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