/rI '_2 &
V 1-61) I'~7 S~5
,4 ~ V
to the History of Price Fixing
By Mary G. Lacy, Librarian
Bureau of Agricultural Economics
United States Department of Agriculture
An address before the
Agricultural History Society Washington, D. C.
March 16, 1922.
Reprinted and Distributed
SWIFT & COMPANY
AGRICULTURAL RESEARCH DEPARTMENT
IT* a., = --
Food Control During Forty-six Centuries U::,,
A Contribution to the History of Price Fixing*
HE man, or class of men, who controls the supply of essential;:: |
foods is in possession of the supreme power. The safeguarding of J
the food supply has therefore been the concern of governments since
they have been in existence. They had to exercise this control in
order to hold the supreme power, because all the people need food and ::l
it is the only commodity of which this is true.
In connection with this control it would seem that every possible -
expedient and experiment had been tried. One of the most frequent .;-
methods of control used has been the limitation of prices by legal a
enactment. The results have been astonishingly uniform considering
the variety of conditions and circumstances under which the experi-
ments have taken place. They make an interesting record and one '
which contains food for thought, for the problem of the people's s i
welfare has been much the same in all ages and it is not yet solved. :j
Egypt, 2830 B.C.
As far back as the fifth dynasty in Egypt, which historians place I
at 2830 B.C. at the'latest, there was inscribed on the tomb of the
Monarch Henku: "I was lord and overseer of southern grain in this |I
'* ,:.iil| |l
In the book of Genesis (12) there arevarious references dating back
to the time of Abraham to the fact that Egypt was a granary where ,'
all the people were sure of finding a plenteous store of corn. .1
The well-known story of Joseph shows how the control of the food ''|
supply by the government reduced a people to slavery. Joseph:;
gathered and stored for Pharaoh in years of abundance one fifth of all ,
the harvests. The improvident Egyptians lived'well and laid by no .;:..
stores. When famine came they and the people in the nearby coun-
tries went to Joseph and bought food from him until all their money
was gone; then they gave him their cattle for food. After they had
*No attempt has been made in this paper to cover the history of price fixing since 1800, "
government monopolies such as the Brazilian valorization of coffee, the tobacco monopoly in
France, and that of sugar in Germany, as well as others which might be mentioned, have been
fully reported by others. The history of price fixing in the U. S. during the War of 1914-18
has also been written in the Bulletins of the War Industries Board, on the history of prices
during the war. Litman gives a good account for Great Britain and the U.S. in his "Prices and :
Price Control in Great Britain and the U. S. During the War."
bartered away all their cattle they offered their land and themselves
in exchange for subsistence. Having thus reduced them to slavery as
the price of life, Joseph about 1700* B.C. gave them seed and put
them on the land again. Flavius Josephus tells the story as follows:
"When famine came, the multitude, sorely oppressed, re-
paired in crowds to the stores and magazines of the king. The
situation of the poorer and common sort was piteous beyond de-
scription; for having laid in but a very scanty store, and not being
able to obtain a supply without ready money, when that was
exhausted, they were reduced to the necessity of exchanging their
cattle, slaves, lands, nay their last little all, to procure grain from
the king's granaries to protract a needy miserable life. When by
these means they became totally destitute, they were abandoned
to a desolate world, that the king might secure their bartered
possessions But when at length the river overflowed, watered
the earth, revived dropping nature, and produced a fertile aspect,
Joseph made the tour of the kingdom, and summoning his re-
spective landholders, restored to them such parts as they had
sold to the king, on condition of their paying a fifth, as tribute to
him by virtue of his prerogative, and then enjoined them to the
same diligence in their improvements, as if they were to derive
the emoluments resulting from the whole. Transported at the
returning prospect of plenty, and the restitution of their landed
property, the people applied themselves to agriculture with unre-
mitting assiduity; so that by this well-timed act of policy, Joseph
established his own authority in Egypt, and increased the stand-
ing revenue of all its succeeding monarchs."
The great Egyptologist Erman (9) corroborates the testimony of
Josephus by giving an account of the government control over grain,
and descriptions of the granaries** which were surprisingly like our
elevators-the grain being poured in at the top and taken out at the
bottom by means of a sliding door. The outstanding result of the
*Some scholars place the date at 2082 B.C. and still others at 1500 B.C. It was probably
in the reign of Aphobis, at the end of the 17th dynasty, according to Dr. Henry Brugsch, in his
history of Egypt under the Pharaohs. Trans. by Philip Smith. (London, John Murray, v.l, p.
Lepsius, Richard. Denkmaler aus Aegypten und Aethiopien. Berlin. 1849-59 v. 3, p. 76,77.
Papyrus Abbott, published in the "Select Papyri in the Hieratic Character from the Col-
lections of the British Museum, London, 1844-60.
