The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1926-04-19


transit, enables them to mill flour
on Z much more advantageous basis
than here in the northwest.
about five years ago company
was formed here in, Minneapolis, and
they built one Of the most modern
and up-to-date plants in the north
west. The building which housed
this plant, six-story, solid brick
building, and the machinery is of the
latest and most approved type, being
ball bearing throughout, and with u
capacity Of three Thousand barrels per
day. The mill is housed in = large
six-story building with what is. known
as . utility building adjoining. which
said utility building prior to that time
had been used in manufacturing
plant Of another line. They bought
that building for 100000 and the
total cost of the milling plant in
Guiding this building, was 100000.
On account of the inability to fin
ance its business, the people that put
in the mill machinery forccl0scd their
mortgage on tho plant and bid it in
at shcriff's sale for. approximately
100000. The property was not re-
deemed within the year and is now
the property Of the machinery COM
pany, which is making every effort
to sell it. 1t has offered this plant
for 100000, or the milling plant
without the utility building for $275,-
900. So far, for the last year and a.
half, it has been unable to find
buyer. These, pcopl. claim that if
this plant were to he built today,
it would cost at least 100000.
II have talked to number Of
millcrs here and they all say that if
the mill were located at Buffalo, they
would be interested, but they arc not
interested in buying, any more mill
ing capacity in Minneapolis.
"Now this is the situation that con-
fronts the mill at Grand Forks: The
railroad rates have placed such
handicap upon milling plants of the
size of the Grand Forks mill as to
make it impossible for anyone. in
my opinion. to operate it at profit.
Mills located at Buffalo arc able to
buy Canadian wheat, northwestern
wheat, wheat from the southwest.
hard winter wheat, and they can put
in a portion Of the hard northwestern
wheat with large percentage Of the
softer wheat and make flour that
will get by. The mill located at Grand
Forks does not have this advantage.
II understand that the Russcll-Mil-
Ter company has closed down a large
number Of its mills in North Dakota.
I understand the claim was made that
it was on account Of the Grand Forks
mill cutting prices. As q matter Of
fact. this is not the case. The reason
is that the milling industry in the
northwest is a thing of the past. and
the railroads have been responsible
for putting tho mills out Of business.
As far as Grand Forks is concerned.
believe it was the deliberate intcn-
ton on the part of the. former adj
ADMINISTRATION to make it show a loss.
However, mill owncds and operated
by the state Of North Dakota is in
direct competition with every private
" owned mill in the country. and, as
large profits in the flour milling bust
manipulation of the raw material.
wheat, at the terminal markets. When
wheat is rushed on to the market in
large volume, and the premiums
arc low, or the price is low. on ac-
count Of that volume, the terminal
elevators arc able to buy it at a dis
count and then hold it for future
delivery. The small millers have been
obliged to buy option wheat. In other
words. if he sells his flour in the fall
of the year. as most Of them do, he
lis not able to buy actual cash wheat
from which to manufacture his flour
because he does not get pay for his
flour until it is delivered. C0nsc-
qucrtly he has gone on. the market
and buys December, May or July
wheat. Then when the time comes for
him to manufacture his flour, he sells
out his option wheat and buys cash
wheat at the market price. With
the cash wheat in the hands of these
terminal elevators, they ask big pre-
miums for it over and above the OPP
ton price. Consequently, if there has
|lbecn an advance in the option mar
ket, it has not kept pace with the
advance in the cash market. have
known millers handling their bust
ness on this basis to lose as high as
$500 a barrel, when perhaps they
we're figuring on only 10 to Is cents
a barrel profit when they made their
sales. The big millcrs, like the Wash
burn Crosby company, the Pillsbury
company. and the Russcll-Miller Mill
ing company, are able to.buy the cash
wheat by reason of the fact that they
have banking connections that will
carry them. As Q consequence, they
have not been compelled to take. the
losses that the smaller mills have been
compelled to do, and anticipate that
unless the state of North Dakota fol-
lows and buys its grain and holds it
SO as 70 avoid being compelled to
pay premiums cxacted by the
terminal grain merchants, 1t
will be in exactly the same posi-
ton rs the smaller mills. There is
another angle also TO take into con-
sideration. and that is that any pri-
vatc milling concern that begins bust
ness is compelled to take losses for
number Of years, until it gets trade
established. This takes time.
AT the present time here in Min
ncapolis. there is frantic agitation
to get the government to go into the
on the Mississippi river. The whole
sale houses here claim that they arc
being Disseminated against, that the
wholesale houses of Fargo. Moor
head, ETC., have a/better rate from
Chicago on goods Of at least $500 a
hundred. That is, the direct rate
to Fargo or Moorhead is $500
hundred less than the rate in Min
neapolis, break bulk here, and then
local from here, and they are there
fore willing to plunge the government
into the socialistic enterprise of
operating a barge line on the Missis-
sippi river in order to "savc their
bacon" am Of the firm opinion
that until there is . radical readjust-
ment in freight rates, the northwest.
including Minneapolis, is going to be
in q bad way as far as competition
with Buffalo and other large centers
"a To FREIGHT rates Is concerned.