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weight of 4,500 tons, have been hauled over the line in a single train; 85 loaded cars in one train is the outside limit, and not many more empty cars can be hauled on the return trip. Even 70 cars in one train is too wearing on the engine to be profitable. The prime cost of moving a sixty-car grain train, that is, the cost at which a few extra trains could be run over the line without loss where ordinary traffic pays for maintenance and fixed charges, is estimated to be considerably below one dollar per mile, very probably under 65 cents. Single wheat cars weighing 139,000 pounds and containing over 2,000 bushels of wheat have been shipped. About 25 years ago, 450 to 500 bushels were considered a large car load and a 1,000-bushel car was unheard of. When properly shipped, all cars are sealed in transit. There is, however, considerable carelessness in shipping. For example, out of a total of 202,352 cars arriving at the five terminal points in Minnesota during 1905, 9,112 arrived in “bad order.” Of these, 3,981 were not sealed; 647 had the seals broken; 1,019 had open end and side doors; 1,330 had poorly fastened doors; 878 had leaky grain doors; 259 had leaky ends and sides; 970 had doors unfastened; and 28 were without doors. Grain is lost from such cars by theft and leakage. When shipments of grain are heavy there is often a shortage of grain cars. During such times of car shortage it is a common railroad practice to utilize the cars so as to secure the greatest possible amount of the grain traffic, taking into consideration that competing roads will also secure as much traffic as possible. In such cases buyers located at non-competitive points and having their elevators full to overflowing may lose several hundred dollars per day because they cannot secure grain cars. The railroads often pursue a generous and far-sighted policy for the benefit of all concerned. Such cases are where transportation is furnished, often free of charge, for experts investigating questions connected with agriculture, and for farmers’ meetings which are held in the interests of agriculture. The thousands of harvest laborers which the roads annually transport at greatly reduced rates, and even without any direct remuneration, is another case in point. The railroads recognize that their prosperity depends upon the prosperity of the farmer, and that they cannot transport the crops which he fails to harvest. Transportation from Seaboard to Foreign Market.—The increased exportation of American cereals, especially of wheat, dates from the middle of the nineteenth century, and was coincident with an increased demand for grain abroad. Europe's extremity in grain has always been America's opportunity. The chief features in the development of wheat exportation from the United States were a decrease in cereal production in western Europe; an increase in the demand for grain, mainly in the United Kingdom, Germany, Belgium, Holland and Switzerland; the laying of the Atlantic cable; the commercial grading of cereals; and the economies effected by modern elevator and transportation methods. Prior to 1850, not more than from 1 to 9 per cent of the production of agricultural nations, or of the consumption of manufacturing nations, was a factor in international trade.” The first direct shipment of grain from the Great Lakes to Europe was a cargo of wheat in 1856. Out of 125 cargoes thus going in the next eight years, only three or four carried grain. The first wheat shipped from the Pacific coast around Cape Horn was sent to New York. The grain was of such a novel character that the New York millers did not know how to manage it, and the venture was not a success. In 1860 California made its first shipment of wheat to England. The English millers sent back for instructions how to mill this grain, but it found a ready market there. By 1901 about half of the wheat flour shipped from San Francisco went to China, Japan and the East Indies, but the United Kingdom stisl received the greater portion of wheat. At that date, 12 ships per month were leaving San Francisco loaded with flour for the Orient, whereas only a few years before there were but two or three.
1 Interview with competent observers.
In 1900 a load of 82,000 bushels of wheat was shipped from Portland, Oregon, to Yokohama. This was the first cargo made up of wheat alone that ever crossed the Pacific to Japan. In the same year at the same port a cargo of wheat was loaded for Europe to go the route by way of Japanese, Chinese, Philippine, and Indian ports through the Suez canal to the Mediter
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1 Emery, Speculation in U. S., p. 106.
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 1,000 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 33% 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.' The average rate on all freight per ton per mile was about the same in 1890 as was that on wheat in 1897.
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." 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.”
1 Industrial Commission, 10:cceiv. * Itailroad Gazette, 39:722.