Thus in the early days, before the advent of railroads, grain was hauled to Chicago by the farmers from as far as 100 miles inland and sold by them on the streets to local buyers. When, on account of the extension of railroads to the West and South, the receipts became so large that this method of selling was no longer practicable, a Board of Trade was formed where buyers and sellers could meet together and handle the grain more expeditiously and economically. After the railroads were built grain men on the Board of Trade furnished capital to put up elevators at country stations. The farmers then sold their grain at their nearest station instead of hauling it to Chicago, and as the railroads continued to branch out the number of elevators located at country stations multiplied.1 THE NORTHWEST.-Flour was first produced in commercial quantities at the Falls of St. Anthony, now Minneapolis, about 1853. While the mill capacity at this early period was quite small, it was larger than the supply of grain locally, and hence grain was brought by barges down the Mississippi River and up from Iowa, Illinois, and Wisconsin. Writing in 1913, the chief grain inspector of the Minnesota Railroad and Warehouse Commission stated that even as late as 30 years previously the raising of wheat was confined largely to that area of Minnesota tributary to the Mississippi and that the markets along this river, including Winona, Wabasha, Red Wing, and Hastings, were among the most important in the world. Millions of bushels of wheat were marketed by farmers at these landings and taken down the river.3 What is said to have been the pioneer elevator of the upper Mississippi was probably that erected at Prairie du Chien, Wis., some 60 years ago and which became one of the objectives of grain shipping from Minnesota in the prerailroad days. It had a capacity of nearly 300,000 bushels and was built standing in the water so that, even at a low stage of the river, steamers and barges could tie up at its doors and load and unload. Before 1857 there was no railroad to the Mississippi north of Dubuque, and all the produce of the country north of this point had to be brought to market on steamboats. St. Louis was the great market, although Galena and Dunleith, Ill., received a small share of the business.5 The Milwaukee & Mississippi Railroad was completed to Prairie du Chien in the spring of 1857 and that fall the first Minnesota grain was shipped over the line from Prairie du Chien to Milwaukee. Within two years 100 carloads a day were going over the same route and the traffic continued to increase until Milwaukee was a successful rival of St. Louis for the grain of Minnesota and northern Iowa. In 1861 the railroad company had a fleet of packets, five running north from Prairie du Chien to St. Paul, two to Eau Claire and points on the Chippewa, and three to Lansing, Iowa, and Brownsville, Minn. Besides these there were the weekly packets operating between St. Paul and St. Louis, which unloaded much grain and other produce at Prairie du Chien, while in winter Iowa and Minne 1 In the matter of the relations of Common Carriers subject to the Act to Regulate Commerce to the ownership and operation of elevators and the buying and selling and forwarding of grain, see Sen. Doc. 278, 59th Cong., 2d sess., p. 30. John S. Pillsbury, in pamphlet, Minneapolis Golden Jubilee, p. 36. Annual Report, Chief Inspector of Grain, Minnesota Railroad and Warehouse Commission, 1913. Minneapolis Journal, Feb. 22, 1920. 5 Ibid. sota farmers teamed to this point over the snow from 200 miles away in Iowa and Minnesota." THE SOUTHWEST.-With the extension of the grain-producing area to the Southwest across the Mississippi, the importance of St. Louis as a country marketing center was greatly increased. In the earlier days when the Mississippi and Missouri River courses were used to carry the traffic of that great interior tributary section, St. Louis, on account of its location, became the center of exchange for this traffic, and thus naturally attained importance even then as a country grain market. Chicago's importance as a grain-trading center was also much increased by this southwestern extension of the grain area. When this area was further extended beyond the Missouri River, Kansas City and Omaha rapidly developed as important local grain-marketing centers. PACIFIC COAST.-While some grain was grown in the Pacific coast section in the first half of the last century, which was mostly consumed by local mills, it was not until the last quarter of that century that grain was produced there in sufficient quantities to be of noticeable importance. By that time a large surplus was being marketed by boats from territory adjacent to the Sacramento and San Joaquin Rivers in California and the Columbia, Willamette, and Snake Rivers in Oregon, Washington, and Idaho. San Francisco, Portland, and Spokane apparently first became important as grain distributing and milling centers. With the completion of the transcontinental railroads to Tacoma and Seattle and the establishment of regular trans-Pacific service from these points, these also became important marketing points for grain, especially that produced in the State of Washington. Section 3. Methods of handling grain. The first type of grain handling prior to about the time of the Civil War appears to have been through a flat warehouse with a scale and a wheelbarrow. This was prior to the advent of the railways in certain sections, and