price is determined by the extent of the differential between the grades at the time of delivery, though some contracts specify the differentials to be employed.

In some cases the farmer may elect not to dispose of his grain locally, but instead to sell it in the terminal market. In such cases it is obvious that no local marketing transaction is involved. In consequence this method is discussed in the chapter dealing with loading and elevation by elevators (Ch. VII), since when the farmer himself sells in the terminal market he frequently, if not usually, employs the elevator for the purpose of loading.

Section 2. Local purchasing factors other than elevators and warehouses. GENERAL CHARACTERISTICS.-Besides the elevators and warehouses there are operating in the country, interior brokers, track buyers, scoop shovelers, solicitors for terminal dealers, feeders, retailers, country mills and other converters, or their agents. The number and importance of these buyers vary according to a variety of conditions. At various points and at different times one or more of these buyers may be found in more or less direct competition with the local elevators or warehouses in purchasing from the farmer. For this reason they must be considered in any discussion of the country marketing, even though their operations are in many sections either negligible or of minor importance as compared with those of elevators and warehouses. Sometimes these purchasers buy from the farmer and sometimes from the elevator. But since such buyers usually lack local warehouse facilities the grain which they purchase is most often bought outright, regardless of whether the seller is the producer or the local house, or whether the farmer is selling grain which he has just hauled in or grain which he has stored in the local house. In so far as these local purchasers buy from elevators or other buyers, these transactions are, of course, between middlemen.

INTERIOR BROKERS.-Interior brokers operating in the country grain territory most often make their headquarters in one of the larger local towns affording transportation facilities in various directions. They purchase grain on a brokerage basis from practically all factors in the country market for anyone who may desire it, including terminal market dealers. The bulk of the purchases made by such brokers is from country houses in carload lots. Comparatively little grain is bought by such dealers directly from farmers, and of the grain so purchased practically all is in carload quantities.

TRACK BUYERS.-Country track buyers are usually located at points in the country from which it is convenient to keep in touch with a considerable number of country stations. These buyers purchase grain in cars "on-track" at the elevator and also buy in carlots from farmers, reselling to whatever purchaser offers the best price, a terminal market factor, miller, jobber, feeder, or converter, etc. In this type of transaction the seller guarantees that the weight and grade of the grain are in accordance with his agreement with the purchaser, but as it is often difficult for country track buyers to obtain official weights and inspection, disputes not infrequently occur. Track buyers, like interior brokers, are perhaps most often found at points so located as to afford transportation facilities in a number of directions, thus enabling shipment to numerous consumption points.

SCOOP SHOVELERS.-The "scoop shoveler," or "scooper," buys grain entirely from farmers and loads it directly into cars from the wagons The usual method of loading is to shovel the grain into the cars by means of scoop shovels; hence the name of this class of grain buyers. At times the "scoopers " employ contrivances known as track loaders, or portable elevators. This equipment consists of a frame carrying a series of buckets on a belt which is often operated by a small gas engine. It is placed alongside the railroad track beside the car to be loaded, one end of the machine extending through the car door. The grain is fed into a hopper at the other end of the machine from the farmer's wagon, the buckets fill themselves, and are carried into the car and dumped as the belt turns.

Scoop shovelers are usually transient, although there are some men who engage in the business regularly at the same place. Whether transient or not, the scoop shoveler is not common in the northwestern grain States. No scoopers were reported at any of the stations in four northwestern grain States which were visited, although one elevator stated that it had experienced competition from such a buyer, though not since 1915. In the Southwest, particularly Texas and parts of Oklahoma,2 such grain buyers apparently operate more frequently.

Occasionally unscrupulous men have been attracted to the business of buying grain in the manner followed by scoopers. The capital required is small. Many of these men have offered prices greatly in excess of the value of the grain, considering freight rates and prevailing terminal market prices. Attracted by these high prices, farmers have sometimes sold their grain to them and agreed to await payment until they had received their remittances from the terminal market. Such farmers have frequently found when attempting to collect their money that the scooper has disappeared.

