An illustration of the strategy of the hog market is a case in point. Imagine a Monday hog market in early March, at which season of the year prices are generally rising. Suppose that instead of the accustomed 40,000 Monday hog run, 60,000 have been received. Suppose that, owing to car shortage or some other reason, eastern shippers are out of the market. There is a larger supply than usual and a smaller demand, and prices decline 15 or 20 cents a hundredweight, perhaps very much more. “Supply and demand,” say the packers and practical economists, with unction. But at that very time every one may know that the potential supply in the country is very small, and the potential demand is very great. At that very time this wider situation may be taken fully into account by the packers in the prices which they are charging for their products to the retailers. The hog market may have broken 15 to 20 cents, but the lard, ham and bacon markets may have held steady or even advanced. The packers, in the prices which they pay for live hogs and the prices which they charge for hog products, are governed chiefly by strategic considerations. Day by day they change their prices to meet the surface indications of changing supply and demand conditions. They may sometimes exercise such poor strategy that they will be compelled to manufacture hog products at a loss for a time. The prime consideration is to buy as cheaply as possible and to sell as high as possible and yet meet the competition, which is rather more active than many farmers have supposed. Now it is obvious that a ratio system of hog prices is not compatible with the system employed by the packers, or by any typical business man, for that matter. Big business enjoys a speculative profit which comes with fluctuating prices. But a daily fluctuating price is not consistent with the idea of a just price or a cost-ofproduction price. If the packing business were a monopoly under government control, stabilized prices under the ratio system might be paid with some degree of satisfaction, provided we assume that the governmental authorities have a real insight into market conditions and a thoro understanding of the ratio system of price judgment as related to supply and demand. Under the present regime, however, it is difficult to see much prospect of hog prices ever being stabilized, for the reason that under a _laissez faire_ system business profits result from fluctuating prices, those businesses profiting most which are best organized and most long-lived, and are able to take strategic positions over long periods of time.