Evening star., 1936-08-14
Two.Price Milk Selling
Plan Defeats Own Ends
To the Editor OF The Star:

To the Editor OF The Star:
The writer has been producing milk
and selling it in the vicinity of Wash
ington for Is years. Mr.. PancoaSt, who
criticizeS your editorial on milk prices,
believes that an advance in the retail
price of milk this Fall, chiefly to keep
pace with the general advance in prices
resulting from the bank credit imitation
that is producing the present ''recov-
cry" will probably occur. But as long as
an appreciable surplus stands in the way
it will be difficult to arrange such an
advance without that loss of trade which
The Stars editorial wisely predicts.
Such a loss in trade would. under the
two-price selling plan in use by the
cooperative association of producers,
prevent the development of much actual
return to the members as whole. Rath-
er will it tend to stimulate sales of sur
plus" as evaporated milk as also the
business of producer retailers or of in
dependent dealers trading on a one
price basis. Members favored in the
association quotas with large basic"
allotmentS can benefit from an advance
in retail prices under the use class"
price scheme. but the average members
AAioSiSoO WOulS NC oublouoly oCAfCa oAio
might even suffer from retail prices that
are advanced while the association is
carrying much surplus and is not ap-
portioning it evenly to all shippers alike
1t is this discriminatory treatment of
producers and consumers in marketing
policy that the marketing agreement"
is calculated to enforce under criminal
law so that the double standard of prices
may be maintained free from competi-
tive interference. Such double stand
ard undeniably yields a subtle subsidy
to thu professors of the surplus" 1t
is significant. therefore, that as shown
by the recent studies of Sanderson and
CaSsels of Harvard in the English mar
ket, the scheme actually operates to de-
feat its own ends-or, at least. those ends
which are alleged when such a price
fixing law is presented for passage in
the interest of farm relef!'
The warning sounded editorially in
the current number of Hoard's Dairy
man against high retail prices as a
source of trouble should be read by Mr..
Pancoast, for If there Is a troublesome
surplus now burdening the situation in
the District milk shed despite the recen,
sharp increase in Washington's popula-
ton, the cooperative association has
only itself to blame. Thus. while pro-
posing retail price based upon feed
costs and pointing to tardy decline in
prices in 1882, he fails to note that that
decline was by no means proportioned to
the fall in feed prices which had then
taken place. The result of this wide
spread cooperative policy of tWo-price
sales, with consequent excessive retail
prices was continued loss of fluid trade
in 1888, which amounted to 100 million
gallons with a proportionate depressing
effect on dairy prices outside the fluid
trade. Naturally an excess of licensed
milk supply has resulted: and the con-
sequence can only be that supplies whose
costs of production, or of distribution
are now above the minimum will have
to be curtailed by individual losses be-
fore prices can be successfully advanced.
In further defense of The Stars posi-
ton attention should be called to Mr.
Pancoast's omission to note prices and
conditions in nearby Baltimore. where
the Federal Trade Commission has re-
Gently reported market conditions to be
far more satisfactory than in those
Northeastern markets which Mr.. Pan
coast cites as affording high retail prices.
AS for the Southern cities which he
notes, their prices have always been
higher than those of the North and cam
not be fairly cited in comparison with
those Of the District of Columbia.
ALDEN A. POTTER.