Jasper County Democrat, Volume 20, Number 101, Rensselaer, Jasper County, 20 March 1918 — HOW Uncle Sam runs the Nation's Wheat Business [ARTICLE+ILLUSTRATION]
HOW Uncle Sam runs the Nation's Wheat Business
UR delay in getting this wheat started across the world was occasioned by the uncertain judgment of the
manager. He sent a sample on to the St. Louis zone agent for test, which verified his Judgment as to grade. He then went about his usual duties, cleaning the grain, filling his bins, and shipping out as regularly as he could in maximum carload quantities, In order to economize the use of cars in time of congestion. He was careful to keep his records very straight as to dates and quantities of wheat purchased, on hand, and shipped out, for the Grain Corporation requires weekly reports and full details of transactions. Selling Wheat to Government.
BOUT 29 days after the farmer brought in his wheat there came a request to this elevator for a carload to be purchased by the Grain Corporation. So one of our
wheat bushels was poured into a car which miraculously had appeared on the siding at a time when car shortage was troubling the entire commercial world. Inquiry might have shown that
the Grain Corporation was making a large purchase for the Allies and wai utilizing its knowledge of available stocks by having on the job a trans portation strategist—Edward Chambers, vice president of the Santa Fe Mr, Chambers was assisting the Food • Administration and has a remarkable “way with him.” Even before he was called to assist Mr. McAdoo, the Director General, his suggestions to the railroads had a wonderful effect in discouraging their hesitancy ns to finding available cars and <n clearing up congestions that looked as though they never could be uncongested. How Unc'e Sam Keeps the Whip Ease in getting the needed cars was one of the advantages enjoyed by this particular elevator after signing the voluntary agreement which ceded to - the Grain Corporation the right to control storage and direct shipments and sales of all wheat bought by the proprietor. While voluntary, this agreement is almost compulsory since railroads give priority recognition to Grain Corporation requests for cars; and elevators or mills outside the official fold must “rustle” for themselves. In return the Government guarantees the elevator proprietor against losses and protects him in every way as to price and pays him rentals for ail storage space requisitioned by it. All elevators, local and terminal, must take out licenses or face a shutdown. What is the power of the license? It requires the operator to lay all cards on the table as to his business dealings. For the time of the war the elevator becomes a public utility and its proprietor must furnish information as to Ids business at any time when required by the Grain Corporation. Each week he must make and mail reports showing the amount of wheat, rye, or their derivatives, chased, stored, and shipped. Under present license terms, the 11censee_ can keep on hand for only 30 days, unless he obtains a special permit, ahy stocks of these grains or their derivatives. He is also forbidden to contract for the sale of any product which can not be delivered within 30 days after the contract la made. -
How the Wheat Was Milled. Away went our bushel of wheat on its Journey to the terminal, where It met other bushels of wheat from all parts of the territory that fed this market There it was regarded for special requirements, marked for immediate milling and rolled on to a large mill in Illinois. * The miller bought the wheat from the Grain Corporation, for each miller in the United States Is under license also, and moat of them have filled out another voluntary agreement which binds them either to purchase all supplies from the Grain Corporation or under Its dl-
,cu supervision. she corporation ebarges each miller 1 per cent of the value of the wheat he grinds to cover the costs of administering the corporation; for the $50,000,000 capital is to be returned to the United Slates Treasury, unimpaired. The agreement lias its compensation, -.however,- for the policy of Unde Sam is to provide each mill with all wheat possible. To do so, every mill signing up was required to furnish an estimate of its possible milling capacity for tlie season. This nation-wide survey of milling capacities, when balanced against the available supply of wheat, enables the Grain Corporation to equalize supplies !l vvi! - v "ever done before. In fact, the schedule of prices arranged for the primary markets had for an object this equalization. For instance, if the proprietor of tin elevator at Maryville. Mo., •10 miles northeast of St. Joseph, and 4.>3 miles from Chicago, desires to market wheat lie has available those markets: St. Joseph, Mo.; Kansas City, Mo.; St. Louis, Mo.; Chicago. 111., and New York City, N. Y. To ascertain the most advantageous price for him, he would work it out on the basis of the following tuble: From this table you can see what
wheat would bring at five different markets if shipped front Maryville, Mo.: St. Kansas St. F. A. G. C. Joseph, City Louis, markets. Mo. Mo. Mo. Base price $2.15 $2.15 $2.18 Rate per 100. pounds .065 .095 .1175 Rate per bushel..... .039 .055 .0705 Net price 2.111 2.09 a 2 1095 New F. A. G. C. Chicago. York markets. I"- City. Base price $2.20 $2.28 Rate per 100 p0und5....1475 .3005 Rate per bushel 0885 .1803 Net price 2.1115 2.0997 Under these conditions the proprietor would probably sell at St. Joseph or Chicago, according to his inclination. The table further illustrates the equalization of prices and'lndicates tp what extent the miller Is protected when buying wheat In any territory. Through this plan discriminations against the producer, the miller, and the consumer are eliminated so far as it seems humanly" possible under a plan of such tremendous proportions.