Egyptian control of the grain crop. was a system of land tenure by::
which the land became the property of the monarch, and was rented 11
from him by the agricultural class. .
China, 424-387 B.C. .1
In his study entitled, "The Economic Principles of Confucius and 'I
His School," Dr. Chen tells us that in China (6) it was recognized I
from very early times that-
there are two sets of interests, those of producers and ,
those of consumers. But nothing more markedly affects the inter-
ests of both sides at once than prices. Therefore, price is the great i
problem for society as a whole. According to the Confucian ....
theory, the government should level prices by the adjustment of
demand and supply, in order to guarantee the cost of the producer -
and satisfy the wants of the consumer. I
"Its chief aim is to destroy all monopoly so that the independ- ,
ent or small producer can be protected on the one side, and the
consumer on the other. It prevents the middleman from making ;
large profits, and gives the seller and buyer full gain." "It is the -
task of the superior man to adjust demand and supply so as to keep |
prices on a level."
The means used by the Chinese government to this end are of the '
greatest interest, because of the economic principles involved and also |
because of their antiquity.
We are told that, "According to the official system of Chou (about
1122 B.C.), the superintendent of grain looked around the fields and
determined the amount of grain to be collected or issued, in accord-
ance with the condition of the crop; fulfilling the deficit of their :
demand and adjusting their supply." (6) &
"When Li K'o became the minister of Wei he said that if the :::':::i
price of grain were too high, it would hurt the consumers, and :'s
that if it were too low, it would hurt the farmers. If the consumers 'k
were hurt, the people would emigrate, andif the farmers were hurt, Ci
the state would be poor. The bad results of a high price and a low "
price are the same. Therefore, a good statesman would keep the .
people from injury and give more encouragement to the farmers. :.(!
*It is evident from the context that "grain" as used in these translations means rice. ::
*~. .. s..s.
After describing the bad condition of the farmers, he gives the fol-
lowing for equalizing the price of grain:
"Those who want to equalize the price of grain must be careful
to look at the crop. There are three grades of good crops: The first,
the second, and the lowest. In an ordinary year one hundred
acres of land yield one hundred fifty bushels of grain." In the
first grade of good crop the amount is fourfold-that is, one
hundred acres yield six hundred bushels. Throughout one year,
a family of five persons needs two hundred bushels for their liv-
ing, so that they have a surplus of four hundred bushels. The
government should buy three hundred bushels from them, leaving
them a surplus of one hundred bushels. In the second grade of
good crop, the amount of grain is threefold-that is, one hundred
acres yield four hundred fifty bushels. The family would then
have a surplus of three hundred bushels. The government should
buy two hundred bushels, leaving them one hundred bushels. In
the lowest grade of good crop, the amount is twofold-that is, three
hundred bushels. The family would then have a surplus of one
hundred bushels. The government should buy fifty bushels and
leave them the other half. The purchase of the government is for
the purpose of limiting the supply according to the amount de-
manded by the people, and it should be stopped when the price
is normal. This policy will prevent the price of grain from falling
below the normal and keep the farmers from injury.
"There are also three grades of famine: the great famine, the
middle famine, and the small famine. During the small famine
one hundred acres yield two-thirds as much grain as in the ordin-
ary year-that is, one hundred bushels. The government should
then sell at the normal price what it has bought in the lowest
grade of good crop. During the middle famine, the hundred acres
yield one-half as much grain as in an ordinary year-that is seventy
bushels. The government should now sell what it has bought in
the second grade of good crop. During the great famine the
amount of grain is only one-fifth of what it is in an ordinary year
-that is thirty bushels. The government should sell what it has
bought in the first grade of good crop. Therefore, even if
famine, flood, and drought should occur, the price of grain would
not be high, and the people would not be obliged to emigrate.
This would come about because the government takes the surplus
of good crops to fill the insufficiency of bad years. In other words,,,1
the government controls the excess of supply in a good yearii
order to meet the demand in a bad year.
"The Policy of Li K'o is for the benefit of both society as ,
whole and the agricultural class when his scheme was carried .
out in Wei, he not only made the people rich, but also made the .."
state strong." ..
The principle of adjusting the supply and demand of grain is.v
found also in the writing of Mencius, who lived 372-289 B.C. Dr. i
Chen quotes him as saying to King Hui of Laing:
"When the grain is so abundant that the dogs and swine eat :"9
the food of man, you do not make any collection for storage. .j
When there are people dying from famine on the roads, you do; A
not issue the stores of your granaries for them. When people thus 7.
die, and you say, 'It is not owing to me; it is owing to the year,' :i
in what does this differ from stabbing a man and killing him, and :|
then saying, 'It was not I; it was the weapon'?" .:
The starving millions of China during 1921 might well have
wished for so statesmanlike an advocate in the councils of their
government as this fearless economist three hundred years before the i
Christian era. Dr. Chen proceeds to say: 3
"The principle of equalizing the price of grain advocated by..... ....
