The Daily Missoulian. [volume] (Missoula, Mont.) 1904-1961, 1918-03-10
REGULATE PRICE
THROUGH BUYING
Stability Put in Stock Market
by Equalizing Supply
and Demand.
Is GOVERNMENT PLAN
Ups and Downs of Market
Obviated at Time Allied
Orders Are Placed,
~ JosePh p. COTTON

"A y
--..Of the U. s. Food Administration. :.
The U. s. Food administration dur
ing this winter has been able to estab-
lish a $3.50 minimum price on hogs
at Chicago. and maintain that mini
mum. not by any virtue Of any price,
liking law. but by the simple CONNER
cial method Of regulating the foreign
buying 80 that the heavy buying should
b done when the hogs were plentiful
and prices kept reasonably steady at
all times. With steady market the
producer can feel reasonably certain
q getting price when his hog is
ready, and he does not have to watch
hts market, and he is not subject to
the power OF the buyer to cut the price
~ low 40 he wishes in times when
hogs are plentiful.
On December !, 1917, the u. s. Food
administration began an entirely new
system Of buying meats In the United
states for the allies. Before that time
the allied nations had bought meat in
thio country an best they could--in
competition with the domestic market
and each other-often feverishly. and
~ meet emergencies.
A. was Inevitable, such buying was a
large factor In the sky-rocketing proc
80 Of meats last fall Not only did
that demand help put prices up, but
+ put prices up irregularly. The fat
back Of the hog, for instance, had
Ocen In especial demand for France
ana Italy, as as a result of that de-
mand the relative value OF the fat
back Gas compared with other cuts Of
the hog) went up out of proportion.
The English had been accustomed to
particular cure of lean hogs. and in
consequence lean hogs were at a mar
ket premium as compared with fat
h09s. That has had a bad effect be-
cause hogs We're being killed before
they were ready to market. and at a
time when soft corn would be wasted
unless 1t went into making weight on
the hog.
The problem was to find n way to
end these difficulties: first, to adjust
the supply to the demand so that tenn
porary shortages would not be used
ny spectators to boost the market or
permit speculative profits. and, sec
ond. to stabilize prices so that the
army and navy, the domestic trade and
the allied nations should all buy on
the same general price level and vet
protect the producer.
Allies CsrtraIixs Buying Power.
AS the first step, the allied nations
all came together and established a
single buying commission for handling
meats and similar products. This COM
mission pooled all the orders, stand :
ardized specifications and contracts,
and adopted a system of regular buy
Ing SO that the trade would know a
reasonable time in advance what was
required ana be ready to meet the de-
mands with the minimum of inconyen-
fence to the domestic business
To handle the business the food ad-
ministratinn established and exeeu-
tive organization which should place
the orders and advise with the federal
trade commission and other established
carnations as to prices.
AZ the threshold of it's work. that or
&anization had to meet and determine
several questions.
The first question was prices. As
To prices on" thing was obvious. There
must be standartt,price on each spec
flied product TO every packer and no
discrimination between packers. What
the price is TO be is an expert aues-
ton which differs in each case, /
will speak of these prices later.
AIiottirg Foreign Orders.
The second question was: Which
packers shall get share OF foreign
orders? The naswer to that was
somewhat difficult. The business could
not so by favor. 1t mist not un-
duly disturb the dist cibutior OF meat IS
TO the people OF the :-nited States. IT
must be divided on some sound fair
theory which would produce results.
On going over the trade it was found
that the shipments must all be in car
load lots. and of standard quality,
which would meet foreign require
ments. That meant that it was am
absolute necessity to confine the for
cign business to packers who had suf-
ficaent equipment and experience
enough to handle the business eco
nomically and efficiently, and-stbove all
promptly. Then it was found that
many of the packers, particularly the
smaller ones. for long time had had
substantial British business and
made a specially of the British trade
They had spent much money to es-
& tabiiah-and had established--irade
names and good will in Great Britain.
1t would be foolish 70 take them out
Of the British business and force them
~ find new markets in the United
6.ases feg their product, that would