The next step is to trace the 44.4 per cent of wheat receipts in the Philadelphia market which was bought from dealers by jobbers (Table 20). The distribution is shown in the following table:

TABLE 22.—Distribution by jobbers in the secondary market-wheat purchased from dealers.

The table shows that jobbers who had bought from dealers sold 26 per cent of the total market receipts of wheat to local consumers and exported 11.9 per cent. These portions have reached their destination, with one merchandising handling in the secondary market. The 6.2 per cent sold to exporters had in addition to the merchandising handling by jobbers another merchandising handling by the exporters in exporting it. This leaves 0.3 per cent sold through jobbers, the final disposition of which is shown in the next table.

TABLE 23.-Distribution through brokers in the secondary market-wheat purchased from jobbers who had bought from dealers.

The table shows that one portion of the wheat which came into the secondary market through purchases from dealers was sold by jobbers through brokers to retail feed distributors, while the other portion went to exporters who exported it. The first portion (0.1 per cent of total market receipts) had one brokerage handling and one merchandising handling by jobbers; the other portion (0.2 per cent of market receipts) had in addition to these handlings a second merchandising handling by exporters.

All portions of the entire receipts of wheat in the Philadelphia market, 6.5 per cent of which was handled on consignment, 30.9 per cent of which was bought through brokers, and 62.6 per cent of which was bought from dealers (Table 14), have been traced to destination. The following table shows in detail the disposition of the entire 100 per cent, and the number of merchandising handlings and handlings by brokers and by commission men. The class of middlemen making the final disposition of the grain and the class of purchasers is also shown, and the table number from which each detail is derived is given for convenience of reference:

TABLE 24.--Disposition of total receipts of wheat in the Philadelphia market, showing number of handlings by commission men, brokers, and merchandisers, respectively, five-year period 1913-17.

The number of times an average bushel of wheat was handled by merchandisers. brokers, and commission men, respectively, in the Philadelphia market may be computed from the above table. This is done by multiplying the number of handlings of each class by the percentage of market receipts so handled, for the various items in the table, and adding the resulting products. The results of these calculations show the average number of handlings of a typical bushel of wheat in the Philadelphia market, as follows:

Merchandising handlings..

Brokerage handlings

Commission handlings..

0.972

.496

.065

It will be noted from these figures that an average bushel of wheat entering the Philadelphia market had practically one full handling by merchandisers, about one-half a handling by brokers, and practically no handling by commission men. These, of course, are averages. Some of the grain may have been handled many times while other portions were bought directly by local mills from outside shippers with no intermediate handling in the secondary market.

Section 4. Method of tracing the entire forward movement of grain beginning with the primary market, and of determining the middlemen's handling charges.

GENERAL STATEMENT.-In preceding sections the method of tracing the flow of grain through primary and secondary markets has been explained, and a state

ment has been made regarding the sources and methods of compiling the figures showing the distribution of grain from primary markets. These explanations have included the method of determining the number of times an average bushel of grain was handled by merchandisers and by commission men in the primary market, and the average number of handlings by merchandisers, brokers, and commission men in the secondary market. It is necessary now to show the complete process of tracing the forward movement of grain from its receipt in the primary market, through the various steps in the marketing process, until all portions have reached their destination.22

Some of the grain, as has been noted, reached consumers in the primary market and the remainder was shipped to outside points. Some of the latter went to other primary markets, and some to secondary markets, while some portions passed through two or more markets (primary or secondary, or both) before reaching a consumer. Other portions went to interior points and still others were exported. The process is one of tracing a constantly diminishing quantity of grain, as one portion after another of the original 100 per cent received in the primary market reaches its destination and is eliminated from consideration.

