We have the greatest respect for the old _laissez faire_ or speculative method of price determination. It worked very nicely under competitive conditions, such as existed before the war. No one knows as to whether or not times now are right for adopting a different machinery thru which the law of supply and demand may work. We offer the ratio method as a method which is probably better adapted to a thoroly democratized co-operative society than the old-fashioned _laissez faire_ method, which was adapted primarily to a competitive society. The spirit of the ratio method is highly technical. The examples given in this book must necessarily be simple. But in actual practice, the ratio method would necessarily become quite technical, requiring for its administration highly specialized statisticians. At the present time very few men are available for work of this sort. The ordinary man who tries to fix prices by the ratio method is biased by either personal or class interests. A notable example of this was the Chicago Milk Commission, composed of leading citizens of the state of Illinois, which sat from December, 1917, to February, 1918, and finally offered as a method of milk price determination the ratio method. The majority of the members of this Milk Commission were city people, and on that account, consciously or unconsciously, they twisted the ratio method so as to bring about a low price for milk. If the majority of the commission had been farmers, they could have twisted the ratio method to bring about a much higher price for milk. But there are now, and in the future will be more, men properly trained in the weighting of agricultural index numbers, who can look into matters of this sort with a scientific nicety and determine prices by the ratio method with the greatest accuracy, by which we mean the minimum of bias toward either producer or consumer. It is our intention in this book to indicate ways of securing ratio prices for various agricultural products. The methods outlined in succeeding chapters are definite and exact; we grant, however, that they may be made more comprehensive and be further refined so as to cover their respective fields in more effective fashion. RATIO METHOD OF DETERMINING COST OF PRODUCING HOGS