Prices may make supply and demand, and supply and demand may make prices. First one has the lead, and then the other; they are constantly acting and reacting. Before the war, the relationship in some commodities might be expressed with almost mathematical exactness, but there were constant little departures. Since the war prices have much more often taken the initiative than they did before the war. The result, of course, is a more violently fluctuating condition of both supply and demand. The problem which farmers and city consumers should put to the Board of Trade people and the packers is: What are you doing to place prices at a point which will result in a more uniform supply and a more uniform demand? COST OF PRODUCTION The common man prefers to approach the question of price not from the standpoint of supply and demand, but from the standpoint of cost of production. The laboring man says that he has no quarrel with the farmer, that in fact he is glad to pay the farmer what it costs him to produce food. Most people take it for granted that the just price is cost of production. In July of 1917, President Wilson gave his scholarly definition of a just price: “By a just price I mean a price which will sustain the industries concerned in a high state of efficiency, provide a living for those who conduct them, enable them to pay good wages and make possible the expansion of their enterprises which will, from time to time, become necessary, as the stupendous undertaking of this great war develops.” The idea of a just price, covering cost of production and reasonable profit, is considerably different from market price or supply-and-demand price. The market price typically alternates considerably above and considerably below the production cost of the bulk of the people engaged in the enterprise. For instance, when prices go up and profits become larger, new people are attracted into the business and production is increased until finally there is more supply than there is demand, and then prices have to go down and profits become losses, and the people who can not produce except at the high prices must go out of business. Both the farming world and the business world are composed of a great many different men, each of whom is chasing a profit in his own way. Many of these men are very short-sighted and are lured into an apparently profitable business just at the wrong time, and in like manner become discouraged with an apparently unprofitable business at just the wrong time. Under the competitive regime, it is apparent to any thoughtful business man that both in business and in farming the market price or supply-and-demand price is almost never the same as cost of production, but fluctuates in rather rhythmical manner, now above and then below cost of production, tending to equal almost exactly, over any long period of years, true production cost.