8oo READINGS IN RURAL ECONOMICS 



extent that the supplies for the time being are thus diminished, 

 present prices will tend to be raised. After due allowance has 

 been made for possible deterioration during the period of stor- 

 age, for interest on the capital invested, and for the rental 

 charge, the tendency will be to place in storage rather than sell 

 for present use so long as the prospective future price offers 

 greater inducements than present market quotations. Here again 

 will be a balancing between two distinct markets. In the same 

 way that the cash buyer weighs the relative advantages of selling 

 in small amounts to local retailers or shipping in carload lots to 

 other primary markets, so, too, will he weigh the comparative 

 worth of sales in the present and sales at some future time. 

 Moreover, the tendency toward equalization in prices between 

 future and present uses will also be operative in the same way 

 that prices tend toward equality over large areas. 



If the business of trading in eggs is to have the advantages 

 of the wide field made possible by shipments to other primary 

 markets and by storage for future sales, inducements must be at 

 hand so that men will find it profitable to perform the middle- 

 man functions necessary in order to make these fields accessible. 

 The interests of both farmer and consumer demand that the egg 

 supply shall be distributed between local and distant markets 

 and between present and future uses. Both kinds of distribution 

 are necessary in order to prevent violent and wide fluctuations 

 in prices. 



The type of cash-buying firm referred to above represents the 

 larger companies which sell both at retail and wholesale and 

 which also store supplies for the future market. Such firms 

 may also enter into special agreements with parties to deliver 

 eggs at some future date at a stipulated price based on present 

 quotations together with charges for rentals and interest and 

 customary losses from deterioration. Where this is done, the un- 

 certainties of future price disturbances are practically eliminated 

 for both buyer and seller. 



The other types of cash-buying firms do not attempt to exer- 

 cise all the different functions enumerated above but rather limit 

 their work to some particular line of activity. One firm may buy 



