have they made the slightest effort to grasp the funda- 

 mental idea of the valuation system. Only a fraction of 

 this sum represents profit. Its main items are freight 

 rates, and factory and sales charges. It were quite as 

 logical to assume that the difference between the retail 

 cost of a pair of shoes and the raw leather from which 

 they were made were all profit. Selling prices always exceed 

 valuations, since the latter show only the seaboard values 

 of the unmixed ingredients and do not include the many 

 other necessary and legitimate charges which accompany 

 the manufacture and sale of mixed goods." 



We could quote from many other State fertilizer reports, 

 explaining in the same way the difference between the official 

 valuation of fertilizers and the selling price. In a word, the 

 difference between the cost of the raw materials at the sea- 

 board and the delivered selling price for the finished goods in 

 the country covers certain fixed expenses which must be met 

 before profits can be considered. These expenses are for assem- 

 bling the materials, grinding, chemically treating them, shrink- 

 age, interest (90% of the goods are sold on "crop time"), bags, 

 freight, wear and tear (which is heavy in a chemical plant), 

 commissions to agents and finally interest on capital employed. 

 The unit cost of a quart of milk may not be over two cents for the 

 grain and hay consumed by the cow, but every farmer knows 

 that he could not afford to peddle milk at two cents a quart. He 

 must have something to cover the cost of labor, loss of animals, 

 wear and tear of team in delivering milk, bad debts, etc. 



Several States which formerly employed the "valuation sys- 

 tem" have abandoned it as being not only unsound, but mislead- 

 ing, because usually misconstrued. For example: Many farmers 

 construe valuations as representing not only commercial value 

 in the country, but agricultural or crop-producing value, which 

 is far from right in either case. According to the inspector's 

 report, two fertilizers may value approximately alike, but one 

 may be worth very much more as a crop producer than the other. 

 The reason for this is, that while the analysis of the fertilizer 

 shows the quantity, it does not reveal the quality or crop value 

 of the plant food which it contains, and on that account no 

 valuation can represent either the true commercial or the agri- 

 cultural worth. Two cows standing side by side in a bam may 



51 



Cost of 

 Selling 

 Fertilizers 

 and Milk 

 Compared 



Quantity 

 and 



Quality 

 Considered 



