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HEAEINIGTS

4-MAYl 9

BKEOBX THE 1

U.S. Co,vjr,^s. liM'.l- ■

COMMITTEE ON INTERSTATE AND
FOREIGN COMMERCE

HOUSE OF EEPBBSBNTATIVBS

GRAIN INSPECTION AND
GRADING BILLS

MAY 20, 1910

OOnOTTSE OR ISTKR8TATE AKS fOKEIQlT COICKERCE
HOUSE OF REPRESENTATIVES

lAUSS R. HANK, luoion, ChalrMM.
IBVDIQ P. WAMOEH, Pa. WILLIAM B. STAPPOBD, Wig.

FRBDBBICE C. 8TEVEMB, Hum. WILLIAH U. CALDER, N. T.

JOHN J. EBCH, Wb. CHABLE8 O. WASHBURN, Uua.

CHARLES E. TOWNSEND, Mum. WILLIAM C. ADAH&ON, Oa.

JAMEB KENNEDY, Omo. WILLIAM RICHARDSON, Au.

J08EPB R. KKOWLAND, ClI. CHARLEB L. BARTLSTT, Qa.

WILLIAM P. HUBBARD, W. Vi, OORDON RUSSELL, T«i.

JAMES M. MILLER, EtMB. THETUS W. SIMS, TlHH.

ANDREW I. PETERS, Mtn.

WASHINGTON

GOVEKNMENT PRINTING OFFICE

1»10

INSPECTION AND 6RADINQ OF 6RAIN, ETC.

Committee on Inteestate and

Foreign Commerce,

House of Representatives,

Washington, D. C, Friday, May 20, 1910.

The committee met this day at 10.30 o'clock a. m,, Hon, Irving P.
Wanger in the chair; later Hon. James R. Mann, chairman, pre-
siding.

Mr. Wander. The special matter this morning is a hearing on the
bill (H. R. 12432) introduced by Mr. Gronna to proride for the inspec-
tion and jading of grain entering into interstate commerce, and to
secure uniformity in standards and classification of grain, and for
other purposes, and the bill {H. R, 16897), introduced by Mr. Pearre,
to provide for fixing a uniform standard of classification and grading
of wheat, flax, com, oats, barley, rye, and other grains, and for other
purposes. Who appear in behalf of these bills ?

\lr. Bartlett. Ajc those all the bills pending on the subject of
grain inspection ?

Mr. Stevens. I think they are the same as the old bills.

Mr. Adamson. Mr. Gronna and others were heard at great length
on these bills at the last session of Congress, were they not f

Mr. Stevens, Yes.

Mr, Jackson. Mr. Chairman, vou are asking who appear for the
bill. I know of no one for the oil), but the Baltimore Chamber of
Commerce is represented here in opposition to the bill.

Mr. Kino, The Philadelphia Commercial Exchange is represented
here in opposition also. We have prepared briefs, which we intend
to leave with you, and I think that is all we care to say in reference
to it.

Mr. Jackson. Baltimore has never had an opportunity to be
heard, on account of its close proximity to Washington. Witnesses
from other places who wanted to hurry away have been heard, but
they always have given Baltimore representatives the tail end of
the hearing, and therefore they have never had a good chance.

Mr. Adamson. I am in sympathy with you if you are against this.

Mr. Wanoer. Suppose you proceed, gentlemen.

STATEXEHT OF JOHH B. DAISH, ESQ., OF VASHinOTON, D. C,
C0UH8EL FOR THE BAITISOBE CHAHBEB OF COKHEBCE.

Mr. Daish. Mr. Chairman and gentlemen, I appear as counsel for
the Baltimore Chamber of Commerce, and what I snail say will be ver^
brief, because a legal argument is better read than stated, because it
is easier to understand and one can see the citations in reading.

4 INSPECTION AND OaADING OF OBAIN, ETC.

The Gronna bill, I believe, is the more comprehensive of the two,
and the briefs in respect to the constitutionality of the proposed
measure is predicated upon what the provisions of that bill are.
Briefly stated, I conceive that any scheme for the federal inspection
of grain must, as to its constitutionality, be very doubtful. The
object of the proposed measure is to make a particular grade or
classification or tund of grain a standard. That means, f&st, uni-
formity. The time of ins[>ection is naturally material. Inspection
laws under the Constitution are reserved to the States. If the Fed-
eral Crovemment shall undertake to inspect and grade grain while it
is still the property, within the part and parcel of the property, of
the State, the Federal Government would thereby infringe upon the
powers reserved to the State. The question of the time of transpor-
tation with relation to the time of mspection is an important legal
auestion to my mind. The Supreme Court recently, m the Grain
lil Companv case, has decided both as to the time or the inspection
and the autnority of the State to provide inspection.
Mr. Bartlbtt. What is that case %

Mr. Daish. The General Oil Company v. Grain, in 209 U. S., at
page 211. From the cases cited in the brief and from excerpts from
the various cases, I conceive that either of the propositions as shown
in the bill, or practically any system of federal grain inspection, is
unconstitutional. As the brief is in print and as you prefer doubtless
to hear from the business men who will tell you how it would affect
the grain business and their markets and affect the marketing of grain
both at home and abroad, I will yield to Mr. Jackson, the president
of the Baltimore Chamber of Commerce. This brief will be filed.
(Following is the brief referred to:)

' IBefWe the Conunlttaa DO lobnUte ind Fonlga CommBms. U. 8. Howe dI RepmaasUUna.)

Mbuobanduh on thk Constitutional Questions Intolted in
THE PaoPOSED Fbdbrai, Inspkotion or Gbain.

DIGEST OF THB PBOFOaBD I^BQISLATION.

The more compreheneive of the two bUle under coneidenttion is H. R. 12432 by iSr.
Gtonna; its proviriona are as followa;

Sectioh I, Secretary ol Agriculture to ot^anize in Bureau of Plant Industry ft sec-
timiof grnin inspection and ftradingi appoint experts and other employees neceosary.

Sec. 2. Secretary to appoint one chief gra.ia inspector and necessai^ assistants at
Btiteen named places anil "other important centers" as b« may consider neceBsary
and proper.

Sbc. 3. Secretary of Agriculture to fix compensation.

Bi0. 4. "That the Secretary of Agriculture shall make all needful ru>ea and r^u-
tations governing inspection and giadins herein provided lor."

Sec. 5. Secretary of Agriculture "to determine and fix, according to such standard
as he may provide, such clasaifications and grading of wheat, flax, com, rye, oats,
barley, and other grains as in his judgment the usages of trade nuy warrant and per-
mit. Hav adopt the standards now recognized by commercial usagee, and nay
modify and change classifications or grades from time to time.

Sec. 6. Public notice to be giveu oC standards fixed; Btandards fixed to be perma-
nent record and known aa "United States standard."

Sec. 7. Classification and grades fixed to be standard in all interstate commerce in
grain, after thirty days' notice.

'Copy of H. R. 12432 by Mr. Gronna appean in the Appendix hereof.

INSPECTION AND QBASINO OF OBAIN, ETC. 5

Szc. 8. Duties of tzaiuportation agencies to notify chief gniin iuBpector at place of
destination within twenty-four houis tSUa arrival.

Unlawful to willfully unload or discharge grain which has at anv time durinc the
period of its traosit been an article of inteistat« commerce, and wnich has not oeon
inspected aa provided by the act.

■Tpon receipt r'--'^"^ —

idard, ana dc
may prescribe.

Ssc. 9. Duties of in^tecton to inspect and grade grain which at the time of inspec-
tion has been shipped m>m one State, Territory, or country to another, or is intended
tor shipment into another State, Territory, or countiy, before same is unloaded from
vehicle in which it was or b being transported; also duty to charge and collect fees aa
may be fixed by the Secretary ol Agriculture according to rules made bv him; fees to
produce sufficient revenue only to meet the necessary expenses of uie inspection
service; feeeto be paid into the Treasury as miecellaneouH receipts.

&KC, ID, Inspectors prohibited from bein^intereeted ingrain busineeaorto be is IhR
employ of corporation interested in said busineea.

Skc. 11. Appeal provided for party interested in grain to chief inepecbv, and from
chief inspector to Secretary of A^cuUure, under rules made by Secretary.

Bbc^ 12. Mixed grain, being nuxture of inspected gisin and utiinspected grain, or
Rain of different grades, shaU not be shipped out ol the State where the mixing is
done without reinspection and grading; oRense, jnisdemeanor.

Sbc. 13. Prohibition of shipment of grain to another State is ftffeign country without
inspection; grain once inspected may ikot be reinspected, but Seo^tary may in his
discretion reinapect cai^o be Core exportation.

S*C. 14. Inspecton to inveatisale the handling and wci^ng ot ^rain inspected;
ij]H>ectioi> at weighing and handling to be permitted bv those weighing grain.

Sec. 15. "Sample grain" may be in£pect«d and graaed,

Skc. 16. Willfully doing any act prohitnted or wilUully neglecting or refusing to do
things required by the act is a misdemeanor; punishment, fine not to exceed $5,000,
or by imprisonment not to exceed one year, or both.

Sec. 17. Salaries and neceeeary expenses appropriated out of the Treasury, 1860,000.

Sec. 18. Act takes effect July 1, 1010.

THE FVRPOai AND OBJECT OF THE PKOFOBED LBOIBLAnON.

(a) Tht raal objtcl of the Ugitlation.

t of the legislation is not apparent from a review ot the pro-

r-,, aw. To ascertain the real object one must secure evidence

aliunde. It has been stated that the purpose of the proposed law is to benefit the
agricultural producer of grain; that at tne present time the purchaser of the farmer's
grain does not grade it aa high as it should be — in short, toat ^rain which actually
Krades No. 2 is bought by some country elevator men as No. 3 in grade and at the
No, 3 price.

It is significant that the demand for a correction of this all^:ed abuse exists in a
small portion of the country. Admitting for the present that such abuse exists, I
can not see how the Federal Government is authorized under any ol the powen
granted to it to remedy the abuse said to exist. The abuse, if it be an abuse, is purely
one of contract, barter, and sale between parties, citizens of the same State, over
personal property subject solely to the sovereignty of the State.

(t) Tht apparent object of the UgUlation.

The proposed legislation on its face attempts to provide that the inspection of grain -
iball be under one central authoritv at Washington, and that the several kinds,
classes^and grades shall be the same tnroughout the United States and even in foreign
countries. The apparent object is to make a bushel of No. 2 red winter wheat ^r
other grade), wherever grown, or wherever found, as standard as a five-dollar gold

liieee observations may seem inappropriate in a memorandum of this character,
but it is submitted that the test ot the validity ot a proposed statute is not its apparent
but its real object; the real object having been ascertained, it ther '" '" "--

6 INSPECTION AND QBAIIINO O? OBAIir, ETC.

determined whether it ie within the scope of the legielative power; the end, m well
ae the meeju employed, must receive CDnsideration.

Yick Wo V. HopkinH, 118 U. S,, 338.

Morgan's L. 4 T. R. A S. S. Co. v. Louiriana Bd. o( Health, 118 U. 8., 4S6.

United States ti. Pox, 95 U. S., 670.

MinneeoU v. Barber, 136 U. S., 313.

Henderson v. New York, 92 U. S., 259.

New York v. Miln, 11 Pet., 103.

The Passenger Cases, 7 How., 283.

Re Rapier, 143 U. S., 110.

II.
THE onjKCT OF msFEcnoN la.ws.

'The object of inspection laws is to protect the community, so bu" as they apply ta
domestic sales, from fraud and impontion; and in relation to articleB designed for
exportation, to preeerve the character and reputation of the State in foreign marketa"
(22 Cyc, 1346).

Turner v. State, 55 Md., 240.

Territory v. Ry. (N. M.), 78 Pac., 74.

Clintsman i>. Northrop, 8 Cow. (N. Y.), 45.

Cin'ti Gas Co. c. State, IS Ohio St., 237.

Neileon V. Guza, 17 Fed. Cas. No. 10091; 2 Woods, 287.

Gibbons V. Ogden, 9 Wheat., 1 (aee Appendix hereof).

People V. Harper, 91 111., 357.
"They are also incidentally deugned to protect manufacturers and vend<»« them-
selves against unfounded and untturt chitDs of vendeee and consumers" (22 Cyc.,
1364).

an'ti Gaa Co. v. State, 18 Ohio St., 237.

III.

