The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1905-05-30


| Because of crop deterioration.
/ Because the action OF Duluth now
makes some action in Minneapolis
imperative.
Altho there was no business today at
the Chamber Of Commerce, many mem
bers came down to their offices in the
to talk over at leisure the i'm
pOrtant proposition that is to come up
soon, the matter of changing the con
tract grade of wheat. AS the time
draws closer it begins to look more as
if the change will be made and No
9 northern became the contract grade.
The fact that the smaller market, Du-
luth, has taken the lead, and made the
change, while Minneapolis remained an
tagonistic, has stirred up the conserva-
tives, who, bitterly opposed to the
admit that Minneapolis viii have I to do do
something, now that Duluth has taken
the initiative.
The following argument favoring the
change is from L. T. Sowle, the veteran
grain man. Mr.. Sowle says: 49,.
Crop Deterioration
The Minneapolis Chamber of Commerce Will
vote on this proposition and If the members
refuse to make No. contract grade here the
Minneapolis elevators will have to hedge in Du-
luth, for bankers who lend money on wheat will
not allow elevators to hedge where manipula tors
further necessity for the change is deter
ioration. Looking at Ohio, Illinois and Iowa,
where growers have been thru this same expert
ence we find that when the quality dropped
1t never came back to original grade. but re-
manned poorer. as anyone can see by the Chicago
and St. Louis changes of contract grade from
time to time as it became necessary. A great
many people do not know that just as good flour
and 1t often contains larger percentage Of
gluten, which is necessary to blend with No. l
wheat in order to make satisfactory flour.
The quantities of each grade of wheat used in
milling mixture by the mills is determined. first,
by the price of each grade and price obtained for
flour and offal. Then in all mixtures they have
to keep up the baking quality of the flour. The
color Of -four obtained from each grade of wheat
also enters largely into the decision of what
quantity of each grade Is used. =
Wheat's Legitimate Price.
IN ter m a%G to ns "
legitimate wheat values is based on -four
making quality, the contract grade should be
such as to cover at least Oneh6lf the crop tribu
tary to Minneapolis to follow the rise and fall
of the flour market, as all grades bought by ec
vators are hedged in current month by sale of
contract wheat.
The valuation of lower grades is arrived at by
the sales to mills from day to day. The small
margin at which wheat is bought from farmers,
comes from competition between the
lend the money, and are looking for
investments Of absolute security, which has
long been the with wheat for collateral
But the crop has deteriorated so for a number OF
years that there is not 10 per cent of contract
wheat grown in wheat marketed at Minneapolis
feel that the contract grade should be changed
for the safety of loans from banks: and for the
milling business for We all know the greater
the risk Of buying the wheat from farmers
| the larger the margin will be In order to guar
antee a safe business, and without this safet!
there could not be credit enough obtained IRON
banks to handle the crop.
AS see it, the contract grade should be sucf
that at least one-half the wheat grown ii
| Minnesota and the Dakotas could be delivered
| on contract let look into the situation
| First, the farmers sell their wheat after thresh
| ing much faster than the rate of consumption
! The surplus accumu'ates and market must bs
found: The country elevator came into exist
ence because the farmers, a majority, coul'
not each one load a car SO had to sell I
local elevators Those elevator owners. not hav
ing money enough to handle the grain offered
come to money centers and ask to borrow money
The banker asks: us this business safe. ant
do you keep your wheat sold as f fast as you
ness is done in buying wheat and hedging.
line of country elevators reports to the man
ager, say $4,000 bushels bought, consisting o
all grades from No. 1 northern to No. wheat
The manager sees how many cars are reporte
in to sell, deducts the number Of bushels con
tanned in them from purchasers In the countr
and steps into the pit at the opening th Of tn
month, contrac9 grade The country purchas
price is based on cash wheat sales of the day
less freight and handling charges, which cor
sist of interest insurance and storage.
How Millers Hedge.
r, ,;,,s In tba;r husiness send ont offer
of -four at price based on contract price G
wheat If sales are made and for any reaso
they do not buy the cash wheat, they simpl
. step into the pit and buy contract wheat for
future month delivery enough to o. make axe IN ID
| wheat on tables they sell out the future cor
tract wheat. The pit simply acts as clear
ing between the elevators and the mi
There is another important element enterin
into the market Some men may believe IN
market too high and make contract to sell an
. deliver at some future time others may tnln
| the market too low and contract to buy an
receive at some future time. Now, what
: needed is change to contract grade tn,
will include at least one-half the crop In ord'
that the price of contract will advance an
decline with the worlds market of both whe'
and -four Then no manipulation like Leitt
. could get hold Of the market and disorganii
legitimate business. and anyone who does NJ
want. to manipulate the market should be
' favor of such a grade. As a matter Of fac
; there is not delivered on contract grade thu
: the clearing house per cent of the whe
oia and b. saple a mot o
contract grade should not be Injurious to al
= interest Men may differ as to the effect OF Il
: change. but I believe that If it hurts the Ell
: yators 1t hurts all; if 1t hurts the mills,
) hurts ALL and it has the same effect on Il
= pit for all interests are necessary one to Il
other.
II ~@r%r ~.