The Elk Mountain pilot., 1920-12-02
ARTIFICIAL MARKETS
AND ARTIFICIAL PRICES

ByWalter Thomas Mills, President OF
the School of Social Service, Berk-
ley, California.
The cotton growers of the South
and the grain growers of the North
recently asked the Secretary of the
Treasury at Washington, y. c., for
the consideration of a certain propos-
al. The Secretary of the Treasury is,
under the law, the chief officer of the
Federal Reserve Bank The Federal
Reserve Bank is a privately owned in
stitution controlled by the Wall
Street bankers, but the salary of the
Secretary is paid by the Government,
which is supposed to represent all of
the people. The Secretary is in duty
bound to act in behalf of all of the
people, not in the interests of the
Wall Street combination. 1t is upon
this assumption that he is made the
chief officer of this privately owned
bank. which was created by the au-
thority of all of the people, but is
owned and managed by only small
fraction of the people.
The thing asked by the farmers was
that warehouse certificates, based on
the products of the farmers, should
be made the basis of credits to be
granted to the farmers by the Federal
Reserve Bank. 1t was asked that this
should be done while the farmers
products still remain the property
of the farmers themselves.
The Secretary replied that it was
contrary to the policy of the govern
ment to support artificially made
prices and the petition was denied.
The Secretary ought to know, the
farmers who brought the petition do
know, that all monopoly prices are
artifcially made. The farmers know,
and the Secretary ought to know, that
year. but are consumed by a process
which lasts throughout the year. The
Secretary ought to know, and the
farmers do know, that each year,
when the farmers products are ready
for the market, prices are artificially
made at the lowest possible levels.
The Secretary ought to know, and the
farmers do know, that the parties
who purchase the farmers products
and dispose of them gradually
throughout the period of their con-
sumption do not buy them for the
purpose of transporting, storing or
manufacturing these products. The
farmers products are year by year
purchased from the farmers by those
who do not themselves use these pro-
ducts. either as consumers or as man.
ufacturers. The purchasers. buy these
products only to hold them out of
use until they can dispose of them to
the manufacturers at prices artifici-
ally advanced. l s-s
1t is known to all students of the
matter, it ought to be known to the
Secretary, that of the price paid by
the manufacturer in the purchase
from the middleman, not from the
producer, is made up of the three
items: Q) of the price paid to the
farmer (2) of the cost of transporta-
tion and storage and (3) of the ar
bitrary rake-off added to these costs
by the middleman, that is. the private
monopoly. This last share of the
price represents no service of any
sort, but it makes up the Mons share
of the final cost of living. The add
ing of this share of the price is pure
ly arbitrary purely artificial, and the
artist is able to get in his work only
through the power of private mo-
nopoly
1t is currently understood that
these middlemen finance the farmer
in the sale of his products. The fact
is that the farmer finances the mid
dlemen in the purchase of his pro-
ducts. Warehouse certificates in the
hands of the middlemen are accept
able by the Federal Reserve Bank and
credits based upon such warehouse
certificates are granted to the useless
intervening monopoly. Through re-
volving process this provides the
means by which the useless profteer
is able to buy from the farmer at de-
pressed prices, hold up the products
for the final buyer for advanced prices
and in this way rob both the producer
and the consumer. He buys small
portion of the harvest. Then he OBJ
tains warehouse certificates for the
share he has purchased and secures
Federal Reserve Bank loan on this
warehouse certificate. With this loan