Li K'o and Mencius was adopted into the system of 'constantly |
normal granary.' During the reign of Han Hsuan Ti, when there '|
were good crops for many years, the price of one bushel of grain "
was as low as five pennies. Then the farmers suffered greatly. i
In 498 (54 B.C.) Keng Shou-ch'ang proposed that the govern- ,
ment should buy grain from places near the capital instead of trans- ':|
porting it from the eastern provinces. According to the old custom' ..::,i::
of the Han dynasty, the government transported annually from i
the eastern provinces four million bushels of grain to supply the::.: ii
capital, which was in the province of Shensi, in northwestern China.
As this transportation was by means of the waterway, the number .
of laborers amounted to sixty thousand. By the plan of Keng ,.|
Shou-ch'ang, which was approved and carried out by the emperor,
the government saved more than half the expenses of transporta-
tion, and the farmers got more profit. Then Keng Shou-ch'ang ?i:::
proposed that all the provinces along the boundary of the empire .3
should establish granaries. When the price of grain was low, they
should buy it at the normal price, higher than the market price,
in order to profit the farmers."
Dr. Chen points out that equalization of the price of grain is a
very beneficial and practical scheme. It benefits the people with-
out cost to the state. When the price is too low, though the govern-
. ment buys the grain at a price higher than the market rate, this does
not mean a waste to the government. When the price is too high,
though the government sells the grain at a price lower than the market
rate, it does not mean a loss to the government. Even if it should be
an expense to the government, the social benefit is much greater than
the public expense. On the contrary, as a matter of fact, the system
has been more than once administered so as to make money for the
The few criticisms which have been made of it are shown by Dr.
Chen ". To be the results not of the original law itself, but of the
administration of man. The chief difficulty in administering it is
that it is not easy for officials to undertake commercial functions
along with political duties."
Athens, 404-337 B.C.
Xenophen (2) tells us that in Athens a knowledge of the grain
business was considered one of the qualities of a statesman. This was
probably because Attica needed a considerable importation of grain,
as the country did not produce a sufficient amount for its needs. It
was brought to market in the Piraeus from all quarters, from Pontus,
Thrace, Syria, Egypt, Lybia, and Sicily. A great quantity was im-
ported, but not all for domestic use-some of it was to be sold in the
Piraeus to foreigners. It has been estimated by Boeckh (2) that Attica
needed annually 3,400,000 medimni* of grain, about half of which it
could produce in a good season. This left, as the lowest of needed
importations, 1,700,000 medimni or 1,133,333% bushels. In an un-
propitious season, when the domestic crop was scanty, this amount of
importation was far from sufficient, so that one of the first objects
of an Athenian statesman was to provide for an adequate supply of
imported grain, and the regulations in regard to the grain trade were
very important. Boeckh in his "Public Economy of the Athenians" says:
*A medimnus was equal to 2/3 of a bushel or 8 gallons.
"The exportation of grain was absolutely prohibited. It was
required by law that two-thirds of the grain which came from a
foreign country to the Attic emporium should be brought into the
city; that is, only a third of the grain brought into the emporium
in the Piraeus could be exported from it to other lands. The execu-
tion of this law was committed to the overseers of the emporium.
"In order to prevent as much as possible the accumulation of
grain and the withholding it from sale, forestalling it was confined
within very narrow bounds. It was not allowed to buy at one
time more than fifty backloads. (About 75 bushels.) The trans-
gression of this law was punished with death. The grain dealers
were also not permitted to sell the medimnus of grain at a higher
price than one obulus (three cents) more than they had paid for it.
These dealers, who were commonly aliens under the protection of
the state, enhanced the price, notwithstanding by overbidding
others in the purchase of grain in time of scarcity, and they often
sold it the same day on which they purchased it at an advance of
a drachma (17.1 cents) on the medimnus. Lysias cannot relate
particulars enough respecting the profligacy of these extortioners.
They were hated full as much as the same class in modern times
0 'Were they not menaced with the punishment of death,' said
he, 'they would hardly be endurable.' While the Ageranomi
(Market masters) had the superintendence of the sale of all other
commodities, the state, in order to prevent the extortion of the
grain dealers, appointed a particular body of officers called the
Sitephylaces (grain inspectors) to have the oversight of this single.
business... They kept accounts of the grain imported, and besides
the oversight of grain, they had also the inspection of meal and
bread, that they might be sold according to legal weight and price."
The Oration against the grain dealers delivered by Lysias (19)
about 387 B.C., is of the greatest interest because of the light it
throws on the speculative practices of the grain dealers in Athens,
the great wheat market of the eastern Mediterranean, and the
attempts of an harassed government to control them. From it we
glean that in spite of the rigorous laws which were in force regulating
the traffic in grain, that "corners" were not uncommon. He wrote:
"For when you happen to be most in want of grain, they grab it
and are unwilling to sell, and you may be well satisfied to buy
from them at any price whatever and take your leave of them so
that sometimes when there is peace we are reduced to a state of
siege by them."
