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White winter wheat, Nos. 1, 2, 3 and 4.
Winter wheat, Nos. 1, 2, 3 and 4. Red winter wheat, Nos. 1,2, 3 an d 4.
Mixed winter wheat, Nos. 1, 2, 3 and 4. Hard winter wheat, Nos. 1, 2, 3 and 4. Western wheat, Nos. 1 and 2.
Spring wheat, Nos. 1, 2, 3, 4 and No. 1 Northern. Macaroni wheat, Nos. 1, 2 and 3.
The rules for grading red winter wheat in New York are as follows:
No. 1. Red winter wheat shall be sound, plump, dry, will cleaned, and weigh not less than 60 lbs. Winchester standard.
No. 2. Red winter wheat shall be sound, dry and reasonably clean, contain not more than 10 per cent of white winter wheat, and weigh not less than 58 lbs. Winchester standard.
No. 3. Red winter wheat shall be sound, dry and reasonably clean, contain not more than 10 per cent of white winter wheat, and weigh not less than 56% lbs. Winchester standard.
No. 4 Red winter wheat shall include all red winter wheat not fit for a higher grade in consequence of being of poor quality, damp, musty, dirty and weigh not less than 52 lbs. Winchester standard.
The first wheat that was raised in the Red river valley grew on a rich virgin soil that was free from weeds, and consequently the grain was of high quality and quite free from foreign matter. As the soil became impoverished and weeds became more prevalent, wheat deteriorated in quality and extraneous matter increased. In the eighties, "No. 1 hard" was the contract grade in the terminal markets, and for several years over onehalf of the wheat received at Duluth was of this grade. Later the contract grade was reduced to No. 1 northern. Not 15 per cent of the crop of 1898 which came to Minneapolis was good enough for even this grade. Of 125,564 cars of wheat received at the six terminal points of Minnesota during 1905, 109,160 contained northern spring wheat, 11,118 winter wheat, 3,391 western white wheat, and 1,557 western red wheat. Of 143,375 cars received during 1902, 139,857 contained northern spring, 2,909 winter, 516 red winter, 53 northern white, 21 white winter, and 19 western white and red. The net average dockage was 21.5 ounces per bushel in 1904, and 18.6 ounces in 1905. Eighteen grades of wheat were recognized in Minnesota in 1902. Wheat contracts well illustrate Gresham's law and the action of a double standard, inasmuch as that grade which is most abundant and cheapest in any one year becomes the contract grade for that year, and other grades are delivered only at a premium.1 The grade is always either understood or specified in contracts on the produce exchanges, and a contract cannot be settled except by a delivery of that grade, or of some higher grade. It is only in comparatively recent times that a contract can be settled by a higher grade, for this is now allowed in order to avoid "corners."
The Mixing of Wheat.—After grades became fixed, houses for cleaning grains and bringing them up to the standard were established. These branched out to include a system of mixing higher and lower grades of wheat to "bring the whole up so it would pass muster, according to the rules of the respective inspection departments for which the mixture might have been made." Grades were thus manufactured. In New York, for example, there were two classifications of grades, one for delivery on the New York produce exchange, and the other for export, both under the same name. The mixing houses were private enterprises, and under no inspection. The practice increased the profit of the mixing house, but it lowered the grades of wheat. The mixer often makes a greater profit per bushel than the producer, and the business is so important that practically all terminal elevators in Chicago have their mixing houses. In running wheat of a high quality through the cleaning house, some of a lower grade is mixed with it in such proportion that the mixture barely passes the contract grade. Two cars of No. 2 wheat mixed with three cars of No. 3 may make five cars of No. 2 wheat. The difference in price between the grades may range as high as 15 cents per bushel. The mixing of wheat tends to fix its price to the disadvantage of the producer. In order to obtain a special quality of wheat, a premium must be paid for it. Export grain sold by sample commands a premium of from 1 to 4 cents per bushel over the speculative grades held in store in American grain centers. The benefit of this premium goes to the mixer and seller of the wheat, and not to the farmer. 1 Emery, Speculation, p. 137.
Wheat taken out of storage is not always of the same quality as that stored. The buyer who purchases in a territory where a low grade of wheat predominates is at a great disadvantage in competing with a buyer who purchases in a territory where the grade varies. Most of the mixing of wheat is done at the primary markets.1
The Advantages of Mixing Wheat are great, and perhaps more than counterbalance the evils resulting from the practice. Without the mixing of wheat, the farmer would be at a great disadvantage because the demand for off grades would cease. Legislative efforts have been made to stop the mixing of grain, but supervision by duly authorized inspectors is a more probable solution of the difficulty. Some elevators make an exclusive business of handling wheat that is shrunken, damp or injured, and work it up a grade by drying, cleaning and mixing. Damp wheat is turned over to them by the regular companies, who do not care to put it in their elevators.
