was one of the subjects of my annual report of 1909. It was shown that for many years previous to about 1897, or a little later, the prices of farm products received by farmers were even less than the cost of production, and often little if any above that cost, so that during a long period of years the farmer was not thriving. It was shown also that in the upward movement, which began about 1897, the prices received by the farmer have advanced in greater degree than those received by nearly all other classes of producers. That this should have been so was merely a matter of justice to the farmer to equalize the reward of his efforts with the rewards in other lines of production.

Increase of beef prices. The price received by the farmer is one thing; the price paid by the consumer is far different. The distribution of farm products from the farm to consumers is elaborately organized, considerably involved and complicated, and burdened with costly features. These are exemplified in my report for 1909 by a statement of the results of a special investigation into the increased cost of fresh beef between the slaughterer and the consumer.

It was established that in the North Atlantic States the consumer's price of beef was 31.4 per cent. higher than the wholesale price received by the great slaughtering houses; 38 per cent. higher in the South Atlantic States; and 39.4 per cent. higher in the Western States. The average for the United States was 38 per cent. It was found that the percentage of increase was usually lower in the larger cities than in the smaller ones and higher in the case of beef that is cheap at wholesale than of high-priced beef. It was a safe inference that the poorer people paid nearly twice the gross profit that the more well-to-do people paid.

The farmer and milk prices. Another investigation into the increase of prices in the process of distribution was made in the last week of June, 1910. This time the object was to discover what fraction of the consumer's price was received by the farmer. It was a time of high prices, of high cost of

living, and the aim was to ascertain to what extent the farmer received a return out of the high consumer's cost of farm products.

The investigation covered seventy-eight cities scattered throughout the United States, and the information was contributed by a large number of the Department's crop correspondents and by some of its special agents who made inquiries in all of the seventy-eight cities. The cities were divided into geographical groups for the purpose of computing averages, and these were combined into an average for the United States, all after proper weighting according to importance.

Milk was one of the commodities under investigation-a food product indispensable to a large fraction of the families of the nation, and now a costly one to all consumers. While it is true that the dairyman is receiving considerably more for his milk than he did before the present era of high prices, yet it was discovered in this investigation that throughout the United States he receives a scant 50 per cent., or one-half of the price paid by the consumer. The other half goes to the railway company for carriage, to the wholesale milk dealer, if there is one in the chain of distribution, and to the retailer who delivers at the consumer's door.

Freight charges for carrying milk vary according to distance, but their average may be regarded as approximately about 7 per cent. of the consumer's price. With the farmer receiving about 50 per cent. of that price and the railroads 7 per cent., the remaining 43 per cent. of the consumer's price is received mostly by the retailer.

The milk wagon of the retailer has a long route. It stops at a house or two in one city block, perhaps passes several blocks without stopping, and so proceeds to serve customers thinly distributed along a route of miles. At the same time the milk wagons of other retailers are covering various portions of the same route, and so there is a great waste of effort and of expense in the distribution.

The division of States in which the cost of distributing milk

from producer to consumer is the most is the North Central group, in which producers receive 44 per cent. of the prices paid by the consumer. Next in order follow the Western States with 47 per cent., the North Atlantic States with 53 per cent., the South Central States with 55 per cent., and the South Atlantic States with 57 per cent.

The average price paid by consumers in the seventy-eight cities is almost exactly 8 cents per quart. In the North Atlantic and North Central States the average is 7.5 cents; in the Western States, 8.9 cents; in the South Central, 9.1 cents; and in the South Atlantic States 9.3 cents. These prices are for the last week in June, 1910.

Size of retail unit, and of farmer's percentage [page 22]. The general fact was that the producer's percentage of the consumer's price diminished as the quantity sold at retail was smaller. For instance, the apple grower received 55.6 per cent. of the consumer's price when the consumer bought by the bushel and 66 per cent. when the purchase was by the barrel. When the consumer bought corn by the bushel, the farmer got 70.6 per cent. of the price, but when the purchase was by the barrel the farmer received 81 per cent. The strawberry grower received 48.9 per cent. of the consumer's price in purchases by the quart and 75.9 per cent. in purchases by the crate. A still better illustration is found in the case of onions. In [purchases made] a peck at a time, the farmer received 27.8 per cent. of the retail price; in purchases of a barrel, he received 58.3 per cent.; and in purchases by the 100 pounds, he received 69 per cent. So in the case of oranges, when the purchase was by the dozen the grower received 20.3 per cent. of the consumer's price, whereas when the purchase was by the box the grower received 59.3 per cent. Price gains from consumer's point of view [page 24]. In the consideration of this subject so far, the aspect has been that of the producer; the farmer thinks of the price that the consumer pays for farm products and compares with them the price that he himself receives. While the farmer is look

