The Seattle star. [volume] (Seattle, Wash.) 1899-1947, 1920-11-26
SCIENTIST
CHAMPIONS
GRAIN PITS
Cornell Professor Says That
Grain Exchanges Are
Necessary

boyle. ph n. extension professor %
rural economy. collegc Of agriculture.
cornell University. Is the author 81 a
book just published which Is causing
wide discussion among agricultural
economists and in business and fnan-
clal circles.
The book. Speculation and the
Chicago Beard OF Trade dcals with
the present scientific methods o. mar.
kcting grain and declares that In
practically all cases where the grain
exchanges are aSSailcd as institutions
ar gambling the charges are a result
Of ignorance or political ambitions.
Touching on the subject OF trading
IN contracts for future delivery.
PROT. Boyle declares that the future
price docs not determine the cash
price"
The course OF corn prices on the
hoard OF trade for isiT,i9iS Mus
srates the fact that futures do not
dominate cash prices. he says.
"The 1915 corp crop was small. In
1sif the crop was iarge-the largest
en- record In January. 1911. cash
corn ranged from s3A cents 20 si.oa,
and May corn then was 9Sis cents
70 si.e3A. or practically the same
spot From this date on the premium
ON cash corn gradually increased. as
both the spot and the future rose In
price.
In July cash corn had climbed TO
3e3@--a figure so high az 70 alarm
tiles gave n warning TO the board
Of trade that corn was getting too
high. and that speculation must bs
eurtailed. The directors on July II
fixed a maximum ON upset price on
corn futures for 1918 % ti.2S and
forbade making any contracts for
1915 IN excess Of this upset price"
REGULATION DID NOT
kEEP PRICES DOWN
The author says that according 90
s'the theory OF some thinkers. this
regulation would have held the cash
price down. also. but the contrary
happened. The trend OF cash prices
was upward. tin the new crop ar.
rived on the market AZ no time
AAAET July NsA~u tRfU TAU 1atRA
$3.50. and most OF the time Il was
above 81
-The conclusion seems warranted
that neither future nor cash price
has dominating influence perma-
nentiy over the other. but that both
are merely the effects Of supply and
demand causes"
Prof. Boyle says the statement has
gained much circulation that the
farmer Is the only person who has
no voice in fixlng the price OF his
product The manufacturer. accord.
Ing to this view. puts the prizes on
hts product This Is true with certain
very important limitations.
Most manufacturers face cornprti-
ton. All manufacturers face the
consumer. The manufacturer sets
his price. let US say. at the outset.
Then what happensf IL he has com
petition he must set his price not
too far above hts competitor sup.
pose the consumers fail 10 buy hts
whole output az this set priocg He
has various alternatives:
First. 70 lower his cost Of produe.
ton and lower his price. Second. 70
stimuIate consumption BY advertising
and selling campaigns. Third, TO I'm
prove his product Fourth. to quit
business.
MANUFACTURERS
FAIL OFTEN
1T is true that a very large par.
ccntage Of manufacturers do. sooner
or later. fail and quit business. be-
cause the consumer refuses TO buy
any volume Of the output at the
price fixed by the manufacturer II
the manufacturer has no competition
he Is likewise compelled TO conform
In the end to the consumers de.
mand
I'm reality. then. II Is only super.
ficiaIly true that manufacturers FIX
their own price and hold the con
sumner 70 those prices. Similarly. We
may say the merchants in the retail
stores fix their own prices--with Ger.
tain very important limitations.
Goods accumulate on their shelves.
dead goods. not movable at the axod
price.
Prof. Boyie. who was formerly OF
the bureau OF markets Of the United
States department OF agriculture. Is
considered one OF the nations leading
agricultural economists