The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1904-07-04

! ing from different points on the sea
and converging upon competitive points
Of assemblage of surplus food products
in the interior. we owe more than TO
any other single agency the degree of
commercial ascendency now enjoyed
| by the United States in the world mar
ket. Their capacity to lay down reg
ularly, month by month and year by
year, cheap food supplies in European
markets, by cooperation with ocean
lines. has converted large portions Of
western Europe from agricultural to
industrial communities. The transit
ton of leading continental states from
the agricultural regime prior to 1870 to
the industrial and commercial order of
the last twenty-five years comedies
with the rise of the American grain
trade in which the American trunk
lines have so long been the ruling fac
tor Not only has the enormous econo-
mic expansion within the United States
been made possible, but also the econo-
mic development of Europe has been
forced into realization.
The problem OF these highways has
rarely been duly appreciated. The
trunk-line problem is not a local prob
lem, but pre-eminently a national
problem. If considered from the stand
point of the domestic producer and the
foreign consumer it may be stated as
follows: Between the price of grain
ket price in western Europe there is
variable difference to be divided be-
tween the distributive agencies, includ-
ing traders, bankers, and transporters.
for a fixed rate Of commission plus a
speculative profit; the banker obtains a
regular rate of discount, from which
risk is practically eliminated by insur-
ance; and the transporter tries to get
the residual share, but is subject to
the foresight of the trader and the
banker, who are really the custodians
of the commodity in store or on it's
way between producer and consumer.
If the transporter holds his services too
high for trader or banker to profit, the
commodities await a higher price or
lower freight charge, and production is
ultimately restricted. If the trader
holds his services too high, the banker
himself may find it to his advantage
~ H.,
movement OF commodities. If the bank
err in turn exceeds the limit of reason
able charges, credit from elsewhere
comes in to do the work. Such is the
mobility both of capital and of business
management within national limits
that no representative of commercial
service can for any considerable time
make his own terms for his part in
the annual distribution Of any agricul-
turaI surplus.
The student of commercial charges in
their relation to prices of foodstuffs
finds that there is one governing tend
ency pervading the whole history of
trunkline operations, viz, that this
difference between producers price and
to become a diminishing proportion per
unit of the value of foodstuffs gener-
ally. In other words, the residual
share, made up of the difference be-
tween what the producer gets and what
the consumer pays, goes to commerce
in its various functions, but that the
portion to be divided up among trad
ers, bankers, and carriers has been
gradually pared down to margin
which probably ten years ago would
have been regarded as ruinously unre-
munerative.
The problem has, from this point of
view, twofold character: First,
whether as a question of general eco
nomic welfare it were better to inject
a larger element of competition into
trunk-line business, and thus for some
lines, if not for all, diminish still fur
Their the residual portion which must
be shared among the participants in
it were better to maintain conserva-
tive limitations on competition in the
form of differential rates as a means
of checking the downward tendency of
commercial charges in general and of
freight rates on foodstuffs in partfcu-
lar. Viewed from a strictly national
standpoint these would seem to be the
alternatives at issue.
For keeping at the advocacy of new
is fulfilling one of the most useful func-
. fionS of a country papar NTa,,i o15