Canal anyway, since to do so means entering the zone of calms and the loss of a great deal of valuable time.

(7) The experience of the Middle West concerning bulk handling is by no means conclusive evidence of success on the Pacific coast, because of the difference in growing conditions, such as the large number of varieties of wheat grown, prevalence of smut, leased lands on which it would not pay to put permanent storage improvements, varying soil conditions due to abrupt changes in the topography of grain-growing sections, and length of haul to country stations.

(8) The sack method is the only economical and satisfactory way to handle the large number of varieties and grades grown so as to keep them distinct, which is necessary if the producer is to get the true value for his wheat. Smutty grain in varying degrees is prevalent in much of the Pacific section, and the different lots of this grain should be kept separate as well as apart from sound grain. The practicable way of doing this is by the sack method.

(9) By the method of using sacks and piling in flat warehouses grain can be stored more cheaply than in any other way. The large concentrated movement to the country station during the harvest season can be taken care of more expeditiously and at less cost by this method.

(10) The extensive demands of the millers that the different kinds of grain be kept separate are much more easily met when sacks are used.

(11) The present facilities of the average Pacific coast farmer are better adapted to handling grain in sacks, and it would mean a considerable outlay for each farmer to equip himself to handle in bulk. (12) Some individuals favorable to the sack method claim that the bulk-handling costs through an elevator are not less than for handling sacks through the flat warehouse, but, on the contrary, that sack handling is the cheaper on account of the much higher construction costs of elevators as compared with those for the flat warehouses.

(13) In sack handling the grain movement can be expedited and hand labor eliminated by using power-operated conveyors wherever possible, as for piling, moving the sacks from the warehouse to cars, boats, etc., as is now being done in some instances.

(14) The plan of converting flat warehouses into bulk-handling plants would be expensive and inefficient. The result would not give a satisfactory elevator, because the two types of houses are so totally different.

ARGUMENTS FOR BULK HANDLING.-Some of the arguments advanced in support of bulk handling by those in favor of it are as follows:

(1) Grain in bulk can be handled much more rapidly and efficiently through elevators either in the country or at terminal points than can grain in sacks through warehouses. This applies to unloading the farmer's wagon, to storing in the house, to loading or unloading from or into boats or cars, and effects a considerable saving throughout the entire handling process.

(2) It is alleged that grain in bulk can be better protected from moisture, vermin, fire, etc.

(3) The farmer in the long run, it is claimed, can provide himself with the equipment for bulk handling, such as granaries, bins, and tight wagon boxes at as low or less cost than is required for him to equip himself with sacks.

(4) Bulk grain can be inspected and graded with much greater ease and accuracy than grain in bags, and there is probably less chance of fraudulent practices.

(5) By means of cleaning machinery, dirty and damaged grain in bulk may be improved in quality and conditioned more readily and with less expense than can sacked grain. In the latter case the sacks must be opened and the grain emptied before cleaning, and the grain rebagged and the sacks tied up after cleaning.

(6) In bulk handling most of the work will be done by machine power instead of man power, a means both easier and cheaper.

(7) Eastern grain buyers prefer grain bulked, and as there is a possibility in the future that Pacific coast grain will be shipped east to a greater extent than formerly, this is an argument in favor of the bulk plan.

(8) So far as the Pacific Northwest is concerned, it is said that the grain buyers are usually the parties interested in the importing and selling of sacks, and that they are the ones who insist that sacks must be used, because this business means large additional profits to them.11

(9) As the situation is now on the coast, it is claimed that practically the entire supply of grain must be sacked in order that about 25 per cent may be shipped in the export trade. If this latter portion must be sacked before shipment, it would seem but fair that the burden should rest only on the grain that is actually shipped sacked, and the entire Pacific Northwest should not be saddled with this apparently uneconomical system merely because of the requirements for a small portion of the grain.

Furthermore, it is stated that a basic argument for the use of sacks rests upon the shipping of the grain by sailing vessels on the long voyage around Cape Horn. The opening of the Panama Canal and the use of steamers with compartments, it is contended, will eliminate the necessity for using sacks and even render bulk shipments preferable.

