Second: That the farmer's prices are fixed by the impact of world wholesale prices; that such prices bear only a remote relation to his costs of production. Third: That any increase or decrease in the cost of placing the farmer's products into the hands of the wholesaler is a deduction from or addition to the farmer's prices; that is, an expansion or contraction of the margin between the farm and wholesale prices makes an increase or decrease in the farmer's return. Fourth: That increase or decrease in the cost of distributing food from the wholesaler to the door of the ultimate consumer is a deduction or addition predominantly to the consumer's cost; that is, the margin between the wholesaler and consumer in its increases or decreases is largely an addition or subtraction from the consumer's price. Fifth: That these two margins in most of our commodities except grain were, before the war, the largest in the world; that they have grown abnormally during the war, except during the year of food control. Sixth: That analysis of the character of the margin between the farmer and wholesaler will show that decreases in price find immediate reflection on the farmer, while immediate increases in price are absorbed by the trades between and the farmer gets but a lagging increase. Seventh: That an analysis of these margins will show that they can be constructively diminished but that, regrettable as it is, the prosecution of profiteers will not do it. Eighth: That the problem must be solved, if our agriculture is to be maintained and if the balance between agriculture and general industry is to be preserved so as to prevent our becoming dependent upon imports for food, with a train of industrial and national dangers. PRESENT PRICES DUE TO INFLATION AND SHORTAGE IN WORLD PRODUCTION Our war inflation does not lie so much in our increased gold and currency. Our currency per capita has increased by perhaps 25 or 30 per cent, but, compared to European practice of currency inflations of 200 to 800 per cent, our conduct has been provident indeed. This is not, however, the real area of inflation. It lies in the expansion of our bank credits. If we exclude the savings bank as not being credit institutions in the ordinary sense, and if we compile the commercial bank deposits, we still no doubt gather in some real savings, but nevertheless the figures show a considerable color of inflation somewhere. No one need think we have gotten so suddenly rich as the money complexion of these figures might indicate. At the outset it should be emphasized that all figures of this kind are subject to dispute and interpretation; but, after all such deductions, the indication of tendencies remains.