St. Paul daily globe., 1892-03-13

sbrewdness and perfect familiarity with
the subject made him an interesting, if
not valuable, relator. Counselor
Erwin opened the ball by asking what
Mr.. Pillsbury knew of the methods of
fixing grain prices in Minnesota. Once
started, the genial miller went off like
pleasant powder magazine.
II will state" said Mr.. PillSbury.
''that at the time the commission took
I'D the Duluth matter | hoped it would
look into the Minneapolis matter also.
The consignments are handled by CON-
.petent men. Country elevators are a
necessity. They are handling farmers
fairly. | am surprised that so few
actual shortcomings have been eX-
posed. | am connected with number
of elevator companies; can prove that
margins are much less than is generally
supposed. In former years it was
profitable business. Of late years it has
not been. There are too many elevators.
] never knew margin to exceed four
cents. / have in my pocket certain
figures which show the profits made by
the elevator companies in the last few
years."
Mr.. PilIsbury then read large mass
of figures to prove his statements, as
follows:
Elevator Figures.
A statement of the Minneapolis & North
western Elevator company for the year end
ing Aug. /. 1889. showed there was net loss
of St2S.000; a loss on weight and grade of
SI22.000. The crops that year were small.
Only handled 3,400,000 bushels. Total earn
ings for that year S2lS000. The expenses
were SOC, 900, taking out the loss. For the
year ending July 30, 1890, they cleared S66 3lS.
They handled 4S47,000, with profit
of 1856 cents a bushel. The income
for that year was S243,0 the eqpenses SITz.-
O00 For the year ending Jan. 30 1891, the
profit was S1l3,647 Amount of wheat han
died was 4.S53, COO bushels. The figures given
on Minnesota and Dakota Elevator company
were as follows: For 1885, S99l profit. They
handled $4,000 bushels OF wheat. In 1889
they handled 900 bushels at a loss
of $4,000. In 1890 they handled
., 49,. 900 at profit OF S36,OOO
In 1891, 2,175,000 at profit of $4,000. An
elevator on the 500 road had been in exist
ence about five years. The first two years it
had failed to pay expenses. In 1889 they
handled 1.32S 900 bushels, the stockholders
receiving the profit of $4,000. 1t took all that
amount to pay The losses of the two previous
years. In 1899 the profits of the company
amounted to SIS, 1876 and it handled 2.7S6. 600
bushels In 1891 there was a profit OF S35 900.
Mr.. Erwin said that the profits on
wheat we're not what was so much de-
sired, as to how prices were made,
though the committee was much
obliged for the light he had thrown Oh
that matter.
In reply to a question Mr.. PillSbury
said it took a capital of about S265,000 to
build the elevators, but to run them
probably took twice that amount.
1T is often the case" said Mr.. Pillsbury,
''if the profit is figured on the amount in
in hn nj lry
large; but if figured on the amount actually
invested, it will show very small profit and
an amount which no person could take ex-
ception to. 1t mast be remembered that it is
often necessary to invest millions of dollars
at time"
''These loans are usually made on short
time, are they not ? asked Mr.. Erwin.
We'll, not always"
''Mr. Pillsbury" asked Mr.. Erwin, ''in max
ing up these figures is the profits in grind
ing the wheat into flour taken luto consid-
Grafton p
No, sir. The milling interest is entirely
separate from the elevator business, and does
not enter into the profit in any way. shape or
manner"
Have any dividends been declared by
any of these companies during the past three
years p
''YeS there have''
would you mind telling what the amount
was 2!
A Talk on Margins.
'The Atlantic Elevator company last year
declared a dividend of about 10 per cent on
the stock if l remember correctly. The year
before that it was not more than or per
cent.
The Washburn company own stock in
the Minneapolis q Northern Railway com
pany. and the former company does but lit
tie business"
MI. Erwin said he had an idea that a
person to protect himself against de-
preSSionS in prices must hedge himself
often by selling portion or all to save
himself.
"a man to be prudent said AR. Pillsbury,
SHOULD not hold a bushel of wheat over
night. have not always held this opinion,
but have come 10 it lately"
Then Mr.. Erwin made inquiries re-
garding the price of wheat to be deliv-
cred in May, but purchased in Septem-
Der, and found by Mr.. Pillsbury's an
swer that the price of May wheat was
governed by the price OF wheat in Sep
tember, plus interest on the money
loaned, expenses of storage, insurance
risk and commission.
Now, what | want TO bring out" said Mr..
Erwin, lis in the case Of a man who makes a
contract to deliver a certain amount of wheat
the following May. He has then no interest
10 pay or risk. so that as matter of fact, he
is sure of profit equal to the amount of the
interest. insurance, etc."
Mr. Pillsbury explained this as being
regulated by the law of supply and de-
mand, but admitted that the fictitious