We learn also that the "market masters," who as we have said
before had the superintendence of the sale of all other commodities,
were not considered sufficient to handle the grain trade also but that
"grain inspectors" were appointed for this duty alone and it required
fifteen of them to take care of the trade in the city and port of Athens. *
Being a grain inspector at that time was no sinecure for Lysias says:
"Ofttimes you imposed upon them, citizens though they were,
the most severe penalties, because they were unable to master
the scoundrelism of these dealers. What then should the male-
factors themselves suffer at your hands, when you even put to
death those who are not able to maintain a watch over them?"
We learn further that there were "combinations in restraint of
trade" at this early date nearly four centuries before the Christian
era, for Lysias says:
"For if you shall find them guiltless when they themselves
admit that they made a combination against the importers, you
will seem to plot against the skippers who came here."
We also learn that the results of even the most severe punish-
ments, unaccompanied by any constructive substitute for the for-
bidden practices, were highly unsatisfactory for Lysias says:
"But it is necessary, gentlemen of the jury, to chastise them
not only for the sake of the past, but also as an example for the
future; for as things now are they will be hardly endurable. And
consider that in consequence of this vocation very many already
have stood trial for their life; and so great are the emoluments
which they derive from it that they prefer to risk their life every
day rather than to cease to draw from you unjust profits. And in-
deed not even if they entreat you and supplicate, would you justly
pity them, but much more rather the citizens who perished on
account of their wickedness, and the importers against whom they
made a combination If then you shall condemn them, you
shall act justly and you will buy grain cheaper; otherwise, dearer."
*The population of the whole of Attica at this time was about 500,000, of which Athens
comprised about 180,000.
:..... ... ".::. ::
Rome, 301- 361 AD.
Rome, not having had the foresight to prevent it, found herse|i
confronted at the close of the third century of the Christian era 'withi.:
a condition of high prices which was very menacing. Diocletian..
with characteristic vigor, proceeded to correct this condition by law w
and issued his famous Edict (20) in 301 A.D., Abbott (1) tells us: ;!
"In his effort to bring prices down to what he considered a ::
normal level, Diocletian did not content himself with such half ::
measures as we are trying in our attempts to suppress combina-
tions in restraint of trade, but he boldly fixed the maximum prices .
at which beef, grain, eggs, clothing, and other articles should be
sold, and prescribed the penalty of death for anyone who disposed
of his wares at a higher figure."
Prices are specified for between seven and eight hundred differ-
ent items-practically all the articles which his subjects would have
occasion to buy. Wages also are fixed-teachers, advocates, brick-
layers, tailors, weavers, physicians-all are included. "The carpenter
and joiner are paid by the day, the teacher by the month, the knife
grinder, the tailor, the barber by the piece, and the coppersmith
according to the amount of metal which he uses." Abbott calls atten-
tion to the fact that the prices given in the Edict are not normal but
maximum. As the prevailing prices were so high, however, it is not
probable that the maximum prices differed very greatly from them.
The net result was failure and the law had to be repealed because of
its impotence in correcting the condition of affairs. Lactantius (17) in
314 A.D., writes as follows of Diocletian and his Edict:
"After that the many oppressions which he put in practice
had brought a general dearth upon the empire, then he set himself
to regulate the prices of all vendible things. There was also
much blood shed upon very slight and trifling accounts; and the
people brought provisions no more to markets, since they could
not get a reasonable price for them; and this increased the dearth
so much, that at last after many had died by it, the law itself was
The historian Gibbon (13) tells us that sixty years after Diodcle- :
tian's effort to control the cost of living by fixing prices, the Emperor
Julian made a similar attempt, with no greater success. He writes:
"The inclemency of the season had affected the harvests of
Syria; and the price of bread in the markets of Antioch had
naturally risen in proportion to the scarcity of corn. But the fair
and reasonable proportion was soon violated by the rapacious
arts of monopoly. In this unequal contest, in which the produce of
the land is claimed by one party as his exclusive property; is used
by another as a lucrative object of trade; and is required by a third
for the daily and necessary support of life; all the profits of the
intermediate agents are accumulated on the head of the defense-
less consumers When the luxurious citizens of Antioch com-
plained of the high price of poultry and fish, Julian publicly de-
clared that a frugal city ought to be satisfied with a regular supply
of wine, oil, and bread; but he acknowledged that it was the duty
of a sovereign to provide for the subsistence of his people. With
this salutary view, the emperor ventured on a very dangerous
and doubtful step, of fixing, by legal authority, the value of corn.