WHAT IB INSPECTION?

ttion <d certain artJ
ration, so that they may be declared fit for
People 1?, Campagnie, etc., 10 Fed., 357, 362.
Neilson v. Garza, 17 Fed. Caa. 10091; 2 Woods, 287, 290.
Burritl defines it as "official view or examination of commodities or manufactures,
to ascertain their quality under some statute requiring it." Andereon's definition:
"An official examination of articles of food or of mercl^ndise, to determine whether
they are suitable tor market or commerce."

Something which can be accomplished by looking at or weigjiiiUE
the thing to be inspected, or applying to it at once some crucial test.
Stale V. McGongh, 118 Ala., 159, 167.
People V. Campagnie, etc., 107 U. S., 59.

"The right to pass inspiection laws is not granted to Congress, and consequently
remains subject to state legislation." (22 Cyc, 1364.)

Gibbons v, Ogden, 9 Wheat., 1 (aee Appendix hereof).

U. S. V. Boyer, 85 Fed., 425 (see Appendix hereof).

Patapsco 1!, Garza, 17 Fed. Caa., 10091; 2 Woods, 287,
Inspection is an incident of the police power.

People 1'. Harper, 91 HI,, 357.

Territory n. R. R. (N. M.), 78 Pac., 74.
The power of state inspection is, however, subject to the paramount right of Con-
gress under the commerce clause of the Constitution. That is, state inspection laws
may infringe the federal right to regulate commerce, just as the federal power to
regulate commerce may invade the stale right within proper grounds; i. e., within
the reasonable limitations of the police power the authority of the State is supreme.

Neilson v. Garza, 17 Fed. Cas, 10091; 2 Woods, 287.

Gibbons v. Ogden, 9 Wheat., 203.

Turners. Maryland, 107 U. S., 38.

Neilson v. Garza, 17 Fed. Caa., 1007; 2 Woods, 237.

TSBFECTIOS AUD OKADING 07 OBATET, ETO. 7

The deciaion of the Supreme Court in Geneml Oil Co. v. Grain, inipector (209 U, 8.,
211), BUBt&inisg a Tenneeeee et&tute providing for inspection of oil even as aeainat tha
right of the Federal Government over interstate commerce, ia a reiteratitai M the ri^t
Ola State to paw and enforce iiupection laws.

UNDBB WHAT FEDB&AL OKA NT

That Congreaa could provide for the inspection of grain, whenpnrchaeed by the Gov-
ernment, ia not controverted, nor that it could provide for the inspection of giain in
that tenitory ovBi which CoDfftOB exerciaee exclusive jurisdiction. The state in-
spection laws have invariably been sustained under the police powers of the Btata
(Tiedeman, Limitations of the FoUce Power; Patapsco Guano Co. v. Board of Agric,
171 U. S., 343; Appendix hereof).

The authority of the States to pass inspection laws is set forth in the Constitutioni
. "No State atiall, without the consent (H Congreee, lay any imposts ot duties on un-
ports or exports, except what may be absolutely necessary for exercising its inspection
laws." (Art. I, sec. 10, cl. 2.)

The frameis of the Constitution seem clearly to have reserved to the States the ri^t
to jwas inspection laws, and the right of the State to charge therefor, such charges being
subject to the revision of Congress; and the courts have held that fees for inspection
in excess of the cost thereof, or appropriated for other purposes, are subject to thfl
revision of the Conness,

General Oil Co. i>. Grain, 209 IT. 8., 211.

Neileon v. Garza, 17 Fed. Cae. No. 10091; 2 Woods, 2B7.

Gibbons v. Ogden, 9 Wheat., 203.

Turner V. Blo^land, 107 U. S., 38.

Neilson v. Garza, 17 Fed. Cae. 1007; 2 Woods, 2S7.

(a) There u no polite poieer o/ the Federal Government.

The police power in our American system has been left wholly within the individual
Slates, and the Congress has no power, expressly or by implication, to take away any
or all of it. (U. 8. ti. De Witt, 9 Wall., 41.)

. "This police power of the State extends to the protection of the life, limbe, health,
condition, and equality of all persons and the protection ot all property within the
aute." {Redfield, Ch. J., in Thorp v. R. R., 27 Vt., 140, 149.)

(6) General welfare eUtuie.

The suggestion that Congress might, under the "general welfare clause," enact th«
propc»ed legislation can be easily aismissed, tor it has been repeatedly held that the
jrords "to pay the debts and provide for the eeneial welfare" do not confer any dis-
tinct and substantial power on the CongresH (U. S. v. Beyer, 85 Fed., 425; Appendix
hereof). Story, in his work on the Constitution (sec. 906, eeq.) hss demonstrated that
the clause "to provide for the general welfare" contains no grant of power, and, in
truth, is only part of the power of taxation.

It issubmitted that by no ^iseible construction of the proposed law can it be deemed
to fall within the power of Congress "to lay and collect taxes, duties, imposts, and
excises;" nor does it appear to be in any view of the plan a revenue measure.

If the fees to be charged for ins7>ectioD should furnish a revenue, or if it be a revenue
measure, it is submitted that as fees are to be chained on export grain it falls within
the prohibitions of Article J, section 9, clause 5, of the Constitution:

" No taxes or duties shall be laid on articles exported from any State. "

The object of this prohibition was to preclude interference with exports by Congress
<Docnmentary His. Constitution, vol. 3, pp. 542-545, 578-580; Hylton v. U. S,, 3 Dall.,
171).

It the stamp tax imposed on foreign bills of lading is in effect a tax or duty upon
exports, and therefore void (Almi^ v. Cal., 24 How,. 174; Fairbank u. U. S., 181 U. S.,
305), much stronger is the proposition to tax the goods themselves, when about to be
exported.

While this provision of the Constitution i
exports, the Supreme Court has sustained »

8 INSPECTION AND GRADING OF GRAIN, ETC.

articles intended for exportation. The purpose of such atatules baa been two-fold —
(o) to identify or muk articles which ore intended for exportation, thereby (b) relieving
them from internal tauition.

In Pace v. Burgeae ^92 U. S., 375), involving the constitutionality of so act requiring
that tobacco intended for export bear a stamp (act July 20, 1S68, and June 6, 1872),
the Supreme Court gave consideration ta tbe purposes oi the acts and said:

"The stamp was intended for no other purpoee than to separate and identify tba
tobacco which the manufacturar desired to export and thereby, instead of'tasi&g it,
to relieve it trom the taxation to whicb-the ouier tobacco waa subjected. It was a
ineajis devised to prevent fraud, and secure the faithful carrying out of the declared
intent with regwd to the tobacco so marked,"

A similar act (act August S, 1892) was considered by the court in Turpin v. Burgesa
(117 U. S 604). The facts of that case are materially different torn thoee which
apply in the proposed federal inspection of grain, and particularly in respect to the
Cuie whenlhego(KiBinteadedforexportBbain>eUieeub]«ct of federal action. Refer-
rine to the providons concerning stamping of tobacco intended fix expwt the court

"The tax (if it waa a tax^ was laid upon the goods before (hey left the factory.
They were not in course of exportation; they might never be exported; whether
they would be or not would depend altogether on the will of the manufacturer. Had
the excise which was laid upon all other tobacco manufactured by the plaintiSa
been laid on tbe tobacco in question, they could not have complained. But it
was not. A special indulgence was granted to them (in common with othera), in
reference to the particular tobacco which they declarer! it to be their intention to
export."

The present bill propoeea that the nain shall be exported at the scAbeard, at a time
whenitcanclearlytiesaidtobe "in the course of exportation." There is no provision
by which grain for export shall be classified or separated from other grain.

((f) The mmmerct dautt.

While under Article I, section 8, clause 3, Congress hu been oustained in going
very great lengths, particularly in reference to business matters among the Slatee — as,
for example, in matters relatingto telegraphic communications (Pensocola Tel. Co.
o. W. U. Tel. Co., 96 U. S., 1; T'el. Co. v. Texas, 105 U. 8-, 460; W. U. Tel. Co. v.
James, 162 U. 8., 650), carriage of lottery tickets (Champion v. Ames, 188 U. 8. J121),
tiansfer of railway shares of competing companies (Northern Securities Co. v. V. 8.,
193 U. S., 197), the use and Bale ol trade-marts (Trade-mark Cases, 100 U. 8., «2\~itia
submitted that in view of the bill under consideration can inspection be considered
to be a regulation of commerce? The interpretation of this power gtanted to the
Federal Government from Gibbons v. Ogden (9 Wheat., 1) to the latest decision of
the 8upreme Court has never extended beyond the making of such rules and n^ula-
tions governing commerce among the States as Conjgreas in its wisdom might see fit.
It is submitted that the inspection of goods is not tramc, is not commercial intercoutae,
ia not commerce, even in its most comprehensive sense. The greatest limit to which,
in my judgment, one can safely go is to say that inspection is an incident of commerce;
OS an incident it is not subject to regulation of the Federal Government. (Nuttii^t).
Mass., 183 U.S., 563.)

Congress may regulate the instrumentalities by which commerce among the several
States is carried on, but the inspection of commodities — the examination of them — is
not an instrumentaJity of commerce. As an incident of commerce the subject blla
clearly within the reserved powers of the States. (Allgeyer v. Louisiana, 165 U. S.,
STS.)

VI,

WHEN DOBS AN ABTICLE BBCOUB AND CEASB TO BK INTEKaTATB OR rOBKION COUMBBOB?

It is necessary to determine this question, because the element of time, while not
controlling, is influential. When an article int«nded for interstate or foreign com-
merce has been segregated from the body of the property within a State so as to fall
within the purview of the commerce clause of the Constitution, Congress may pro-
vide such rules and regulations relating to the commerce thereof as it may think
needful. Assumijig that the inspection of goods falls within the commerce clause <A
the Constitution — a very rash assumption, for. as heretofore shown, inspection is at
most but an incident of commerce — the time at which the Federal Government rnxj
take action must be clearly designated. Hence the necessity for determining —

1, When does a shipment become interstate commerce? A review of all the deci-
eions necessarily leads to the conclusion that whenever property has begun to move

INSPECTION AND QBADINQ OF QEAIN, £TC. 9

ae an article of commerce, from a point in one State to a point in another State, then

it becomes the subject of interstate comiuerce and i« under the power of th? CongrcM
to reeulate it. {Gilman v. Philadelphia, 3 Wall., 724; The- Daniel BaU, 10 Wall.,
557; Coe v. Errol, 116 U. S., 517; R. R. v. Penna., 136 D. 8., 114; R. R. v. Penna..
145 U. S., 192; U. S. v. Knight, 158 U. S.. 13.)

The movement does not begin until the articlea have been shipped or etarted in their
tmuportation (Coe v. Enol, supra); the preparation of the article for transportation is
not sufficient (U. 8. v. Boyer, 85 Fed., 425); nor the intent to OuMport (Coe v. Errol,
Bupra); it must be actually delivered to the carrier for tianBportation <U. S. v. Boyer;
Appendix hereof.)

2. And when do the goods cease to be the subject of inteiatate commerce? The
law upon this subject is, that when the goods have been so act«d upon that they have
been incorporated in or mixed with other property of the State they cease to be Bubiect
to the regulation of the Congress. (GibboQa v. Osden, Appendix; Brown v. Md.,
12 Wheat., 419; Welton v. Mo„ Bl U. S., 275; HoweMach. Co. v. Gage, 100 U. 8., 676;
Tierman v. Rmker, 102 U. S., 123; Brown v. Houston, 114 U. S., 622; Robbins t:
Shelby County Taxing Dist,, 120 U. S.. 48B; Emert v. Mo,, 156 U. S., 286.) Some
decisions bold that the shipment is incorporated into the property of the Slate when
it has been delivered to the consignee. (Bowman v. R. R., 125 L. S., 456; Rhodes v.
Iowa, 170 U. S., 412; LeUy v. Hardin, 135 U. 8., 100; Vance v. Vandercook, 170
U. S., 430.) Some decisions go so far as to hold that it is required that some of the
glpods shall have been sold after thev have arrived within the State of their deetina-
tion; it is doubted, however, that sale is a requirement, but it is clear that a sale of a
part or all of the goods in the State where they are destined and delivered destroys their
character as interstate commerce.

In General Oil Company v. Crain (209 U. S., 211, 228) the Supreme Court recently
reviewed the decisions on this point and said :

"The beginning and ending of the transit which constitutes interstate commerce
are easy to mark. The first is defined in Coe v. Errol (116 U. S., 517) to be the point
of time that an article is committed to a carrier for transportation to the State of its
destination, or started on its ultimate passage. The latter is defined to be, in Brown
V. Houston (114 U. 8., 622), the point of time at which it arrives at its destination.
But intermediate between these points questions may arise. (State, Detmold,
Prosecutor, v. Engle, 34 N, J, L„ 425; Slate, Lehigh 4 W, Coal Co., Prosecutors, v.
Carrigan, 39 N. J. L., 35; The Daniel BaU, 10 Wall., 557.)"

