THE MANUFACTURER AND DOMESTIC MARKET 119 



proved land included in farms show that land is the chief storehouse 

 of surplus agricultural wealth. Approximately one half of the land 

 included in American farms is unimproved. Under these conditions 

 the farmer has sought money crops, and has been obliged to market 

 as soon after production as possible. To secure adequate supplies 

 of materials, therefore, some lines of manufacturing have been 

 obliged to take direct part in the organization of a spot-cash market 

 on which materials would always be sure of sale at fair prices. Such 

 materials are then rendered good money crops and hence attractive 

 to short-handed farmers. An excellent illustration of the way in 

 which this has been done by manufacturers is afforded by the various 

 union stockyards of this country, in most of which the packing inter- 

 ests are prominent. The financial problem of accommodating the 

 even requirements of a manufacturing plant for materials throughout 

 the year to the necessity which the farmer feels of disposing of his 

 crop at once when it is matured, has been solved through the co- 

 operation of several agencies. The early purchases of manufac- 

 turers involve them in speculative risks. The profit or loss showing 

 of a cotton or woolen mill or the milling profit of a flouring-mill 

 often depends principally upon the correctness of the buyers' esti- 

 mate of speculative conditions. There are also independent insti- 

 tutions illustrated by the grain elevator companies which aid in 

 carrying speculative risks and controlling storage conditions. Fur- 

 thermore, by the organization of produce exchanges it has been made 

 easy for the general public, through speculative investments, to 

 assume a considerable part of the financial burden of carrying food- 

 stuffs and other materials through the year. 



A third force drawing the manufacturer upon raw-material mar- 

 kets is railway competition. The result of intense competition for 

 traffic has sometimes been that, in pursuance of a compact, a road 

 has given substantial advantages to a large consumer when he has 

 acquired the ownership of materials at the market of their origin, 

 and is hence able to prevent their being diverted from the line at 

 any competitive point, and insures their routing as desired. The 

 transportation arrangement may include both the outgoing and in- 

 coming traffic of a concern in an agreement permitting manufacture 

 in transit. Between a group of competing roads manufacturing 

 interests have occasionally obtained advantages in return for acting 

 as traffic-distributers. The classic case of this is in the early history 

 of the Standard Oil Company. In these transportation struggles 

 the manufacturer has been unable to keep aloof. The old-time free 

 lance, the commission merchant, has been thrust aside; the raw- 

 material producer has been confined increasingly to his local market; 

 the manufacturer has taken up transportation worries and commer- 

 cial functions unknown years ago. 