He enacted that, in a time of scarcity it should be sold at a price
which had seldom been known in the most plentiful years; and
that his own example might strengthen his laws, he sent into the
market four hundred and twenty-two moddi, or measures, which
were drawn by his order from the granaries of Hierapolis, of Chal-
cis, and even of Egypt. The consequences might have been fore-
seen and were soon felt. The imperial wheat was purchased by the
rich merchants, the proprietors of land, or of corn, withheld from
that city the accustomed supply, and the small quantities that
appeared in the market were secretly sold at an advanced and
Thus ended Julian's attempt to fix prices arbitrarily. It should
be noted that both in the case of Diocletian and Julian the effect of
the price fixing was the withholding from the market of the needed
food, making necessary the abrogation of the laws by which the prices
Great Britain, 1199- 1815 *
Litman (18) in his "Prices and Price Control in Great Britain and
the U. S. During the World War" tells us that:
*The English corn laws from 1804 to 1846 furnish probably the best known instance of
governmental attempts to stabilize prices in more modern times. The corn statutes of these
years are simply a record of the impotence of legislation to maintain the price of a commodity
at a high point when all the natural economic causes in operation are opposed to it. Encyclo-
pedia Brit. 11 th ed., v. 7, p. 177.
"An attempt to control both the wholesale and the retail '!1
price of wine by fixing a maximum was made by the British Govc
ernment in 1199. The measure failed and in 1330, after a long ..
period of ineffectiveness, a new law was passed which required :!
the merchants to sell at a 'reasonable' price, the latter to be
based on import price, plus expenses. This new measure of control
proved as futile as the old one.
"The first attempt to regulate the price of wheat and bread
was made in 1202. The most important ordinance on the matter
was by Henry III. This ordinance fixed changing weights for the
farthing loaf to correspond to six penny varieties in the price of
the quarter of wheat from 12 pence to 12 shillings. The law was
enforced locally on sundry occasions, but fell gradually into
Not until 1815, however, were the last laws fixing the prices of
bread repealed, after a continuous existence of five and a half cen-
turies. The official document (14) recommending their repeal enumer-
ates the ways in which these laws have worked out to show that their
repeal is in the interest of the public welfare.
John Fiske (11) in one of his essays ascribes the downfall of the
city of Antwerp in 1585 to the bungling price-fixing legislation of the
Government. He says:
"The turning point of the great Dutch revolution, so far as it
concerned the provinces which now constitute Belgium, was the
famous siege and capture of Antwerp. The siege was long and the
resistance obstinate and the city would probably not have been
captured if famine had not come to the assistance of the besiegers.
It is interesting to inquire what steps the civic authorities had
taken to prevent such a calamity. Finding that speculators were
accumulating and hoarding up provisions in anticipation of a
season of high prices, they affixed a very low maximum price to
everything which could be eaten, and prescribed severe penalties
for all who should attempt to take more than the sum by law
decreed. The consequences of this policy were twofold. It was a
long time before the Duke of Parma, who was besieging the city,
succeeded in so blockading the Scheldt as to prevent ships laden
with eatables from coming in below. Corn and preserved meats
might have been hurried into the beleaguered city by thousands of
tons. But no merchant would run the risk of having his ships sunk
by the Duke's batteries merely for the sake of finding a market no
better than many others which could be reached with no risk at
all.' The business of Government is to legislate for men as they
are, not as it is supposed they ought to be. If provisions had
brought a high price in Antwerp, they would have been carried
thither. As it was the city by its own stupidity blockaded itself
far more effectually than the Duke of Parma could have done.
"In the second place the enforced lowness of prices prevented
any general retrenchment on the part of the citizens. Nobody
felt it necessary to economize. So the city lived in high spirits
until all at once provisions gave out and the Government had to
step in again to palliate the distress which it had wrought.
"In this way a bungling act of legislation helped to decide for
the worse a campaign which involved the territorial integrity and
future welfare of what might have become a great nation perform-
ing a valuable function in the system of European communities."
India, 1770 and 1866
The famines of India are prominent features in her history.
William Hunter (15) in his remarkable book entitled, "Annals of Rural
"Lower Bengal gathers in three harvests each year; in the
spring, in the early autumn, and in December, the last being the
great rice crop, the harvest on which the sustenance of the people
depends. The December crop failed utterly in 1770 and fully a
third of the population died. This disaster stands out in the con-
temporary records in appalling proportions. It forms, indeed, the
key to the history of Bengal during the succeeding forty years.