Scoop shovelers are a thorn in the side of the regular grain dealers. Each load of grain bought by the scoopers is lost to the elevators. In addition, the scoopers often, if not generally, offer higher prices than the elevators are paying, and to secure grain it is necessary to meet these prices.

3

At times an elevator company in a new territory before completing its elevator may engage in buying grain in the manner followed by scoop shovelers. Any type of company may follow this practice, but it is particularly prevalent with cooperatives, because the organizers of cooperatives are usually anxious to begin business

at once.

TERMINAL DEALERS.-The purchase of grain from farmers by representatives of terminal market grain dealers is usually spasmodic. Frequently their purchases are made from farmers who, dissatisfied with the prices offered at the station, have loaded their grain with the intention of consigning it or selling it "on-track." Purchases by this type of buyer are usually in carload lots, although at times grain has been bought from farmers in wagonload quantities. This last is particularly true of new territory where elevators have not been extensively established. At times portable elevators have also

* Cf. Livingstone and Seeds, Marketing Grain at Country Points, Department of Agriculture Bulletin No. 558.

They can, of course, afford to do this, since they have no fixed operating expenses comparable with those of the elevator.

been used by these solicitors for loading grain directly from wagons into cars.

The bulk of the grain purchased by solicitors of terminal market concerns, however, is from elevators, warehouses, and scoopers rather than farmers.

As solicitors of terminal concerns are also frequently attempting to secure the consignment business of local elevators, purchases of grain from farmers are avoided at stations where a local elevator is a customer of the house by which the solicitor is employed. Were a solicitor to buy grain from a farmer under such circumstances, the elevator's volume of business would be decreased and its account almost certainly lost to the solicitor's house. For example, a farmer at Broadview, Mont., had loaded a car of flaxseed which a solicitor of a line elevator company attempted to persuade him to consign to his firm. The farmer wanted to sell outright, however, and the solicitor refused to make him a bid because the agent of another local elevator company objected.

OTHER FACTORS.-Agents of the mills and other converters at times go from place to place, depending upon local prices and other conditions, purchase grain in carload or wagon lots from farmers, and then ship to the miller or other consumer.

Feeders are stock raisers or liverymen, and the grains they purchase usually corn and oats-are used for feeding their stock. They also buy grain from farmers in both wagonload and carload quantities, in the former event loading it from the wagon into cars for shipment.

The operation of the retailer is local in character. He buys grain from the farmer, usually in wagonload lots, and then sells it to his customers as feed. Very often the grain is paid for by merchandise.

SCOPE AND EXTENT OF OPERATIONS.-In spite of the considerable number of purchasers besides elevators and warehouses which are operating in the country market, the great bulk of the initial buying from farmers is done by the country houses. The operations of all other classes of purchasers discussed in the preceding paragraphs are more limited in character, and it is doubtful if their total amounts to more than a small fraction of the total sales made by the producer. In a rough fashion, the importance of all these other factors as purchasers of the farmers' grain is indicated by the replies to the Commission's inquiry of elevators and warehouses as to the direct loading by other buyers in their respective localities (Appendix 2, inquiry 19). Since most of the buyers from farmers in the country other than elevators, warehouses, and retailers load directly into cars for shipment, the extent of direct loading is roughly indicative of the extent to which other purchasers compete with the elevators and warehouses for the farmers' grain.

The replies to the inquiry on direct loading by buyers were tabulated for reporting elevators in nine States selected at random, i. e., Michigan, Montana, Missouri, Oklahoma, Illinois, Wisconsin, and North and South Dakota. From these States 3,553 elevators reported as to the existence or nonexistence of direct loading and 845 as to its extent. The replies were tabulated together for all types of elevators and without reference to the number of elevators

9964°-207

reporting at a station, and Table 24 presents the results of this inquiry:

TABLE 24.—Number and percentage of elevators in specified States reporting direct loading by buyers in their vicinity and extent of such loading reported.

