TALKING THEIR HEAVY TOLL
Follette, Senator R. M. La
Taking Their Heavy Toll How the Grain Speculators and the Trusts Stand Between Producer and Consumer (From a Speech at Milwaukee, October 30, 1916) By SENATOR R. M. LA FOLLETTE IMADE a speech...
...I made no attack on the Chamber of Commerce of Milwaukee but the Chamber has seen fit to apply the facts to themselves and charge a misfit...
...It is closely allied with transportation and it takes toll of both producer and consumer...
...There were only 6,723,-175 bushels of wheat received in Milwaukee in 1915...
...Richardson and on the Union Pacific to the Peavey Elevator Company...
...At times other dockage has been taken...
...Will anyone honestly say that the present price of coal is fixed by the law of supply and demand...
...The Milwaukee Chamber of Commerce has taken one or two sentences from a newspaper report of the speech and used it to cloak its real design in making a political attack upon me, through its membership, by interviews and paid advertisements in the press...
...THROUGH THIS METHOD OF DEALING IN GRAIN THE PUBLIC IS MADE TO SUFFER...
...The special car services have been aptly called "the bandits of commerce...
...THIS GOES TO THE DEALER WITHOUT PAYMENT...
...Does anyone suppose that the present price of print paper is caused by a shortage in pulp wood...
...It has great powers over its members and enforces that power by rules, regulations—and expulsion if necessary...
...Where did they get it and how did they get it...
...When the "bears" are in the ascendency they sell in great quantities and prices go down...
...The Milwaukee Chamber of Commerce is only one of a great number of associations that are forcing and manipulating prices to the great detriment of th public...
...So the amount thus taken from the farmers yearly in the Duluth-Superior market is more than one-half of all the wheat received in Milwaukee in 1915...
...The situation is a matter of great notoriety...
...THE live stock exchanges are guilty of worse practices, and until the farmers began to build their own packing plants they were robbed at every turn...
...cient explanation has ever been made of this finding...
...it lives off from the products of others...
...The producer fails to get a reasonable value for his grain and the consumer is forced to pay unreasonable prices for the grain...
...In fact all good grades will average more than 60 pounds to the measured bushel...
...A FEW OF THE GRAIN GAMBLERS IN THE COUNTRY ACTING IN CONCERT CAN MAKE THE MARKET GO UP OR DOWN TO SUIT THEIR PLEASURE...
...In Wisconsin the railroads seem to be in alliance with the grain elevator trust...
...In part these methods will account for the findings of Judge Sanborn...
...Take the coal situation...
...Insofar as the Milwaukee Chamber deals in "futures," it affords a gambling place for grain speculators...
...Why should there be a shortage of coal...
...Likewise the practice of applying a suction draft to the grain as it passes in the spout to the weighers has applied quite generally...
...The Great Northern Railway in Superior leases its elevators to A. D. Thompson, the Omaha road leases its elevators to Nye-Jenks Co., and lease a part of its right of way to the Peavey People...
...If he did so the Trust refused to sell him meat during the season when he could not purchase locally...
...When the "bulls" are in the ascendency they buy grain in great quantities and prices go up...
...that upon the Chicago, Burlington and Quincy and the Chicago, Milwaukee and St...
...It is a matter of common knowledge that the elevator companies maintain line elevators, that is, local elevators along a certain line of railroad, fend where the farmers themselves have not co-operated to maintain local elevators, they FIX THE PRICE TO SUIT THEMSELVES and the farm-ers have to accept the price so fixed...
...The wide margin between the grades makes it possible to ship out grades of a higher grade than was received in...
...that the Bartlett-Frazer Company and Peavey Elevator Company had such privileges with the Northwestern Railroad, as to place them in substantially the same position of advantage on that road...
...To anyone familiar with grain grades it is easy to see how this may be...
...These associations are closely allied through interlocking directorates and memberships...
...Taking Their Heavy Toll How the Grain Speculators and the Trusts Stand Between Producer and Consumer (From a Speech at Milwaukee, October 30, 1916) By SENATOR R. M. LA FOLLETTE IMADE a speech here in Milwaukee on August 25, 1916, before a joint meeting of the Federation of Labor and Society of Equity, in which I attempted to show there should be closer cooperation between the consumer and producer, in order to secure better prices for the producer and lower the cost of living to the consumer...
