€ SUMMARY ANNUAL REPORT 



interest in agricultural welfare at the present time adds to the proba- 

 bility that some such relief will be afforded. That is a federal matter. 

 The state's responsibility is to see that such a safe system of ware- 

 housing is provided that Montana grain farmers may immediately be 

 in position to take advantage of the opportunity to replace existing 

 debts with loans more nearly fitted to their need and ability to pay. 

 Changes in the laws regulating grain stoi'age recommended in this 

 report aim at a greater measure of safety in handling grain storage, 

 but the problem that will be presented by federal credit legislation 

 cannot be met by such changes alone. 



As long as grain elevators are permitted to ship out and sell 

 stored wheat as has been the practice of many elevators in the spring 

 wheat states, there will always be a certain element of risk in grain 

 warehouse receipts, and to a certain extent the purpose of storage, 

 which is to keep wheat off the market for the time being, is defeated. 

 On the other hand, a strict requirement that each elevator must keep 

 on hand an amount of grain equal to its storage liability, tends to bring 

 about a rapid congestion of stored grain in the country houses that re- 

 stricts the state's grain handling capacity. 



The proper place to store grain which the owner does not desire 

 to sell immediately, is on the farm. If the grain could be inspected, 

 graded and held on the farm under seal, with receipts outstanding 

 against it that would be acceptable as collateral by the War Finance 

 Corporation or such federal agency as may be created to administer 

 the proposed new forms of farm credits, a great deal of the present 

 trouble over grain warehousing, congestion in elevators, and car short- 

 age during the fall months might be avoided. The State of Nebraska 

 has passed such a law which has not, however, been subjected to a 

 real test of usage by the farmers of Nebraska. 



StatP IVeeds Storage Room: To avoid congestion of stored grain 

 in public warehouses, and to safeguard the owner of the wheat in his 

 title to wheat of commercial value equivalent to that of the grain he 

 delivered in storage, the state of Montana should interest itself to create 

 storage opportunities to which grain stored in public elevators could 

 be moved and held in storage under the direction of the state, until 

 the owner desired to sell it. Such a system should work to the ad- 

 vantage of both farmer and elevator man. 



It will be remembered that the people of Montana authorized the 

 construction of a terminal storage elevator at Great Falls, which the 

 supreme court of Montana later held was within the power of the 

 state. Bonds were never sold for this purpose, probably because of 

 the slow demand for bonds at that tipie, and because of the question 

 that arose over the exact meaning of the term "agricultural lands" 

 that were to bear a tax for the payment of interest and principal on 

 the bonds. 



If, in addition to the construction or purchase of storage capacity 

 within Montana, the state would authorize the lease of storage space 

 at Minneapolis, the sale of stored wheat by a warehouseman might 

 then be strictly prohibited. The manager of a country elevator, when 

 it became desirable to move stored grain to provide room for new 

 receipts would notify the owner who would decide whether he wished 

 his grain to be stored within the state or moved to Minneapolis for 

 final stroage. There might be times when competition between coast 

 buyers, Monana millers, and eastern trade would make it desirable to 

 keep the wheat within the state for storage. The owner in eastern 

 Montana would not wish to be compelled to stand the back haul cost 

 on his wheat to a state elevator located, for example, at Great Falls. 

 He would probably prefer to have his wheat placed in storage for him 

 at Minneapolis. 