HESE schedules arranged for the various markets are veritable “price dams” to prevent the overflowing of the stream of wheat at any single
market. They also tend to correct many abuses prevalent in the past, such as cutthroat methods adopted by mills to secure supplies and indiscriminate moving of wheat to terminals. | J For all practical purposes the wheat ! business of the country is apportioned, 1 and whenever possible mills are sup- | plied from wheat in the territory near--1 est them. This policy has for an ob- ' ject the saving of waste in transpor- ; tation. In another way saving is I made: Formerly large quantities of 1 undergrade wheats have been difficult I to dispose of on account of unco-ordl- ; nated purchase of the competing mills; ' but under Uncle Sam’s domination each bushel of wheat must now go somewhere and the poorer wheat will ■ move just as freely as the more desirable grades.
Limiting Millers’ Profits. The Illinois miller who received the carlot containing our bushel of wheat milled It promptly and shipped Its flour to a port for exportation. The miller was - permitted by the Food Administration to make a fair profit, not ex-, ceeding a-.maximum of 25 cents per barrel on the flour and a maximum profit of 60 cents per ton on the feedstuffs left over. All mills, however, must furnish at regular Intervals to the Milling Division full statements of manufacturing costs, which are scrutinised carefully. The derivatives of this wheat the miller sold for domestic consumption, as the policy of the Government Is to keep in the United States all available feedstuffs In order to encourage live-stock production.
Milling Canadian Wheat.
11l I.E our bushel was being milled a cnrlot of wheut reached this mill from Canada. Importation of Canadian wheat without special consent being forbidden, the mill
operatives became curious and made inquiries. This wheat was part of a large supply which the Grain Corporation had brought into the United States to aid in keeping the American mills running. There was another reason. Domestic wheat was not moving from tlie farms ns freely as the millers needed It, and shortage forced the mills to operate at a great disadvantage and, according to them, at higher costs. The lost journey stage of our first bushel, although considerably changed in its form, was to J?b as flour to port under rush orders. It now had right of way over oil other classes of freight except other munitions of war. Consent of the War Trade Board being obtained, it was loaded on a ship and passed safely through the submarine field to France, where It succored the hungry. We started out to follow the travels of two bushels of wheat from the farm to their points of consumption under war condition with the U. S. Food Administration in control of the marketing. I have previously discussed the journeys of these two bushels from the farm to the elevator at the country point. Here they parted and one of them passed on to a terminal, and from the terminal to a mill and from the mill to seaboard. There It went to France for consumption. The Other Bushel of Wheat Starts T raveling.
OW as to the other bushel of wheat. A certain Georgia miller, in need of supplies, notified the Grain - Corporation and received permission to
buy on the open market. About the same time our co-operative elevator manager had listed a shipment with Ills terminal representative —a highly reputable commission firm, also under Grain Corporation license. This firm caught wind of the Georgia order and secured permission to sell the Missouri wheat. The second bushel was among those poured into a car and hustled along to its destination. This shipment did not pass through any terminal market. It moved straight to Atlanta, where It went between the rollers of the mill. Controlling the Jobber by License. Now, the flour which came front our second bushel of wheat was rolling serenely along in another direction, but the enr was diverted by special order of the U. S. Food Administrator and received by a large wholesale jobber In New York City. This jobber also does business under a Food Administration license, but administered by the distribution divison. Under license terms the jobbers must sell at a fair profit only, although the exact amount of this profit is not determined, the Food Administration reserving the right in each case to call a halt when a licensee hasp sone “the limit.”
