PREFACE TO REVISED EDITION

The purpose of this volume is to describe the commerce of the United States in agricultural products, special attention being given to those phases of trade organization which have to do with the distribution of farm commodities from producer to consumer. Its scope is more fully outlined in Chapter I. It is especially designed to serve as a textbook for colleges and universities, much of the information contained in it having been compiled for use in a course dealing with the business methods and organization of American commerce, which the author has conducted at the University of Pennsylvania since 1908.

An effort has been made to revise thoroughly the original text which was published in 1915. Many of the fundamentals principles and facts concerning the commerce of the United States in agricultural products have remained substantially as they were but the developments in marketing methods, trade organization, commercial practices, prices and legislation occurring in recent years made revision essential. New sections were inserted in most of the chapters originally included, so as to embody the more important recent developments and make them more comprehensive. Several new chapters have also been added. It was thought desirable to include chapters dealing with grain prices and grain exporting, the trade in dairy products, and cooperative marketing of farm products.

The original plan of the text is retained because it is believed to be sound from the standpoint of teaching method. The commerce in farm products may be described in part by discussing commercial functions in general, but the various agricultural trades differ in so many respects that description of the trade in separate commodities is desirable for the purpose of emphasizing how the essential functions of commerce are variously performed under different conditions and how the

principal agricultural products are distributed. In addition to the various chapters treating agricultural commerce on functional lines it is believed to be helpful to the reader to include chapters dealing separately with the trade in important and representative groups of farm products. Those selected for description on the commodity basis are the grains, cotton, livestock, wool, leaf tobacco, the various dairy products and the fruits. The methods of distribution discussed in connection with the fruit industry, moreover, apply in the fresh vegetable and produce trades. The chapters describing trade functions in general include the scope and definition of agricultural commerce, classification of markets and marketing methods, organized speculation, coöperative marketing, inspection and grading, the financing of crop movements, the insurance of agricultural products, the collection and dissemination of crop and market reports, agricultural prices and price factors, and foreign markets and market influences.

I desire to acknowledge with many thanks my obligations to the various state and federal government officials and officials of grain, cotton, live-stock and other exchanges, elevator, insurance, grain dealing and other business concerns which have courteously provided me with forms and other information. The index was prepared by Mr. W. J. McComb, Instructor in Transportation and Commerce, University of Pennsylvania.

G. G. H.

CHAPTER

CONTENTS

I. INTRODUCTION: DEFINITIONS AND SCOPE.

Production and distribution distinguished, 1; Commerce de-

fined, 2; Study of commerce in agricultural products sub-

divided, 3; Plan of treatment, 4; General classification of

agricultural crops, 4; The primary crops, 5; Live stock on

farms, 8; Animal products produced on farms, 10; Foreign

commerce in farm products, 12.

II.-CLASSIFICATION

OF AGRICULTURAL MARKETS

AND MARKETING PROCESSES

Classification of agricultural markets, 14; Growers local mar-

kets, 14; Central wholesale markets, 15; Secondary wholesale

markets, 17; Retail markets, 18; Classification of marketing

processes, 18; Growers' Sales, 19; Local dealers' sales, 21;

Central market trade organization, 22; Secondary wholesale

market transactions, 24; Retail sales, 25; Consumers' pur-

chases, 27; Exporting and importing methods, 28; Agricul-

tural export methods, 28; Agricultural import methods, 30.

III. THE COUNTRY GRAIN ELEVATOR AND WARE-

HOUSE SYSTEM: THE LOCAL GRAIN MARKET .

Functions of country elevators and warehouses, 33; Geo-

graphical distribution of the local grain trade, 33; Distribu-

bution of local wheat trade, 33; Distribution of local corn

trade, 36; Distribution of local trade in oats, 39; Distribu-

tion of local trade in barley, 40; Transfer of grain from

grower to country elevator or warehouse, 40; Length and cost

of local haul, 40; Methods of local hauling, 42; Description

of country elevators, 43; Management of country grain ele-

vators, 46; Classification of country elevators, 46; Line ele-

vator companies, 46; Local grain dealers' elevators, 49;

Farmers' coöperative elevators, 49; Other local grain mar-

keting agencies, 52; Hazards of the country elevators, 54;

The local grain market in the Pacific Coast region, 56;

Local purchasing by exporters, 56; Handling of grain in

sacks, 56; Coöperative growers' associations, 58; Price-quot-

ing system, 58.

IV.-PRIMARY AND SEABOARD GRAIN MARKETS: THE

TERMINAL ELEVATOR SYSTEM

The flow of the grain trade, 59; The system of grain markets,

59; Geographical location of primary markets, 60; The vol-

ume of business at the primary markets, 60; Competition

between primary markets, 64; Functions of primary markets,

66; Shipping routes, 66; Milling-in-transit, 69; The seaboard

markets, 69; Activities and management of terminal elevators,

71; The functions of terminal elevators, 71; Construction

and capacity of terminal elevators, 72; Elevator owner-

ship, 73; Regulation by the states, 74; Regulation by grain

exchanges, 83; Federal regulation, 87; United States Ware

house Act, 88; Sources of elevator profits, 90; The purchase

and sale of grain at the primary markets, 95; Scalping trans-

actions, 96; The purchase of grain from country elevators,

96; The sale of grain stored in terminal elevators, 98.

V.-PRIMARY AND SEABOARD GRAIN MARKETS (CON-

CLUDED)

The grain export trade, 104; The grain export fundamentals,

104; Grain export orders, 108; Types of grain exporting

concerns, 109; factors influencing grain prices; prices paid

to the farmers, 111; Prices paid at the seaboard, 112;

Primary market prices, 112; Adjustment of the general

level of grain prices, 115; Adjustment of grain prices through-

out the crop-year, 118; Relation between grain prices in the

United States and Liverpool, 123.

VI. THE LOCAL COTTON MARKET

The cotton-growing belt, 127; Commercial and geographical

classification, 129; World's production of cotton, 131; The

local handling and shipment of cotton by growers, 131;

Ginning and baling, 132; Local storage and hauling, 135;

Sale of cotton by the grower, 136; Sale to local merchants,

137; Sale to local ginners, 138; Sale to exporting houses and

cotton brokers, 138; Sale to southern mills, 139; Consign-

ment to cotton factors, 140; Sale to foreign buyers, 140;

The cotton-growers' unions, 140; The determination of the

growers' prices, 143.

VII.-CENTRAL COTTON MARKETS: THE DISTRIBUTION

OF COTTON

.

Supply and distribution: Cotton exports, 149; Shipments to

northern mills, 151; Consumption by southern mils, 151;

Direct shipments, 153; Marking and tagging, 153; Com-

pressing flat bales, 153; Through bills of lading, 154;

Cotton insurance, 154; Interior points of concentration, 156;

Sources of supply, 156; Functions, 156; Extent of com-

petition, 158; Purchase of cotton from growers, local mer-

chants and factors, 158; Cotton receiving ports, 159; Func-

tions of receiving port, 160; Sale of cotton to domestic mills,

104

127

149