"In 1770 the Government by interdicting what it was pleased
to term the monopoly of grain, prevented prices from rising at
once to their natural rates. The province had a certain amount
of food in it and this food had to last nine months. Private enter-
prise if left to itself would have stored up the general supply at the
harvest with a view to realizing a larger profit at a later period in
.. ... ... .: ,,
"Prices would in consequence have immediately risen, corn. "
spelling the population to reduce their consumption from the y
beginning of the dearth. The general stock would thus have'
husbanded and the pressure equally spread over the wholene
months instead of being concentrated upon the last six. Instead ,A:
of this the Government in 1770 prohibited under penalties all
speculation in rice. A government which, in a season of high
prices, does anything to check speculation acts about as sagely....
as the skipper of a wrecked vessel who should refuse to put his .:.:.. ..
crew upon half rations.
"Very different was the procedure of the Government at the j
time of the famine of 1866. Far from trying to check speculation, .i
as in 1770, the Government did all in its power to stimulate it. j|
In the earlier famine one could hardly engage in the grain trade j
without becoming amenable to the law. In 1866 respectable men j
in vast numbers went into the trade; for the Government, by 'I
publishing weekly returns of the rates in every district, rendered
the traffic both easy and safe. Everyone knew where to buy |
grain cheapest and where to sell it dearest and food was accord- '
ingly bought from the districts which could best spare it and car- i
ried to those which most urgently needed it. i
"In 1770 the price of grain, in place of promptly rising to j
three half-pence a pound, as in 1865-66, continued at three farth-
ings during the earlier months of the famine. During the latter |...
months it advanced to two pence, and in certain localities reached i
four pence." :|
Colonial U. S., 1633 -1779
Passing now to the eighteenth century some observations will not
be amiss on the price-fixing measures resorted to in our country during "
Colonial days and the early years of the Republic, and'also in France
during the tragic period of the French Revolution. |
Both of these periods have been so ably described that little seems
necessary except to give the reference to the literature. Winthrop (24) (
tells us, in 1633: .....*
"The scarcity of workmen has caused them to raise their :::iii
wages to an excessive rate, so as a carpenter would have three
shillings the day, a laborer two shillings and six pence, etc.; and, ;
accordingly those who had commodities to sell, advanced their
prices sometimes double to that they cost in England, so as it
grew to a general complaint, which the court, taking knowledge
of, as also of some further evils, which were sprung out of the
excessive rates of wages, they made an order that carpenters,
masons, etc., should take but two shillings the day, and laborers
but eighteen pence, and that no commodity should be sold at
above four pence in the shilling more than it cost for ready money
in England; oil, wine, etc., and cheese, in regard to the hazard of
bringing, etc. (excepted)."
Bolles (3) gives an excellent account of the experiment of price
fixing in the early years of the United States in the attempt to stop
the rise in price of the necessities of life, caused by the declining value
of the continental paper currency.
Pelatiah Webster (21) discusses the legal limitation of prices with
vigor and lucidity and shows by resistless logic that such legislation
defeats its own end in several ways, the most important of which is
the withholding of commodities from the market which it inevitably
On December 20, 1777, Sir Henry Clinton, in charge of the British
forces occupying New York, made a proclamation (7) as follows:
"Whereas it is consonant not only to the common principles
of humanity but to the wisdom and policy of all well regulated
states, in certain exigencies, to guard against the extortion of
individuals, who raise the necessaries of life, without which other
parts of the community can not subsist; and whereas the farmers
in Long Island and Staten Island, are possessed of great quantities
of wheat, rye, and Indian corn for sale beyond what they want for
their own consumption; and it is highly unreasonable that those
who may sttnd in need of those articles, should be left at the mercy
of the farmer; and whereas it is equally just and reasonable that
every encouragement should be given to the industry of the hus-
bandman, and that in all public regulations respecting the price
of the produce of his lands, regard should be had to that of the
conveniences which he is obliged to purchase, and whereas the
present rates at which wheat, flour, rye meal, and Indian meal are
sold, do vastly exceed in proportion the advance price of those
articles which the farmer stands in need of purchasing, and I
being well satisfied, from the best information, and most accurate .,
estimates, that the following prices upon the articles above men-
tioned will be liberal and generous, have thought it fit to issue t mhis mm
Proclamation, and do hereby order and direct, that the prices$to i
be hereafter demanded for the said articles shall not exceed them
following rates, viz.:
"A bushel of wheat, weighing fifty-eight pounds, twelve shill- .m
wings, with an allowance or deduction in proportion for a greater
or lesser weight. A bushel of rye or Indian corn, seven shillings)' .
The proclamation proceeds to state that the farmer shall declare
how much grain he has and if he presumes to sell for a higher price 4
than the one stipulated or "refuse to sell the same at those prices,
shall be subject to have his whole crop of grain, or quantity of flour
or meal, concerning which such offence shall happen, seized and con- i
fiscated, and himself liable to imprisonment for such offense."
Davis (8) in his able and comprehensive treatment of limitation of l
prices in Massachusetts, gives much information relating to this
subject in the other states also. Felt (10) gives extracts from the text i1
of the "Act to prevent monopoly and oppression." He also gives the
actual prices set for the various commodities, and in appendix 2 gives |
"Prices of grain, etc., appointed by the general court and taken as cur- I
rency." These prices are of much interest as they go back to 1642 *
and were legal tender at that time.