In short, under the most favorable interpretation it appears from the caeee that
goods can not becomesubjects of interstate commerce priorto the time they are loaded
upon vehicles for the purpose of transporting them to another State, if in fact the
time is not postponed until the actual movement be^ne; and that they remain inter-
state commerce and are subject to federal control until they come into the poeeeteion,
actual or constructive, of the consignee, if not in fact until the time of the sale thereof,
in whole or in part.

The bill is not definite concerning the exact place of mspection, although it appears
that inspection muet be at de£tination,for it is provided tnat it is the duty of inspect-
ors to "inspect and grade all grain which at the time of inspecting and grading of
same has been shipped from any other State, Territory, or country than the State,
Territory, or country in which the same is inspected. So, also, the grain is to be
inspected if it is "intended for shinment into any other State, Territory, or foreign
country before the same is unloaded," etc.

As tne jurisdiction of the State attaches on the arrival of the commodity at desti-
nation (Brown v. Houston, 114 U. S., 622), it can not be conceived what rights (of
inspection or any other) the Federal Government can exercise in reepect thereto.

The pending biU provides: "That the Secretary of Agriculture shall make all
needful rules and regulations goveming the inspection and grading herein provided
for." This, I believe, attempts to dele^te to' an executive officer the legislative
power confided to the Congress alone.

"One of the settled maxims of constitutional law is that the power conferred upon
the legislature to make laws can not be delegated by that department to any otner

10 INSPECTION AND QRADINO OF GRAIN, ETC.

responaibility by choooing other agenciea upon which the power shall be devolved,
nor can it mibstitute the judgment, wisdom, and patriotiBm of any other body lor
those to which alone the people have seen fit to confide thisMvereiga truet." (Cooley,
Cons. Lim., p. 163.)

Id Field v. Clark (143 U. S., 649) the court aaid:

"That CongTBfla can not delegate legialative power to the Preeident is a principle
univennlly reco^lzed aa vital to the int^rity and maintenance of the syetem of
government ordained by the Conetitution. * • • 'llie true difltinction,' as Judge
Kanney, apeaking for the supreme court of Ohio, has well said, 'is between the de^-
ftation of power to make the law, which necessarily involves the discretion as to wtutt
It shall be, and conferring authority or discretion as to its execution, to be exercised
under and in pursuance of the law. The firet ca^ not be done; to the latter no valid
objection can be made.' "

1 am not unmindful of the case of Buttfield v. Stranahan (192 U. S., 471), but it is
submitted that the preecnt propoeitinn for federal inspection of grain doea not con-
tain the elements or chaiacterifftics of the act to prevent the importation of impure
and unwholesome tea (approved March 2, 1897, 29 Stat, L., 604, chap. 3fi8}. The
two so radically differ in their puipoees and provisions that the decision of the court
in the latter can serve as no guide for the former.

That legislative power can not be delegated, see Sutherland (Notee to Cons^ pp.
677-685); Thome v. Cramer (15 Barb., 112); Bradley v. Baxter (IB Barb., 122); Barto
V. Eimrod (8 N. Y., 483); People v. Stout (23 Barb., 349); Rice v. Foster (4 Harr.,
479); Santo v. State (2 Iowa, 16S); Qeebrick v. State (5 Iowa, 91); State v. Beneke
(9 Iowa, 203); State v. Weir (33 Iowa, 134); People v. Ckillins (3 Mich., 343); R. R.
ti. Com., etc. (1 Ohio St., 77); Parker ii. Com. (6 Pa. St., 607); Com. v. McWilliamf
(11 Fa. St., 61); Maize v. State <4 Ind., 342); State v. Parker (26 Vt., 357); Meehmeir
V. State (U Ind., 482); Sute v. Swisher (17 Tex., 441); State v. Copeland (3 R. I.,
33); State v. Wilcox (46 Mo., 468); Com. v. Locke (72 Pa. St., 491); Ex pute Wall
(48 Cal., 279); WilUs v. Owen (43 Tex., 41); Famaworth v. Lisbon (62 He., 461);
Brewer Brick Co. u. Brewer (62 Me., 62); State v. Hudson Co. Com. (37 N. J., 12);
Auditor V. Holland (14 Bush., 147); SUte v. Simons (32 Minn., 540); Bradshaw v.
Laokfoid (73 Md., 428); Owensboro, etc., R. Co. v. Todd (91 Ky., 175).

VIII.

B A.SD ORADBS.

Early in the history of the proposed federal denomination of grades, and, in fact,
until a very recent time, it was propmed that the federal gndee uould be permissive;
that is, buyer and seller might agree that the federal grade should be the standard in
their transactions. The pending measure prohibits the transportation of grain uniesa
it has been inspected (sec. 13).

It is reapectiully submitted that it does not lie within the powem of a State (or
the Unitea States, if its power for the geneial purpose be conceded) to prohibit tke
use of other standards than tboee laid down by the l^islature. Sales "by sample"
would be impossible.

Tiedeman, speaking generally of inspection laws, says that they are constitutional
exercise of the police power of the States "so far as they permit one party to compel
the other to comply with the regulations, in the absence of their agreement to the
contrary. For example, it is permissible for a statutory regu^ttion to provide for
standard weights and measures, and to compel their use, when the parties have not
agreed upon the use of others. But it can not be reasonable to pronibit the use <d
any other mode of measurement. It is an exceaiive exercise of police power when
the law compels one to make use of the means provided for his own protection agaiost
fraud. The same distinction would apply to regulations requiring tne inspection and
weighing of articles of merchandise D]/ the inspector and weigher, and charging »
' u when the parties have agreed in good faith to the waive compliance with the

"class legislation?"

It is suggested that should Congrees provide for the inspection of certain kinds of
'in it should provide as well for the inspection of all grain, and having provided
the inspection of all grain should provide for the inspection of all other commo-
transported among the States or foreign nations. This particular point, how-
is one more of legislative policy than relating to the power of Congress in the

INSPECTION AND OKADING OF GRAIN, ETC.

THE FOBT FBEfEBBNCB CLAUSE.

Q oi commerce or revenue to the

, _jr Bball vewels bovmd to, or from, ooe State

be obliged to enter, clear, or pay duties in another."

The p«ndii^ bit! Bpeciatly denominates certain natural ports at which inapecton
Bfaall be installed and leavee to the Secretary of Agriculture the selection oE other ports.

Quare: Should the Secretary select some of the natuial ports and omit to provide
tv inspectors at others, would this constitutional provisioik be violated?

The object of this provision is to restrain Congieea from faeterinsor oppreeeiug one
tKjrt or the commerce of one State (Munn v. III., 94 U. S., 135; PaBe«ier Cosea, 7
How., 383), to prevent discriminatioiis between Uie Stat«e (Pa. v. Wheeling Bridge,
IB How., 435), It being intended to preserve the commercial equality of the States,
ftud any legislation tending to destroy such equality is by the provision probibitea
/n -jer CaaeB, 7 F — """'

(Paseenger Caaes, 7 How.,

D STATES INSPECTION LAWS.

It will doubtless be suggested that there are in force and effect federal inspection
laws, A list of these is tobe found in the appendix. Of tJieee it is sufficient to say
that they either fall under distinct grants to the Federal Government, which are
inapplicable to the inspection of articlea of commerce, or when their 'constitutionality
hM been attacked the courts have held them void.

Acnvmr of thb btatbs.

The States have always guarded the rights of their c:

of commodities is concerned, even before they were States. In the appendL.

be found a list of the state inspection laws from the earliest colonial legislation, a
list of commodities now subject to inspection under state r^ulation, and a digest of

" ■ ' " "" " 'lich p ' •" "

I insi>ecti< ^ , .__ , ,

a provisions vary greatly, some authorizing
boards of trade to appoint inspectors (Indiana), others appointing these officials
throtigh the machinery of a state railroad and warehouse commission (Illinois).

The penalties of the bill — fine of (5.000, <« imprisonment for a year, or both — seem
to foil within the case Ex parte Edward T. Young, petitioner (^ U. S., 123), and
therefore unconstitutional on the ground that excessive fines and penalties are imposed.

the laws of those States whicn provide for the inspection of urain. The States which
by statute now provide for the inspection of grain are: Illinois, Kansas, Missouri,
Hinneaota, Wisconsin, and Indiana. The provisions vary greatly, some authorizins

In conclusion it is submitted —

1. That the right to enact inspection laws is by the Constitution clearly reserved to
th«r States;

2. That the States, since the foundation of the Government and up to the present
time, have been active in enacting such inspection laws as the wisdom of the several
Btate l^islatures dictated;

3. That the said power to enact inspection laws falls within the police power of the
SUt^

4. That there is no federal police power;

5. That Congresa can not either under the "general-welfare" clause or the "power
to lay and collect taxes" or the "commerce clause" constitutionally proi-ide for the
inspection of commodities, even though the commodities be at the time of inspection
articles of interstate commerce, becaune inspection does not fall within those rules
and regulations which Congress is authorized to enact, as inspection is a mere incident

6. That, as the pending hill proposes to lay inspection fees upon experts, the propo-
sition falls within the prohibition of the Constitution concerning taxes on exports;
T. That the present proposition attempts to confer legislative power upon a federal

12 INSPECTION AND QBADINO OP GRAIN, ETC.

8. That a pl&n which prohibits the uee of other standards of grading and clusiflca-
tion ia an unwairacted reatraict of the inalienable righte of the individual;

9. That the present plan would probably result in a violation of the "port prefer-
ence clause" ot the CoDBtitution, and,

10. That the penalties of the bill are violative of the constitutional provision reepect-

Respcctfully submitted.

JoHK B. Daish,
0/ Counsel Batlimore Chamber of Commerce.
Wasbinoton, D. C, May 20, 1910.

Note.— The Appendix contains excerpts from The U. S. v. Boyer; Patapaco Guano
Co. V. Board of A^culture; Present Federal Inspection Lawe; Digest of State Grain
loapection Laws; List of StaM Inepection Laws, etc.

OIBBONS V. OQDBM.

In Gibbons v. Ogden {9 Wheat., 1, 203), the court says:

"But Ihe inspection laws are said to be regulations of commerce, and are certainly
recognized in tne Constitution as being pasMd in the exercise of a power remaining
with the States, ;

"That inspection laws may have a remote and considenble influence on commerce
will not be denied; but that a power to regulate commerce is the source from which
the right to pass them is derived, can not be admitted. The object of inspection
laws is to improve the quality of articles produced by llie labor of the country; to
fit them for exportation, or, it may be, for domestic use. They act upon the subject
before it becomes an article of foreign commerce, or of commerce amoi^ the States,
and prepare it for that purpose. They form a potion of that immense mass of l^ie-
lation which embraces everything within the territory of a State not surrendered to
the General Government; all which can be most advantwieouBly exercised by the
States themselves. Inspection laws, <}UBrantine laws, health laws of every deecrip-
tion, as well as laws for regulating the mtemal commerce of a State, and those which
rexpect turnpike roads, ferries, etc., are component parts of this mass.

No direct general power over these objects is granted to Congress; and, conje-
quently. thev remain subject to state legislation."

