adjustment to need. We are at the present time a nation that is freight car crazy. We are also crazed by freight car shortage. Next year it will be worse. Here is a way out. Such a point-oforigin standardized plant would give the small town its natural and proper advantage of a lower cost of living than any great city could rival.

The second part of this plan is an efficient and honest information service which will enable both shippers and purchasers to know the supplies and demands. At the present time we have a perfect chaos of effort in seeking information concerning markets, and also a chaos in the supply of markets, so that one market is glutted, with the result of disappointed farmers, while another reasonably nearby market is starved, with the result of equally disappointed would-be purchasers. For example, this summer good peaches sold at from 40 to 60 cents a basket near Bordentown, N. J., while at the same time similar fruit was bringing $2.00 a basket in north Jersey towns suburban to New York. A proper information service would have had the cheap peaches in the high-priced market, with the result that prices would have been somewhat higher for suppliers and somewhat lower for purchasers; all parties would have been satisfied, consumption would have been increased and likewise production. It may be of interest to know that an attempt to establish such an information system in one of our largest eastern states was killed by commission men, although it is probably easy to show that it would have been to their advantage.

I do not wish to claim originality for these plans. They were worked out by Mr. A. B. Ross, now with the Pennsylvania Public Safety Committee, in the process of his attempts to solve some very distressing conditions of badly fed towns and poverty stricken farmers hardby. Why do we not have it? There are four reasons: (1) the American farmer lives in a mental burrow and is the fiercest of individualists, while the plan that I have described necessitates that men shall coöperate; (2) the American townsman, despite the fact that he eats three times a day, thinks food supply is the farmer's problem, when really it is a town problem and he is about as set an individualist as the farmer; (3) the United States Department of Agriculture, for reasons defended by any social economist, thus far does not take hold of such work: (4) most of our state departments of agriculture and our state colleges and agricultural extension service are equally shy of this constructive work.

Perhaps the shyness of state and national government could be explained if we could read the full history of lobbying and appropriations. Put yourself in the position of a bureau chief whose work depended on appropriations, and it is easy to see why he should hesitate to start things that would get all the middlemen of the country out to kill his appropriations. Meanwhile the need accumulates, and we have an unexampled opportunity in the present need and the unusually widespread desire to be of service. Here is a possible good result of the war.

This war is a terrible thing, but, like most misfortunes, it too may have a silver lining. The world is getting new concepts of public necessity and the way to meet it. If styles are not right, we change them. Not long ago someone had the notion that the ladies would look better with large, wide-flowing skirts, but suddenly a person in Washington, a person of thought, saw that this was going to cause world suffering from a wool famine. A brief international interview took place, and behold the lady is to look different. Her skirt is to continue short, and be exceedingly narrow, using little wool. Does steel go to make fences for game preserves, to make the skeletons of more hotels at pleasure resorts, to make limousines for the parkway? In England the answer is emphatically "no." The nation needs steel for three things: munitions, warships, merchant ships. No one else can have a pound unless he proves his need to the Ministry of Munitions which has control of the steel industry. We will be shortly in the same position if we do our part. Does a young man do as he pleases, go to college, play golf, take a job, marry a wife? No, it is decreed that the nation needs him in the army, and to the army we send him. When this war is over we are not going to lapse back to individual chaos. Instead of this the concept of public need and the utilization of a nation's resources to meet it will be applied as never before. One of the ways will be the development of rural market organizations which will give us cheap and abundant supplies of vegetable foods, a class of production that even our food administration in war times scarcely thinks it is possible to affect with all the authority at its command. It can only urge individual action.

The bringing of such market organizations to pass this winter in preparation for next year's business is the peculiar opportunity of Public Safety Committees and other voluntary war service organizations.

PRICE CONTROL

BY JOSEPH E. DAVIES,

Federal Trade Commission.

Prices all over the world during this war have risen, and very rapidly. This is not a local phenomenon or manifestation. It is world-wide. The price of coal in Norway, the price of foodstuffs in Italy, the price of silver in China, the prices of all commodities the world over have appreciably increased. One of the fundamental reasons, perhaps, for this increase in prices is found in the fact that the measuring standard of value-money-has greatly increased in volume. Nations have been obliged to issue large volumes of paper money. Credits have taken the place of money to an appreciable extent. The inevitable consequence is an increase in the prices of commodities whose value they measure.