Weeden (22) writes in his "Economic and Social History of New _
England, 1620-1789": 1
"The colonial history of the United States affords many V
instances of the failure of fixed prices to remedy the evils they were 2
designed to cure. The governor and council of New England fixed ?
the price of beaver at 6s in fair exchange for English goods At 30 4
per cent profit, with the freight added. The scarcity of corn which J
was selling at 10s "the strike" led to the prohibition of its sale to :(
the Indians. Under the pressure of this prohibition the price of
beaver advanced to 10s and 20s per pound, the natives having '
refused to part with beaver unless given corn. The court was
obliged to remove the fixed rate and the price which ruled was
20s. An equally fruitless attempt was made to regulate the price
of labor. These regulations were inforced for about six months
and then were repealed."
As regards the limitation of prices in France during the Revolu-
tion, there seems nothing to add to Bourne's (4) discussion of this subject
in the "Journal of Political Economy" for February and March, 1919.
We cannot fail to note, however, that the system failed signally in
France as elsewhere because supplies were withheld from the markets.
The producers could not be forced to declare what they had and with-
out this knowledge the Government could not prosecute for with-
holding them. Bourne writes:
"The arguments in the convention relative to the matter ran
the whole gamut from the principles of economic liberty advocated
by the economists of the day to the radical abstractions of Robes-
pierre and his followers, who swept commerce aside by main-
taining that 'the food necessary to man is sacred as life itself,'
and 'The fruits of the earth like the atmosphere belong to all men.'
"One of the most interesting of the many suggestions made in
the convention was that of Barbaroux who advocated 'a plan to
form local associations to collect and circulate information about
the crops. In other words, for coercion he would substitute co-
operation, believing that the French citizens, farmers and mer-
chants included, would not turn a deaf ear to an appeal for common
action against the oncoming peril' (famine). Price fixing finally
became one of the characteristic features of the Reign of Terror,
and when Robespierre and his councilors passed through the
streets of Paris in the carts of the executioners the mob jeered say-
ing, 'There goes the dirty maximum.'"
The history of government limitation of price seems to teach one
clear lesson: That in attempting to ease the burdens of the people
in a time of high prices by artificially setting a limit to them, the
people are not relieved but only exchange one set of ills for another
which is greater. Among these ills are (1) the withholding of goods
from the market, because consumers being in the majority, price
fixing is usually in their interest; (2) the dividing of the community
into two hostile camps, one only of which considers that the govern-
ment acts in its interest; (3) the practical difficulties of enforcing sU.,,h
limitation in prices which in the very nature of the case requires H,1.;i"8 |!,
cooperation of both producer and consumer to make it effective.
qEgypt took entire control of the grain trade and saved the people..:
from starvation, but took over the land in return.
China worked out a system of control of supply and dema-hnd
which kept prices normal. She seems to have been the only county....
which recognized the whole price question as being a symptom anid ..'r3
not the disease itself, and because she recognized this fact seems to :,
have come nearer than any other country to solving the problem of sup- ..;j
plying the people with the food they needed at a price they could pay.
Athens regulated the grain trade and set prices by legal enactment j.
but found herself unable to enforce them.
Rome made a colossal experiment in controlling prices by legal 4
enactment, but it utterly failed.
Great Britain had on her statute books laws fixing the price of i
bread continuously for more than 500 years. The price of wheat, .
fish, and wine was also regulated, but all such laws were abrogated in '
1815, because of their failure to accomplish the purpose for which
thev were designed.I
Antwerp was overthrown in 1585, and at least one historian of note
declares that price-fixing legislation was largely responsible for its
India has learned in the hard school of experience that even in' :
times of famine, price fixing is a very dangerous expedient because it
removes one of the most powerful checks on consumption; namely, :
The Colonial United States tried the same experiment at various -
places and times but failed utterly to secure satisfactory results. '
Revolutionary France tried the same measures, but the protagon- .
ists of the movement perished on the guillotine. The dreary story of i
France's efforts to limit prices is distinguished from that of the other ..i
countries we have noted because of the proposal of Barbaroux to enlist "ii
the aid of both producer and consumer in the effort of the Government .
to control the food supply in the interest of the people's welfare.
This proposition was not carried out but it furnished the first indica-
tion of the goal of cooperation towards which we are still pressing.
Read before Agricultural History Society, Washington, D. C., Mlarch 10, 1922.
10~ -* -Bfl
List of References
1. Abbott, Frank Frost.
The Common People of Ancient Rome. New York, Scribner, 1911
2. Boeckh, August.
The Public Economy of the Athenians Tr. by Anthony Lamb,
Boston, Little Brown & Company, 1857. Book 1, chap. 15.