This doctrme was cited and applied in Turner v. Maryland (107 U. 8., 50), holding
that statute of Maryland relating to inspection of tobacco before exportation was con-
stitutional; S. C. (p. M], holding all such laws are subject to the revision and control
of Congress; Bowman v. Chicago R. R. Co. (125 U. S., 4SS), holding that a state law

Srohiblting importation of liquor without a certificate that consiKnee was licenaed
ealer was not an inspection law, but a regulation of commerce and unlawful; Leisy
V. Bardin-(135 U. S., 113), holding a state Taw prohibiting sale of imported liquors by
the importer except in unbroken packages void; Voight v. Wright (141 U. S., 65),
holding state law of Virginia requiring inspection of imported flour void as diserim-
inating in favor of home-made flour; Patapsco Guano Co, v. North Carolina (171 U. S.,
356), sustaining state law for the inspection of fertilizers imposing a charge per ton
to defray costs of inspectioa; New York v. Compagnie Gen. Transatlantique ^20
Blatchf., 303), holding state laws for inspection of alien immigrants not inspection
laws in sense of the Constitution; United States v. Bain (3 Hughes), claasing inspection
'- mong the subjects of legislation left to state control; In re Wons Yung Quy

y., 447), holding statute of California relating to disinterment and removal of
e corpses not in conflict with National Constitution; Corfield v. Coryell (4
Wash. C. C„ 380), holding by analogy that New Jersey oyster law of 1820 was con-
stitutional; Neilson v. Garza (2 Woods), holding inspection laws of Texas of 1871-1874
constitutional; Swift v. Sutphin (39 Fed., 637), holdine Minnesota statute, effect of
which was to prohibit imnortatioD of any fresh meat, violate of the Constitution; In re
Barber (39 Fed., 650), holding Indiana statute, in effect prohibiting import of dreaeed
meat, unconstitutional; United States v. Boyer (85 Fed., 435), holding that congree-
sio&al law for inspection, before slaughter, of animals intended for export not within
constitutional power to regulate commerce; State v. Coal Co. (41 La. Ann., 471),
holding that as regards inspection laws quantity was as legitimate subject as quality;
Turner v. State (55 Md., 264), holding State could regulate dimensions of packages,
require their delivery at state warehouses for inspection, and impose charges to cover

aS-c

INSPECTION AND GRADING OF GRAIN, ETC. IS

the coat of inspection; Moore v. State {48 Miw., 170), commenting on the quarantine
and jMlice powers of State, the court holding the State could legislate to prohibit
lotteries; Scott v. Wilson (3 N. H., 327), arguendo, that etate law to prevent damage
from floating timber loose down the Connecticut River did not affect to r^pilate com-
merce; Smith V, State (100 Tenn., 499), sUBtainins state law for separate railroad ac-
commodation for white and colored races as s valid police regulation; St. Louis, etc.,
Ry. Co. V. Smith {49 S. W., 631), upholding state inspection as respecting importation
of diseased cattle.

FATAPSCO QUAVO CO. V. BOABD OF AOfttCULTUBE.

In PaUpsco Guano Co. v. Board of Agriculture of North Carolina (171 U. 8., 343),
the Chief Justice, writing the majority opinion, said :

"Innwction laws are not in themselves regulations of commerce, and while their
object frequently is to improve the quality of articles produced by the labor of a coun-
try and fit them for exportation, yet they are quite as often aimed at fitting; them, or
determining their litness, for domestic use, and in so doing protecting the citizen from
fraud. Necessarily, in the latter aspect, such laws are applicable to articles imported
into as well as to articles produced within a State.

"Clause 2 of section 10 eiprenly allows the State to collect from imports as well as
exports the amounts necessary for executing its inspection laws, ana Chief Justice
Marshall expressed the opinion in Brown v. Maryland that imported as well as exported
articles were subject to inspection.

"The observations of Mr, Justice Bradley, on circuit, in Neilsen v. Qarza, are quit*
apposite on this and other points under discussion, and may mufitably be quotea.

That case involved the validity of a law of the State of Texas, providing for the
inspection of hides, and Mr. Justice Bradley said :

It the state law of Texas, which is complained of, is really an inspection law, it
is valid and binding unless it interferes with the power of Congress to regulate com-
merce, and if it does thus interfere, it may stilt be valid and binding until revised
and altered by Congress. The right to make inspection laws is not granted to Congress,
hut is reserved to the Stales; but it is subject to the paramount right of Congress to
regulate commerce with foreign nations, and among the several stales; and if any
State, as a means of carrying out and executing it£ inspection laws, impose any dut^
or impost on imports or exports, such impost or duty is void if it exceeds what is
absolutely neceseary for executing such inspection laws. How the question whether
a duty is excewive or not is to be decided may be doubtful. As that question is
ponea upon by the state legislature when the dut^ is imposed, it would hardly
be seemly lo submit it to the consideration of a jury in every case that arisee. This
might give rise to great diversity of judgment, the result of which would be to make
the law constitutional one day and in one case, and unconstitutional another day
in another case. As the article of the Constitution which prescribes the limit goM
on to provide that "all such laws shall be subject to the revision and control of Con-
gress, it seems to me that Congress is the proper tribunal to decide the question
whether a charge or duty is or is not exceerive. If. therefore, the fee allowed in
this case by the state law is to be regarded as in effect an impost or duty on import*
or exports, still, if the law is really an inspection law, the duty must stand until Con-
gress shall see fit to alter it.

" 'Then we are brought back to the question whether the law is really an inspec-
tion law. If it is, we can not interfere with it on account of supposed excess'

of fees. If it is not, the exaction is clearly unconstitutional and void, being a;

thorized interference with the free importation of goods. The complaint contends
that it is not an inspection law; (hat inspection laws only apply legitimately to the
domestic products ol the country, intended for exportation; and that no inspection
is actually required in this particular case, but a mere examination to see if the hides
are marked, and who imported ihem, etc., duties which belong to the entry of goods
and not their inspection.

" 'No doubt the primary and most usual object of inspection is to prepare goods for
exportation in order to proaerve the credits ol our exports in foreign markets. Chief
Justice Marshall, in Gibbons v. Ogden, says: "The object of inspection laws is to im-
prove the quality of articles produced by a labor of a country; to fit them for exporta-
tion; or it may be. for domestic use." {9 Wheat., 203; Story, Const., sec. 1017.)
But in Brown i>. Ma^land he adds, speaking of the time when inspection takes place:
"Inspection laws, so farastheyact upon articTesfor exportation, are generally executed
on land before the article is put on board a vessel; so far as they act upon importations,
they are generally executed upon articles which are landed. The tax or dutvof inspec-
tion is a tax which is frequently, if not always, paid for service performed on land."

14 INSPECTION AND QBADINQ OF OBAIN, ETC.

(12 Wheat., 419; Ston; Const., aec. 1017.) So that, according to Chief Justice Mar-
shall, imported as well as exported goods may be subject lo inspection; and they may
be inspected as well to fit tfaem for domestic use as for exportation.

" 'Ml housekeepers who are consumers of flour know what a protection it is to be
able to rely on the inspection mark for a fine or superior article. Bouvier defines
inspection as the eitamination of cert»ia articlea made by law subject to such exami-
nation, BO that they may be declared fit forcommerce. (Law Diet., verb, "Inspec-
tion.") "Theremoval or destruction of unsound articles is undoubtedly," says Cnief
Justice Marshall, "an exercise of that power." (Brown r. ifaryland, supra; Story,
Const., sec. 1024.) "The object of the inspection laws, "says Justice Sutherland, "is
to protect the community, so far as they apply to domestic sales, from frauds and
impositions; and in relation to articles designed for exportation to preserve the char-
acter and reputation of the State in foreign markets." Clintsman r. Northrop (8 Cow,
46). It thus appears that the scope of inspection laws is very laigc and is not confined
to articles of domestic produce or manufacture or to articles intended for exportation,
but applies to articles imported, and to thoee intended for domestic use as well.'

"But in Turner v. Maryland (107 U. S., 3?), which related only to the laws of Mary-
land BO far as providing for the preparation for exportation of tobacco grown in the.
State, any opinion as to the provisions oE thoee laws referring lo the inspection d
tobacco grown out of Maryland was expressly reserved.

"In Voighl V. Wright (141 U. S., 62, 6fl), a statute of Virginia relating lo the inspec-
tion of flour brought into that Commonwealth was held to be unconstitutional, because
it required the iiupectiou of flour from other States when no such inspection was
required of fiour manufactured in Virginia, an objection to which the act under con-
sideration is not open, for the inspection and payment of its cost are required in respect
of all fertilizers, whether manufactured in the State or out of it, and it is conceded
that fertilizers are manufactured in North Carolina., as, indeed, their many laws
incomoiating companies for the purpose of so doing plainly indicate. Mr. Justice
Bradley in Uiat case remarked that the question was still open as to the mode and
extent in which titate inspection laws can constitutionally be applied to personal

Eroperty imported from abroad, or from another State, whether such laws can go
eyond the ideutilication and regulation oF such things as are strictly injurious to
the health and lives of the people, and therefore not entitled lo the protection of the
commercial power of the Government as explained and distinguished in the case fi
Crutcher v. Kentucky (141 U. S., 47), just decided.'

"Whenever inspection laws act on the subject before it becomes an article of com-
merce they are confeesedly valid, and also when, althotigh operating on articlea
brought from one State to another, they provide for inspection in the exercise of that
power of sel [-protection commonly called the police power.

"No doubt can be entertained of this where the inspection is manifestly intended,
and calculated in good faith, to protect the public health, the public morals, or the
public safety. (Minnesota u. Barber, 13G U. S., 313.) And it has been det^mined
that this is so, it the object of the inspection is the prevention of imposition on the
public generally.

"In Plumley v. Massachusetts (155 V. S., 461), it was decided that a statute' of
Massachusetts ' to prevent deception in the manufacture and sale of imitation butter, '
in its application to the sale ol oleomargarine artificially colored, so as to cause it to
look like yellow butter, and brought into Massachusetts, was not in conflict with th«
' clause of the Constitution of the United States investing Congress with power to
regulate commerce among the several States. That decision explicitly rests on the
ground that the statute sought to prevent a fraud upon the ^[eneral public. It is true
Qiatanarticleoffood was involved, but the sole ground of the decision was that the State
had the power to protect its citizens from being cheated in making their purchasee,
and that thereby the commercial power was not interfered with. (Schollenberger v.
Pennsylvania, 171 U. S., 1.)

"Where the subject is of wide importance to the community, the consequences of
fraudulent practices generally injurious, and the suppreesion of such frauds matter
of public concern, it is within the protective power of the State to intervene. Lawe
providing for the inspection and grading of flour, the inspection and nsulatioD of
weights and measures, the weighing of coal on public scales, and the like, are all
competent exercises of that power, and it is not perceived why the prevention or
deception in the adulteration of fertilizers does not fall within its scope.

"It is apparent that there is no article entering into common use m many of the
Statea, and particularly the Southern States, the inspection of which is so necessary
for the protection of those citizens eng^^d in ^i^cultural operations as commerciiu
fertilizers. Certain ingredients, as ammonia or nitrogen, phosphoric acid, and potash,
make up the larger part of the value of these fertilizers, and without the aid ol acien-

INSPECTIOK AND QRADING OF GRAIN, ETC. 16

tific analyHui the amount of theee ingredients can not be ascertained nor whether the
fertilizer sold is of uniform gnde. The average farmer was compelled, without an
analysiB, to depend on his senK of smell, of his euccees or failure during the previous
jrear with the eame brand or name, to determine the relative amounts of the essential
ingredients and the value of the materials. To protect aericultural int«reatfl against
spurious and low-grade fertilizers was the object of this mw, which simply imposed
tne actual cost of inspection, necesBarily varying with the agricuJtural condition of the
various yean. The label or tag could only be furnished after an analysis, the result
of which was therein stated, in that light the law piactically required an analysis
in every case, and was sustained as bo doing by the Supreme Court of North Carolina
in SUte v. Norris (78 S. C, 443).

"The act of 1877, requiring the obtaining of a license to sell fertilizer on the pay-
ment of a privil«^ tax of (500, was considered in that case, at January term, 1878,
of that court, and held valid under the state constitution as intended to protect the
public from being imposed on by adulterated fertilizers, and to keep the traffic in
the hands of responsible parties, making the means to that end eeff-eustaining by
the license tax. And it was also decidra that the law was not in conflict with the
Federal Constitution on the authority oi Woodruff v. Parham (8 Wall., 122) and
Hinson t>. Lott (8 Wall., 148).

"As before remarked, the sections of the act of 1877 relating to this subject were
carried forward into the Code of 1S83, and section 2190 required the license and im-
posed the privilege tax.

"In Stokes v. Department of Agriculture (106 N. C, 439, 1890), the Supreme Court
held that section 2190, in prohibiting the eale, or the offering for sale, of fertilizers
in North Carolina until the manufacturer or fereon importing Ine same should obtain
a license, did not probibit the use of them in the State, nor the purchase of them in
another State to be used for fertilizing purposes by the purchaser himself in North
Carolina; and that, where a person acting for himself and others, resident farmers of
^e State, ordered from a nonresident manufacturer a number of bags of fetilizer, a
given number being ordered for each purchaser, and the same was shipped in separate
parcels, addressed In diSerent purchasers separately, and separate bills sent to each
ptiTchaser, there being no intent to evade the statute, the transaction did not come
within the inhibition of section 2190, and the goods were not liable to seizure at the
isetance of the Department of Agriculture.

"Similar laws of other States regulating the sale of fertilizers have been sustained
on the same ground.