...But notwithstanding this, the various Boards of Trade or Chambers of Commerce and the elevator combinations have been able to defeat any legislation looking toward relief...
...You know the price of meat here in Milwaukee and you are able to judge for yourself whether you are getting a square deal...
...first, a profit to the railroad and, second, a profit to the special car service...
...THE Chamber of Commerce rules provide that the grain shall be clean...
...In this way double dockage is obtained...
...The meat trusts dominated the market absolutely...
...The members of the Chamber deal in "futures," a large part of which are purely gambling transactions...
...that is to say, they sell grain when they have no grain to sell and none to deliver...
...The local market was forbidden to purchase cattle and butcher locally...
...In Milwaukee the railway elevators are leased to the Armours...
...I need not go into this subject...
...It is claimed that I stated that Chambers of Commerce had cheated the producer through weights and grades...
...that excessive dockage was taken and that the grades were mixed so that more grain of a high grade want out than of a similar grade received into the elevator...
...THESE things are so well established that they need no citation of authority...
...For instance, in the Duluth-Superior market, Minneapolis market and other markets, 30 to 100 pounds per car was arbitrarily taken...
...For instance, on the Milwaukee Chamber of Commerce, the grade of Number One, Hard Spring Wheat is as follows: "It shall be sound, ripe, sweet and clean, consisting of over 50 per cent, of hard Scotch Fyfe and weigh not less than 58 pounds to the measured bushel.'' Number 1, Northern Spring Wheat must be: "Northern grown, sound, clean and of good milling quality and must contain not less than fifty per cent, of the hard varieties of spring wheat and weigh not less than 56 1/2 pounds to the measured bushel...
...The Chambers of Commerce throughout the country have strenuously opposed such legislation and have succeeded in preventing government weighing and grading...
...You know that the Armours have just declared a 400 per cent...
...Twenty-six million bushels in ten year's would be 2,G00,000 bushels a year...
...The grain is tested in the car by taking an average sample and the seeds are sifted out of the average sample and weighed and the amount of these foreign seeds, so determined, constitutes "dockage" or "shrinkage...
...He could hardly find a dealer who would handle his grain in the market...
...Further abuses of transportation is found in the special car service, like Pullmans, Refrigerator cars, Oil cars, etc...
...Now, it is a known fact that good hard wheat will average MORE than 58 pounds to the measured bushel...
...It can maintain under its rules a BOYCOTT on members who fail to comply with its orders, and it prevents its members from trading with outsiders except pursuant to its rules...
...The Chamber is associated with other chambers through memberships and through rules and regulations...
...The local meat market was as helpless as the farmer...
...They take extra toll on transportation...
...Grain bought on grade has its market price fixed for the grade, so, the dealer in grain is able to get a HIGHER market price on the wheat OUT than in, THROUGH GRAIN MANIPULATION ALONE...
...It is well known that the grain is shipped from the western farms without cleaning and contains other grains like oats, barley, rye and other seeds, valuable for feeding purposes...
...The manipulation of weights is something that is hard to prove, but I think it is a fair inference to say that weights were manipulated as well as grades, in order to secure this immense volume of grain out, that was never reported in...
...So much for the handling of grain...
...The Chamber of Commerce produces nothing...
...THE grading and weighing of grain should not be a private function...
...When one calls attention to these facts it is easy to say that he is seeking votes, but, it is a serious matter, not only to the workman, whose family has to shiver and freeze in the winter, but to the manufacturer who has to have coal to operate his plant...
...He could not ship it himself...
...For twenty-five years the farmers in the great grain-producing states have been demanding of Congress a law for Federal grain inspection and weighing in order to secure uniformity of grades and the prevention of frauds...
...UNDER such conditions the farmer had to sell his grain to one of the elevators at his local station...
...It fixes the price of grain at which its members may purchase on grade in the country...
...The need of the farmer for money is almost always urgent...
...The supply of coal Is unlimited, except as the Coal Trust limits the supply to enforce an exorbitant price...
...In a decision of the District Court for the Western District of Wisconsin, Judge Sanborn in his opinion said that in the Duluth-Superior market the elevators in ten years had SHIPPED OUT twenty-six million bushels MORE grain THAN THEY RECEIVED in during the same period, as shown by the records of the Duluth Board of Trade...
