The Journal of Macromarketing in 1987 carried an abstract of a stimulating paper by Scott D. Johnson and Stanley C. Hollander, presented at the twelfth annual Macromarketing Conference held in Montreal. Johnson and Hollander's paper was titled "The United States Industrial Commission of 1898-1902: The Formation of Early Marketing Thought" and dealt with the commission's report Vol. 6, Distribution of Farm Products. The Journal of Macromarketing abstract states, "This early document addressed some enduring macromarketing issues, including: the cost of marketing, infrastructure development, consumer education and protection, and the need for a governmental role in equitable and efficient market performance" (76). While Johnson and Hollander did not focus on organized speculation, that abstract aroused my curiosity as to what Vol. 6, Distribution of Farm Products, contributed to understanding the role of the speculator and organized speculation as an institution. I found Volume 6 contributed far more than expected.
The U.S. Industrial Commission and its staff worked from 1898 to 1902 studying problems of immigration, labor, agriculture, manufacturing, and business in search of appropriate remedies. The results were published in nineteen volumes, one of which was Vol. 6, a 508-page report on the distribution of American farm products, a seminal study of organized speculation as an institution, prepared under the direction of John Franklin Crowell. The following article is an explication of Crowell's role in the history of institutional economics thought bearing on expectations and futurity.
Henry C. Taylor of the University of Wisconsin, the father of agricultural economics under the guidance of Richard T. Ely, and his wife, Anne Dewees Taylor, praised Crowell's study as "by all odds the best book on agricultural marketing available to students of agricultural economics at the beginning of the twentieth century" (1952, 517). They recognized that "Crowell was, obviously, thoroughly trained in economic theory as well as familiar with the facts of agricultural marketing" (524). A half century later, the Taylors wrote that Crowell's "statements are worthy of careful study by the student because of their value as a standard of comparison with conditions in later periods, as well as for their importance as a segment of the agricultural history at the turn of the century" (524). D. G. Brian Jones and David D. Monieson wrote, "In presenting statistical facts from original and official sources in a descriptive manner the approach used in that report was certainly consistent with the general approach to the study of economics at Wisconsin. It is not surprising therefore, that Taylor adopted it so enthusiastically for course work" (1987, 160).
The institutional economics orientation of Crowell's study pervades the report, beginning with a well-done "Summary of Results," followed by an excellent overview of "The Main Factors in Commercial Distribution." Succeeding chapters were titled "The Distribution of Cereals" (with map), "Cotton in Commercial Distribution," "Special Statistical Report on Speculation and Prices of Wheat and Cotton," "The Marketing of American Live Stock," "The Distribution of Dairy Products," "Cold Storage as a Distributive Factor," "The Distribution of the Tobacco Crop," "The Distribution of the Wool Clip," "Distribution of Farm Products in City Markets," "The Milk Supply of Cities and Towns," "The Broom Corn Trade," "The Hay Trade," "The Fruit and Vegetable Trade," "Some Special Features of Distribution," "Appendix A-Grain Elevators, Warehouses, etc., on the Northern Pacific Railway," and "Appendix B-Daily Closing Prices of Cotton 'Futures,' 1894-1899." L. D. H. Weld praised Vol. 6 fulsomely: "The United States Industrial Commission of 1900 made a comprehensive and rather thoroughgoing investigation, and its report on this subject, though it awakened relatively little public interest at the time, stands out as a remarkable piece of work in view of the fact that so little had previously been done along this line" (1916, 2).
The volume, with its well-thought-out and well-written narrative, numerous statistical tables, and illustrative maps and charts became at once a standard reference and potential textbook in agricultural economics, marketing, logistics, consumer economics, and closely related fields. Taylor (writing in the third person) described his use of it at the University of Wisconsin: "The report of the Industrial Commission, entitled 'Report on the Distribution of Farm Products,' was at first Taylor's most valued source of information. That report, which John Franklin Crowell prepared under the supervision of E. Dana Durand (Secretary, United States Industrial Commission), had much influence on his course in economic geography and in turn suggested the method used in studies from 1912 to 1917 in the marketing of Wisconsin farm products. He was much impressed with the map in that book which showed the surplus grain regions of the North Central States and the primary grain markets. That map, prepared by the Grain Department of Armour and Company, comes close to being the parent of the Wisconsin dot maps showing the production and distribution of dairy products and potatoes" (Taylor and Taylor 1952, 556-557). Robert Bartels, in The Development of Marketing Thought, wrote, "Part of the significance of this publication lay in the fact that it served as a text in early marketing courses, even until about 1920" (1962, 159).
While the Crowell report proved useful in ways probably beyond anyone's anticipation, its scope and contents were nominally confined to describing the distribution of American farm products, with some limited analysis of the division of the consumers' price between producers and distributors. As Johnson and Hollander wrote decades later, "The question of whether marketing costs are excessive has been a recurring issue at least since the turn of the century" (1988, 131-132). Crowell made the report's intent clear in the opening paragraph: "The object has been twofold; first, to describe the distributive system by which these products are handled from producers to consumers; and, secondly, to determine as far as practicable the share of the consumers' price which goes respectively to producers and distributers, at any given time and place, in marketing any particular species of farm product" (1901b, 5).
Neither the advancing of economic theory nor the recommending of public policies was the primary object. Neither did the report, as regards organized speculation, owe an intellectual debt to institutionalists apart from Arthur Twining Hadley and Henry Crosby Emery, since virtually no other institutionalists had studied organized speculation. As reviewer Henry R. Seager wrote, "the great value of the report does not consist in its explanations of economic phenomena or in its recommendations, but in the mass of information it presents in regard to the actual methods of modern business. Students may and will differ with Dr. Crowell in regard to questions of interpretation, but all must feel grateful to him for bringing together in such convenient form the essential facts touching this important subject" (1902, 169). Yet the study provides much more than that, depending on what the reader is looking for. It is a hidden jewel in the early study of organized speculation as an institution.
Implications for the Economic Theory of Speculation
It turns out that Crowell's study contains many implications for economic theory, especially by extending A. T. Hadley and Emery's line of thought regarding speculation. A. T. Hadley and Emery were not without precursors among American economists; Van Buren Denslow, for example, in chapter 3, "Values and Prices," of his book Principles of the Economic Philosophy of Society, Government, and Industry, wrote objectively and insightfully about organized speculation (1888, 79-124). However, A. T. Hadley, and then Emery, made quantum leaps in their works on the subject.
When A. T. Hadley's Economics: An Account of the Relations between Private Property and Public Welfare was published in...