"Id Steiner u. Ray (84 Ala., 93), it was held that a statute regulating the sale of
commercial fertilizers, when its controlling purpose was to gusjd the agricultural
public against spurious and worthless compounds sometimes sold as fertilizerB, and
to furnish to buyers cheap and reliable means of proving the deception and fiaud,
should such be attemptea, was strictly within the pale oi police reeulatian and was
constitutional. And this case was cited with approval in Kirby v. Huntsville Ferti-
lizer A M. Co, (IDS Ala., 529), where it was ruled that the sale of commercial fertilizers
was void unlesB each sack was tagged as required by statute at the time the right of
property paeeed from the vendor to the vendee.

"In Vanmeter r. Spurrier (94 Ky., 22), an act of Kentucky, 'to regulate the sale
of fertilizers in that Commonwealth, and to protect agriculturists in the purchase and
use of the same,' was sustained; and it was neld that the statute could not be fairly
construed to authorize the levy of an im^t on interstate commerce heyond what
was necessary to inspection. The court said: 'The statute, as its title indicates, was
enacted for protection of farmers of this Commonwealth against fraud and imposition
of those having for sale commercial fertilizers. To accomplish that object, each one
Belling, or offering for sale, any fertilizer is required to submit a sample for analysis
and test of its quality at the experimental station. For that purpose only can the tees
collected by the director be used, and in that way and to that extent only can farmera
of the Commonwealth be benefited hy the statute. In our opinion the law is valid

"In Faircloth'r. De Leon (81 Ga., 158), Goulding Fertilizer Company v. Driver
(99 Ga., 623; 25 S. E., 922), and other cases, the supreme court of Geoma has held
that the seller of commercial fertilizers, which had not been inspectea as the law
required, could not maintain against the buver an action for the price; but in Martin
V. Upshur Guano Company (77 Ga,, 257), taat the statute was not applicable where
sale and delivery were without the State,

"The act of January 21, 1891, must be regarded, then, ae an act providing for the
inspection of fertUizera and fertilizing materials in order to prevent the practice of
imposition on the people of the State, and the charge of 25 cents per ton is intended
merely to defray the cost of such inspection, it being competent for the State to pass

16 INSPECTION AND QBADINO OF OHAIN, ETC.

lawB of this chamcter. Does the Tequirement oi inspection and payment of ita cint
bring the act into collision with the commercial power vested in Conneea? Clearly
this can not be so as to foreign commerce, for clause 2 of section lOof Article I exprewiy
recognizee the validity of state inspection laws, and allows the collection of the
amounts neceseary for their eiecution; and we think the same principle muet apply
to interstate commerce. In any view the effect on that commerce is indirect and
incidental, and ' the Constitution of the United States does not secure to anyone Hit
privilege of defrauding the public' "

VNITBD 9IATKS T. BOTSB.

which defines bribery, the indictment was in three ci
attempted to bribe an aMistant inspector of the Bureau o
demurrer the court held that the act of Congreea providing for the inspection of cattle,
sheep, and hogs at sUughterhouses in the sereral Statee (1 Supp. Rev. Stat., 937; 2
Supp. Rev. Stat., 403} wu enacted without any constitutiMial warrant; that rulea and
reflations provided by the Secretary of Agriculture were alao unconstitutional;
that packing houses engaged in slaughtering cattle and other animn ln intended for
interstate and foreign commerce are not enm^ tn intetatate C(»nmerce; that inter-
state commerce is not determined by the charact«r of the commodity nor the inten-
tion of the owner respecting its tranaporUtion, nor the preparation of it for trans-
portation, but the actual commencement of its transit to another 3tat«; that the
power conferred under the "general- welfare clause" is not sufficient to support such
legislation.

The court in disposing of the matter said:

"The point to be decided is whether the indictment charges an offense against the
laws of the United States. Has Congress the power under the Constitution to send an
inspector into a packing house located within a State and impose upon him the duties
alleged in the indictment? If it has not, is one guilty of bribery, under the United
Stat«e statutes, who offers or gives such inspector money to induce him not to perform
such alleged dutiee? The importance of the question is very great. The discunion
of the demurrer evinced care, research, and earnest thought by counsel, and the court
has given the subject the consideration it deserves. It is a matter of public history
that foreign countries have complained of American eiportations of diseased meats.

the legislation whereby the Secretary of Agriculture was empowered to have made a
careful inspection of cattle, sheep, and hc^ at slaughterhouses, which were about
to be slaughtered , the products of which were intended for sale in other States or foreign
countries (1 Supp. Rev. Stat., 937; 2 Supp. Rev. Stat., 403). And these inspections
were to be made under rules and regulations preecribed by the Secretary of Agricul-
ture (Id.). The inspecttHH were appointed in pursuance of the statut«i referred to
supra, and the duties alleged in the indictment preecribed by rules and reguiations
made in pursuance thereol. The packing houses offered no oppoeitionj it they did not
in fact approve and promote the legislation. They applied for the inspectors, pre-
sumably c«cause it enabled tbem to secure the indorsement of the United States that
their goods were sound and wholesome food products. If, therefore, no indictment
can be predicated, under the statute, upon the state of facts set forth in the indict-
ment, it is because there was no power in Congress to enact the statute; and the result
follows that the inspectors may be corrupted with impunity because their presence in
the slaughterhouses, and the duties they were called upon to perform, were both
without any legal warrant, in which event the United States 'has the alternative left
to afford the packing houses the desired indorsement through the medium of innpecton
they never had any authority to appoint, or to withdraw them altogether and leave the
subject to state supervision. Narrowed down, the ttimple question is whether the
duties alleged in the indictment, which the inspectors were required under the rules
and regulations of the Secretary of Agriculture to periorm, were such duties as belonged
to the State of Missouri or to the United States."

"In McCultoch v. Maryland (4 Wheat., 405) Chief Juetice Marshall sud;

" 'This Government [of the United Stales] is acknowledged by all to be one ol
enumerated powers. The principle that it can exercise only the powers granted to it
would seem too apparent to have required to be enforced by all those arguments which
its enlightened friends, while it was depending before the people, found it neceemry

o arise as long as our system shall exist.'

INSPECTION AND GKADING OF OBAIN, ETC. 17

"In Mutin v. Hunter's Lenee (1 Whe*t., 326) the same learned jurist sUted tlia
wine doctrine aa follows;

' ' ' The Government of the United States can claim no powers which are not granted
to it by the Constitution, and the powere actually granted must be such as are expreadjr
given, or given by neceeaary implication.'

"In the elaborate discussion of the principles of the Constitution and the nature
and character of the Government of the United Stales, in the L^l Tender cases (12
Wall., 457) a good deal is said about the 'noneuumerated powets' in the Constitution.
It is a significant fact, however, that in these cases the court thought it necessary to
point out the clause of the Constitution where the power to enact the legal-tender
statutes was to be found. In these cases, too, as stated in the disoenting opinion ct
iSx. Justice Field (12 Wall., 63S):

" "The advocates of the measure do not agree as to the power in the Constitution to
which it shall be referred, some placing it upon the power to borrow money, some on
the ctHnins power, and some on what is termed a "resulting power" from ute general
purpoaes <m the Government.'

"ThaL however, which is moat significant, I repeat, is that all the judeea sought to
find, and did designate, some power or powers to which the l^ielation shall be referred.
However that may be, 1 do not think it can be fairly said that the court, even in th«

in the Legal Tender cases (p. 539):

' ' 'Said Chief Justice Marshall, m delivering the opinion of the court (in McCulloch v.
Maryland): "Let the end be legitimate; let it be within the scope of tiie Constitution;
and all mean> which are appropriate, which are plainly adapted to that end, which
are not prohibited, but consiat with the letter and spint of the Constitution, are con-
stitutional." The case (McCulloch v. Maryland) marks with admiiable precbion the
province of this court. It declares that "when the law (enacted by Congrew) isiiot
prohibited, and is really calculated to effect any of the objects intrusted to the Govern-
ment, to undertake here to intjuire into the degree of its necewity would be to pass tiie
line which circuDiHoriben the judicial department, and to tread on legislative grouad.
This court (it wa« said) disclaims all pretensions to such a power," It is hardly necfe-
aary to say that these principles are received with universat aseent.'

"1 have quoted this extract from the Legal Tender Cdsea to show that in thoaecsMS
the court approved the principles announced in McCulloch v, Maryland. The quee-
tkrn is in no sense involved in the case at bar as to whether the majority of the court in
the Legal Tender caaee correctly applied the principles above quoted; but, if it were,
it would be indelicate, it not altogether improper, for me to expreoe an opinion in
r^ud thereto. My duty is to coniform to the opinions of that great court and not to
cntirif^e them.

"In the l.egaljrender cases the court said, further:

" 'A decent regard for a coordinate branch of the Government demands that the
judiciary should prceume. until the contrary is clearly shown, that there has been no
transgreaioD of power by Congress, all the Membera of which act under the obligation
of an oath of fidelity to the Constitution.'

"Such seems to be the settled canon of construction. (Com, v. Smith, 4 Bin., 123;
Fletcher v. Peck, 6 Cranch, 87; Dartmouth College v. Woodward, 4 Wheat., 625;
Livingstone v. Moore, 7 Pet., 469; Ogden v. Saunders, 12 Wheat., 294; Knox t>. Lee,
12 Wall., 531; Livingston Co. v. Darlington, 101 U. S., 410.)

"By the tenth amendment to the Constitution it is nrovided that —

" 'Thepowersnot delegated to the United States by tne Constitution, nor prohibited
by it to the States, are reserved to the States, respectively, or to the people.'

"If reasons are required for the principtee announced supra, this amendment, it
■eems, should suffice. We must therefore look to the ConMitution to find the power
for the authority of Congress to enact any legislation. Nor will any degree of respect
for that great tentative body supply the place of the power if it is not to Be found in the
Conetitutton. It need not loe found in any one power, but if 'noneuumerated,' or ft
'reeulting power,' flowing from the general purpcees of the Government, still it muat
betoundaomewherelnthe Constitution, or it does not exist and ehould not be claimed.
Hence. Chief Justice Marshall said, in McCulloch v. Maryland, supra:

" 'Should Congress, in the execution of its powers, adopt measures which are pro-
hibited by the Conatitution, or should Congreas, under the pretext of executing its
powers, pass laws for the accomplishment of objects not intrusted to the Government,
U would become the painful duty of this tribunal, should a caae reqtiiring such &
decision come before it, to say an act yna not the law of the land.*
46331—10 2

tS IKBPEOTIOK AND GBADINO OF OBAIN, BTO.

clause or proviBian of the Conatitution did Coi^ese enact the legialBtion authorizing
'the inspectinn of meats, or cattle, hoga, and aheeii. or their carcaeeee, while or before
-being Blaunhtered in aliiughterhouses within a State? The learned counsel for the
United States suKeste, in argument, that the power may be found under what is
■tenunonly called the 'general- we If are' clause. The mention of the 'general welfare'
5i fiiHt found in the preamble of the Congtitution, which may be properly referred to
for the purpose of correctly conatniin? the instrument; but I venture the opinion
that no adjudicated case can be cited wliich traces to the preamble the power to enact
'anv statute.

Mr. Justice Story, in hia work on the Constitution (sec i62), says:

" 'And here we must guard ourselves against an error which is too often allowed to
creep into the discussions upon this subject. The preamble never can be reeorted
to to enlarge the powers confided to the General Government orany of its departments.
■It can not confer any power per ee. It can never amount, by implication, to an
enlarcement of any jjower expreaaly given. It can never be the legitimate eource of
Any implied power, when otherwise withdrawn from the Constitution. Its true
office is to expound the nature and extent and application of the powers actually
conferred bv the (.'onstitution, and not substantially to create them. For example,
the preamble declares one object to be "to provide for the common defense." No
one can doubt that this does not enlarge the powers of Congress to pass any measures
which they mav deem useful for the common defense. But su))iMHe the t«rms of a
■ iven power admit of two constructions— the one more restrictive, the other more
_beral^and each of them is consistent with the words, but is and ought t« be gov-
erned by the intent of the power; if one would promote, and the other defeat the
common defense, ought not tne former, upon the soundest principles of interpretation,
to be adopted? Are wo at liberty, upon any principles of reason or common sense,
to adopt a restrictive meaning which will defeat an avowed object of the Constitution,
when others equally natural and more appropriate to the object is before us? Would
not this be to destroy an instrument by B measure of its woras, which t^at instrument
itself repudiates?'

