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turer, dealer, or producer thinking he is making money when, as a matter of fact, if he really knew his costs, he might be losing money.
The World War gave a great stimulus to trade associations. When it became clear that the war was as much a war of organized economic resources as it was a war of organized fighting men, President Wilson made one of his happiest selections of men and placed Bernard M. Baruch in charge of the War Industries Board, with instructions to mobilize the manufacturing resources of the Nation for the single purpose of winning the war.
Mr. Baruch executed this commission with singular success, and one of the most serviceable devices he used was to deal with a whole industry through the officers of the trade association of that industry. So effective was this method, that, where an industry lacked such an association, Mr. Baruch demanded that one be organized, so that the Government might have an effective channel for immediate communication with its thousands of individuals and might have a central source of information about the productive resources of that industry at any moment.
Thus the trade associations became clearing houses of the facts about stocks of raw materials, work in process, labor employed, manufacturing processes in which waste and duplication might be eliminated, actual and potential output and—of secondary importance then, but of very great importance-costs of production, upon which the Government based the prices it would pay. This information enabled the Government to allocate raw materials and labor to the best advantage, and to buy its supplies at prices, which, though higher than peace-time prices, were arrived at upon a basis of costs and not by guesswork, and were very much lower than the prices originally demanded by the manufacturers.
The manufacturers themselves were vastly enlightened by this experience. Many of them learned for the first time that some of their competitors were using much more effective methods than they, and what those methods were. Many learned for the first time how to figure their own costs of production—what cost accounting really is. And, most revealing of all, they rediscovered the familiar fact that there is another kind of competition than competition in price, namely, that if everybody gets the same sale price for his product, any individual manufacturer can still make more money than his competitor by either increased production or decreased cost of manufacture, or both. An enormous stimulation was given to the continuance, after the war, of the study of cost accounting, of improved processes, of the management of labor, and of the interchange of such information among the members of trade associations.
The larger thought is that America, and the lesson can be applied to the other countries, is entering upon a period in which nature no longer offers a lap overflowing with plenty. Save in the unexplored
. frontiers of science, our pioneers have for the most part done their work. These, then, are the days of refinement in our processes, if we are to keep our place in the sun; and these are accordingly the days of cooperation.
And when you look at trade associations in that light, you get a larger, more vivid picture—that of industry and commerce accepting their responsibilities along with their privileges, and making from
the old equilateral triangle with the Government, the business public and the people a kind of circle of promise intent upon the future prosperity of America and the world.
NAYLOR, E. H. Trade associations: Their organization and management. 1921.
competition and combination. 354 pp. 1912. AMERICAN ACADEMY OF POLITICAL AND SOCIAL SCIENCE, Annals, v. 63. National
industries and the Federal Government. 322 pp. 1916. FAY, C. N. Big business and government. 1912. WYMAN, BRUCE. Control of the market. 1911. JONES, FRANKLIN D. The trade association as a factor in reconstruction. Ann.
Amer. Acad. Pol. and Soc. Sci., v. 82, no. 171, p. 159. Mar., 1919. UNITED STATES DEPARTMENT OF COMMERCE. Trade association activities. 1923.
THE DAIRY INDUSTRY IN NORWAY.
R. MORK, assistant professor, Norwegian Agricultural College, Aas, Norway.
I. According to various official statements, the milk production in Norway in this century has grown from 885,000,000 kilograms in 1900, and 1,000,000,000 kilograms in 1907 to 1,120,000,000 kilograms in 1915.
This growth is partly due to an increase in the number of dairy cows, which was 685,000 in 1900 and 750,000 in 1915; partly to an increase in the average milk-yield per cow, which was estimated to 1,279 kilograms in 1900 and 1,483 kilograms in 1915.
During the World War the total production diminished till 1918, when the number of cows was 717,000 and the milk yield also considerably reduced compared with 1915.
After the World War the number of cows rapidly grew to its former size, in 1920 about 755,000, but the yield per cow being but 1,455 in this year, the total production of cow's milk was 1,100,000 kilograms and thus did not reach the production in 1915.
In the last two years the production has grown considerably according to the milk receipt at the factories, and must now be considered greater than in 1915.
The production of goat's milk is of great importance, especially in certain districts as the Gudbrandsdal and the western and northern fjord districts, where the Gudbrandsdalsost-a goat's cream whey cheese is produced. The per capita production of milk was:
Kilograms. 400 1915 425 1920_
448 418 Million kilograms.
For comparison the per capita production of milk in some other countries is cited, according to various statistical reports: Kilograms.
Kilograms. Denmark (1914) 1, 273 Finland (1910)
464 Switzerland (1914) 777 Norway (1915)
448 Sweden (1912)-640 United States (1917).
392 Netherlands (1912). 541 | Germany (1912)
344 It must be noted that objections have been made about the items previously cited for the production per cow and thus about the total production. The objectors think that these items must be reduced by about 10 per cent. The author's view is that the official statements must be considered the right ones.
II. A great part of the production is consumed on the farms. During the year 1920 it can be calculated that, on the whole, about 500,000,000 kilograms were thus used. This quantity includes about 50,000,000 kilograms which were fed to calves and hogs. The rest, 450,000,000 kilograms, was used for household purposes as milk, butter, and cheese. Probably about 250,000,000 kilograms were consumed in form of milk and 200,000,000 kilograms in form of butter and cheese. The farm population being about 1,000,000, this represents 250 kilograms of milk, 6 kilograms of butter, and 5 kilograms of cheese per person per year.
