778 READINGS IN RURAL ECONOMICS 



the amounts of produce sufficient to meet the consumers' de- 

 mands, and for this purpose they must anticipate prospective 

 needs during periods of plenty and build up reserves accordingly. 

 To do so successfully they must be able to unload later at an 

 advance in price sufficient to cover additional costs for rent, 

 interest and insurance as well as a margin of return for the risks 

 incurred. 



The risk feature becomes magnified when we remember the 

 large number of agencies storing produce independently with only 

 a vague knowledge of the actual supply held over for the future 

 market. Not only is the amount in storage unknown but the 

 various contingencies affecting the time and amount of additional 

 future supplies are always a matter of grave uncertainty. The last- 

 named difficulty was clearly exemplified during the winter of 191 3 

 in connection with the storage of eggs. Unusually mild weather 

 early in the winter had suddenly augmented fresh supplies, ren- 

 dering exceedingly problematical the unloading of storage eggs 

 whose supply under normal conditions would not have been exces- 

 sive. Although jobbers began to cut prices, relying on elasticity 

 of demand to remove the stored goods with sufficient dispatch, 

 the retail agencies were more tardy in reducing their figures 

 because of an unwillingness to sell at a loss. This explains why 

 certain jobbers were ready to make terms with other avenues of 

 sale, such as that created by women's clubs in some of our leading 

 markets. 



Where jobbers dispose of their surplus by placing it in cold 

 storage they are confronted with the need of setting aside the 

 amount of capital represented by the stored goods. Few jobbers 

 command the necessary money without resorting to borrowing. 

 The usual course in this connection has been a resort to loans at 

 the banks. However, the rise of large storage companies with 

 superior facilities for credit has introduced important changes in 

 this respect. 



Jobbers in the leading primary markets now often secure loans 

 directly from storage firms, who in turn arrange loans at lower 

 rates with the banks. Similarly, in securing the protection of 

 insurance on the stored goods, jobbers find it advantageous to 