The New York jobber took for his own, in this case, a profit of r>o cents per barrel. He sold part of tills shipment to a retail merchant. This merchant did a small business and was not licensed, but even here was another social check. For the retail merchants of -the large cities find those of many small cities and towns find each morning and afternoon in the dally, papers a price list for flour and other commodities which are considered fair. by the Federal for their State. Thapnprloes are usually arrived at ihrough the machinery of the wholesalers’ and the retailers’ organizations. The retailer also discovered that the Jobber who sold him this flour was keenly Interested in the prices paid by the consumer. For the Food Administration has discovered an Indirect
means ot control of the retailer by making the jobber a voluntary policeman to Ids customer. The Jobber is licensed to sell only to traders who deal fairly, and if it should turn out that a jobber persists in doing business with retailers guilty of profiteering In staples under control the Food Administration has and may exercise tiie right to revoke the license of the Jybber. The other part of this shipment contained our second bushel of wheat and went over to the East Side into a small bakery, which quickly made It Into creamy loaves. These loaves wore placed in groceries and delicatessens and the next day were eaten by hungry little hoys and girls with dark eyes and big noses and quaint ways. Brings Out Startling Truths. Government control has brought out these startling trutlts: More people unnecessarily make their living out of wheat distribution than was suspected. Thousands and thousands of little ‘speculators have had to turn elsewhere for a livelihood. A number of commission men have had to close shop. There are place* ivhere elevators should he built and other places where there are too many elevators. The Government, dominating the wheat market, carries Its own marine insurance. Wheat handlers at terminals have had their activities restricted. But most of nl{. It Is Interesting to see how the price of flour per barrel tumbled from the time Uncle Sam took n positive hand in (lie matter. The Food Administration has recently completed an interesting chart on the prices of wtieat and hulk flour nt Minneapolis. In a statement of November 23, the Food Administration says: The farmer received for the 1916 harvest between $1.45 and $1.50 per bushel for the harvest, taking the country by large and • • •. Last year he received under 20 per cent of the price of the loaf. Today ho Is receiving over 40 per cent of :he money paid for the cash loaf, this being the result of the stabilization of prices and the total elimination of hoarding and speculation In this Industry. The statement reports ttint farmers on November 23 were receiving with freight charges included from the territory represented to Minneapolis, approximately $9.50 for 4*4 bushels of wheat. The price of bulk flour nt the Minneapolis mill is about $10.25 per barrel, showing thnt the miller Is now receiving about 75 cents per barrel, which must Include both his operating expenses and profit.
URING Inst July and August, \\ Idle Congress was wrestling with Itself to produce a food administration, and there was no Grain Corporation, (lour production in the principal centers was 75
per cent under the same period In 1913. In September, October and November, under the supervision of the Food Administration, flour production was 114 per cent of the asm© period in 191st. What this means In the great national situation, with depleted domestic flour reserves and clamoring foreign buyers, can hardly he overemphasized, when movement of wheat Into primary markets has been hardly
half that of a year ago, or 100,000.000 bushels less. It was nothing short of master strategy. The total number of bushels purchased by the Grain Corporation from the time it commenced activities to February 1 Is 97,276,145.59. Arranged by months, the purchases In bushels were: 7,841,209.20^*-,Octo-ber, 19,359,646.59; November, 30,920,074.20; December, 21,456,249.06, and January, 17,698,966.08. During July and August our floor exports were about the same as In the same two months of 1916; hut In September, October, and November, the exportation was 50 per cent larger than a year ago. So the Grain Corporation has discharged our obligations to the allies, and restored onr flour reserves, which 1s the larger aspect of the question.
Loading Wheat at an Atlantic Port for the Allies.
Success in This War Depends Large ly on America’s Next Wheat Crop.