Part II.] COST OF MILK PRODUCTION. 61 



place, these figures provide for interest on his investment. 

 That is an addition to the 10 per cent. They provide for his 

 labor as an ordinary laborer; and then they provide for this 

 additional 10 per cent as remuneration for his managerial 

 ability. Now this 10 per cent does not include profit. That is 

 another, distinct matter. These are the things which actually 

 enter into his cost, and then, in addition to these various items, 

 there is the element of profit which may or may not exist — 

 usually doesn't exist as we know the business at the present 

 time. I should say in direct answer to Mr. Grant's question 

 that if a farmer can receive a price for his milk as indicated in 

 these figures, I think there is sufficient inducement for him to 

 go into the business; and I believe that if the milk-producing 

 industry were on this basis, and farmers were actually getting 

 these costs, it would attract capital into the business. But, of 

 course, in the past capital has not been attracted to the busi- 

 ness for the reason that farmers have not gotten these costs. 

 The question was asked in the State House, before the Fed- 

 eral Milk Commission recently, if farmers are losing money as 

 they claim to be, why do they stay in the business? And the 

 answer is that most farmers would like to sell their farms, but 

 nobody will buy them. They stay in the business because 

 they have farms on their hands and they have to. Now that 

 may or may not be true. I presume it is true to a certain ex- 

 tent. Obviously, farmers have not been getting the prices in- 

 dicated here. If they have not, have they been losing money? 

 Now, that question has been often asked. Are they losing 

 money? Most farmers haven't very much money to lose. 

 They haven't been losing money as such, but they have not 

 been receiving adequate pay for their labors. That is the re- 

 ply. They have not been losing money by having it in a bank 

 and giving it away in one way or another. There are some 

 economic considerations here which we, as dairymen, have got 

 to face. In the first place, it is a relatively easy matter to 

 produce more milk than the public can or will consume. It is 

 easy to overproduce milk, and if this matter were based en- 

 tirely on the law of supply and demand I presume that at the 

 present time we could not expect prices like this. Incidentally, 

 it is going to be very interesting to see what is going to happen 