The object of tracing this movement is to determine the total number of handlings and the total charges per bushel by middlemen on all portions of the receipts of a particular kind of grain at a primary market from the beginning until all have reached destination.23 The following is a general description of the method used to secure these results: For each of the 10 leading primary markets 24 the receipts of wheat, of corn, or of oats,25 as reported by middlemen in the market, were taken as 100 per cent. Then taking the figures for any one of these primary markets and for a particular kind of grain, the percentage of total receipts of this grain consumed in this market and the percentage shipped out were determined. Next, this latter percentage was multiplied by the percentages of the particular kinds of grain which were shipped out of the primary market to the various points to which these shipments were made. The results showed the distribution of the grain from the original primary market to these various points in percentages of the total receipts of that kind of grain in that market. Thus the distribution was made to show the percentage of receipts in the original primary market which went to each of the other leading primary markets and to each of the leading secondary markets, to the minor primary markets as a group and to the minor secondary markets as a group,20 as well as to interior points as a group.

The average number of times the 100 per cent of receipts was handled in the original primary market by merchandisers and by commission men was determined by the method illustrated in section 1. Then it was necessary to determine the number of handlings to be charged against the total receipts in the original primary market by reason of the merchandising of portions of these receipts in other primary markets to which shipments were made. It was also necessary to trace the shipments which went from the original primary market via a second primary market to a third, and to ascertain the number of handlings to be charged against the total receipts in the first primary market on account of the merchandising in the third market of this portion of the original receipts in the first market. The method of computing these figures can best be shown in the illustrative examples given later in this section. (See pp. 110 and 111.)

As has already been stated, certain portions of the grain receipts in the first primary market reached secondary markets either directly or indirectly. It was necessary to ascertain the number of handlings to be charged against the total receipts in the first primary market on account of the handling of these portions in the secondary markets. This was done by multiplying the average number of handlings by merchandisers, brokers, and commission men, respectively, for

In illustrating the movement of grain through the primary and secondary markets figures for wheat were used, but the same method was employed in connection with the computations for the other grains. It is obvious that the handing of the grain by country elevator operators and the transportation from the country to the terminal markets precede the handling in the terminal markets. Logically the handling by country elevator operators and the transportation to the terminal markets should be considered first, but for reasons which will appear as the method of determining the costs of marketing is developed, it seems best to postpone the consideration of the earlier steps in the process until the method of tracing the forward movement from primary markets has been explained.

The method of determining the average profit per bushel charged by country elevator operators will be found in section 6, while the method of computing transportation charges is discussed in section 7.

34 Certain modifications of the method were necessary on account of lack of basic figures in some cases. The extent and character of these modifications is stated at the end of this section. (See p. 114.)

In the concrete example of the method which is given in this section, the figures for wheat are used, but the method was the same for the other grains.

These are designated in the statistical tables as "other primary markets” and “other secondary markets," respectively.

each secondary market,27 by the percentage of total receipts in the first primary market which went to the particular secondary market.

Finally, for each of the leading primary and secondary markets which received any shipments from the original primary market, the proper money charge (in cents per bushel) was made against the average number of handlings by each class of middlemen (merchandisers, brokers, and commission men) who handled the grain in the particular market. Then an estimate of the charges in the minor primary markets, designated in the statistical tables as "other primary markets," was made on the basis of the average charge for the specified primary markets. Similarly, an estimate of the charges for "other secondary markets" was made on the basis of the average charges for the specified secondary markets. As explained later (p. 113), there was no charge made for handling grain at interior points.28

The sum of all these charges, computed as above indicated, gave the total charges on an average bushel of the given kind of grain, which were exacted by all classes of middlemen in all the terminal markets (primary and secondary) through which any of the grain passed, including the final markets in which the various portions reached the hands of consumers.

The money charges used in making these computations were the average gross profits per bushel received by the different classes of middlemen. (See Ch. IV, pp. 71 and 72.)

The various steps in the processes mentioned above and the details of the method will be made clearer by a concrete illustration.

CONCRETE ILLUSTRATION OF THE METHOD.-In illustrating the method of tracing the entire movement of grain from its receipt in the primary market until all portions have reached destination the figures are here presented for wheat received in the St. Louis market.

For the five-year period 1913-1917, the average number of merchandising handlings of wheat in the St. Louis market was 0.452, and the average number of handlings by commission men 0.513. Of the entire wheat receipts in this market 33.7 per cent was shipped to outside points and 66.3 per cent sold to local consumers. (See Appendix Table 48.)