1 Where returned as a percentage, replies less than 5 per cent were classed as "occasional" and 5) per cent and over as "considerable." Expressions such as "once in a while," "seldom," "about one-fourth," "a great deal," "a large amount," etc., were, of course, classified readily under the one or the other head. A few schedules, where the replies were too vague to be thus definitely classified, were rejected and are not here included.

Of the 3,553 elevators replying to this inquiry only 924 houses, or slightly over one-fourth, reported direct loading by buyers in their locality. Even these figures, however, considered by themselves, give a misleading impression of the importance of this practice, for the reason that they give no indication of the extent of such direct loading in the vicinity of the houses reporting it. Of the 924 houses reporting affirmatively, 845 also reported, in one fashion or another, as to prevalence of the practice. The answers returned to this portion of the Commission's schedule (Appendix 2, inquiry 19) were in all kinds of phraseology and included a certain number of replies in percentages. All returns were carefully classified under the headings of "occasional" or "considerable," the most of the replies being so worded as to render such a classification reasonably accurate. Percentage returns above 5 per cent were classified under the heading "considerable," those less than 5 per cent under the heading "occasional." Of these 845 houses, 84.62 per cent report that direct loading in their vicinity is occasional and 15.38 per cent that it is considerable.

As measured by direct loading reports, therefore, a considerable proportion of elevators are in competition with the other types of buyers discussed in this section in purchasing the farmers' grain.

This competition in the great majority of cases, however, is of minor importance.

Section 3. Outright sales by farmer to the elevator.

DELIVERY.-In the great grain-producing States of the Central West grain is practically always delivered in bulk to country elevators and warehouses. For this purpose farmers employ "grain tight" wagon boxes or tanks having a capacity of from 50 to 100 bushels. Upon his arrival at the local station the farmer may drive his grain around, if there is more than one elevator or buyer at the point, until he has ascertained where he can obtain the best returns for his load. In determining the total returns of the farmer from the sale, grade, dockage, and weight all play a part and will be considered in the order mentioned.

GRADING.*-In determining the grade of a load of grain the elevator agent usually scans the load and examines several handfuls therefrom for shrunken kernels, admixture with other grains, dirt, smut balls, etc. If a careful agent, he will also plunge his hands far into the load for the purpose of discovering any signs of heating. If the grain has been bin burnt or contains smut or garlic, etc., this can usually be detected by smelling samples of the grain, any such contamination giving rise to strong, disagreeable odors.

Following this examination the test weight is taken, the weight of the grain being an important element in determining the grade. For this purpose a device known as a "hand tester" 66 or test kettle" is employed. It consists of a cup or kettle (usually of a pint or 1 or 2 quarts capacity) attached to a hand beam scale. The beam balances at zero when the kettle is empty and is so graduated that when in balance with the kettle filled it will record the number of pounds the grain content of the kettle will weigh to the bushel. This result is the test weight per bushel.

Taking into consideration all of the above tests and giving due weight to each, the agent decides the grade that he is willing to give the grain.

During the season of heavy deliveries at country points many agents do not even attempt to grade each load. At that time this often becomes a practical impossibility on account of the time which this process necessarily consumes. Instead, several handfuls of grain are taken from the stream as the grain is dumped from the farmer's wagon into the unloading pit and these are placed in a box or other container. The samples from each farmer's grain thus taken are kept separate, and when a farmer has finished hauling for the day the combined samples of his grain are thoroughly mixed and then graded, the result being the grade for all loads delivered.

The process of obtaining samples from the stream is also often followed in grading individual loads. Samples obtained in this manner are more representative of the load than are those obtained from the wagon box on account of the fact that certain light foreign material, such as seeds, etc., for which dockage is taken are forced to the top of the load by the motion of the wagon, while other and heavier foreign matter settles to the bottom on account of its weight. A few

Built to prevent all leakage during hauling.

This discussion is based upon the practice in the Northwest prior to the introduction of Federal grades. 'Bin-burnt grain is that which has heated in the bin because of wet condition.