48 OUTLINES OF AGRICULTURAL ECONOMICS 



the transfer from producer to consumer can be effected most econom- 

 ically. To err is to eliminate himself. An attempt to impose even 

 a trirlingly small excess of charges on cotton or grain at one distribu- 

 tion point will be taken advantage of by competing points.' ' Can 

 you illustrate the operation of such a process of elimination? Has 

 the same movement gone on since 1900 ? Is it apparent in other prod- 

 ucts than those mentioned, such as fruit, truck, and dairy products ? 



10. " Two years ago tomatoes were scarce and high. This enabled 

 the co-operative association to sell its product, even the inferior stock, 

 at high prices. The buyers were on the ground grabbing for the cars. 

 The association took all the credit, claiming they forced the wicked 

 buyers to bid over each other. News of the great profits went round 

 and this year everybody had tomatoes, oodles of them. As a result, 

 the association blew up. Buyers would not even bid, but asked for 

 goods on consignment. Acres of fine tomatoes went to waste. The 

 law of supply and demand stepped in and changed the order as it 

 always has and always will." Does this point to a limitation and a 

 danger which co-operative associations must face? Explain. How 

 can it be met ? 



n. "A correspondent points out that two articles of food are 

 practically always to be found in every part of the United States, and 

 almost always at a low price when the distance which they are trans- 

 ported is taken into account. The two articles are oranges and 

 bananas. The price of the latter, in fact, is almost stable and uniform 

 all over the country year in and year out, although bananas are a 

 perishable product and are shipped thousands of miles. The market- 

 ing of oranges and bananas is extensively organized the former by 

 co-operative associations, the latter by a trust.' ' Should we look to 

 organizations like the United Fruit Company to reduce marketing 

 costs in the future ? Have the meat-packers reduced costs ? 



12. "A conspicuous feature of the American grain market is the 

 existence of a large ' visible supply' during the greater portion of the 

 year." Exchange reports from day to day record the increase or 

 decrease of this visible supply and make comparisons with conditions 

 of previous years. Competitive dealing in the light of this informa- 

 tion tends to eliminate large profits to middlemen. "On the other 

 hand, products such as fruits and vegetables, where no storable supply 

 exists, because of their perishable nature, have shown but a slow 

 tendency to get rid of the more expensive methods of distribution." 

 Explain the two propositions here laid down. Can you show that 

 the organization of the produce trade today is such as to make pos- 

 sible the securing of fairly reliable information as to the visible supply 

 of even perishable commodities ? Is this calculated to have a stabil- 

 izing effect upon prices ? How ? 