where this was the case the flat houses were usually, though not always, river houses. Although Josept Dart began at Buffalo in 1842 the erection of probably the first steam transfer and storage elevator employing buckets attached to a belt revolving over two pulleys, this method of handling even at terminal points does not seem to have been rapidly adopted and in the country appears to have come into use even more slowly. In the Northwest, at least, the flat warehouses continued to be the principal means of handling grain until at least about the late sixties, when the first type of elevator came into use. Flat warehouses, however, continued to be built for some time. In fact, in the Northwest they continued to be constructed to some extent until the early eighties. One of the first types of elevators in the Northwest was the Davidson high bridge, gravity elevator, developed by one Commodore Davidson. Teams were driven up on this bridge and the grain dumped from the wagons flowed by gravity into bins and cars. The Minneapolis Journal, Feb. 22, 1920. Joseph Dart, Grain Elevators of Buffalo, Publication of the Buffalo Historical Society, Vol. I (1879), pp. 400-401. 8 At least one of these high bridge elevators is reported to be in operation to-day in the State of Illinois. driveways were finally done away with in the early seventies when steam began to be used for hoisting purposes. The steam-power house, however, was quickly succeeded by the horse-power elevator around 1880. This elevator was operated by a sweep, the horse being driven around and around in a circle. This type of elevator is said to have resulted in a decrease in size and greater economy in operation. Horse power was in turn followed, about 1885, by the application of gasoline power to hoisting machinery, and gasoline and other types of internal-combustion engines are still the principal sources of power for operating country elevators, although of recent years a few electrically operated houses have been built and put in operation. Section 4. Commercial line elevators. While there are many commercial line elevators in States other than the northwest group, this last area may properly be termed the great stronghold of this type of house, and the indications are that the first large commercial line companies developed in this territory. In the early days the buying of grain in this territory was apparently largely dominated by the line organizations. Even in the sixties the flat warehouses, it is stated, were generally small lines of 5 and 10 stations. The pioneer large commercial line elevator company in the Northwest appears to have been the Pillsbury & Hurlbert, organized in the late seventies. Another of the early commercial lines was the Minnesota & Dakota, which, according to one of the older line elevator men, absorbed the Davidson houses. It is also stated that this line later became the Farmers' Union. Apparently the railroads went into the elevator business at first in some degree. The Soo Railroad is reported by several grain men to have built a few elevators, and other roads reported either to have built or purchased elevators are the Chicago & North Western and the Northern Pacific. The railroads, however, failed to make a success of the operation of these houses, and later sold them out. About 1879 or 1880 the Northern Pacific Line Elevator Co. was started by one G. S. Barnes and a partner, and the Northwestern Elevator Co. (a line now in operation) began operations in the early eighties. The old Davidson system of elevators bought no grain, but simply issued storage tickets, which were sold by the farmers." The Minneapolis Millers' Association kept buyers at all points at which the Davidson houses were located and the farmers sold their storage tickets to these agents or to representatives of David Dowes, a large New York grain concern. Mr. Marshall, of the National Elevator Co., a large Minneapolis line, states, quoting the report of the interview with him, "The elevator man shipped the grain on orders from these firms on a fixed charge that either the Millers' Association or Dowes paid on the surrender of the storage tickets for shipment together with any storage charges, if storage had been earned. I believe, but do not know, that the fixed charge was agreed upon between the elevators and the buyers. I am not certain about this, even though I was operating one of the Davidson elevators." According to best information obtainable there were some 40 or 50 of these Davidson elevators located on the old St. Paul & Pacific Railway. With the advent of the commercial lines in the Northwest, succeeding the Davidson type of elevators, the method of handling appears to have changed from a storage to a merchandising basis, and this destroyed the business of the Millers' Association buyers who were purchasing storage tickets from the farmers in the country. According to Mr. Magnuson, of the Northwestern Elevator Co. line, the early commercial lines actually bought the grain and sold it to the Millers' Association on the basis of a fixed commission over the country price, amounting to a few cents per bushel. According to Mr. Magnuson's recollection the mills financed the purchases of the lines, loaning the money to buy the grain, and also paying the freight. The commercial line development of the Northwest may be attributed largely to the scarcity of local capital resulting from the rapid development of this area as a grain-producing territory. Agriculture in the Northwest developed extensively rather than intensively. Land was cheap and fertile and this situation lent itself to large farms and the extensive cultivation of one or two crops. The territory was sparsely settled, there was little or no local capital available, and as a result lines of elevators were built by organizations located at Minneapolis and other points possessing the resources and initiative to undertake such operations. (Ch. II, sec. 8.) Section 5. Mill line elevators. THE NORTHWEST.