'■ "But the 'general-welfare' clause to which the learned counsel doubtless referred
is found in section 8, Article I, of the Conatitution, and is as follows:

" 'The Congress shall have powerr (I) To lay and collect taxes, duties, imposts, and
excises, to pay the debts and provide for the common defense and general welfare of
the United States; but all duties, imposts, and excises shall be uniform throughout
the United States.'

"Mr, Justice Story, in the same elaborate work (sees. 907 and 908), says of this
provision:

■■ '"Before proceeding to consider the nature and extent of the power conferred by
this clause and (he reasons on which it is founded, it seems necessary to settle the
grammatical construction of the clause and to ascertain its true reading. Do the words
"to lay and collect taxes, duti<*, imposts, and excises" constitute a distinct, subataji-
tial power; and the words " to pay the debts and provide for the common defense and
general welfare of the United States" constitute another distinct and substantial

Eower? Or are the latter words connected with the former so as to constitute a quali-
cation of them? This has been a topic of political controversy and has furnished
abundant materials for popular declamation and alarm. If the former be the true
'interpretation, then it is obvious that, under color of the generality of the words "and
provide for the common defense and general welfare," the Government of the United
States is, in reality, a government of genera! and unlimited powers, notwithstanding
'the subsequent enumeration of specific powers. If the latter bo the true construction.

national character, "to pay the debts and provide for the ci
-Welfare." The former opinion has been maintained by some minds of great ingenuity
and liberality of views. The latter has been the generally received sense of the nation,
■i^d seems supported by reasoning at once solid and impregnable. The readinv, there-
fore, which wul be maintained in these commentaries is that which makes the Utter
-words a qualification of the former, and this will be best illustrated by supplying the
■words which are necessarily to be understood in this interpretation. They will then
stand thus: "The Congress sh&ll have power to lay and collect taxes, duties, impoots.
and excises in order to pay the debt«, and to provide for the common defense and

Ssnera! welfare of the United States;" that is, for the purpose of paying the public
ehle and providing for the common defense and gencial welfare of the United States.

QTSPECriON AND QBADIBQ OF GOUN, ETC. 19

Id this seiwe ConETeen but not an unlimited power of taxation; but it is limited to
specific objectB— the payment oC the public debia and providing for the common
aefense and seneial welfare. A tax, tuerefore, laid by Coo^eea for neither of these
objects would be unconatitutional, as an exceas of ita legislative authority.'

After a moet ekbarate and historical diecussion of the subject, preeenting the dif-
ferent views of the different political schools or partie*, he concludes that the 'Reneral-
welfare ' clause 'contains no grant or power whatsoever, but it is a mere expression ot
the ends and purposes to l>e effected by the preceding power of taxation {Id., sec.
911). I content myself with the fact that the former construction has never been
sustained by any court, and the reverse has been held so often as not to require cita-
tions to support It, while the latter construction rests upon the theory that the 'general-
welfare' clause contains no power of itself to enact any legislation, but, on the con-
trary, the words 'and provide tor the common defense and general welfare of the
Uuited State's,' according hi the most liberal constructionist, is a limitation on the
taxing power of the United States, and ^at only.

"No caae has been cited tracing the power to enact any statute to the general-
welfare clause above quoted, and I do not believe any can be. The learned counsel
in this connection has cited various acla of (..'ongress of a nature quiti; similar to the
one in question, but no number of statutes or infractions of the Constitution, however
numerous, can be permitted to import a power to the Constitution which doM not
exist, or to furnish a coui'truction not warranted. They, too, must stand or fatl, when
broU|;ht in a question, by the rame principles which are to be apjilied alike in all

"It has been sugg^ted that the 'commerce clause' may warrant the enactment of
the statute under consideration. NfanKestly. I think, the statute wa-* enacted upon
the theory that such was the case. That such is not the case, I think there is no rea-
aonable doubt. The clause rca<ls as follows: 'The Congress shall hsve power to
regulate commerce with foreign natioun, and among the several States, and with the
Indian tribes.' Wliat is commerce? Is it manufacturing? In slau^hterini; cattle
anil sheep and h<^ commerce? If so, why is not farmin];, or stock rni-'ing, or manu-
facturing lumber, or mining? For all these enter into commerce, both domestic and
foreien, and are intende^l for both.

"In Gibbons i'. C^en (9 Wheat,, H Chief Justice Marshall said-

'"Commen-e, undoubtedly, is tnffic, but it is somethinc more. It i:* intercourse.
It de^ribes the commercial interrotirHe between nations and parts of nations, in all its
branches', and is regulated by prescribing rules tor carrying on that intercouire.'

"But what commerce or intercourse is it that Conerepf has the power to regulate?
It is 'commerce with foreign nations, amons the Hpveml Statei-. and with the Indian
tribes.' Nopower in here jiiven to regulate, or prepcribeniles for repuialinj;, commerce
or intercourse among the citi/.ens of a State. Does the power, then, 'to reculate com-
merce with foreign nations, and among the "evemi States, and with the Indian tribes,'
embrace the power to send insjieolor" within a Slate to inspect animals being slaugh-
tered, the product of which is intended for foreign markets? Nobody contends that
Congress has any power to regulate commerce n iihin a State. That it has not is uni-
veiyally admitted. When, then, doex commerce become interstate commerce? Thai
question has gone before the Supreme Court of the United States many timei'. and in
many forms. Kidd v. Pearson (US U. S., 1; 8 Sup. Ct,, 6) is a case in which the State
of Iowa passed a law prohibiting the manufacture or keeping of intoxicating liquon
within that State except for mechanical, medicinal, nilinaty, and sacramental pur-
poses. Kidd maouftictured liquor" not intended for the purposes slated, but exclu-
sivel^' for exportation to States in which the sales of liquors were not prohibited. He
was indicted therefor, convicted, and the case was aflirmcd by the Supreme Court of
Iowa. Writ of error was sued out to the Supreme Court of the United States, and the
first auestion presented was whether the lovra statute was in conflict with section 8,
Article I, of tne Constitution o( the United States, by attempting to regulate com-
merce between the Slates. Mr. Justice Lamar delivered the opinion of the court,
quoting approvinelv from Gibbons v. Ogden, supra, and used these words;

"'The genius and character of the whole Government seems to be that its action is
to be applied to all the external concerns of the nation, and to those internal concema
which affect the States f>enerally. but not to those which are completely within a
particular State, and with which it is not necessary to interfere for the purpose of
executing some of the general powers of the Government. The completely internal
commerce of a Slate, then, may be considered aa reserved for the State it'ielt.'

"Continuing, Mr. Justice Lamar said:

"'No distinction is more popular to the common mind, or more clearly expressed
in economic and political literature, than that between manufactures and commerce.
Ifanufactuie is transfoimation — the fashioning of raw materials into a change of form

20 INSPECTION AND QBADINQ 07 QSAIN, ETO.

for use. The buving and »el

commerce; and tne r^;ul»tioi ._ .__ _ _

regulation, »t least, of such tnuiBportation. The l«sal definition of the term m given
by this court in County of Mobile v. Kimball (102 U. 8., 691, 702} ia as follows: "Ccm>
meice wi^ foreign nations and among the States, strictly considered, comosU in
intercoune and traffic, iscludiog in these terms navi^tion and the tianspMtation
and transit of persoDs and property, as well as the purchaee. sale, and exchange of
commodities." If it be held that the term includes the r^ulation of all such manu-
factures as are intended to be the subject of commercial truuactiona in the future,
it is impossible to deny that it would alBo include all productive industries that con-
template the same thing. The result would be that Congress would be invested, to
the exclusion of the States, with the power to regulate, not only manufacture, but
also agriculture, horticulture, stock raising, domestic fisheries, mining — in diwt,
every branch of human industry. For is there one of them that does not contemplato
more or less clearlv an interstate or foreign market? Does not the wheat grower of
the Northwest, and the cotton planter of the South, plant, cultivate, and harveet his
crop with an eye on the prices at Liverpool, New York, and Chicago? The power
being invested in Congress and denied to the States, it would follow as an inevitable
result that the duty would devolve on Congress to regulate all of theee delicate, multi-
form, and vital interests — interests which in their nature are and must be local in
all the details of their successful management. It is not necessary to enlartre on, but
only to suggest, the impracticability of such a scheme, when we regard the multi-
tudinous ar^rs involvea, and the most infinite variety of their minute details.'

"Justice Lamar, continuing, said:

" ' We have seen that whether a State, in the exercise of its undirouted power of
local administration, can enact a statute prohibiting within its limits the manufacture
erf intoxicating liquors, except for certain purpoeee, is not any longer an open aueetion
before this court. Is that right to be overthrown by the fact that the manuiacturer
intends to export the liquors when made? Does the statute, in omitting to except
from its operation the manufacture of intoxicating liquors within the limits of the
6l&ta for export, constitute an unauthorised interference with the power given to
Conerese to regulate commerce? These questions are well answered m the language
of the court in the License Tax cases (5 Walt., 462, 470): "Over this commerce and
trade (the internal commerce and domestic trade of the States) Congress has no power
of regulation, nor any direct control. This power belongs exclusivelj^ to the States.
No interference by Congees with the businees of citizens transacted within a State is
warranted by the Constitution, except such as is strictly incidental to the exercise of
powera clearly granted to the l^islature. The power to authorize a businees within
a State is plainly repugnant to the exclusive power of the State over the same subject."
The manufacture of intoxicating liquors in a State is none the lees a businees within
that State because the manufacturer intends, at his convenience, to export such
liquors to foreign countries or to other States, This court has already decided that
the fact that an article was manufactured for export to another State does not of itself
make it an article of interstate commerce within the meaning of section S, Article I,
of the Constitution, and that the intent of the manufacturer does not determine the
time when the article or product passes from the control of the State and belongs to
commerce,' citing Coe tj. Errol (116 U. S., 617; 6 Sup. Ct., 475).

"Quoting from Coev. Errol, supra, delivered by Mr. Justice Bradlev, he wjn:

" 'There must be a point of time when they cease to be govemea exclusively by
the domestic law ana begin to be governed and protected by the national law ot
commercial regulation; and that moment seems to us to be a le^timate one for this
purpoae in which they commence their final movement for transportation from tlw
State ot their origin to that of their destination.'

"Quoting also from The Daniel Ball (10 Wall., 557), he says:

" 'Whenever a commodity has begun to move as an article of trade from one State
to another, commerce in that commodity between ^e StAt«8 has commenced. But
this movement does not begin until the articlas have been ^pped or started lor
trmnsportation from the one State to another.'

" In Covington; etc., Bridge Co. V. Kentucky (154 TJ. 8., 210; 14 Sup. Ct., lOBT) Ur.
Justice Brown said:

" 'Congress has no power to interfere with police regulations, relating exciiudvelf
to the internal trade M the Sutee (U. S. v. Dewitt, 9 Wall., 41; Patterson v. Kentucky,
97 U. S., 501); nor can it, by exacting a tax for carrying on a certain business, thereby
KUthorite such businea to be carried on within the limits of a State. (License Tax
casea, 5 Wall., 462, 470, 471.) The remarks of the Chief Justice in this case contain
the aubetance of the whole aoctrine: "Over this {the internal) commerce and trade
Oongreia has no power of regulation, nor any direct c<mtroL Tliis power belong*

nrsFBonoN and qbaputo of obaik, etc. 21

exclusively to the Statei. No mterference by CangKK with the bumneas of citizens

tnuiBBcted witbiD a State is warnuited by the CoDstitution, except such as is strictly
incidental to the exercise of poweis clearly granted to the i^ielature. The power to
authoritie a buninen within a State is plainly repugnant to the exclusive power of the
8tat« over the same subject. '"

"In United States v. E, C. Kni^t Co. (156 U. S., 9; 16 Sup. Ct., 249) Mr. Chief
Justice Fuller, deliverini^ the opinion of the court (>t p. 14, 156 U. S., and pp.
245, 255, 16 Sup. Ct.), quotes approvinsly from Kidd v. Feareon, supra; Gibbons v.
<Wen, supra; and Brown c. Msjyland (12 Wheat., 419), and says:

It is vital that the independence of the commercial power and of the police power,
and the delimitation between them, however sometimes perplexing, should always be
recognised and observed; for while the one furnishes the strongest oond of imton, the
other is eesentiat to the preservation of the autonomy of the States as required by our
dual form of government; and acknowledged evils, however grave and urgent they may
appear to be, had better be borne than the risk be run, in the efiort to aupprees them,
of more serious con»equencee by reaort to expedients of even doubtful constitutionality.