...The Interstate Commerce Commission in a report said: "While the investigations of the commission have not fully covered this aspect of the case as yet, it is a matter of common information and we know from repeated complaints received, that some one firm or individual purchases substantially all of the grain which is handled by a given line of railroad, and the claim is made and the inference is almost a necessary one, that this firm or individual must receive concessions which enable him to under bid other buyers in the same market...
...dividend...
...it makes nothing...
...The market is subject to the "bulls" and the "bears...
...Assume that I said so...
...The testimony taken shows that on the Rock Island Railroad, Charles Counselman and Company were given special privileges which enabled them to obtain a monopoly of grain buying along that line of road...
...Through the means of the Chamber and other like Chambers, "corners" on grain are made and prices go up far beyond what the market would be if it depended on the natural supply and demand...
...IHAVE NOT time to deal extensively with this subject, but if I had, I could furnish you information that would be astounding...
...It prevents its mem-from bidding above the price so fixed...
...THE Chamber of Commerce grades and weighs the grain handled on the board...
...Numerous associations of grain growers have petitioned Congress for Federal inspection...
...Bear" prices are made when the grain is largely in the hands of the producer...
...The millers have complained to Congress as bitterly over the manipulation of grades as have the farmers...
...When the grain is shipped out of the elevator, through mixing, it is thinned out to the exact number of pounds per bushel of the grade...
...There has been no chinch bugs and no drought and no hail storms to interfere with the production of coal...
...the railroads would not give him cars...
...The Duluth Board of Trade is a Chamber of Commerce similar to the Milwaukee Chamber...
...These special service lines are parasitical...
...The answer to the price of print paper is the Paper Trust...
...No suffi...
...The State of Wisconsin has succeeded in passing an Act for state grading and weighing at Superior, but because of the opposition of the Milwaukee Chamber of Commerce, was unable to make it apply to Milwaukee...
...Grain is "cornered" when it is largely out of the hands of the producer and in the hands of the grain gamblers...
...Assuming that the average bushel of Number One grade is mixed with the average bushel of Number Two grade, you will be able to get an average weight to the measured bushel of 58 pounds or better, making the whole product a Number One Grade, and this is true of all the other grades...
...Does anyone suppose the present price of boots and shoes is the result of a shortage, an actual shortage in the supply of leather, or, is it the result of a combination to force the price of leather...
...The Milwaukee Chamber of Commerce is organized pursuant to a private act of the legislature of Wisconsin and is given governmental powers in the weighing and inspection of grain and other commodities, in which its members deal...
...I regard this attack as purely political and shall spend some little time in replying to it...
...The public is compelled to pay millions of dollars to the grain gamblers in increased cost of living...
...The special car service does more than to absorb profits: it helps monopolize trafic in special commodities and obtain complete control of the price of commodities through its monopolization of the traffic...
...The mere fact that Chambers of Commerce have bitterly opposed weighing and grading by the Government in the face of grave charges of fraud and corruption is indicative of an ulterior purpose...
...It should be regulated and controlled by Government...
...At other times the "bears" are in control and the price goes down far below the natural price of grain, based on supply and demand...
...Two profits are made where only one should be made...
...How is it that the Coal Trust can fix the price of coal in April for every month for the succeeding year...
...they buy grain when they do not intend to pay for it and which they do not intend to receive...
...THE PRICE OP GRAIN IS MANIPULATED THROUGH THE DEALING IN "FUTURES...
...Paul Railroads the Armour Elevator Company maintained exactly the same control of the grain buying business and that like favors were given on the Santa Fe to Mr...
...An investigation was made by the Industrial Commission, appointed pursuant to an Act of Congress, and the testimony taken by that commission showed that the grain-producing sections of the country were divided into districts and allotted by the railroads to certain elevator companies, and that these elevator companies, through alliance with the railroads, excluded competition and were given a monopoly of the grain buying throughout all that territory...
...He was compelled to accept the market most accessible to him...
...IT HAS been charged—and found by investigations in Minnesota and Wisconsin to be true—that the grain was undergraded when received into the elevators...
...ISAID that the elevators were in combination with the railroads to monopolize grain buying...
Vol. 8 • December 1916 • No. 12
