1258 
merely general desire for a thing. It is 
“market demand.” That is, demand 
which is willing to purchase or make an 
exchange for a given article. Demand 
which never becomes effective in some 
markets never affects the price or value 
of a thing. That is to say, if there is no 
market, if one man having money and an- 
other having peaches cannot meet, either 
personally or through some middleman or 
agent, so as to make an exchange, there 
is no market and no price, no value. A 
desire for peaches in Mars does not affect 
their price in Wenatchee for the reason 
that this kind of demand is not effective. 
The problem which faces the grower 
of peaches in Wenatchee who knows of 
the general desire of men for peaches 
and who has on hand in his orchard a 
supply of 10,000 boxes for which there is 
no market, is not at all a problem of how 
to account for value in general or of how 
to account for the fact that he can get 
nothing for his peaches in Wenatchee. 
The simple fact is that there is no market, 
no point at which the general desire of 
men the world over for peaches and his 
10,000 boxes can be brought together so 
as to effect an exchange. Therefore there 
is no price, no value. 
His problem is rather how to create 
a value for his peaches by first creating 
a market. It is a problem in market 
making, a problem in distribution, and 
to this problem individuals and associa- 
tions of distributors must address them- 
selves. 
As an example of the operation of this 
law in the fruit-marketing business we 
might take the case of apples and banan- 
as. If it costs as much in labor to pro- 
duce 10 apples as it costs to produce 15 
bananas, from that viewpoint 10 apples 
could be equitably exchanged for 15 
bananas; but if the habits of the people 
were such that consumers preferred 
bananas to apples, then the case might 
be reversed and 10 bananas might sell for 
as much as 15 apples. In this latter case, 
the profits in bananas would be much 
greater than the profits in apples, because 
the cost of producing bananas is one- 
third less than the cost of producing ap- 
ENCYCLOPEDIA OF PRACTICAL HORTICULTURE 
ples. If the cost of producing bananas 
and apples were equal and the demand 
equal, the prices would be equal; but if 
the cost of production were unequal or 
the demand unequal, then the price would 
be unequal. 
The fact that cost of production in dif- 
ferent localities may vary in comparison 
with the demand gives rise to the natural 
tendency for an industry to become local- 
ized into those sections where the great- 
est values can be produced with the least 
labor. But tariff laws between the na- 
tions or other artificial conditions may 
greatly modify this tendency. 
Money and Prices 
The money market itself sometimes 
fluctuates, depending on the supply of 
money in proportion to the demand. In 
cases of the financing of great enter- 
prises, a period of great speculation or 
of disturbances between nations, money 
may be in great demand, and the prices 
of other commodities proportionately af- 
fected. 
Characteristics of Markets 
Wynard Hooper, financial editor of the 
Times, London, writing for the Encyclo- 
pedia Britannica, says: “The conditions 
required in order that the operations of 
a trading body may display the fully de- 
veloped market features, whether for com- 
modities or securities, are: 
“1. A large number of parties dealing. 
“2. A large amount of securities or 
commodities to be dealt with. 
“3. An organization by which all per- 
sons interested in the commodity or se- 
curity can rapidly communicate with one 
another. 
“4, Existence of and frequent publica- 
tion of statistical and other information 
as to the present and probable future 
supply of the commodity or security. 
“The changes which take place in prices 
in any market, whether fully organized or 
not, depend largely upon changes of 
opinion between buyers and sellers. The 
changes of opinion may be caused by er- 
roneous as well as by correct informa- 
tion. They may also be the result of 
wrong inferences drawn from correct in- 
formation. In markets for commodities 
