tation, which shall be up to the best standard of efficiency, convenience and safety, so desirable to the investor that the necessary funds for betterments and extensions will be forthcoming, and so attractive as a vocation that the highest ability will be employed in its management? Otherwise, if unhappily this is not done, must not our country come measurably to a standstill and face a future. of comparative stagnation?

"Second. The payment of liberal wages to an adequate number of competent men. This not only to insure increasing skill and reliability in a service which is all the while becoming more exacting, and on which the safety and comfort of the public constantly depend, but also because of the very great influence of railway wages upon the compensation of labor in every sphere and grade. of private employment. To my mind the fundamental social problem is to provide, by the wise development of our institutions and without radical action or injustice, for a more equable diffusion of the bountiful wealth which the earth produces. Now, as a large and increasing majority of the able-bodied live, and must live, by working for others in some capacity, a high and advancing standard of payment for service of every sort tends strongly to promote, and is the best practical means to bring about that degree of equality in social welfare which makes for the satisfaction and happiness of all our people.

"Third. The betterment of existing lines so as to greatly augment their serviceableness to the public, as can in varying degree be done everywhere, without unnecessary and undesirable increase in capitalization. Every dollar borrowed to improve a road now in operation involves a permanent addition to the interest charge which the public is required to pay; the improvement from current earnings puts no lien upon the property, but rather augments its value and usefulness, and by adding to the security of the capital already invested tends to a lower rate of interest upon that capital. Broadly speaking, this means a national policy, so to speak, in respect of railroad rates and revenues in harmony with our national policy in other matters of public concern, and in accordance with that enlarging spirit of altruism which manifests itself in public as well as in private life, and which impels the present assumption of burdens that might be escaped or deferred in order that another generation may have an easier task and a larger opportunity. Is it not in this particular field a wise and patriotic policy?"

FARMER'S SHARE OF THE CONSUMER'S COST
BY HON. JAMES WILSON,
Secretary of Agriculture.

FROM THE REPORT OF THE DEPARTMENT OF AGRICULTURE FOR THE
YEAR 1910.

High prices was one of the subjects of my annual report for 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 price 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 received 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 DAIRYMAN GETS ONE-HALF THE MILK PRICE.

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 78 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 78 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

*Note-Milk is carried by rail on passenger trains, or by special milk express service.

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 wih 57 per

cent.

The average price paid by consumers in the 78 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. BUTTER AND THE RETAILER.

Factory butter was included in this investigation of prices, in the three classes of creamery print, creamery tub, and renovated. Consumer's prices were taken in 78 cities in all parts of the country and the facts were ascertained in the latter part of June, 1910.

In the distribution of creamery butter from factory to consumer the ultimate price includes the railway charge for transportation and the retailer's addition. The freight charge is about 0.6 of 1 per cent of the consumer's price.

As a general average for the 78 cities, the creamery receives 86.3 per cent of the consumer's price for creamery prints. The percentages are nearly the same in all geographic divisions, the lowest, 84.6 per cent, being found in the Western States, and the highest, 87.5 per cent, in the South Atlantic States.

In the case of creamery tub butter, the factories receive 86.5 per cent of the consumer's price in the 78 cities, the Western States again having the lowest percentage, 84.6 per cent. The highest percentage is 88 for the South Central States, and in the other divisions the percentage is between 86 and 87.

Factories that renovate butter receive a somewhat larger percentage of the consumer's price than in the case of creamery prints and tub butter. The average for the 78 cities is 88.3 per cent, with inconsiderable variations among the geographic divisions of the country.

The increase of price of farm products in their transfer from producer to consumer was thoroughly investigated in all parts of

the country and for a large variety of products by the Industrial Commission. Although the facts obtained in that investigation are now about ten years old, it is believed that the ratios between producer's and consumer's prices are approximately the same now as they were then. At any rate, it seems probable that the farmer is not now receiving a larger share of the consumer's price than he received ten years ago, and he may be receiving a smaller share.

POULTRY.

Within the field of investigation it was found that poultry almost doubled in price between the farmer and the consumer; in other words, the farmer received only 55.1 per cent of the consumer's price. Inquiries were made concerning turks as distinct from other poultry, with the result that it was found that the farmers received 63.5 per cent of the final price. Chickens as a separate description are represented by the percentage of 68.4 when priced by the pound, and by 57.1 per cent when priced by the head.

Of the price per dozen paid by the consumer, the producer received 69 per cent in the case of eggs; dried beans, 75 per cent when bought by the bushel; cabbage, 48.1 per cent when bought by the head and 64.9 per cent when bought by the pound; cauliflower, 75 per cent when bought by the dozen; and celery, 60 per cent when bought by the bunch.

THE SMALLER THE RETAIL UNIT, THE LESS THE FARMER RECEIVES.

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 purchasing 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 con