(10) It is stated that the present method is especially uneconomical on the coast on account of the fact that the exported grain is rarely shipped in the identical sacks in which it is received. The sacks upon arrival at the terminal are opened, the grain cleaned, and then resacked. The old sacks are not returned, and the new sacks are left to the importer to dispose of as he sees fit. To say nothing of the loss of time occasioned by this double operation, the additional sack loss is considerable.

(11) Lastly, it is urged that there is no sound reason against bulk handling on the coast because of the existence of flat warehouses, since it is contended that they can be converted into buildings capable of handling bulk grain by installing an air-pressure conveyor, engines, and scales, and dividing the warehouse into bins at an expenditure by no means excessive.

J. D. Brown, president Farmers' Union of Oregon and Southern Idaho.

ATTITUDE OF DIFFERENT INTERESTS.12-The general attitude of various interests in the Pacific Northwest may be summarized as follows: Growers. Many of the growers, particularly the moderately large producers, favor bulk handling and are of the opinion that facilities for that purpose will continue to be provided rapidly. They consider that bulk handling will not again be abandoned, and that it is now a safer proposition than ever before. On the other hand, quite a number, particularly of the smaller growers, and some very large ones, who produce under varied conditions, think the permanency of bulk handling doubtful on account of the unwillingness of the average farmer to try new methods and his desire to preserve the identity of his individual grain. They believe that when the grain movement of the section under discussion is once more to the coast and the price of sacks becomes normal the trend will again be toward the sack method. Naturally, the growers who have changed to bulk handling and provided equipment for it generally feel that the method will grow, but some state that bulk handling is not as cheap as the sack method if the price of sacks drops to anything comparable with the prewar level.

Warehousemen.-The warehousemen generally show a preference for handling wheat in sacks, but some acknowledge that many growers want bulk handling and think it bound to come, though they are not willing to predict how soon or how fast. Some warehouse representatives believe the farmers' elevators will not be successful in the Pacific Northwest, and that those erecting them will not meet with success largely because the original cost of construction, as compared with that of flat warehouses, is so heavy that it will not be easy to obtain sufficient grain to pay for their operation.

Elevator operators.-Those in charge of elevators recently placed in operation are apparently almost unanimous in the opinion that bulk handling is the only method of handling wheat, because in this way the grower gets rid of the use of sacks, the uncertainty of procuring them, and the constantly fluctuating price.

Millers.-The millers as a rule favor sack handling. At the same time a feeling exists among them that the sentiment for bulk handling is growing. They believe, however, that the change will come slowly. They also express the opinion that if the price of sacks again becomes normal farmers will buy them instead of going to the expense of installing equipment necessary for bulk handling. Banks and investment companies.-The officials of banks and investment companies are conservative in their opinions as to the growth or permanency of the bulk-handling movement. They state that the high cost of sacks and the shipping of wheat east by rail, where it comes in competition with bulk grain, have had more to do with the growth of the sentiment for bulk handling than any permanent desire on the part of the growers. Some, however, think that lack of interior elevators and terminal bulk-handling facilities are primarily the factors that have retarded the more extensive use of bulk handling.

Farmers' unions.-In general, the farmers' unions emphatically contend that there is no sound objection to bulk handling; that grain

"Based largely upon a Report of Engineer G. B. Hegardt to the Commission of Public Docks, Portland, covering an Investigation of the Movement to Adopt the System of Bulk Handling of Wheat.

is so handled nearly everywhere else; and that with the opening of the Panama Canal the last obstacle thereto on the Pacific coast has been removed. They say the whole question is a matter of education, and that the sentiment for bulk handling is steadily gaining ground.

SUMMARY.-While it would seem probable that the bulk method of handling will ultimately prevail on the Pacific coast as elsewhere in the United States, it is likely that the sack method will continue to be used for a long time to come.

Section 4. Type differences in country houses.

LINE HOUSES.-A concern engaged in the country elevator or warehouse business may, theoretically, operate any number of houses. Actually, something under 200 houses seems to be about the maximum. The largest number of houses operated by a single organization which was reported in the returns to the Commission's country elevator schedule was 178. There are instances, however, where the ownership and control of two or more organizations, each operating several houses, are in the hands of a third organization, and in such cases it is evident that the latter concern might be operating, at least indirectly, more than the above-stated maximum.

