Since the first of July this year, many economic forces have caused a situation adverse to the consumer. There has been a steady increase in wages, a steady increase in cost of the materials which go into food production and manufacture, and in containers and supplies of all kinds. There has been an increase of 25 per cent in freight rates. The rents of the country are increasing and therefore costs of manufacturing, distribution and transportation are steadily increasing and should inevitably affect prices. The public should distinguish between a rise in prices and profiteering, for with increasing prices to the farmer—who is himself paying higher wages and cost—and with higher wages and transport, prices simply must rise. An example of what this may come to can be shown in the matter of flour. The increased cost of transportation from the wheat-producing regions to New York City amounts to about forty cents per barrel. The increased cost of cotton bags during the last fourteen months amounts to thirty cents per barrel of flour. The increase in wholesalers' costs of drayage, rents, etc.,
amounts to ten cents, or a total of eighty cents without including the increased costs of the miller or retailer.
Such changes do not come under the category of profiteering. They are the necessary changes involved by the economic differences in the situation. We cannot "have our cake and eat it." In other words, we cannot raise wages, railway rates, expand our credits and currency, and hope to maintain the same level of prices of foods. All that the Food Administration can do is to see as far as is humanly possible that these alterations take place without speculation or profiteering, and that such readjustments are conducted in an orderly manner. Even though it were in the power of the Food Administration to repress prices, the effect of maintaining the same price level in the face of such increases in costs of manufacture, transportation and distribution, would be ultimately to curtail production itself. We are in a period of inflation and we cannot avoid the results.
We have had a large measure of voluntary coöperation both from producers, manufacturers and wholesalers, in suppression of profiteering and speculation. There are cases that have required stern measures, and some millions of dollars have been refunded in one way
or another to the public. The number of firms penalized is proportionately not large to the total firms engaged.
In the matter of voluntary control of retailers we have had more difficulty, but in the publication from week to week in every town in the country of "fair prices" based upon wholesale costs and type of service, there has been a considerable check made upon overcharges. The Food Administration continues through the armistice until legal peace and there will be no relaxation of efforts to keep down profiteering and speculation to the last moment.