Communication and Transportation become an important fa tor in the price of wheat wherever the market has develope beyond the most limited local conditions. Prices that we formerly awaited for 2 or 3 months are now flashed by ele tricity over the whole world during the same day on whic they are made. A favorable location is no longer an advantag in determining prices, for all markets are affected simultan ously by a change in either supply or demand. All improvemen in communication and transportation resulting in a decrease charges tend to lower the cost and increase the amount o production permanently, and hence they enable the producer compete more successfully in the world's markets. If tw countries have surplus wheat for export, a few cents more less per bushel on the whole cost of moving may determin which country can sell at a price that will secure the trad Ideally, the only difference of price which should exist betwee any two markets, or between what the producer receives fo his wheat and what the consumer pays, is that resulting fro transportation and commercial charges, and the cost of suc manufacturing processes as the wheat may be put throug These are the only variations that should occur in the worl price of wheat.

Competition and Price.-Competition is a powerful facto in determining the specific price paid for wheat, especially tha paid to the producer. By means of competition, all charge incidental to moving wheat are kept at a minimum, while th price paid for the grain is kept at a maximum. For exampl at Milton, North Dakota, a non-competitive point, 2 cents les was paid per bushel for wheat than at competitive points onl 6 miles distant. When the local elevator systems combin against the interests of the farmer, the only effective remedy

petition has generally kept up the level of prices. Th of the latter statement is shown by the fact that the market with the highest level of prices has secured the

Exportation and Price.-There is a tendency for expo to decrease as population increases. When a counti sumes all of the wheat which it produces, then its p wheat is fixed within the country, provided there are straints to trade, and that the cost of production is not than the cost of importing grain. As soon as a country surplus for export, and receives more for exported whea the home price, plus the expense of exporting, exporting crease, the home price will rise, production will increas the price is no longer fixed within the country. The c which buys the export may thus fix the price of wheat country which produces it, but such a price under norm ditions must always be higher than that which the pro country could possibly fix for itself, and consequently a to the latter country. It is as a consumer of the world plus that England has held a position of such commandi portance in fixing the price of wheat. It has been whether the large combinations of grain interests can or grain prices. The only conditions under which they coul manently do so in a large market would be that they ha approximately complete knowledge of the conditions of s and demand, and that they would be far-sighted enough the price in accordance with what it naturally should be the existing conditions.

The Visible Supply and Price. The consumers of whe ways have an advantage over the producers in that dem

dling wheat in great bulk at the terminal markets, and the presence of a class of men who, having capital and commercial capacity, have justified their existence by the manner in which they have handled the reserve supply. As all value is, in its last analysis, a subjective thing, the existence of this great visible supply must have the psychological effect of delaying, and perhaps lessening demand, and thus decreasing price. Since the producer has already thrown the wheat into the market, the distributer must either dispose of it at once, or, if he holds it indefinitely, run the risk of loss from depreciation as the next harvest approaches. This tends to put the consumer in a position to set the final price on wheat, a position that is further strengthened by the fact that competing wheat countries of the southern hemisphere throw their surplus into the world market about midway between North American harvests. Argentina has thus become notorious as a disturber of wheat prices, as have also Australia and India to a lesser extent. During one-fourth of the year, three-fourths of the world's wheat supply comes upon the market. This results in a congestion of supply which exerts a powerful influence in determining the price for the remaining three-fourths of the year. While this tends to give stability of price, it favors the consumer and not the producer. An increase in the local consumption of wheat by milling is decreasing the visible supply. An import duty adds the amount of the duty to the cost of production, and consequently must raise the price of the wheat imported. In the following table are given the import duties on wheat and wheat flour in 1907 in the principal importing countries having such charges.1

1 Data furnished by U. S. Dept. of Commerce and Labor.

The

The Market.—Price is always determined in a market. old proverb, "three women and a goose make a market," is true, assuming that the women possess some other commodities which they can exchange, for all the essential primary elements of a market are present, namely: A commodity; its owner; and one or more other persons, each of whom wishes to become the owner of the commodity by exchanging it for a quantity of some other goods. The primary origin of the "supply" and the "demand" is external to this market, which is merely the point where the forces of supply and demand meet and attain equilibrium through the exchange of commodities. A market increases in size, complexity and importance as these elements increase in number, as they are modified in form, and as consequent manipulations arise. We found a market at the center of each of the three concentric circles of distribution. The marketing or bargaining is early concentrated in the local market. The local market, so long as it is independent of larger markets, is so limited in all of its factors as to be easily known in every phase and violently affected by every local event of importance. The city market resulted from the conditions of supply and demand pertaining to a much larger territory, and is correspondingly more complex. It is not so violently affected by any single event as is the local market, and events tending to opposite results may offset one another. Prices are always a resultant of the forces or conditions of supply and demand that exist in the whole territory tributary to the market, and that have been there concentrated, directly and indirectly. Prices can no longer be predicted from a knowledge of conditions in any one locality. What is true of the city market is pre-eminently true of the foreign or international