUSTRY IN UNITED STATES [430 



As will be seen later, however, the supply during these years 

 was by no means the only force that acted upon prices. 

 In 191 1, 1908, and 1896, there were business depressions 

 during which the prices of all commodities fell and the price 

 of butter was not an exception. In 1901, the general price 

 level also fell slightly and the increase in the supply was 

 therefore not the only cause depressing the price of butter 

 for that year. In 1902, there was great prosperity and 

 this aided in raising the price. It is seen therefore that 

 the forces of supply and business conditions frequently act 

 in conjunction' in causing fluctuations in the price. 



Oleomargarine must also be considered as a part of the 

 supply of butter in treating butter prices. In diagram XL 

 the receipts of butter at Chicago, the yearly amounts of 

 oleomargarine consumed in the United States and the Elgin 

 prices of butter are shown. The administration of federal 

 and state legislation interfered considerably with the pro- 

 duction and sale of oleomargarine. In 1902, for instance, 

 the federal law taxing colored oleomargarine was passed 

 and this law no doubt had a serious effect upon the amount 

 produced and consumed in the United States. However, 

 the course of the graph shows clearly enough that the con- 

 sumption of oleomargarine decreases when the price of 

 butter is low and increases when the price is unusually high. 

 This was the tendency from 1890 to 1902, and also from 

 1909 to 1913. Immediately after 1902 the manufacturer 

 of oleomargarine was not only hampered in his operations 

 by the administration of the new law, but was in strong 

 competition with low prices for butter. When the butter 

 prices began to rise again in 1905 the consumption of oleo- 

 margarine began to increase. It thus appears that oleo- 

 margarine in some measure acts as an equilibrator upon the 

 price of butter. The relation that oleomargarine bears to 

 the supply and price of butter would also seem to show that 



