Part 9 (1/2)
It is customary just now to attribute the high cost of living to lessened production due to a supposed decline of agriculture, and to advise, therefore, that more persons engage in farming for the purpose of increasing the product. This position is met by an editorial of the New York Tribune, which holds that intermediary trading combinations are responsible:
”It is true that the raising of cattle for the market has almost ceased in the East and that agriculture generally has not kept pace with the demand for food products. Yet it is hard to believe that agriculture in any part of the Union would steadily decline in the face of an enormous appreciation of the cost to the consumer of all farm products, were there not some powerful disturbing factor operating to deny the farmer the benefits of that appreciation. If the Eastern farmer could have reaped a legitimate share of the increase in the price of farm produce which has taken place in the last twenty years, he would certainly be in position to command all the labor he needs and to develop resources now neglected because it does not pay to develop them. Under normal conditions economic law would certainly drive labor and energy into a field of production in which there had been the greatest relative expansion in the selling price of products.
”Yet economic law has not operated to stimulate agriculture, because the returns from steadily mounting prices have not really reached the producer. Thirty years ago the fattening of steers for the local markets was common in the East. But when the vast Western ranges were opened, and the great packing houses were established, the cheapness of range beef, refrigerated and delivered in Eastern cities, was used as a weapon to kill off the cattle industry of the East. When the Eastern cattleman was driven out of business, the price of beef rose, but virtually all the increase has gone to the packing combinations, which fix their own price to the Western range man and their own price to the consumer and artificially control the supply so as to discourage increased production in the West and to prevent a revival of production in the East. The country is growing in population at the rate of twenty to twenty-five per cent each decade. But Secretary Wilson has shown that the supply of food animals is not being maintained in proportion to population. In the last decade cattle have remained about stationary in numbers, swine are actually decreasing, and, while more sheep are available, the supply has diminished relatively to population.
”It can hardly be contended that with steadily diminis.h.i.+ng supplies and steadily increasing prices the law of supply and demand would not work out a new balance, stimulating production through easy profits, were there no artificial interception of the producer's normal share of the advance in price. Were there a free market for the Eastern raiser of stock, milk, and food products generally, with the middleman's commissions properly restricted, Eastern farming would probably be profitable enough to hold its own against manufacturing and to compete successfully with the manufacturer for labor.”
_The farmer's part._
Of course, it is necessary to teach every farmer how to grow more crops, for this is his business, and it also enlarges his personal ambition and extends his power and responsibility; but merely to grow the crops will not avail,--this is only the beginning of the problem: the products must be distributed and marketed in such a way that the one who expends the effort to produce them shall receive enough of the return to identify him with the effort. Thereafter, social and moral results will follow.
_The middleman's part._
I recognize the service of the middleman to society. I know that the distributor and trader are producers of wealth as well as those who raise the raw materials; but this is no justification for abuses. I know that there are hosts of perfectly honest and dependable middlemen. We do not yet know whether the existing system of intermediary distributors and sellers is necessary to future society, but we do not see any other practicable way at present. In special cases, the farmer may reach his own customer; but this condition, as I have suggested, is so small in proportion to the whole number of farmers as not greatly to affect the general situation. We do not yet see any way whereby all farmers can be so organized as to enable them to control all their own marketing.
Therefore, we must recognize middleman-practice as legitimate.
_A system of economic waste._
But even though we yet see no way of general escape from the system, we ought to provide some means of regulating its operation. The present method of placing agricultural produce in the hands of the consumer is for the most part indirect and wasteful. Probably in the majority of cases of dissatisfaction, the person whom we call the middleman does not receive any exorbitant profit, but the cost of the commodities is piled up by a long and circuitous system of intermediate tolls and commissions.
_Cooperation of farmers will not solve it._
It is commonly advised that farmers ”unite” or ”organize” to correct middleman and transportation abuses, but these troubles cannot be solved by any combination of farmers, because this is not an agricultural question. It is as much a problem for consumers as for producers. It is a part of the civilization of our day, completely woven into the fabric of our economic system. The farmer may feel its hards.h.i.+p first because he must bear it, while the consumer, to meet higher prices, demands more pay of his employer or takes another st.i.tch out of somebody else. But it is essentially a problem for all society to solve, not for farmers alone, particularly when it operates on a continental basis. This also indicates the futility of the arbitrary control of prices of the great staples by combinations of farmers (page 126).
Of course, temporary or local relief may be secured by organizations of producers here and there, or of consumers here and there (probably consumers can attack the problem more effectively than producers), and by the establishment of public markets; but no organization can permanently handle the question unless the organization is all the people.
The present agitations against middleman practices and stock-market gambling ought to compel Congress to pa.s.s laws to correct the evils that are correctable by law, and the organizations then should keep such touch on the situation that the laws will be enforced.
It has been suggested that the superabundant middlemen go into farming; but no one can compel them to go to farming, and they might not be successful farmers if they should attack the business, and the farming country might not need them or profit by them,--for it is not demonstrated that we need more farmers, although it is apparent that we need better farmers.
_It is the business of government._
It is the business of any government to protect its people. Governments have protected their countries from invasion and war, but the greatest office of government in modern times is to develop its own people and the internal resources of its realm. We are beginning to protect the people from the over-lording of railroads, from unfair combinations in trade, and from the tyranny of organized politicians. It is just as much the business of government to protect its people from dishonest and tyrannous middlemen lying beyond the practical reach of individuals. The situation has arisen because of lack of control; there is no conspiracy against the farmer.
It is said that compet.i.tion will in the end correct the middleman evil, but compet.i.tion does not correct it; and compet.i.tion alone, under the present structure of society, will not correct it in most cases because ”agreements” between traders restrict or remove compet.i.tion: the situation does not have within itself the remedies for its own ills.
When we finally eliminate combinations in restraint of trade, the middleman abuses may be in the process of pa.s.sing out. It is to check dishonesty on the one hand and to allow real compet.i.tion on the other that I am now making suggestions.
_Must be a continuing process of control._
I have no suggestion to make as to the nature of the laws themselves.
There are many diverse situations to be met; and I intentionally do not make my remarks specific. Of course, any law that really attempts to reach the case must recognize the middleman as exercising a public or semi-public function, and that, as such, he is amenable to control, even beyond the point of mere personal honesty. The licensing of middlemen (a practice that might be carried much further, and which is a first step in reform) recognizes this status; and if it is competent for government to license a middleman, it is also competent for it to exercise some oversight over him. It is not necessary that government declare an agency a monopoly in order to regulate it. Commercial situations that unmistakably involve service to the public are proper for governmental control in greater or lesser degree. The supervision of weights and measures is a good beginning in the regulation of middleman trading.