COOPERATIVES: EARLY PHASES 75 



To remedy this situation, the tendency was for a large number of dealers 

 to join together in associations. By employing inspectors and grain masters 

 to look after the interests of the group, they succeeded in checking many 

 of the abuses. Once success was realized, the grain dealers did not always 

 use their power to the advantage of the farmer. They made track buyers, 

 for example, whom they had always looked upon with disfavor, the 

 special object of their displeasure. Track buyers could quote higher prices 

 for grain than other purchasers because they had little capital invested, 

 paid no taxes, and stayed in business only while conditions were favorable. 

 In one fashion or another the dealers' associations managed to squeeze 

 them out. 



Also of great importance in the grain trade were the activities of the 

 commercial line companies, backed as they were by the abundant capital 

 of exporters and commission firms and favored also by the railroads along 

 which their elevators were located. Often the managers and large in- 

 vestors in these lines were stockholders or directors of the railroads that 

 served them ; hence the way was wide-open to special treatment, including 

 cheaper rates. Line companies, when they chose, could make conditions 

 intolerable for the independents. Sometimes they offered to buy an inde- 

 pendent elevator outright, and if the owner refused, company officials 

 might even threaten to build a new elevator and "run him out." Com- 

 pelled to choose between financial ruin and compliance with the line 

 companies' requests, hundreds of independents in the upper Mississippi 

 Valley were obliged to choose the latter alternative. 



Farmers soon detected a high degree of uniformity in the prices that 

 the line companies offered them; only when local competitive conditions 

 forced them to it did the line companies pay high prices. A. J. Hoskins, 

 the price agent for a group of 39 elevator companies controlling from 900 

 to 1,000 elevators in Minnesota and the Dakotas, testified before the Inter- 

 state Commerce Commission in 1906 that he received from a committee 

 representing the companies daily price quotations which he, in turn, com- 

 municated to the local elevators. 40 



The system of country grading and inspection of grain was another 

 constant source of discontent. Local agents examined the farmers' grain 



40. Oscar N. Refsell, "The Farmers' Elevator Movement," Journal of Political 

 Economy, XXII (November, 1914), pp. 874-85. 



