ing the time that the quotation committee quoted prices the Board attained the object for which it was organized. The diagram seems to indicate that after 1903 a new influence caused the difference between the two prices to be greater than at any time since 1896. When it is remembered that in 1903 the New York Mercantile Exchange created its quo DIAGRAM II.-VARIATIONS OF ANNUAL ELGIN BUTTER PRICES FROM NEW Data on which diagram is based from U. S. Bureau of Labor Statistics, Bulletin 149. tation committee and that the middlemen desire low prices while the producers want high prices, the hint made in the previous chapter that these quotation committees actually did adjust prices favorably to their constituents seems to be verified by the results charted in the above diagram. In order that the charge of the government that the Elgin quotation committee was dominated by centralizers who were buyers rather than sellers of butter in the summer, and -2 -4 -6 -8 -101 sellers rather than buyers in the winter, may be examined in the light of figures, table no. 17 has been computed. In this table the differences between the monthly New York and Elgin prices are shown-that is, the New York prices are subtracted from the Elgin prices to which $0.0065 was added to allow for the cost of transportation. The monthly differences are averaged for the period from 1893 to 1898, because the rise of the large centralizers dates from DIAGRAM III.-VARIATIONS OF ELGIN BUTTER PRICES FROM NEW YORK PRICES DURING THE PERIODS 1893-1898 AND 1903-1911 Average of monthly differences from 1893 to 1898. this year. It is desirable to compare this period with the period when the centralizers, it is charged, entered the field of speculation and controlled prices on the Elgin Board to suit their convenience. In 1912 and 1913 there is a marked change in the prices which is probably due to the fact that November. December. TABLE XVII DIFFERENCES BETWEEN WHOLESALE PRICES FOR BUTTER AT NEW YORK AND ELGIN. BEFORE TAKING DIFFERENCES $0.0065 WAS ADDED TO THE ELGIN PRICE TO ALLOW FOR Cost of TRANSPORTATION Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 0205+.0025.0045 +.0185+.0005-0015 -.0165 +.0015 -.0125.0075.0025.0125 -.0005.0075 -.0075-00150045.0045.0045+.0005.0035+.0025+.0035-0095.0055-0005 -.0180 (Computed from data taken from U. S. Bureau of Labor Statistics Bulletins nos. 39. 51, 57, 63, 69, 75, 81, 87, 99, 114 and 149.) the quotations were based on actual sales. The significance of this table is more readily seen when the monthly averages for the first period and those of the second period are charted. This is done in diagram III. It is seen that the averages of the monthly variations of the Elgin prices from the New York prices during the period from 1893 to 1898 are much lower on the whole than they are for the period from 1903 to 1911. This fact is of course in agreement with the results shown in diagram II. While the prices during the period from 1903 to 1911 were on the whole considerably above the New York prices, the course of the prices throughout the year is the opposite from the course of the prices during the period from 1893 to 1898. In the first period prices were comparatively high in the summer, while in the second period they were low in the summer and comparatively high in the winter. The time for storing butter is during the months of May, June, and July, and sometimes as late as August. It is during these months that the level of the Elgin prices as compared with the New York prices falls in the latter period. The charge therefore that the Elgin quotation committee was dominated by the large centralizers and that they depressed prices in the summer months in order that they might buy butter and butter fat on a comparatively low basis and sell it in the fall and winter at a higher price, seems to be verified by the results of this comparison. WHOLESALE AND RETAIL PRICES COMPARED It is a familiar fact that wholesale prices fluctuate more widely than retail prices. Diagram IV. shows the course of retail and wholesale prices of butter in New York City. The two price levels show rather close correspondence. There are of course some pronounced exceptions, the most notable being the drop in the wholesale price in February, Actual retail prices in New York City reported on the 15th of each Actual average monthly wholesale prices in New York City. Data from U. S. Bureau of Labor Statistics, Bulletins 81, 87, 93, 99, 105. 1910, when the retail price shows merely a steady decline. In discussing the organization of the butter market it was pointed out that the wholesale dealers make it their business to watch all conditions that affect prices, and for this reason it may be expected that the course of the wholesale prices will show small fluctuations to which the retail prices cannot respond. On the whole, however, the retail and DIAGRAM IV.-COMPARISON OF RETAIL AND WHOLESALE PRICES OF EXTRA CREAMERY BUTTER IN NEW YORK CITY FROM 1908 TO 1911 1908 1909 |