ing forward with regard to the prices of his products, the consumer is looking backward, and so regards the prices that he pays as increases upon what the farmer gets. This aspect of the matter may now be worth some attention.

It is established by the investigation of this Department made last June that the milk consumers of seventy-eight cities paid for milk an increase of 100.8 per cent. above the price received by dairymen; in other words, the farmer's price was fully doubled. The lowest increase among the geographic divisions was 75.5 per cent. in the South Atlantic States and the highest was 111.9 per cent. in the Western States.

In the purchase of butter the consumer pays 15.8 per cent. above the factory price in the case of creamery prints, 15.6 above in the case of factory tub, and 13.3 per cent. above the factory price in the case of renovated butter. The percentages of increase among the five divisions of States do not vary much from the averages for the United States.

Some large percentages of increase of prices were found by the Industrial Commission-135.3 per cent. for cabbage bought by the head; 100 per cent. for melons bought by the pound, for buttermilk sold by the quart, and for oranges sold by the crate; 260 per cent. for onions bought by the peck; 400.4 per cent. for oranges bought by the dozen; 111.1 per cent. for strawberries bought by the quart; and 200 per cent. for watermelons sold singly.

There were many cases of increase of consumer's price over farmer's price amounting to 75 per cent. and over, but under 100 per cent., and among these were 90.5 per cent. for apples bought by the barrel and 80.6 per cent. for apples bought by the box; 75 per cent. for chickens bought by the head; 83.4 per cent. for onions bought by the pound; 80.5 per cent. for potatoes bought by the bushel; 88.8 per cent. for poultry in general bought by the pound; 95.8 per cent for strawberries bought by the box; 82.5 per cent. for sweet potatoes bought by the bushel.

It may be worth while to extend the list of farm products that are sold to consumers at a large increase above farm prices. In the class of commodities selling for an increase of price amounting to 50 per cent. and over but under 75 per cent. above farm prices, may be mentioned the following increases: 61.8 per cent. for cabbage bought by the pound; 66.7 per cent. for celery bought by the bunch, turnips and parsnips bought by the bunch, and green peas bought by the quart; 54.4 per cent. for chickens bought by the pound; 50 per cent for eggplants bought by the crate; 68.4 per cent. for onions bought by the bushel; 68.7 per cent. for oranges bought by the box; 60 per cent. for potatoes bought by the peck; 59.8 per cent. for turkeys bought by the pound.

The import price of coffee in the fiscal year 1910, which was 8 cents a pound, after the increase to 20 and 35 cents per pound to the retailer, has risen in price to the consumer from 150 to 337.5 per cent. So with tea of the same fiscal year; its import price of 16 cents per pound, after being increased to 50 to 70 cents per pound, cost the consumer an advance of 212.5 to 337.5 per cent.

Before assigning to middlemen the various increases of prices, it is proper to deduct the percentage due to freight rates. The freight charge for milk received in New York is about 18 per cent. of the producer's price, and in Chicago about 14.7 per cent. Of the import price of coffee, the ocean freight charge from Rio Janeiro is 3.6 per cent. The percentages of farm price for which freight charges stand in the United States may be estimated at approximately 0.9 of 1 per cent. of the factory price for butter; 1.2 per cent. of the farm price for clover seed; 1.6 per cent. for cotton; 1.3 per cent for eggs; 13.6 per cent. for apples; 4.8 per cent. for beans; 14.8 per cent. for potatoes; and 5 per cent. for sweet potatoes. The rates for oats, rye, barley, and wheat are nearly the same, ranging from 6 per cent. for oats to 7.3 per cent. for barley and rye. The rate for corn is 9.2 per cent. and the average