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cheese, evaporated, condensed, or dried has been determined 

 by price. Whether the butter moves to Chicago, Pittsburgh, 

 or New York City has been determined by price. 



Since the butter is not produced uniformly throughout the 

 year, periods of feast and famine would occur if butter were 

 eaten as soon as produced. In the periods of high production, 

 prices fell and the distributive trades carried over large quan- 

 tities of the low-priced butter to the winter months when 

 the price was high. This helped both the farmer and the con- 

 sumer. It returned to the farmer a greater income than he 

 would otherwise get. The large spring-summer production at 

 the somewhat higher price brought more income. It also 

 helped the consumer. In the winter months, when the pro- 

 duction was low and the price rose, the out-of-storage 

 movement of butter prevented consumer prices from rising 

 unduly. It reduced the violence of the fluctuations of the con- 

 sumer's prices, stabilized his supplies, and raised the farmer's 

 income. 



Price very efficiently guided the flow of grain. The major- 

 ity of farmers sold their grain shortly after harvest, while 

 the consumers demanded their bread in constant supply. 

 Huge terminal elevators were built to store this grain. Nor- 

 mally, the movement of grain in and out of these elevators 

 was largely determined by the relationship of the cash prices 

 to future prices of wheat at Chicago. When the cash prices 

 were low relative to the future prices, the elevators were en- 

 couraged to store grain. When the cash prices rose above the 

 future prices, the elevators were encouraged to sell their 

 holdings. A small change in the relationship between cash 

 and future prices told the small country elevator and the 

 large terminal elevator whether society wanted grain with- 

 held from consumption or forced into consumption. The 

 Chicago Board of Trade, popularly believed to be a den of 