" Cases on this point might be multiplied almost indefinitely, and from them I cite
License Tax cases (5 Wall., 470); United States v. Dewitt (9 Wall., 41); Patterson v.
Kentucky (97 U. 8., 501); Covington, etc., Bridge Co. v. Kentucky (154 U. S., 210;
14 Sup. Ot., 1087); Tennessee v. Davis (100 U, S.. 300); Sands v. Improvement Co. (123
U. S., 295: 8 Sup. Ct., 113); RoyaU v. Virginia (116 U. S., 577; fl Sup. Ct., 510); The
Daniel Ball (10 Wall., 557); Kidd v. Pearson (128 U, S., 23; 9 Sup. a., 6); United
SUtee V. E. C. Knight Co. (156 U. S. 13; 15 Sup. Ct., 249); In re Greene (52 Fed., 104,
119); Slaughterhouse cases (16 Wall., 36); United States i>. Trans-Missouri Freight
Association (166 U. S.^ 290^ 17 Sup. Ct., 540).

" From these authorities it follows that —

" ' When the (interstate) commerce begins is determined, not by the character of
the commodity, not by the intention of the owner to transfer it to another State for sale,
nor by his preparation of it for transportation, but by its actual delivery to a common
carrier for transportation, or the actual commencement of its transfer to another State.
At that time the power and regulating authority of the State ceases, and that of Con-
gress attachee and continuee, until it has reached another State and becomes mingled
with the general mass of the property in the latter State. That neither the production
or manufacture of articles or commodities which constitute subiocts of commerce, and
which are intended for trade and traffic with citizens of other States, nor the prepara-
tion for their transportation from the State where produced or manufactured pnor to
the commencement of the actual transfer or transmisaion thereof to another Slate,
constitutes that interstate commerce which comes within the regulating power of Con-
gress. ' (In re Greene, 52 Fed,, 113.)

"The Jacob Dold Packing Company, therefore, while engaged in slaughtering and
packine cattle, sheep, and hogs within the State of Missouri, the carcasses and prMucIS
of which they intended to transport and sell for human consumption in other States
and Territories, or in foreign countries, were not engaged in interstate commercej and,
not being enraged in inteistate commerce, their business was in no sense subject to
be r^ulated Dy Congress under the interstate commerce clause of the Constitution.
The cases which I have quoted sufficiently indicate that the regulations which the
Secretary of A^culture, under the act of Confreas, sought to exercise, and which are
alleged m the mdictment, are clearly and exclusively lodged in the State of Minoiui,
and not in the Government of the United States; but what has been said may bo
supplemented by the language of Chief Justice Marshall in the great case of GibDons
t. Oeden, supra, as follows;

" That inspection laws may have a remote and considerable influence on com-
merce will not be denied; but that a power to regulate commerce is the source from
which the right to pass them is derivea can not be admitted. The object of inspection
laws is to improve the quality of articles produced by the labor of the country; to fit
them for exportation, or^ it may be, for domestic use. They act upon the subject
t .. __ ,. L __ ig ^ foreign — ' "■"" "'----

before it becomes an article of foreign commerce, or of commerce among the States,
and prepare it (or that purpose. They form a portion ot that immense mass of legisla-
tion which embraces everything within the territory of a State not surrendered to
the General Government, all which can be most advantageously exercised by the
States themselves. Inspection laws, quarantine laws, health laws, of every descrip-
tion, as well as laws for regulating the internal commerce of a State, and thoee which
respect turnpike roads, ferries, etc., are component parts of this mass. No direct
general power over these objects is granted to Congress; and, conBe<^uently, they
remain subject to state legislation. If the legislative power of the Union can reacn
them, it must he for national purposes. It must be where the power is expressly given

22 msPZOTLois akd aanDiita of qeaijs, bto.

tor aBpecial purpose, oris cleculy incidental tosome power which iaexprewly given.'
(Story COQHt., BBC. 1070.)

" It has not been suggested that tJie l^iaktion under diacunion may be tnced to
any other power found m the Gonstitutioa, and hence 1 do not diecun any other power
found therein. I think it clear from what has been said that Congreee has no power,
even if it had done bo by exprees l^ialation^ to create the officee of inspectors, ana
impoeo upon them, or upon aeenta appointed in purauance oE law by Qie beftds of
departmenM, the duties alleged in the indictment.^'

UNITED STATES IHSPBCnON LAWB.

These statutes may be conveniently divided into the following heade:

1. Food and dnu acts:

(a) Relating to ^iry products and imitations and adulteiationB thereof: Act August
2, 1S86, chapter S40, section 6, of this act, relating to the branding and marketiog, was
held conBtitutional in Dougherty v. United States (108 Fed., 56). Act May S, 1902,
diapter 784; no test of conBtitutionality. Act June 6, 1896, chapter 337; no test of
cons ti tutionali ty .

(b) Inspection of articles of food, drink, medicines, etc.: Act August 30, 1890, chapter
839; no teat of conatitutionaliCy. Act March 2, 1897, chapter 35S (t«a); held consti-
tutional in Sang Lung (85 Fed., 602).

(c) Relating to importation of drugs, etc., Revised fitatul«8, sections 2611, 2612,
2743, and 2933; no test of constitutionality.

(d) Act February 23, 1887, chapter 210; no test of conatitutionality.

it) Act June 30, 1906, chapters 291S and 3913; no teet of constitutionality.

2. Concemingsteam vessels: Revised Statutes, sections 4399-1462; no test of consti-
tutionality.

3. Vessels carrying immigrants and emigrants: Section 6, act March 3, 1893, chapter
206, amending section 8, act March 3, 1891 ; no («st of constitutionality. Section 16,
actMarch 3, 1903; no test of constitutionality.

4. Inspection of veaaelB carrying passengers: Section 11, act August 2, 1SS2; no test
ctf constitutionality.

5. Inspection ot mines in Teiritoriee: Act March 3, 1391, chapter 564; no teet of con-
stitutionality.

6. Inspection, weighing, etc., under customs laws; no test of constitutionality.

7. Inspection of animals: ActMarch 3, 1891, chapter 355, as amended by actMarch
2, 1895, chapter 169. Act May 29, 1884. Both held unconstitutional in U. 8. v. Boy«x
(8S Fed., 425). Act March 4, 1907, chapter 2907; no test of constitutionality.

DiGBBT or Statk Gban Inspection Laws.

|ReTl3«]SUtute3,l«0S,p.lS9I. 131.]

Warehouses divided into three classes (licenses required from circuit court of
county— bond filed — in Class A).

No grain to be delivered Erom a warehouse unless inspected by a duly authorized
inspector of grain. Railroad and warehouse commissioners can put inEpectore in
fliose elevators where the proprietors store their own grain witli that oi others to prevent
any undue advantage being taken. Elevator receipts bear on their face statement as
to the quantity and quality of grain received into store.

Governor, with advice and consent of senate, appoints chief inspector of every
city or county in which is located a warehouse of Classes A and B. To be a disinter-
ested party. But appointment in counties or cities containing warehouses of Class B
to be made only on recommendation of board of railroad or warehouse commiaBionera.

Chief inspector to have a general supervision of the inspection of grain, under ad^'ice
and immediate direction of the board aforesaid. Chief inspector can nominate to tiie
board assistant inspectors and other employees. Commissioneni authorized to make
such appointments. Chief and assistant inspector to take oath and give bond.

Chief inspector, assistants, and employees are governed by rules prescribed by the
board of commissioners, etc., who make ail rules for the inspection of grain — and they
it^ulate all charges, etc., which are to be made sufficient to meet the services of inspec-
tion, and no more.

Board exercises ajgeneral supervision over the inspection department, prescribing

INSPECTION AND OBADING OF GRAIN, £T0. 2^

lUtei of stonge to be published by each warehouee of Class A during the firet week
in January of eAch year^ which rates shall not be increased during the year, except as
provided lor. Ko diacnminatiDn to be made for the storage of grain.

In all places where there are ImUy appointed inspiectore of groin no proprietor or
manager of a public warehouse of Claae B can receive any grain unless eame has been
gnded and inspected.

Any owner or consiffnee dissatisfied with inspection, or who does not weigh his grain
to BO into store, shall tie at liberty to withhold it from storage, i. e., from going into a
public warehouse.

Committee of appeals provided for, and their

[RtTimd Stotata of, B. TB23 tt •«),]

Board of railroad and warehouBe conunisiraierB. Th«y appoint chief inspectoif ~
two yean. He has a general supervision of the inspection of grain, under the inmna -
diate direction of the board.

Certain warehouBBs designated as "public." License. Bond. No diBCrimination
in storage of grain, but charges to be uniform. Grain received at public warehouse*
to be inspected and graded by a duly authorized inspector. No grain to be delivered
from a public warehouse unless it be inspected. (Various other provisions analogous
and some identical with those of Illinois.)

Chief inspector has a general supervision. Chief inspector nominates deputies and
such other employees as may be necessary (provisions as to salaries, etc.).

Conunissioners eetablish the grades of grain. Commisnoners can subpcena witneaas.
(Attachment for contempt of courts.) Wei^unaeters provided for.

[RSTted Lavi, mc 9UT, at nq.)

Elevators located at 8t, Paul, Minneapolis, and Duluth, and other points in the
State which are now or may hereafter be uesignated as terrainBl points, in which grain
is received for stora^ in bulk, and that if different owners mixed togeuier, or so stored
that the identity (3 the different lots or parrels is destroyed, shall be public war^
houses known as terminal warehouses. License. All grain to be inspected on receipt.

All grain received at a terminal warehouse to be inspected and graded by a stllte
inspector, and reinspected in like manner upon delivery from such warehouse.
CSia^es of same paid by warehousemen and added to the storage.

Htnneapolis and Duluth grain inspertioo. Boards provided for two yean' service.
The "Minnesota grades" established by these two Doardt. They appoint a chiel
inspector; two years. Deputy inspectors provided for; deputy inspectors of St. Ptuil,
Hinneapolis, and Duluth styled chief deputies. "

Inspectors to inspect and grade all grain received at or shipped from ani/ terminal
wareiiouee, whether in car or boat load lots. Appeal to nearest board of grain appeals
is provided for. Not necessary to have grain stored, upon giving proper notice, etc.
Weighmasters provided for. All moneys coming into state treasury through this
means is appropriated to the salaries of this department.

The inspection boards were formerly known as the board of appeals.

[BiBiu'> Anut. IndtaosStatuta.]

Board or county commiffiioners in any county may appoint inspecton— four yMM
nnlen removed — to inspect within said county, when required, salt, beef, pork, flonr,
and hay.

There sh^ be appointed annually, by the board of trade or other commercial organ-
ization, one or more inspectors of grain or other property for the county where such
board is organized, and in case there be no such organisation in any county then Iftie
judge of the circuit court may appoint such inspectors (oath prescribed). Where
there are two or more such oi^anizations in any city the one whose members deal most
exclusively in grain or produce shall make such appointment, and shall provide for
*"" compensation; and for that puipnee may fix a schedule of fees to be paid by the

owners of such property as may

purpose may
be inspected.

24 iKBPEonoN ANT OBADurQ OF qraut, etc.

Such inspector nuy claeai^ uid deWnnine the grade to which any article of prop-
erty submitted to his ins^ction belong; but where there is a board of trade or other
commercial oi^anizatioD in such county it ^all have the exclurive authority to fix
the grade of property, defimng what shall constitute grades Noe. 1, 2, etc.^ the
inspector detennining only as to what grade the same belongs. Where tiiere is no
Bucn organization in any cohnty, then the grading and rates of compensation adopted
by such organization in the city nearest the point where such grain or other property
u inspected diall govern the inspector in bis inspection.

Department of record established for inspection and weighing of grain — called state
giain inspection department. Such department has full cnai^e of the inspection and
weighinf^ of grain in the State at all railroad terminals, public warehouses, or other
points within the State, wherever State grain inspection and weighing may be eetab-
lished at the discretion of the chief inspector.

Governor appoints suitable person, with confirmation of the senate, to be known
as chief inspector of grain for State of Kansas; two yean' service.

Duties: 1. GeneralsuperviBion of inspection and weighing of grun. 2. Supervise
handling, inspection, and storage of gram. 3. Establi^ neceseary rules and regula-
tions. 4. To keep proper rectnds. 6. Investigate complainta of fraud in the grain

Bond, SIO.OOO.

Chief inspector can recommend to governor a suitable person as supervising inspectw
of each city, town, or place in the State where one or more public warehouaea may
be doing bustneae under the law.

