EVOLUTION OF THE ORGANIZED GRAIN EXCHANGE 347 



The Fanner and the Terminal Market. As stated above, 

 95 per cent of the grain reaching the terminal has already passed 

 out of the possession of the farmer. An increasing number of 

 farmers, however, are now availing themselves of the machinery 

 of the terminal markets, including that of the grain exchange 

 itself. For instance, some farmers ship their grain to the terminal 

 elevator and have it cleaned, and the dockage eliminated, before 

 selling. The screenings are then sold at their market value for 

 manufacture into stock feeds. A few farmers use the futures 

 market for disposing of their crop. Thus in the fall of 1919 many 

 Iowa and Illinois farmers found their corn crop assured, both as 

 to quantity and quality, and the December contract price, during 

 August, a satisfactory price. There was 'also at this time a tre- 

 mendous campaign inaugurated by the Federal government against 

 the high cost of living, and hence, partly in consequence of this 

 campaign, a strong probability of a fall in corn prices. Hence many 

 of these farmers sold their corn for December delivery, these future 

 contracts assuring them of fair profits on their crops. Their 

 judgment proved correct, for there was a decline in corn prices 

 before the delivery month arrived. This service costs the farmer 

 only one-fourth of a cent a bushel. 



Past Organization of the Grain Trade. The grain trade, in 

 common with other commercial institutions of America within the 

 last thirty years, has responded to the demands for a higher code 

 of business ethics. In all probability the practices in the grain 

 trade were no better or no worse than the practices generally 

 prevailing in manufacturing, transportation, or other branches of 

 industry. The abuses in the grain trade of yesterday are so fresh 

 in men's minds that many clever writers and speakers find it easy 

 to stir up the farmer's wrath and hot indignation on this subject. 

 The past organization of the grain trade, with its evils laid bare, 

 is best traced under three topics, namely, (1) evolution of the 

 organized grain exchanges; (2) evolution of the terminal elevator 

 railway monopoly; (3) evolution of the farmers' elevator. 



(1) Evolution of the Organized Grain Exchange. Prior to our 

 Civil War grain was handled very largely by independent dealers 

 with no fixed customs in the different markets. Some markets, 

 for instance, handled wheat by the measured bushel, others by 

 the weighed bushel (sixty pounds). Each important market, like 

 Buffalo and Baltimore, had its own grades. Lack of transporta- 

 tion facilities made it difficult to move grain to the seaboard from 

 the inland. Water routes were of course long the sole means of 



