Imperial Valley press., 1937-05-21
THE RETAIL MILK PRICE
REGULATION DANGER

In the state legislature at Sacramento
is bill, Assembly Bill 2422, commonly
called the Desmond bill, which would
establish dangerous principle such as
has been rejected in this country since
the Revolutionary War was fought. It
is described as "A bill to provide for en-
forcement of minimum wholesale and
retail prices of market milk and market
cream
The Desmond bill would set up in
each dairying district of the state board
or commission empowered to determine
fair price for wholesale and retail
milk sold to consumers in that district.
The board, it issupposed, would take into
consideration efficient business manage
ment, costs to the wholesaler or retailer.
and other items of operation in fixing
the price consumers must pay for milk.
Therein lies the first objection.
A politically appointed board, made
up of men who probably know more
about politics than about business, would
be entrusted with the job most of us
would hesitate to place in the hands of
J. P. Morgan or Roger Babson. They
would determine what is efficient oper-
alton. They would be made demi-gods
TO determine a thing which business
men themselves have been trying to set
tie for decades.
Another objection, and probably a
more important one, is this: Once the
precedent is established. what safeguard
is there against politically fixed prices
fixed for food, clothing, cigaret lighters
stoves and every other article the aver
age man uses?
If we are going to take one step to-
ward the Communistic idea of political
ly controlled economics. we might as
we'll go all the way. Politics has en-
croached too far on business already.
It is time to close the door against fur
ther inroads.
Friends of the Desmond bill argue
that price fixing would tend to elimin-
ate from business the inefficient distribu-
tors. because they could not operate at
a cost permitting them to sell at the
minimum price. Only reasonably eff
cient distributors would remain in busi-
ness they contend.
The same end is attained at present,
and would not be expedited by price
control. The efficient distributor is the
one who can sell for less and make
profit. No amount of price fixing legis-
lation would deprive him of his eff
cheney. nor change the fixed economic
law which governs efficiency, nor change
the fixed economic law which governs
efficiency and inefficiency. Survival of
the fittest was law of nature long be-
fore man wrote any statute books.
The only halfway reasonable argu-
ment for the bill is that the price paid
to the producer is already fixed by the
Young Act-therefore the price paid to
the distributor should also be fixed. Even
that is open to rebuttal.
The producers costs are more liable
to fuctuation than any other cost IN
the business world. The farmer does
not know from day to day what he will
pay for feed, what his herd will pro-
duce. nor what the demand will be. The
distributor faces different situation.
His costs are largely fixed. They are
labor costs, cost of transportation, cost
of processing, and similar items. He can
set UP his books beforehand, find what
price he must charge the consumer II
he is to make a profit, and charge that
price.
The farmer cannot operate efficient
" if he is at the mercy of fluctuating
market which is up today, down tomor-
row. and just fairly good the next day.
down tomorrow, and just fairly good the
next day. The distributors market is not
liable to such drastic fiuctuation.
Price fixing on milk to the consumer
does not seem either economically neces-
sary or desirable.