can be remedied. In Europe, the great public
markets in the cities bring farmer and consumer closely together in many
commodities, but in the United States the bulk of products are too far
afield for this. The farmer must market through a long chain of
manufacturers, brokers, jobbers and wholesalers with or without their
own distribution system, who must establish a clientele of direct
retailers; and thus public markets, except in special locations and in
comparatively few commodities, have not been successful. Another major
factor in our cost of distribution is the increasing demand for
expensive service by our consumers. There are many other factors that
bear on the problem and the economic results of our system which are
discussed, together with some suggestion of remedy, later on.

The second result of these studies was to show the great widening of
this margin during the war. During the year of the Food Administration's
active restraint on this margin, there was an advance of six points in
the wholesale index while the farmer's index moved up 25 points. Both
before and after that period the two indexes moved up together. The same
can be said of the margins between the wholesaler and the consumer.
Taking the period of the war as a whole, the margin between the farmer
and consumer has widened to an extravagant degree.

A good instance of a movement in margins is shown in flour in 1917. The
farmer's average return for wheat of the 1916 harvest, as shown by the
Department of Agriculture, was about $1.42. As about four and one-half
bushels of wheat are required to make a barrel of flour, the farmer's
share of the receipts from this harvest was about $6.40 per barrel. In
1917, before the Food Administration came into being, flour rose to
$17.50 per barrel to the consumer, or, at that time, a margin of $11.00
per barrel. During the Administration, the farmer received an average of
about $2.00 for wheat at the farm, or about $9.00 out of a barrel of
flour. The consumer paid $12.50, the margin being about $3.50 per
barrel.

This increase in margins shows vividly in the higher priced foods, for
instance, pork products. If we take hogs at the railway station over the
great hog states contiguous to Chicago as a basis, we find:

------------------------------------------------------
| Price of Hogs | Price of | Margin
Six | in Principal | Cured Products | Between
Months | States | to Consume