-In the late seventies or early eighties Hurlbert is reported to have sold out his interest in the Pillsbury-Hurlbert line, and this organization became the Minneapolis & Northern. Sometime in the early eighties the Minneapolis & Northern apparently passed into the control of the Pillsbury-Washburn interests. According to Mr. Marshall's recollection this change in control marks the beginning of the mill line in the Northwest, and this line may be regarded as the pioneer mill line.10 The control of the Minneapolis & Northern does not appear to have amounted to ownership, and the relationship appears to have been rather one of affiliation. The St. Anthony & Dakota (a line company affiliated with Washburn-Crosby interests) began operations about 1885, and the Western Elevator Co., of Winona, also more or less related to the milling interests, about the same date. The most plausible reason assigned for the development of the mill line in the Northwest is that the milling interests in Minneapolis were developing so rapidly that they found considerable difficulty in obtaining sufficient grain, more especially as Milwaukee and other markets began to draw from their territory. As a result, the mills either began the establishment of their own elevators or else affiliated themselves with existing elevator lines. MILL ELEVATORS AND CHARACTER OF WHEAT PRODUCTION.-The mill line elevator is relatively even more important in the Southwest than in the Northwest territory. Thus, mill line elevators constitute about 19 per cent of the total elevators reporting from the State of Kansas, 38 per cent of those of Oklahoma, and 10 per cent of those in Missouri. Relatively, therefore, these three States are 10 There is some divergence between Mr. Magnuson and Mr. Marshall on certain of these points. Both agree that the Minneapolis & Northern was the pioneer mill line. Mr. Magnuson is authority for the statement that it was controlled by the PillsburyWashburn interests. Mr. Magnuson, however, states that the Minneapolis & Northern constructed all of its elevators instead of being the successor to the Pillsbury-Hurlbert line, as stated by Mr. Marshall. the most important mill line States. In the number of these houses reporting, Kansas ranks first, Oklahoma fourth, and Missouri eighth. An examination of the figures of reporting elevators reveals the fact that in Kansas, Oklahoma, and each of the four Northwestern States, the proportion of mill line elevators is very much greater than the proportion of the individual mill elevators, while in Nebraska, Iowa, and Missouri and each of the States east of the Mississippi the reverse of this situation obtains. The former of these two areas is chiefly a hard-wheat producing section and the latter raises principally soft wheat. This clearly appears in the following table, which shows the proportions of mill line and individual mill elevators in the 14 principal grain-producing States in comparison with the proportion of total wheat production represented by hard wheat. TABLE 22.-Distribution of mill elevators by specified States in comparison with hard wheat production. 1 Figures are from Commission's Report on Commercial Flour Milling, as supplied by the Office of Cereal Investigation, Department of Agriculture. In the five States of Missouri, Indiana, Ohio, Michigan, and Illinois the proportion of hard wheat produced is relatively small, while in Kansas, Oklahoma, and the four Northwestern States practically all the wheat production is of the hard varieties. In the former area the proportion of individual mill elevators is relatively high as compared with the mill lines; in the latter area the reverse is true.11 RELATION OF HARD WHEAT TO MILL LINE DEVELOPMENT.-Historically, these differences in the character of wheat production have probably had a very important bearing upon the development of mill line and individual mill elevators. In the two decades prior to 1870 the great bulk of the flour-milling industry was located east of the Mississippi 11 Nebraska, Iowa, and Wisconsin are the only hard-wheat States with a higher proportion of individual mill than of mill-line elevators. Only 16 mill elevators of both types reported from Iowa and only 21 from Nebraska. In both cases this is less than half the number reporting from any other of the 14 States. On account of the small number involved, therefore, the percentages of the two types in these States are probably not significant. In Wisconsin the high proportion of individual mills as compared with mill lines, though hard wheat production predominates, may probably be attributed to the early development of local milling in this area before the great development of the hard wheat area farther west and its persistence down to the present time. According to the census of 1870, Wisconsin was the seventh State in flour production. In that year it produced between two and three times as much as the State of Minnesota, though by 1890 the reverse was true. |