Economic essays

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Monograph

Identifikator:: 1753623200

URN:: urn:nbn:de:zbw-retromon-136107

Document type:: Monograph

Title:: Economic essays

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1927

Scope:: viii, 368 S.; Ill., graph. Darst.

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: The holding movement in agriculture / Jesse E. Pope

Collection:: Economics Books

272 ECONOMIC ESSAYS IN HONOR OF JOHN BATES CLARK scarcity value. In other words they insist that the normal work- ing of supply and demand does not guarantee to the farmer his cost of production plus a fair profit. The real significance, therefore, of the demand for credit for holding for higher prices lies in the second proposition, viz., that the working of the law of supply and demand does not bring about satisfactory prices and that what is sought is not the normal market price but something more, namely, a satisfactory price, or a fair price. Secretary Wallace has accurately stated the real philosophy underlying the holding movement as follows: “The energy and the intelligence with which the farmer works, the number of hours he works, the cost he incurs in producing crops—none of these are considered in determining the price.” (Year Book of the Department of Agriculture, 1921, p. 2.) The outstanding attempts to secure cost of production plus a reasonable profit by resort to holding and so-called orderly marketing are: the coffee valorization scheme of the Brazilian government, the various attempts to control Cuban sugar pro- duction, and the activities of the raisin growers’ cooperative marketing association and of the cooperative wheat pools. During the first decade of the present century the Brazilian ocrowers of mild coffees were in a serious situation. Bountiful harvests had created an oversupply and had forced prices below cost of production. There was a persistent demand on the part of the growers for Governmental relief and finally the Govern- ment undertook to raise the price of coffee by the purchase and storage of a sufficient part of the coffee supply to enable the balance to be marketed at a “fair” price. The Government fixed the minimum price and undertook to buy all the coffee for which the grower himself could not find an outlet. This coffee in the hands of the Government was placed in storage houses at home and in Europe. The undertaking was financed by the issue of paper money against the coffee in storage, which was to be retired as the coffee was disposed of on the market. This plan is the well known valorization scheme. It was adopted as a temporary measure to meet a temporary crisis. The materially higher prices brought about by valoriza- tion relieved the financial situation of the growers but also stimulated the production of coffee at home and abroad, and as a

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