distant from the purchasers and therefore having the advantage of lower freight costs. The distant mill, they argue, must "absorb" a part of the freight cost if it is to share in the business. But if the national market for a commodity were divided by agreement or tacit understanding among the producers in such a way that each producer or local group of producers were permitted to monopolize the market in its immediate vicinity at a fixed price and in addition to operate in certain neutral territory, the geographical range of prices would be about as described by the authors for the cement industry. There would be competition in the neutral territories, but monopoly in the restricted zones, and the existence of such local monopoly would be manifested by higher f.o.b. mill prices to purchasers in the restricted area than to purchasers in the neutral area. The practice of charging different f.o.b. mill prices according to the location of the purchaser, if it is common in the cement industry, is evidence that competition does not fully prevail in that industry.

The authors have, with the one exception noted, formulated and developed more fully than has previously been done, the important objective price tests of the existence of competition. The writer is convinced, however, that their application of these tests to the cement industry, instead of demonstrating the prevalence of competition, establishes a strong presumption that price competition, at least in the neighborhood of the important producing regions, is totally or virtually non-existent.

UNIVERSITY OF CHICAGO

JACOB VINER

BOOK REVIEWS AND NOTICES

Sugar in Relation to the Tariff. By PHILIP G. WRIGHT, A.M., with the aid of the council and staff of the Institute of Economics. New York: McGraw-Hill Book Co., 1924. Pp. xiii+312. $2.50.

This study is the first of a series to be issued by the Institute of Economics, "designed to reveal the relation of the tariff to agriculture." Subsequent volumes will deal with the tariff in relation to wool-growing, the cattle industry, cotton-growing, wheat farming, and the production of cotton oils.

Part I of the study furnishes a background of descriptive and statistical information regarding the sugar industry. Part II treats of the sugar tariff historically, discusses the extent to which the domestic industry is dependent on the tariff, analyzes the effects of tariff changes upon prices, imports, and domestic production, considers the protection afforded by transportation charges, and discusses arguments for and against a duty on sugar. Finally, the conclusions of the study are stated.

In general, the treatment is thorough and satisfactory. In view of the design of the series, however, fuller and more systematic treatment of the effect of an increase or decrease in the sugar duty on agriculture generally, and specifically on cane- and beet-growing, under present contractual arrangements between grower and factory, would have been desirable.

To the reviewer, the volume's chief omission is a chapter devoted to a critical study of the "flexible provision" of the tariff act of 1922 as applied to sugar (for text of provision, see Appendix H). Such a study would be valuable not only because this is the first of a series of tariff studies, but because the sugar tariff happens to be the first of any considerable importance which the president is called upon to adjust under this provision, and the public is entitled to a thorough understanding of all its implications. Many of these are discussed, it is true, but in various connections; some of those discussed should have further consideration, others not touched upon should receive attention, and all should have connected discussion.

The Economics of Consumption. By WARREN C. WAITE. New York: McGraw Hill Book Co., 1928. Pp. vii+263. $3.00.

The method of approach in this outline of the study of the utilization of wealth is economic, contrasting with the sociological approach of Dr. Elizabeth Hoyt's The Consumption of Wealth (1928) in which the approach is sociological. Dr. Waite also takes for granted a background of economic theory, while Dr. Hoyt seems to assume no previous study.

The Economics of Consumption is intensive and clean-cut and marks an advance in the scientific study of consumption as a phase of economics. The plan of the book comprises an introductory chapter and four parts, entitled, respectively, "The System of Prices and the Consumer," "The Choice of Goods," "Administration of the Individual Income," and "Social Problems of Consumption." Though the approach is economic, Professor Waite does not ignore the social implications of consumption. In Part II, "The Choice of Goods," which makes about a third of the book, he discusses the psychological basis of consumers' choices but devotes most of his attention to the effect of price. In relation to consumers' purchasing habits he discusses retailing and its costs, the increasing efforts spent in distribution, and the possibilities of reducing the costs of retailing, leaving to the psychologists and sociologists the deeper analysis of choice.