Between the companies thus operating from 30 or 40 to 150 or more houses located at different points 13 and between companies operating a smaller number of houses there is no essential distinction except in size. For this reason all these houses have been classed together and designated as line houses. For the purposes of this report, therefore, a line house may be defined as one operated by an organization which operates two or more houses located at different points. INDIVIDUAL HOUSES.-Between the line type of elevator or warehouse and the individual type there is a fairly clear line of demarcation. A single line house is only a part of a larger organization buying grain in two or more localities, and all its operations are directed and controlled, with reference, more or less, to the operations of all the other houses composing the line. The individual elevator or warehouse, on the other hand, operates locally only and is managed without reference to the operations of other houses, except in so far as it may be competitively affected by them.

In each of these two principal classes of houses there may be distinguished four subclasses based on the character of control or ownership. On this basis the line type may be divided into "commercial," cooperative, mill, and maltster subtypes, and individual type into independent, cooperative, mill, and maltster houses.

COMMERCIAL LINE HOUSES.-A commercial line company may be defined as a company operating two or more houses at different stations for the purpose of buying and selling grain at a profit. The typical large commercial line company is one which has a head office in one of the primary markets and which operates a comparatively large number of elevators, ranging, say, from 30 or 40 to 150 or more. The great bulk of such companies are found in the Northwestern States, most of them having head offices in Minneapolis, from which the buying and selling operations of the various country stations are supervised.

13 Occasionally a single line company wi'l operate more than one house at a particular point, but these instances are rather exceptional.

INDEPENDENT HOUSES.-An independent elevator or warehouse is one operated, as is the commercial line house, for merchandising profit. In short, an independent elevator or warehouse is a single house organized and operated by an individual, partnership, or corporation for the purpose of making a profit in the buying and selling of grain. If two or more such houses are operated by the same company, the result is a commercial line concern.

LINE AND INDIVIDUAL COOPERATIVE HOUSES.-" Cooperative" as employed in this volume in referring to elevators and warehouses includes not only elevators and warehouses paying patronage dividends 14 but also those operated or owned and operated by farmers. In fact, a more accurate designation of many of the houses reporting themselves to the Commission as cooperative would perhaps be "farmers' houses." As commonly employed in the grain trade the meaning of the terms "cooperative" and "farmers in trade the

country houses is decidedly inexact and indefinite. Both terms are frequently, perhaps most commonly, used to describe houses operated or else owned and operated by farmers. But they are also employed in many instances, especially the term "cooperative," to designate those which pay patronage dividends. The loose usage of both terms is indicated by the fact that one often encounters the expression "patronage dividend cooperatives."

Moreover, the dividing line between these two classes of houses is not as definite as might appear to be the case. The farmer's company, even though not paying patronage dividends, frequently has as its stockholders or owners a very large proportion, and in some cases practically all of the farmers in the vicinity who would normally be its patrons. Such an elevator or warehouse, therefore, is cooperative in the sense that the patrons receive the great bulk or all of the profits, although the distribution thus made as between individual farmers is not in any exact proportion to the business which they offer the house.

Since a very large proportion of the houses reporting to the Commission as cooperatives also report that they do not pay patronage dividends, the term cooperative wherever employed in the volume is to be interpreted as including not only patronage dividend cooperatives but also farmers' elevators or warehouses which, while not paying patronage dividends, are either operated or else owned and operated by their farmer patrons. Elevators and warehouses of this type, therefore, may be distinguished from those of other types chiefly by reason of the fact that they are operated by and in the interest of producers.

A cooperative line house is the same as an individual cooperative, except that the former is operated by a concern which is operating two or more houses located at different stations.

LINE AND INDIVIDUAL MILL HOUSES.-The primary function of the mill elevator or warehouse is to insure the mill a supply of grain (usually wheat) for milling purposes. This is the fundamental

A patronage dividend house is one which pays a dividend based upon the amount of business done by the house with those from whom it purchases. While the returns to the Commission's inquiry as to the basis of patronage dividend payment (Cf. Appendix 2, Inquiry 9) are not sufficiently numerous nor comprehensive to warrant presentation, it may be stated that the method of paying such dividends most frequently reported was according to the number of bushels of grain sold to the elevator, although a considerable number of houses based these dividends upon the value of the grain thus sold instead of upon the quantity. For further information on patronage dividends see Ch. IV, sec. 13, of this volume.