THE MARKETING OF WHEAT 225 



21.5 ounces per bushel in 1904, and 18.6 ounces in 1905. Eight- 

 een grades of wheat were recognized in Minnesota in 1902. 

 Wheat contracts well illustrate Gresham's law and the action 

 of a double standard, inasmuch as that grade which is most 

 abundant and cheapest in any one year becomes the contract 

 grade for that year, and other grades are delivered only at a 

 premium. 1 The grade is always either understood or specified 

 in contracts on the produce exchanges, and a contract cannot be 

 settled except by a delivery of that grade, or of some higher 

 grade. It is 'only in comparatively recent times that a contract 

 can be settled by a higher grade, for this is now allowed in 

 order to avoid " corners. " 



The Mixing of Wheat. After grades became fixed, houses for 

 cleaning grains and bringing them up to the standard were es- 

 tablished. These branched out to include a system of mixing 

 higher and lower grades of wheat to lt bring the whole up so it 

 would pass muster, according to the rules of the respective in- 

 spection departments for which the mixture might have been 

 made." Grades were thus manufactured. In New York, for 

 example, there were two classifications of grades, one for de- 

 livery on the New York produce exchange, and the other for 

 export, both under the same name. The mixing houses were 

 private enterprises, and under no inspection. The practice in- 

 creased the profit of the mixing house, but it lowered the grades 

 of wheat. The mixer often makes a greater profit per bushel 

 than the producer, and the business is so important that practi- 

 cally all terminal elevators in Chicago have their mixing houses. 

 In running wheat of a high quality through the cleaning house, 

 some of a lower grade is mixed with it in such proportion that 

 the mixture barely passes the contract grade. Two cars of No. 

 2 wheat mixed with three cars of No. 3 may make five cars of 

 No. 2 wheat. The difference in price between the grades may 

 range as high as 15 cents per bushel. The mixing of wheat tends 

 to fix its price to the disadvantage of the producer. In order 

 to obtain a special quality of wheat, a premium must be paid for 

 it. Export grain sold by sample commands a premium of from 

 1 to 4 cents per bushel over the speculative grades held in store 

 in American grain centers. The benefit of this premium goes 

 to the mixer and seller of the wheat, and not to the farmer. 

 1 Emery, Speculation, p. 137. 