3. Bolles, Albert S.
The Financial History of the United States from 1774-1789. Fourth ed.
New York, D. Appleton, 1896, p. 158-173.
4. Bourne, Henry E.
Food Control and Price Fixing in Revolutionary France. (Journal of
Political Economy. V. 27, p. 73-94, 108-209. Feb. and March 1919.)
5. Breasted, James Henry.
Ancient Records of Egypt. Chicago, Univ. of Chicago Press, 1906-07,
v. 1, p. 126.
6. Chen, Huan-Chang.
The Economic Principles of Confucius and His School, N. Y., Longmans,
Green and Co., 1911. (In Columbia Univ. Studies in history, economics,
and public law. V. 44 and 45.)
7. Clinton, Sir Henry.
Proclamation Dec. 20, 1777. (In the Remembrancer; or impartial re-
pository of public events. Ed. by John Almon. London [v. 6.] 1778.
S 8. Davis, Andrew McFarland.
The Limitation of Prices in Massachusetts, 1776-1779. (In Colonial
society of Massachusetts. Publications v. 10, Boston, 1907, p. 119-134.)
9. Erman, Agdolph.
Life in Ancient Egypt Tr. by H. M. Tirard. London and N. Y.
MaCmillan & Co., 1894, p. 107-108, 433-434.
10. Felt, Joseph B.
An Historical Account of Massachusetts Currency. Boston, Perkins,
and Marvin, 1839, p. 170-173, 184-185, 242-245.
S 11. Fiske, John.
.j:: The Unseen World and Other Essays. Boston, 1904, p. 20.
S 12. Genesis XII, 1-10; XLI, 54; XLII, 2.
* 13. Gibbon, Edward.
The History of the Decline and Fall of the Roman Empire. N. Y.
Fred de Fau, 1906, v. 4, p. 111-112.
UNIVERSITY OF FL.
3 1262 06921
14. Great Britain, Parliament. House of Commons. -.
Report from the Committee of the House of Commons on Law SS
to the Manufacture, Sale, and Assize of Bread. 6 June, 1815."
15. Hunter, William W.
Annals of Rural Bengal. Ed. 7, London, Smith, Elder & Co., r8917. "i
16. Josephus, Flavius.. :: ,
History of the Antiquities of the Jews. Ed. by George Henry Ma-
London, C. Cooke, 1789. Bk. 11, Chap. VI & VIII.. '
17. Lactantius, L.C.F. -
A Relation of the Death of the Primitive Persecutors. Written
in Latin Englished by Gilbert Burnet, D.D. Amsterdam, ''
p. 67-68. ...... .
.T .:: ." .. ."* ..
18. Litman, Simon.
Prices and Price Control in Great Britain and the United States:..
the World War. N. Y., Oxford IUniv. Press, 1920. :
19. Lysias. ..... ...
'...... .. :. .....
Against the Grain Dealers. (In eight orations of Lysias. Ed. by M
H. Morgan. Boston, Ginn & Co., 1895, p. 89-103.) For transla
Botsford, G. W., and E. G. Siblier, Hellenic civilization. N. Y. CohtCi4i^
Univ. Press, 1915, p. 426-430.
20. Mommsen, Theodor. .. .
Corpus in Scriptionum Latinarum. Berloni apud Georgium Re'iri'xt'":i'!
...': ...... ....
1889, v. 3. (Suppl. pt. 1) p. 1926-1953. ",....
21. Webster, Pelatiah. ....... .
.... .. .. :..:. ...
Political Essays. Philadelphia. Joseph Cruikshank, 1791, p. lle148 .. ""..
..* .. .. ,.":.' :' .'
22. Weeden, William B. ....: .. ... .
Economic and Social History of New England, 1620-1789. Houghto,,;li:
Boston, 1890. ,,
S .... ; ." ..: : .. .. .:,.:
", ;: .:: '*'; ": .:'i:
23. Wilkinson, J Gardner. "":a
The Manners and Customs of the Ancient Egyptians. London. :jobs.
Murray, 1878, v. 2, p. 378. -, A
.. -.;., ', '.:.. :i*:: -. "*:."
24. Winthrop, John. "
The History of New England from 1630-1649. Boston Phelpsand Farn- ej
ham, 1825, v.l, p. 116.
This address was issued in mimeographed form in 1922 .
by the Bureau of larkeLr and Crop Estlimates which has -.:
since been combined with the Office of Farm Management ...
to form the present Bureau of Agricultural-Economics.. : :
It was also published in the "Scientijfic Monthly,"v. 16, : ':
No. 6, June 1923, P. 623-637. Owing to the renewed
interest in price fixing and the resulting demand, this ":
address has been reissued in this form August, 1933.
,, ** .. .' .. ...
Prite in .a,. V
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