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ranean, and thence to England. Whether the cargo of wheat went all the way to England was not clearly stated, but it reversed the usual route to Great Britain, and full return cargoes from Europe and the east were promised. The following year at least one steamship took the same route to Europe, carrying about 3,000 tons of wheat. In 1901 one steamer took a cargo of 51,931 barrels of flour, besides 1,^00 tons of miscellaneous freight, from Portland, Oregon. This was the largest cargo of flour ever floated anywhere previous to that date, with the exception of one of 55,000 barrels taken from Newport News. A single shipment of about 40,800 barrels of flour was made from San Francisco in 1903.
There is a widely prevalent opinion that the Oriental trade of the Asiatic millions is the greatest commercial prize of the age, and that it will absorb the entire wheat surplus of the Pacific coast. Great American vessels have been built especially for this trade, but their owners have not found the traffic as lucrative as they had hoped. The mercantile marine system of the United States is not the most encouraging for American shipping. It is claimed that the Japanese vessels carry flour and wheat across the Pacific at over a dollar a ton cheaper than the American vessels. It is also claimed that the Japanese are carrying out an ambitious plan for colonizing Manchuria on an extensive scale in order to raise sufficient wheat to supply the needs of Asia, and thus close its markets to American grain.
During the last decade of the nineteenth century about 333 vessels were engaged in the grain trade on the Pacific coast. They belonged to 12 different nationalities. Over 65 per cent of them were English, and less than 3 per cent were American. Regular lines of steamers carried nearly all the flour shipped from the Pacific coast ports, but sailing vessels carried the great bulk of wheat exported. In California ships are often loaded directly from the car, but in Oregon and Washington the wheat is more generally re-cleaned and then re-sacked, before it is loaded. Practically all export wheat from the Pacific coast is sacked. From the Atlantic and Gulf ports, wheat is generally shipped in loose condition. A very large portion of it is carried in English bottoms.
Transportation Charges.—Early freight rates on wheat were prohibitory. For example, the charge for transporting the first wheat sent from the Red river valley to Duluth was 30 cents per bushel. A general reduction in railroad, river and ocean freight rates is the condition which, more than anything else, has made possible the shipping, and consequently the growing, of immense quantities of wheat. This was the major factor involved in opening a market for the wheat grower, not only in the great centers of consumption in our own country, but in those of the world. Estimates at the close of the nineteenth century still placed the cost of carrying wheat from the northwest to the Atlantic seaboard as one-half as great as the original cost of production. By 1897, the cost of concentrating the wheat surplus at Chicago was reduced to one-fourth or onethird of the cost in 1880. In 1884 the cost of getting wheat from the farm to the consumer was 22 per cent of its Chicago value. This had fallen to 6 per cent in 1897. The Chicago price of wheat was practically the same at both dates.
From 1867 to the end of the century, the freight rate per bushel of wheat from Chicago to New York by rail decreased from 33V2 cents to 12 cents. As we have seen, however, the competition between these two points was the most severe possible, and it must not be assumed that freight rates in general decreased to this extent. The rate per bushel for shipping wheat from Chicago to New York by lake and canal route was 8.8 cents in 1871, and 4.8 cents in 1905; by lake and rail it was 12.1 cents in 1875 and 6.4 in 1905; and by an all-rail route it was 20.9 cents in 1875 and 9.9 cents in 1905. From Chicago to New York, the rate by lake and rail route fell from 19.2 cents in 1870 to 5.6 cents in 1902. At the close of the century the average rate between these two points was less than one cent greater by rail and lake than by lake and canal, and railroad rates had reached the lowest notch, for the roads preferred to lose the grain trade rather than to reduce rates further. In 1880 railroads carrying wheat to Chicago charged from 1.08 to 1.75 cents per ton per mile. In 1897 the rates were 0.78 of a cent to 1 cent, a reduction of from 0.25 to 0.74 of a cent per ton per mile in 17 years. This reduction was less than that made by the cotton and coal roads during the same period of time.1 The average rate on all freight per ton per mile was about the same in 1890 as was that on wheat in 1897. 1 Industrial Commission, 6:59-60.
In 1898 the farmers' organizations secured a compromise from J. J. Hill of the Great Northern according to which that road reduced freight rates on grain 14 per cent, and competition forced the other roads to meet the reduction. The reduction did not amount to quite 2 cents per bushel, but, contrary to expectations, it made no difference whatever in the price paid for wheat to the farmer. It is believed that the reduction benefited the consumer and shipper only.1 From St. Louis to New York, the rate was 32 cents per 100 pounds in 1882 and 20.5 cents in 1905. In 1890 it cost 17.4 cents per bushel to haul wheat by rail from St. Louis to Chicago. This rate had fallen to 11.6 cents in 1901. The rate from St. Louis to New Orleans by river fell from 8.1 cents per bushel in 1877 to 4.2 cents in 1902. The cheapest transportation in the world is on the Great Lakes, 0.75 of a mill per ton per mile.
