KEMMERER, E. W. Agricultural Credit in the United States, American Economic Review (Dec., 1912). MACKLIN, T. Efficient Marketing for Agriculture (1921). PATTERSON, E. M. Certain Changes in New York's Position as a Financial Center, Journal of Political Economy (June, 1913). POPE, J. E. Agricultural Credit in the United States, in Quarterly Journal of Economics (Aug., 1914). POWELL, G. H. Coöperation in Agriculture (1913), chap xi. PUTNAM, G. E. Farm Credits in Kansas, American Economic Review (Mar., 1915), pp. 27-37. SMITH, ROLLEN E. Wheat Fields and Markets of the World (1908), Part II, Chaps. 3, 4. WARBURG, P. M. The Discount System in Europe, National Monetary Commission (1910). Agricultural Credits Act of March 4, 1922. Committee on Banking and Currency, House of Representatives: Hearings on Rural Credits (1923). International Institute of Agriculture: Outline of European Coöperative Credit Systems (1910). Federal Farm Loan Act of July 17, 1916. Federal Trade Commission: Report on Terminal Grain Marketing (1921). Jewish Agricultural and Industrial Aid Society: Annual Reports. Joint Commission of Agricultural Inquiry, Part I: The Agricultural Crisis and Its Causes (1921); Part II, Credit (1922). Sub-Committee of House Committee on Banking and Currency: Hearings on Rural Credits, 63rd Congress, 2d Sess. (1914). United States Department of Agriculture: Costs and Sources of Factors Affecting Interest Rates and Other Charges on U. S. Senate Compilation of Documents on Agricultural Credit Wisconsin State Board of Public Affairs (William M. Duffus). Report on State Loans to Farmers (1912). CHAPTER XX PRICES OF AGRICULTURAL COMMODITIES No phase of the trade in farm products has in recent years caused more discussion than the rise and fall in prices which products have undergone since the year 1896 and more practically since the beginning of the European War. In discussing the extent of these fluctuations and their causes, and the factors which determine the prices of farm commodities it is advisable to bear in mind that the trade organization through which such commodities pass in their flow from farmer to consumer varies and that their prices change as they pass from the local to the primary or central markets of the interior and again as they pass to the final purchaser, who may be located in the interior, at the seaboard ports or other distant domestic markets, on in foreign countries. There is no uniform trade machinery, but as in the sale of other commodities it is possible to distinguish at least three primary groups of prices for many of the great farm staples: wholesale or central market prices, growers' local prices and retail prices. WHOLESALE PRICES Although the crops in many instances pass through the local markets before reaching the great central wholesale markets it is desirable to discuss wholesale prices first, as they constitute the basis alike of farm and retail prices. The wholesale prices are the standard in accordance with which all other agricultural commodity prices are gauged. It is at the wholesale markets that price fluctuations are primarily determined. The wholesale markets for American farm products in most instances are threefold: the central or primary markets of the interior, the seaboard markets, and the foreign wholesale mar kets. Their relative importance as price establishers varies, a limited group usually having a dominant position. In establishing the wholesale price for American grain, for example, the primary grain markets of the interior, particularly Chicago, are dominant; in the cotton trade, Liverpool, New Orleans and New York; in the domestic wool trade, Boston, New York, and Philadelphia; in the live-stock trade the primary live-stock centers of the Central West; while in the leaf tobacco, fruit and produce and dairy products trades the importance of the various wholesale markets is more evenly balanced. The absolute prices of a given farm commodity differ, but, except temporarily, such differences merely reflect varying transportation, selling and other distribution costs, and in some cases import duties. Wholesale agricultural prices, especially in those trades where exchanges have been organized, are national, their entire level fluctuating in relatively close harmony. The wholesale prices for grain and cotton, moreover, are practically world-wide because of the extent of international trade in those staples, the well-organized condition of the world's trade in them, and the larger amount of organized speculation. To a limited extent there is also a world wholesale price for wool, leaf tobacco, live stock, and some of the dairy products produced in the United States. Price Index Numbers of Agricultural Products.-The standardized method of indicating the fluctuations of general price levels is in terms of index numbers based upon actual prices but expressed in percentages, and such index numbers have been computed for the wholesale prices of farm products from 1860 to the present time. Those for the years 1860 to 1890 were compiled by the so-called Aldrich Committee1 of the United States Senate, and those for later years by the United States Bureau of Labor Statistics, which, as shown in Table XV has readjusted all of them for the years 1860 to 1913 with the average for the period 1890 to 1899 as 100. Those for more recent years are stated in the table XVI, the index number for 1913 being 100. 1 Senate Report No. 1394, Part II, 2d Sess., 52d Cong., Finance Committee, 1893. |