The farmer's costs of production relate to a period long prior to the fall. Thus, if wages are due to fall as a result of a fall in food prices, the farmer is always selling on the old basis of his costs. The farmer has but one turn-over in the year. The middleman has several and can thus adjust himself quickly. Second, the custom of many of these businesses is to operate upon a percentage of profit on the value of the commodities handled, even after deducting all their increased costs, interest or other charges. When we have rising prices, therefore, a doubling of prices, for instance, tends to double profits on the same volume of commodities handled. In a rising market, competitive pressures are much diminished and the dealer can assess his own profits to greater degree than usual. While the packers make a profit of, say, two cents on the dollar value of commodities, it represents double the profit per pound over pre-war, even after allowing such items as interest on the larger capital involved. REDUCTIONS OF THE MARGINS Aside from the necessary rise in the margin that has grown out of the rise in cost of labor, rent, etc., from inflation and world shortage, there are some causes which have accumulated to increase the margins between the farmer and the wholesaler and the wholesaler and consumer that could be greatly mitigated. BETTER TAX DISTRIBUTION During the war, in order to restrain wild greed and profiteering in the then existing unlimited demand, margins between purchase and sale in the different manufacturing and handling trades were fixed in all the great commodities--iron, steel, cement, lumber, coal and foodstuffs. The first task of the war was to secure production, and the margins were therefore fixed at such breadth as would allow the smaller high cost manufacturer and the smaller dealer to live. Otherwise, the smaller competitors would have been extinguished, production would have been lost, and, worse yet, the larger low-cost operator would have been left with much inflated monopoly. The excess profits tax was levied as a sequent corrective to this necessary first step, so as to take the undue profits of the large producer back to the public. It was a wise war measure, but the moment restraints on profits were taken off and there was a free and rising market ahead, then the tax was added to prices by all the participants and passed on to the consumer, or deducted from the farmer when world levels crowded his prices down. It should have been repealed at the time the controls were abandoned, but our legislatures have been busy with other things and, in the meanwhile, in food it not only increases the margin between the farmer and the consumer but tends, as stated above, to come out of the farmer to a large degree. It has other vicious results in that it also stimulates dealers and manufacturers to speculate their profits away in unsound business, rather than to pay it to the government.