Insurance.—There was insurance on goods in trust at least as early as 1704. On granary risks of stored grain the rate under the London mercantile tariff in 1877 was 0.76 per cent. After the fire at the King and Queen Wharf of-that year, the rate was raised to 1.08 per cent. In recent years in the United States, a few companies are writing insurance on wheat in the stack or granary, upon which they charge a rate of 1 per cent per annum. Wheat in elevators at the local market is insured by most of the large fire insurance companies at a rate depending upon the construction and hazard of the elevator, and varying from 1.5 per cent to 3 per cent per annum. Grain in transit is insured under railroad schedule policies written by a syndicate of companies in New York. The rate upon this class of risks is from .60 per cent to 1.5 per cent, for it varies from year to year. The rate of insurance for wheat stored in elevators at the primary or seaboard markets varies from .50 per cent in modern elevators of steel and concrete construction to 3.15 per cent in elevators of other construction, according to type of construction and surroundings. In Canada, the law compels warehousemen to insure stored pxain, and the average rate on grain in elevators is nearly 2 per cent.
1 Industrial Commission, 10:ccex*I; cccxxJx.
doubtless be the great factor in the future development of the country. The construction of the trans-Siberian railroad has been considered as the initial step in the opening of extensive grain fields. This railway is about 6,600 miles long in its direct line. Earth was broken for its construction in 1891. The road has been completed, but "what this country can do in the way of wheat production is yet to be demonstrated." On account of high freights, wheat cannot be shipped to the frontier by rail, and the surplus of Western Siberia does not get beyond the rural districts. Much of the grain from the western wheat lands of Siberia is carried by boat down the Irtish and up the Tura to Tinmen, from which place it is forwarded by rail to Russia. Some is also shipped east and west on the transSiberian railroad.
In Russia, grain was formerly handled in sacks. There were no elevators at the country stations and the grain was much damaged from exposure to the elements. The same state of affairs existed at the seaports, where the grain was further damaged. Here an attempt was made to classify the grain according to its quality, but there was no machinery for cleaning it. Screenings were bought from the farmers and again mixed with the wheat. Various other extraneous matters were also introduced, such as manure, sand, and a species of grass, | Kukal. The latter was in such demand at times as to bring a higher price at Odessa than rye.
In 1888 the first warehouse with elevators was erected in Russia, and it did not pay expenses. Subsequently the Russian government assisted in erecting grain elevators on the Ameri- \can plan. These were mainly along the lines of the southern railway, and at Odessa and other southern ports. In 1895 there were 55 warehouses with elevators, having a capacity of about 8,905,000 bushels, and 221 warehouses without elevators, having a capacity of about 9,082,000 bushels. In 1898 over 50 per cent of the Russian wheat contained 2 per cent of foreign matter, and some of it contained as high as 12 per cent. No attempt at grading and inspecting the wheat has thus far been success- |. ful. It is mostly sold on samgle in Great Britain, and there i; are frequent complaints of fraud. Some fruitless efforts have been made to get Russian wheat sold on a 5 per cent extraneous
matter basis, a plan recently adopted in Roumania. Experience in other countries has shown that if such efforts were successful, the most important result would be the transportation of that much more rubbish from Russia to England.
India.—An immense stimulus was given to wheat cultivation in India by the development of transportation facilities. The first of these was the completion of the Suez canal in 1869. This, however, reached its greatest importance only after some railroads were built into the wheat districts. In the eighties the movement of wheat was still greatly hampered, not only by high railroad rates, but by the entire lack of railroads in many of the best wheat districts. The situation had not greatly improved yet in 1898, when there were few branches to the railroads, the country roads were poor and freights were high. The traveler still saw the long lines of camels that were silently and majestically treading their way through the night across the plains to the seaports, in successful competition with the railroads as grain carriers. After threshing, the grain is left lying on the ground, or it is buried in pits. In the latter case, it suffers less from destructive insects than if placed in granaries. Cartmen haul it to market. Ninety per cent of them do not haul their own grain, but engage in a speculative business of buying and selling. In the eighties, there was much fraud practiced by these cartmen in handling wheat. Dirt was mixed freely with the grain. The ingenuity and resourcefulness of the cartmen seems almost incredible. In 1889 McDougall wrote: '' There are 10 or 11 villages in which the lower classes make it a trade to supply different colored earths to suit the color and size of the different kinds of grain. The earth is worked into small grains to look like grain, and the traders say it is impossible to winnow out this description of dirt. . . . Water, again, is put in to increase the weight. All these practices are resorted to by the conveying traders in self-protection against the tricks of traders, who rob them in various ways."1 A poor quality of wheat was also mixed with a good one, and then the whole was given a uniform color by mixing with clay. Firms engaged openly in selling this clay. As a result of all these manipulations, the wheat did not arrive at the foreign 1 Jour, of Soc Art.. 37:644.