The progressive farmer. [volume] (Winston, N.C.) 1886-1904, 1894-01-09
SUPPLY AND DEMAND.

Given away. The calamity bowler who
complains of present conditions is told
that the cause of low prices is overpro-
drction. We are told that the immut-
able law of supply and demand governs
prices of all farm products. When
that cartridge of dynamite is thrown
at us we are expected to shut up like
a clam to avoid the effects of an explo-
sion.
How does this very pretty supply
and demand theory accord with facts4
The demand for scientific books is very
limited, while the price Of such books
h very high. The demand for standard
fiction is great, while the price is very
low. I have one work on chemistry,
the price of which is $1O6. The same
quantity of printed matter in fiction
could be readily purchased for $50.
Supply in each case is of course unlim-
tied. It would seem then that supply
and demand does not affect the price
of books.
The supply of agricultural imple-
ments in this country greatly exceeds
demand. In South America demand
exceeds supply. Yet our manufacture
ers will transport their machinery
thousands of miles to South America
where demand is great, and sell them
cheaper than they sell at home, where
demand is incomparably less in pro-
portion to supply. The law of supply
and demand, then, does not apply to
farm machinery.
In almost any daily paper we may
pick up we will see reports of great
suffering from hunger, with occasional
cases of starvation unto death, in this
great land of millionaires where farm
ers do not receive for wheat nearly the
cost of production. There must, then,
be some explanation Of these excep
tions to that so called immutable law.
We find in the case of books that the
cost of production is much more per
copy where few copies are sold, hence
the high prices. The explanation of
the different prices for the same agri-
cultural implement was given me by a
Western manufacturer of harrows. He
stated that he wanted only ten per
cent. for manufacturing. He could
sell in South America for cost of har-
row, plus ten per cent, plus transpor-
tation. In America, 80 grea& is the
competition between manufacturers
that, to sell at home, he is compelled
to keep expensive agents among the
farmers to laud the merits of his espe-
cial harrow. He therefore just doubles
the price he could sell for without COM
petition and places the extra amount
in the selling expense fund.
In the above we see that certain con
ditions aside from demand affect prices
The greatest factor, however, in regu-
lating the prices of farm produce, is
the volume of our medium of ex-
change. Eliminate that factor and
consider only the comparative ex
change value of commodities, and the
law of supply and demand becomes np
erative. If hay is plenty and potatoes
scarce, more hay will be demanded in
exchange for a definite quantity Of po-
tatoes than if the conditions be re-
versed. But this does not establish
prices. Exchange value varies accord
ing to supply and demand, but price
cannet be fixed without considering
the cost of money. The cost of money
is almost absolutely fixed by supply
and demand.
Remember that the unit of value is
a definite amount of labor. A days
work, not a dollar, is the unit of value.
When money is plenty, it will take
less value to buy a dollar than when it
is scarce. When the supply of money
is reduced to less than one-tenth of the
amount demanded by business, as it is
at present, the amount of value re-
quired to purchase the money we need
is far beyond the reach of most of us.
The same would be true if great fnan-
ciers should get a corner Son potatoes
as they now have on money. The
amount of value we would have to
swap for potatoes would be so great
that we would do without them. Yet
if these great %financiers could make all
obligations payable in potatoes, we
would he compelled to sacrifice prop,
erty to buy potatoes. Those great
fnanciers another name for thief
have a corner on money, and for near
" thirty years our several secretaries
of our national treasury have made no.
financial move without first consulting