The work of the social investigators of family expenditures is considered, beginning with the early studies of Sir William Petty in 1672 and including the French study by Frederic LePlay, 1855-79, the German study of Ernest Engel in 1857, and the various American studies, such as those of Chapin, the United States Bureau of Labor, More, Ogburn, the California State Civil Service Commission, and the United States Department of Agriculture. In criticism of these writers, Dr. Waite says:

It is unfortunate that the majority of investigators of family expenditures have not seen fit to carry their analysis beyond the state of arithmetic averages. It would be useful, for example, if the data for the various income levels were given in terms of frequency distributions and coefficients of variation for each budget group. We would then be able to judge the consistency of expenditure on the different levels, and gain other useful information.

He points out that "when we endeavor to examine the changes taking place within these large budget items accompanying income changes

what is normal. Costs for 1921 would require a reduction in the duty; for 1922, an increase; for 1923, probably a reduction (p. 147). By what standard shall normalcy in costs be judged? The study concludes that an average of the 1921 and 1922 costs would be a proper cost basis. But by what process of reasoning or warrant in law can the average of two "highly exceptional” (p. 147) years be taken as a normal for subsequent years? Should, then, under the act, the costs be those for the most recent available year, for some selected year, or years, since the duty was imposed, or for any year, or years, the president may choose?

How variously the flexible provision may be executed, and with what various results, is developed (pp. 143-45), and might well have raised the question of its constitutionality. Under a given executive policy the duty on sugar might be raised 50 per cent. Under another policy it might be lowered 50 per cent. Particularly in the application of bulk-line costs, any one of several rates might be computed from a given set of facts, depending upon method chosen. Congress can require the president to ascertain facts which under its prescribed formula will automatically determine the tariff rate. But can it under constitutional limits delegate the power to impose a duty whose rate is determined by arbitrary discretion?

These and other questions arising under the application of the flexible provision (such as the inclusion in cost of interest and other capital charges, of expenses of marketing refined sugar, and of agricultural costs) are those about which the present sugar-tariff controversy, both in and out of the Tariff Commission, is being waged, and concerning which a bewildered public is seeking light.

In effect, the study (Conclusions, pp. 237-53) takes issue with the tariff policy expressed in the flexible provision, that all protected industry shall be stabilized by a duty that will maintain the present ratio of domestic consumption of foreign product to that of domestic. "The rate [on sugar] should be based upon broad principles of public welfare." Nevertheless, a consideration of the public's many conflicting interests leads to the conclusion "that the most equitable adjustment will be effected by a rate which will stabilize the industry in about its present position with reference to foreign and domestic sugars." This permits of a reduction in duty on Cuban sugar from 1.7648 cents per pound to a point estimated between 1.25 and 1.5 cents, since prices are still much above domestic marginal costs. Presumably by accidental coincidence, this is the result reached by the application of the formula contained in the flexible provision.

points the way to further effort which must be expended by economists before the economics of consumption can have the place in economic science which its vital importance justifies.

FLORENCE A. ARMSTRONG

SIMPSON COLLEGE

Economics of Fashion. By PAUL H. NYSTROM. New York: Ronald Press Co., 1928. Pp. vi+521.

Many students of economics and business were given their first brief but interesting view of what lies behind fashion by Cherington's little volume on the wool industry, published in 1916. Those whose interest was awakened by that glimpse will get no small satisfaction from this volume on Economics of Fashion. In the Preface to this extremely interesting book, Professor Nystrom declares it his purpose to "present a well considered statement of information and suggestion concerning: (1) what fashion is and how it operates; (2) what the causes of fashion are and what factors influence its movements; (3) what the present fashions are; (4) the current trends of fashion and coming fashions." To the discussion of each of these matters the author brings a quantity of material from bibliographical investigation, from practical experience, and from long association with purveyors of fashion merchandise, which renders the book a significant and enjoyable contribution for both the business man and the student of society.

Although not formally so organized, the volume has in reality four parts. The first eight chapters are concerned with the nature of fashion and the cultural forces which mold it or are closely related to it. Chapters ix to xi might well be called "The Institutional Machinery for Fashion Creation." A third part is "A History of Modern Fashion," particularly in clothing, while a final division deals with technical advance in the production of fashion goods and modern trends in fashion.

A glance at these main themes will at once lead some readers to the conclusion that the book is named Economics of Fashion with doubtful accuracy. The discussion of "Fashion Cycles" in chapter ii, couched in statistical terms and fortified with graphic presentation of quantitative data, is without doubt an addition to what we commonly call the economics of consumption. But when in the next several chapters the author plunges boldly into "The Psychology of Fashion," "Factors that Influence Fashion Movements," "The Relation of Art