The cost of transporting a bushel of wheat to Europe from the Atlantic ports of the United States was 5.5 cents in 1902, from New Orleans 8 cents, and from San Francisco 16 to 20 cents. The rate per bushel from St. Louis to Liverpool by way of New Orleans was 22.7 cents in 1882, and 10 cents in 1903. By way of New York it was 23.7 cents in 1882, and 15.6 cents in 1905. The rate per 100 pounds from Chicago to Liverpool was 33.5 cents in 1896, and 19.2 cents in 1905. It is claimed that competition of the Gulf ports has forced the railroads carrying grain to Atlantic ports to charge a lower rate when grain is destined for export than when it is destined for domestic consumption, the only alternative being to cease exporting.
The railroad rate from Chicago to New York is only a part of the through rate from Chicago to Liverpool, and in support of the view that the rail and ocean rates are complementary, it has been cited that in 1876 there was a railroad rate war, and the ocean rates at once met the railroad rates. From April 6 to June 1 the rate from Chicago to New York fell from 24 cents to 12 cents, while the ocean rate rose from 10 cents to 21 cents during the same period. The ship owner gained and the railroad lost, while the total cost to the shipper was approximately the same.2
1 Industrial Commission, 10:ccciv.
2 Railroad Gazette. 35:722.
It was asserted in the eighties that the competition of overconstructed railroads in the United States and ships in England had caused the hauling of wheat below cost. In 1901 the surplus-cereal states still had at least as many railroads as could be profitably operated.1 The transportation facilities proved inadequate for moving the wheat crop of 1906.
By making freight discriminations, transportation companies can exert a powerful influence upon the volume and direction of grain traffic. Discriminations are effected in various ways, and may be against certain forms of grain, against certain persons, and against certain places. It is claimed that the export flour trade is greatly injured by the fact that railroad and ocean carriers discriminate against flour in favor of wheat, thus giving the foreign miller an advantage in competing with the American miller.
The interstate commerce commission found that discriminations during the year 1898 were probably worse than at any previous time. "It is claimed by some that direct rebates and secret rates are still frequently granted; commissions are paid for securing freight; goods are billed at less than the actual weight; traffic within a state not subject to the interstatecommerce act is carried at lower rates; allowances and advantages are made in handling and storing, etc.''2 The large shippers generally receive the greatest favors. Laws have been enacted to remedy the evil, but their effective enforcement is not an easy task. On the whole, however, it must be said that the transportation service for wheat has improved vastly during the last 25 years, while its cost has been enormously reduced during the same period of time. Such evils as exist will doubtless be corrected in at least some measure as a result of the present wave of popular agitation against all corporate abuses.
1 Industrial Commission, 6:48.
2 Industrial Commission, 4:5-6.
The storage of wheat has four aspects which correspond to the four stages of transportation, namely: Storage at the farm; at the local market; at the primary market; and at the seaboard. Under the subject of storage is included the vertical and horizontal transportation involved in getting wheat to and from wagons, cars, ships and warehouses.
Storage of Wheat at the Farm.—The granary upon the farm should have an exposed location, and should be so constructed as to make the handling of grain as easy as possible. The principal things to be guarded against are dampness, insects and vermin. Cold does not injure wheat, and it lessens the activity of injurious insects. The loss from insects decreases with increased bulk and decreased exposure of the surface of grain. Bins should be constructed with smooth, oiled, or painted walls to prevent lodgment of insects, and without air spaces where vermin can hide. If the granary is fully exposed, a single thickness of inch boards will keep out all rats and mice. Where injurious insects are likely to be abundant, the windows should be screened, the doors made close fitting, and all crevices and other means of ingress closed. If the granary is properly constructed, there is practically no loss of weight through storage. On the largest wheat farms, such as exist in the Red river valley, the grain is stored in elevators. Alongside of the railroad track which runs through the great field, two elevators of about 50,000 bushels capacity each are located on opposite corners of the farm. On the Pacific coast, where there is no danger of rain, the sacked wheat is left lying in the open field until it is shipped. East of the Mississippi river, mixed farming is generally practiced, and as a rule there is sufficient granary room on the farm to store the wheat held over, which is quite a large portion. In the Northwest, where the main feature of farming is growing grain for the market, it is estimated that 75 per cent of the grain is put upon the market before the close of the year.