THE GRAIN EXCHANGE 345 



The hedging of grain by country shippers is common in the 

 North, but is not common in the Kansas City district. The chief 

 reasons for this lack of hedging in Kansas and that section are as 

 follows: (1) More grain is financed locally and less by commission 

 mei chants the commission merchant requiring hedging and the 

 local money lenders not; (2) More local mills and industries, 

 buyers of grain, are situated near the local elevator, so that the 

 time of the grain en route is less and the risk of loss consequently 

 less; (3) Considerable grain is sold to arrive, and this is hedged by 

 the terminal buyer. 



Mixing. As the grain flows from the country elevator to the 

 terminal market following the harvest season and one-half the 

 wheat goes to market within four months it is necessary to pro- 

 vide storage for it. Terminal elevators are the principal buyers 

 and storers at this time. These elevators are both " public" and 

 private, the " public" warehouses being houses owned by private 

 corporations which store grain for the public at a regular storage 

 fee. Private warehouses are those which store their own grain 

 only. Much grain which is wet or otherwise out of condition finds 

 its way to market. A class of private elevators known as Hospital 

 Elevators either buy this grain or condition it for their customers 

 at certain rates of compensation. Public elevators are not per- 

 mitted to mix grains of different grades, whereas private houses 

 mix their own grain to suit themselves and their customers. Some 

 private houses derive considerable income from buying low-grade 

 grain and mixing it with high-grade grain in such a way as to raise 

 the grade of much poor grain. Since the price is reflected back to 

 the country when low-grade grain is bought for mixing purposes, 

 the farmers do not suffer from this terminal practice. 



The Terminal Elevators at all times have strong competition 

 from other buyers, such as flour and feed millers, exporters, and 

 the industries using grain. 



The Grain Exchange. -At the larger terminal markets the 

 various buyers and sellers of grain and the receivers and shippers 

 of consigned grain have associated themselves together and 

 formed grain exchanges (Fig. 70). These exchanges are com- 

 monly incorporated, the corporation furnishing a place to trade, 

 rules for trading, and market information of every available kind, 

 but the corporation itself doing no trading. A strict code of 

 ethics is imposed on the members in their dealings -with one an- 

 other and with the outside public. A breach of the rules is pun- 

 ished by suspension or expulsion. Applicants for membership to 