The rest of the milk production, 600,000,000 kilograms, was sold from the farms partly in form of milk, and partly in form of butter and cheese.
The production for sale of butter and cheese on the farms is considerable. In 1920 it can be estimated at 3.200,000 kilograms of butter and 2,300,000 kilograms of cheese, in the whole representing 113,000,000 kilograms of milk.
The total sale of milk from the farms was thus about 490,000,000 kilograms. From this quantity about 210,000,000 kilograms were sold directly to the consumers and 280,000,000 kilograms were delivered to the factories. The milk delivered to the factories was disposed of as follows:
154, 000, 000
55, 000, 000 Condensing
32, 000, 000 Other manufacturing purposes.
281, 000, 000 The disposal of the total milk production for the year 1920 can then be summarized thus:
Consumed as milk.
III. It will be observed that on the whole 230,000,000 kilograms, or 21 per cent, of the total milk production have been used for production of butter and cheese, etc.
, for sale. Only half of it has been converted in the factories; the other half on the farms. In addition to this, about 200,000,000 kilograms of milk have been made into butter and cheese on the farms for home consumption.
It is obvious that this is unsatisfactory, as the farm production can not render so great a yield, nor such fine products, and especially not as high prices as factory production can afford. As to the production for farm consumption it can be discussed whether it will be worth while to collect the milk used thus for factories; but as to the production on farms of butter and cheese for sale, there is no doubt that factory production is the only right one.
The state department of agriculture has been aware of this and has since 1850 tried to help in various ways. The milk production in 1907 amounted to about 50 per cent of the value of the whole agricultural output, and the organization of butter and cheese factories has accordingly been one of the most urgent of marketing problems.
The total number of factories and the total receipt of milk in factories were for the following years:
Kilograms of milk.
1890. 1900 1910. 1915. 1920.
307 77,000,000 845 184,000,000 738 278,000,000 694 305,000,000 552 281,000,000
The greater part of the factories are cooperative organizationsin 1920, 85 per cent. The first cooperative cheese factory was organized in 1856.
It will easily be understood that since the organization of factories has not developed further-in the factories only 281,000,000 kilograms, or 25 per cent, are handled—there must have been special difficulties.
The essential cause of the delay in developing the dairy industry has been the transportation difficulties, which again are greatly due to the long distances and the scattered population. Norway has only 2,600,000 population, but its land area is 310,000 square kilometers.
On account of this it has been difficult in many districts, especially in the fjord districts of western and northern Norway, and also in the valleys of eastern Norway, to obtain factories of sufficient size. During the last years the transportation facilities have been considerably developed. In the fjord districts the use of motor boats has made the collection of great milk quantities possible, and in the central parts new railways have been built.
On the other hand, there is no doubt that failures and mistakes have been made during organization and that these have a considerable part in the delay. The items previously given of the number of factories in the years after 1890 show that the number grew very fast in the nineties and reached its highest point in 1900. The factories existing in 1890 were almost altogether cheese factories, but those organized in the nineties were butter factories of the Danish type. Most of these, however, failed within a few years, and now we have only 42 left. The decrease of the factories in the table mentioned is wholly due to butter factories.
We have in this an example of the fact that great precaution must be taken in transmitting a system of production from one country to another. In many other respects dairymen may learn from each other, but each country must develop for itself from out its own natural and economic conditions, the organizations for production and trade.
While the number of butter factories thus decreased rapidly in the years after 1900, the total milk receipt increased from 184,000,000 kilograms in 1900 to 305,000,000 kilograms in 1915. This increase is on the part of the cheese factories and the city milk plants. Both these types have developed along sound lines, new factories have been organized, and the old ones have increased in capacity.
Time has thus given an unquestionable answer in favor of the cheese production and in disfavor of the butter production, and we are now approaching a rapid growth in the organization of new factories wherein the cheese factory line will be followed.
On the whole, much has to be done to give the milk producers opportunities for disposing of their milk in an economic way. Among the dairy problems of to-day this is by far the most important.
IV. The demand for fresh milk has always been satisfied except in some months in the fall of 1918. It is supposed that the consumption of milk is about 200 kilograms per capita per year for the town inhabitants and 250 kilograms for the country population.
The demand for butter has been satisfied during the years from 1895 to 1917, and there has also been a small export to England. Since the war, the imports have exceeded the exports by about 3,500.000 kilograms a year. The per capita consumption of the nonagricultural population was in 1920 estimated at 5.0 kilograms per year, consisting of
1, 150, 000
3, 200, 000 Imported butter
3, 670, 000
8, 020, 000 The demand for cheese has also almost always been supplied, but since the war the imports have exceeded the demand. It must be noted that in Norway a great part of the cheese consumed is whey cheese. The per capita consumption of the nonagricultural population in 1920 was estimated at 8.0 kilograms a year, consisting of
4, 460, 000
2, 430,000 Whey cheese produced in factories.
4, 200, 000 Cheese produced on farms--
2, 300, 000 Imported.-
1, 430, 000
14, 820, 000