There are additional reasons for increases in prices. There have come great and abnormal demands for certain commodities. The great war has consumed enormous quantities of materials in its processes of destruction which heretofore were not demanded for that particular use, or lack of use, but which were used in the ordinary processes of industry and trade. The demand for basic commodities has greatly increased. With reference to a great many commodities there are physical limitations in increasing production. It takes a year and a half to build a paper mill or twelve months to build a steel mill. The increase in the supply has not kept pace with the increase in demand. Prices register this condition.

Thirty million men, or more, have been taken away from production and have been engaged in the destruction of property. Not only have the sources of supply been curtailed, but the available supply has been consumed in non-productive forces. Under such conditions it is inevitable that prices should rise.

Whenever in the history of the world such a situation has come, men organized into communities or governments have tried to prevent the hardship that accrues. Governments cannot prevent the workings of economic laws, but government seeks to prevent the cupidity of men from taking an exorbitant profit out of commodities whose value has increased entirely because of abnormal conditions. With the supply limited, governments have sought to pre

scribe how that supply shall be distributed, and at prices which are based upon costs and upon such fair values as obtained before the rise of unusual and abnormal conditions.

The earliest instance of price fixing historically, I presume, was biblical. The Emperor Diocletian in Rome, three hundred years after Christ, tried to fix the prices of various commodities and the prices of labor. Sixty years afterwards the Emperor Julian tried the same thing. During the French Revolution the English fleet blockaded France, foodstuffs fell off in production, there was a great demand for food, prices went up and the French government attempted at that time to establish fixed prices and fixed the law of the maximum which, after a very brief trial, was suspended in its operation.

Recently, Germany has made the most elaborate and intensive effort to control prices. The results we will not know with definiteness until the conclusion of the war. France followed; English colonies early embarked upon the plan; England itself was the last to attempt it. We are now embarking upon a similar effort. In fact, there isn't a neutral or warring nation in the world that has a conscious, deliberate intent to serve the interests of its people but that is addressing itself to this problem and trying to control price.

Economists have always maintained that this was impossible; that it was unsound to attempt it; and that it was foredoomed to failure. It is characteristic of man that in the process of his evolution he will not admit that failure is foreordained where the general welfare of society is concerned, and it remains to be seen whether under present conditions as to production, transportation and distribution, with modern intelligence, this situation can be successfully worked out.

Our present situation is briefly this: legislation has been passed looking to fixing prices for government purchase generally and looking to the fixing of prices for the public as to food and fuel. The National Defense Act and the Naval Appropriation Act gives the President of the United States power to fix the price at which materials shall be taken for the use of the government. It is maintained that this power applies only to the purchase of those commodities which are used directly in military activities for ourselves or for our allies, steel for warships or projectile steel for shells, or lumber or coal for ships.

There are others who maintain that under this power the President might extend this to the possible fixing of all prices for the use of the general public.

The only specific legislative authority to fix prices for the public thus far, however, is found in the so-called Lever Act which has to do with food, fuel and agricultural implements. Senator Pomerene has introduced a resolution which is now before the Senate and which aims to bring about the same control over the price of steel and other commodities as obtains over the price of fuel and food. With the government of the United States a large purchaser-taking out of the lumber and steel markets or any of the basic markets a large quantity of material for war purposes, there follows a manifest effect upon prices. The available supply for the business and commercial uses of the country is that much diminished. In a market already hectic with demand the introduction of such an additional large buying factor forces prices still higher.

Prices in the market at the present time are, generally speaking, not dependent upon the cost of production, but are dependent upon the degree of men's needs and the competitive bidding they engage in to get the materials.

The Federal Trade Commission has been engaged for the past eighteen months with a large corps of accountants and investigators in ascertaining the facts as to costs of production of many of the basic commodities, such as steel, cement, aluminum, petroleum, fuel, oil, news-print paper and a great variety of similar commodities.

This was upon the direction of the President of the United States who, with characteristic foresight, concluded that it would be necessary for him and other government agencies to have accurate information of a definite, scientific character as to what the exact costs of production were, so that when the price was named, if it were to be named, it would be determined not upon hearsay, not perhaps upon the self-serving declarations of those who were engaged in that business, but upon the facts which had been determined by a government agency which had no purpose other than the disinterested one of serving the public.

One of the chief difficulties attendant upon any plan of price control is the varying costs of production. The outstanding fact in all industrial production appears to be quite generally that the low cost, highly efficient, highly integrated plant can sell and make a