Obviously, the entire 100 per cent of receipts is to be charged with 0.452 handling by merchandisers and 0.513 handling by commission men. The 66.3 per cent of total receipts which went to local consumers had no further handling by middlemen.

The distribution of the 33.7 per cent of total wheat receipts which was shipped to outside points from the St. Louis market is shown in the following table. This distribution was made by applying the percentages of total wheat shipments from St. Louis to various destinations, as reported by middlemen in that market, to this 33.7 per cent.

TABLE 25.-Distribution of shipments of wheat from the St. Louis market to various destinations in percentages of total receipts of wheat in the St. Louis market, fiveyear period 1913-1917.

SHIPMENTS FROM ST. LOUIS TO OTHER PRIMARY MARKETS.-The portions of the St. Louis wheat receipts which were shipped to other primary markets, as

27 Computed by the method illustrated in section 3.

28 Similarly no charge was made for handling grain exported directly from Chicago after it left that market.

shown in Table 25, will first be traced. For each of these markets there is to be determined the number of handlings by merchandisers to be charged against St. Louis receipts on account of the portion which was forwarded to the given primary market. The figure is ascertained by multiplying the number of times direct purchases 29 were handled in the second primary market by the percentage of total St. Louis receipts shipped to that market. The next step is to find the percentage of total St. Louis receipts forwarded through the second primary market to other markets. This is done by multiplying the percentage of total St. Louis receipts forwarded to the other market by the percentage of direct purchases shipped out of that market. The distribution of this portion of the total St. Louis receipts to the various destinations is then made on the basis of the percentage distribution of shipments out of the second primary market.

The figures for the different primary markets to which shipments were made from St. Louis will be taken up in the order in which they are listed in Table 25. Chicago. The first item in Table 25 is the 3.6 per cent of total St. Louis receipts which was shipped to Chicago. Direct purchases of wheat in the Chicago market were handled by merchandisers on the average 1.165 times (see Appendix Table 42). Accordingly the number of merchandising handlings in the Chicago market which must be charged against St. Louis receipts on account of the portion which was shipped to Chicago, was 1.165 handlings×0.036=0.042 handling.

Next, it is necessary to ascertain the percentage of total receipts of wheat at St. Louis which passed through Chicago to other points. This was computed by multiplying the percentage of St. Louis receipts shipped to Chicago by the percentage of Chicago receipts shipped to outside points." The calculation is as follows: 3.6 per cent 31 X0.828=3.0 per cent.

The distribution of this 3.0 per cent of St. Louis receipts which was shipped through Chicago to other points is shown in Table 26, which follows. This shows in percentages of St. Louis wheat receipts the portions going to various destinations, the distribution being made on the basis of the percentage distribution of total shipments of wheat from the Chicago market.

Table 26.—Distribution of shipments of wheat from St. Louis through Chicago to outside points in percentages of total receipts of wheat in the St. Louis market.

This table shows that 0.5 per cent of total market receipts of wheat at St. Louis passed through Chicago and reached destination at interior points, while 2.0 per cent was exported directly from Chicago. New York received 0.4 per cent of St. Louis receipts via Chicago and Baltimore 0.1 per cent. The two portions first mentioned have reached destination, the other two will be traced to destination later (p. 111). It is desirable first to trace the shipments of St. Louis wheat which went to the other primary markets as shown in Table 25. This will be done in accordance with the method already illustrated for Chicago.

The figures showing the average number of times receipts of wheat in the Chicago market from all sources were handled were not used in this connection, because total receipts include a large proportion of grain handled on consignment. The available information does not indicate that any considerable quantity of grain is received on consignment from another terminal market. The only other figures available were those for direct purchases, although their use is also open to some objection because they include purchases from the country. However, a smaller element of error seemed to be involved in using the figures for direct purchases than those of total receipts, since the latter include so large a proportion of consigned grain. (See Appendix Table 42 for these figures.)

Using the figures for direct purchases instead of those for all market receipts.
See Appendix Table 42.