34 BULLETIN 558, U. S. DEPARTMENT OF AGRICULTURE. 



bankruptcy ; or a fire has destroyed the house. There is a remark- 

 ably close correlation between the number of elevators serving a 

 community and the fire ratio. An insurance company reports that 

 in one State, noted for its oversupply of elevators, 42 fires occurred 

 within a year; while in another equally prominent grain State, in 

 which the supply of elevators is better proportioned to the demand, 

 but two houses were lost by fire. 



COST OF OPERATING A COUNTRY ELEVATOR. 



Accurate information concerning the cost of operating an elevator 

 is not easy to obtain. Many operators do not keep cost accounts; 

 some make rough estimates, while some endeavor to keep accurate 

 accounts; but in each of several hundred cases investigated by rep- 

 resentatives of the Office of Markets and Rural Organization some 

 item of the operating cost had been overlooked. 



Figures were obtained from operators who had made an effort to 

 ascertain the cost and from those who were willing to state their 

 opinion. These estimates of cost of operating varied from one- 

 quarter of 1 cent to 5 cents per bushel, the average being 1-^- 

 cents for houses handling less than 200,000 bushels in 1914; l^o 

 cents for houses handling over 200,000 bushels; or a general average 

 of 1-nnr cents. This variation in cost of handling follows about 

 the same ratio in various sections of the country as the margin of 

 profit, being largest in the East and South, decreasing as the central 

 part of the grain belt is reached, but gradually increasing toward 

 the North and West. Most of these concerns when attempting to 

 figure the cost of operation consider only actual expenses, including 

 office salaries, labor, fuel, power, telephone, telegraph, postage, 

 travel, repairs, supplies, and insurance. Sometimes depreciation, 

 together with interest on the investment in plant and working capi- 

 tal, is included, while a very few consider the loss through shrink- 

 age. None were found, however, who attempted to ascertain the 

 loss through overgrading in making purchases. 



From the estimates obtained and from first-hand study it is evident 

 that the items of actual expense are practically fixed for each ele- 

 vator and vary slightly only as changes in the volume of grain 

 handled necessitate the employment of additional low-priced labor 

 and slight increases in the other items that are not nearly in propor- 

 tion to the increase in the volume of business. Usually these items do 

 not admit of any considerable reduction, although it is possible at 

 times to reduce the amount of labor hire, as well as the insurance 

 on the stock. Substantial reductions may frequently be made in the 

 rate of insurance, both on plant and stock, by effecting inexpensive 

 changes and providing proper fire-control equipment. If the in- 

 surance companies are consulted, advice usually is freely extended 



