Heavy Lifting - thoughts and web finds by an economist
     I also contribute to Division of Labour Load HL's Front Page
Thursday, March 02, 2006

Supply and Demand c. 1906

In the March 2, 1906 NYT is an article concerning the supply and demand for ice, of all things. The interesting thing about the article is that there is no blame, no calls for government intervention, no accusations that the then-Haliburtin or some other firm is manipulating the amount of ice available. There are no political experts describing how the lack of ice will likely impact the off-term elections. Just a little explanation of what had happened in the market for ice and what people might expect in the immediate future.

For example, how about this?
With Summer yet a long time off, the price of ice has already been raised by the American Ice Company from 30 cents to 40 cents a hundred pounds. With an advance thus early in the year, there is reason to suppose that the price will go still higher toward June Never before has there been such a bad year for ice. Four million tons were harvested from the Hudson River last year; only 600,000 tons his year. By stretching the artificial plants in New York to their utmost capacity, the ice companies may be able to get 760,000 tons of the artificial product, as against 500,000 tons last year.

Of last year's supply 300,000 tons were left over for consumption this year. Therefore, omitting the ice that may still be harvested from rivers and lakes, the total maximum supply for this year is estimated at 1,600,000 tons. This against a total available supply of 4,500,000 tons last year.

There is no longer any doubt that New York is in real danger of an ice famine.

The article reports that the highest price for ice in 1905 was 30 cents a hundred pounds. Then the article reports that "[n]ot in sixteen years has New York faced such an iceless prospect as this year."

How about this simple description of the interaction of supply and demand and how changes in both are expected to change price and quantity?
The very conditions which bring little ice bring a great want of it. This Winter was wonderful for its mildness. This made people want ice, and at the same time it made less ice. The result has been that, through the supply failed, the sales of ice in New York this winter were 50 per cent. greater than they were last Winter.
And what is expected to happen to price in this case? Any of my undergraduate students should be able to answer this question.

How about the inelasticity of momentary supply?
Wesley M. Oler, President of the American Ice Company, admitted yesterday that the conditions were cause for great anxiety. He still hopes for a cold March, but if that fails nothing can be done. He says that more plants cannot be built and put in operation in time for Summer. [emphasis added]

What today would be heralded as evidence of global warming was then just a "risk of doing business":
"Heretofore we have always been able to count on the Maine icefields as a sort of reserve in case of shortage on the Hudson or elsewhere in the State. Now we hear that Maine itself has been swept by the warm wave, and that its ice fields are not ice fields, but just water. Of course, there's some ice there, but mighty little compared to former years.

Finally, the article describes the process of getting ice, which, not surprisingly, is a little more complicated for the American Ice Company than it is for us going to the corner grocery:
"For instance, we closed to-day a contract for the ice from Kaaterskill Lake. From there we have to ship the ice by rail to Kingston. There we load it on barges and bring it down the Hudson River. Then we have bought a lake near Starlight, Penn. whence the ice has to be carried over the Ontario and Western to Cornwall before it can be loaded on barges.

Even in Massachusetts we have bought Richmond Lake, near West Pittsfield. From there the ice has to be brought down by rail to Port Morris, on the Harlem River, and there it is put on barges. Anywhere we find the ice we will get it. Short as the supply is in Maine, we get some from there, It is brought all the way to New York by sea, of course."


Comments: Post a Comment


Le Chai - galerie du vin



Posts that contain Craig Depken per day for the last 90 days.


Heavy Lifting's Main Page
Email Me
Atom Feed

Heavy Lifting

Great Links

Money I Found Today

Heavy Lifting - Firehose style (56k warning)

Recent Posts

- Supply and Demand c. 1906



Site Meter Blogroll Me!


Modified maystar design
powered by blogger