124 Cooperation in Agriculture 



The Method of Selling the Grain 



Formerly the farmer sold his grain to a local merchant 

 or consigned it to a commission merchant in one of the 

 primary markets, where it was sold to a dealer. The lo- 

 cal merchant who bought from the farmer shipped the 

 grain to a commission merchant or sold it to a dealer in 

 a primary market. In the course of time, the local dealers 

 were largely replaced by well-organized local firms which 

 specialized in grain buying and selling, and which built 

 elevators at the shipping points. Between 1889 and 1900, 

 large corporations were formed in Minneapolis, Milwaukee, 

 Kansas City, and Chicago. They built elevators along 

 different lines of railroads and placed in charge their own 

 buyers at the local shipping stations. Their elevators 

 were known as line elevators to distinguish them from the 

 elevators owned by the local grain dealers. The terminal 

 grain corporations were also owners of warehouses in the 

 primary markets. In several of the states, such as Illi- 

 nois, Nebraska, the Dakotas, Minnesota, and Iowa, the 

 grain dealers have organized into "Grain Dealers' Asso- 

 ciations" to improve the conditions surrounding the grain- 

 handling business. There is still a large amount of grain 

 shipped direct by the farmers to commission merchants 

 outside of the large primary markets, but a large propor- 

 tion of the crop is purchased by the local grain dealers 

 or the line-elevator companies. 



Origin of the Farmers' Elevators 



The farmers' cooperative elevator companies grew out 

 of abuses in the grain-distributing system as handled by 