They shall visit daily the elevators and railroad tracks, supervising inspection,
with a view to securing a uniform inspection of grain.

A supervising weighmaster also to be recommended for similar placee. He shall
mipervise weighings, mspiect scales, etc. Assistant inspectoie, assistant weighmasten,
and other employees similarly provided for.

Governor to make such appomtments if fonnd by him to be nece«ary.

Assistants bonded, $5,000.

Governor appoints three pereons as "Grain inspection commission," they to estab-
lish the '' Kansas grades; " two years, $100 and mileage.

Samplee to be provided by inspectors.

Various fees provided.

These inspection charges a lien, and treated as advanced chafes whenever grain
is in transit. Collected and paid by common carrier. Monthly report of the chief
inspector, and money collected paid into state treasiuy.

The various sakries provided for. Provided, that if at any inspecting point tha
revenue is lees than sakry of an assistant inspector, that branch oi the service io»,y
be abolished by chief inspector or an arrangement may be made with such officer
to accent the revenue coming from such a place as full compensation for his servicea.

Penalties provided for neglect of duty or false inspection.

Only quaTified inspectors to act — ^misdemeanons.

Action of state inspection officers conclusive to alt parties in interest.

Penalty for bribery.

Decision of assistant inspectors final, unless an appeal be taken as hereinafter pro-
vided for.

Beinspection may be called for in case of dissatisfaction with grading of giaioi or
an appral taken to a standing committee of three (appointed by chief inspector at
every point where state inspection may be established), this committee to consist
of experienced grain men; decision final; $3 per case to he paid to said committee
before any appeal entertained (as a sort of security for costs), going to committee IJF
appeal sustained, and going back to complainant if overruled.

Nothing in this act to prevent anv person selling grain by sample, regardless of grade.

State's legal department helps chief inspector.

Repealing certain acts inconsistent with the one io considetation.

Any shipper of grain weighed by state inspection department may get weight of
■une'from cnief inspector, etc.

STATE IN8PB0TI0N LAWS.

instances of state

INSPECTION AND OBADINO OF OBAIN, ETC. 25

Hie following ue tbe acta and the subjecta in reference to which they were passed:

New Ham^irt.—CtiAa of flaxseed, 1785, see Perpetual Iaw« of New Hampshire,
1789, page 193. Dimensionfl of Hhingles, atavee, and noopa. Ibid., page 1S8.

JfoHocfttuettt. — Sbinglee, etavea, and hoops. Acts ana Resolves of the Province of
Manachuaetta Bay, volume 3 (1742-1766), page 128 et seq., chapter 22. 8iie of caaka
to pickled fish. Ibid., jMge 1000. Act of 1757.

Rhode ItUmd. — Regulating the inapectiDn of beet, pork, pickled fiah, and tobacco.
and ascertBining the aasiae of casks, clapboards, shingles boards, etc.. Public Laws ot
Rhode Island and Providence Plantations, edition 1798, pages 509, 512, 522.

Connecticut. — Statutes of Connecticut, edition 1786. For aacertainii^ the asrize oi
casks used for liquor, beef, pork, and fiah, pages IS, 312. There were sworn packers
of tobacco, whose duty it was to brand caelu.

New York.—lA-wB, edition 1786. All fiour for esporlation to be packed in casks of
a certain size and make. No flour to be exported without having been inspected,
1785. chapter 35, page 197. No pot or pearl aahes to be exported before inspection.

JV«ii> /«rnw.— Capacity of meat barrels. Act of April 6, 1676. Learning and Spicer,
page 116. Capacitv ot barrels, ibid., page 120; brickfi. ibid., 459; barrela, ibid., 508.
Aseiie of bread, ibia., 545,546, 547. Size ofcaaks, act of 1725. Staves, hoops, sbinglee,
etc., act of September 26, 1772. Size of casks, act of September 26, 1772.

PeTmeylvaiaa.—'La.'wa of Penasylvania, A. J. Dallas, 1797. Dimensions of casks tor
beer, ale. pork, beef, etc., page27et seq. Dimensions of staves, headings, boards, and
timber, ibid., page 452, act of 1781, chapter 201.

Maryland. — Gauge of barrels for pork, oeef, pitch, tar, turpentine, and tare of barrela
for flour or bread, 1745, chapter 15. Flour barrels, 1771, chapter 20; 1781, chapter 12.
Stavee and headings, 1746, chapter 15; 1771, chapter 20; 1786, chapter 17. Salted
trovisions, 1745, chapter 15; 1786, chapter 17. Hay and straw, 1771, chapter 20.
Flour, 1781, chapter 12, Fish, 1786, chapter 17. Liquor casks, 1774, chapter 23:
1777, chapter 17; 1784, chapl«r83; 1785, chapter 87. Many other Maryland provincial
laws, prescribing the length, superficial and solid measure, weight, and capacity of
domestic OToducts are collected on pages 45-^7 ot Ae report of Mr. A, J. Alexander on
the Standards of Weights and Meaauiement in Maryland.

Fir^Tita.— Laws of Viivinia Revisal 1783, pages 47, 188^ 192. Pork, etc., required
to be packed in barrels before exportation. As to contents, quahty, and stamps ot
hairels of pork, beef, pitch, tar, and turpentine, see ibid., page 47, act of 1776, chapt«r
43. Inspection of tobacco, and size of tobacco hogsbeads. Act of 1783, chapt«r 10,
sections 1 15, 20.

North Carolina. — Iredell's Laws of North Carolina, edition 1791. Dimensions of
beef, pork, and fish casks, stavee and headings and of boards, planks, and shingles.
Act of 1784, chapter 36.

8<mth Carolina. — Grimke's Public Laws. Dimensions and capacity of beef and
pork barrelH, page 209.

Qtorgia. — Waudn's Digest. Casks tor beef and pork. Size of barrels for pilch, tu,
and turpentine. Act of 1766, No. 140, amended by act of 1768, No. 178.

In the Isolation of the Province and State of Harvland. in reference to tobacco,
the dimensions or gauge of tobacco hogsheads was fixed by tne acta of 1658, chapter 2;
1676, chapter 9; 1694, chapter S; 1699, chapter 4; 1704, chapter 53; 1711, chapter 5;
1715, chapter 38; 1718, chapter8; 1717, chapter7; 1723, chapter 26; 1747, chapter 26;
1763, chapter 22; 1763. chapter IS; and 17S9, chapter 26.

Penmslvania. — Beet and pork, intended for exportation, when packed or repacked,
in Phihulelphia: 1 Brightly, Purdon's Digest, 1873, pages 157, 158. Butter and lard,
ibid., 188. 189; domwtic distilled spirits, ibid., 526; flaxseed, ibid., 708; flour and
meal, ibid., 711.

Delaware. — Size of casks for exportation of breadatuffs. Revised Slatutee, 1874,
page 363.

Ku^nta.— Tobacco, Code 1873, pages 739, 740. Fiab, ibid., 750; pitch, tar, tur-
pentine, salt, staves, shinglee, and lumber, ibid., 751.

Bhode /ilotut.— Public Statutes, 1882. Beef and pork caaka, chapter 3, page 294;
lime caaka, ibid., 298; fish casks, ibid., chapter 114, page 299.

Jfnifw.— Revised Statutes, 1871. Lime, cbapter39, section 3; pot and pearl aahea,
ibid., section 9; nalla, ibid., section 17; nsh, ihid., chapter 40, sections 7, 8, and 11:
cord wood, ibid., chapter 41, section 1; charcoal baskets, ibid., section 7; packed
diingles, ibid., section 16; staves and hoops, ibid., sections 18, 19; beef and poA
barr^B, ibid., chapter 38, sections 16 and 17.

New HantpMre. — General Laws, 1878. No salted beef to be exported except In
tierces, barrels, or half barrel of particular quality, weight, and dimensions, and daij
btmnded, chapter 126, MCtions 4 and 6; bntt^ and lardcaaka, chapter 127, page SOB; '

''X^

26. INSPECTION AND QBADINO OV QKAIN, BTO.

flah bairelB, tiercee, aod casks, chapter 129, page 310; casks ot pot and pearl ashes,
chapter 130, page 114.

MaaiachvMUi.—GeatmX Statutes, 1S60. CoskB for picklodfiah, chapter 49, aectitm
44; aJewivee, ibid., section 50; staves, ibid., section 85; hogshead hoops, ibid., sec-
tion 86; casks for pot and pearl sahee, ibid., section 167; k«gi for butteoT and laid,
ibid., section 14.

Confudtnii.— Oeneral Statutes, 1S75. Fish baneb, page 275, section 18.

FcnnonJ.— Revised laws of 1880, page 715. Barrels of flour, weight, etc.

New Jeruy. — Revision, 1S77; beef and pork bairels, flour and meal casks, ibid., 437;
herring casks, ibid., 467.

Geotvia.— Code, 1867; flour barrels, section 1562; turpentine barrels, ibid., section
1573.

Louitiana. — Digest of Statutes, volume 2, 1870; beef and pork barrels, page 38,
section 28.

tTtMonnn.— Statutes of fish casks, paee 856, section 22.

Miehigan.— Compiled Laws, 1871, voliime 1, paecs 474-485. Size and weight of
beef, pork, and fish barrels, butter and lard ban^b; flour and meal casks; pot and
pearl ash casks.

Soulh Carolina. — Geneial Statutes; flour barrels, page 275; beef barrels, ibid., 278;
Staves and shingles, ibid., 280.

North CoroHna.— Battle's Revisal; flour barrels, chapter 61, section S4, page 496;
beeF or pork cables, ibid., section 50, page 499; fish barrel^, ibid., section 53, page 499;

* '— ii tar, and pitch borreis, ibid., section 54, page 600.

M.— Statutes, 1871; butter or lord casks, section 1832; flour barrels, 18S4.

jitonaa. — Digest of Laws, 1881, page 579; sizes of tar and turpentine barrels.

MiMsiuippi.—Flom and pork barrels; Revised Code, 1880, section 949, pace 280.

Ohio.- — Revised Statutes, 1880, volume 1; hogsheads of tobacco, page 264, section
391; fish barrels, ibid., section 4300: spirit barrels, section 4327; oil barreb, section
4293; pot and pearl ash barrels, section 4291; beef or pork barrels, section 428S; floor
and meal barrels, section 4281.

The le;^Blatioii of Maryland since 1787 oSords the follomng instances: Pot and peail
ashea, intended for exportation from Baltimore or Georgetown, in Mont^mery County,
were required to be packed in a particular manner in casks and to be inspected and
weighed. 1792. chapter 65. A similar provision was made to prevent the exportation
of unmerchantable flour and unsound ^I«d provisiona from Havre de Grace by the
act of 1796, chapter 21; and from Chester, by the act of 1797, chapter 7. By the act
of 17S1, chapter 12. provision was made to prevent the exportation of bread and flour
which were not mercaantable from the town of Havre de Grace. This act was enacted
for a limited time only and expired. It was revived and enacted into a permanent
law by the act of 1801, chapter 102, section 2, and is sot forth in a note to the section
last referred to in the act^ of IdOl. By section 6 of the act of 1801. chapter 102, the
size of all flour casks brought into Baltimore town for exportation, the character of the
materials and make, the manner oJ hooping and nailing such hoops, the particular
lei^th of the stays, the diameter of the casks at the heads, and the number of pounds
of flour to be in each cask are specifically prescribed. The size of laths and the mode
of packing them was reaulaled by the act of 1811, chapter 69. The number and char-
acter of hoops upon caska of ground black oak bark exported from the port of Baltimore
was prescribed by the act of 1821, chapter 77. The groee weight ot a hogabeod ol
tobacco, as well as ita net weiB'ht, was required lo be marked on the hogshead by the
act of 1789, chapter 26. section 21. The dimensions of the hogsheads in which tobacco
was required to be packed was prescribed by section 35 of the act last cited. Further
iliustration mav bo found in the following legislation: Weighing wheat, 1858. chapter
266, section 5;'l'>arier v. Warfield (13 ild., 300-304); fish barrels and tierces. Public
Local Laws, article 4, section 309; flour, ibid., section 352; domestic distilled liqiMHO,
ibid., section 360; dour barrels, 1 Maryland Code, article 96, section 20.

BT&TB8 NOW aA.VINO LAWS PBOVIDINO POB THB INBPECITOM OF FBBSONU.

Arkantas. — Oils and fluids, chapter 85; fruit treee, chapter 86; timber, chapter 82;
tobacco, chapter 88; wine, section 6104. Arkansas Digest, 1904.

Cal^omia.—GoB meters, sections 115 et se^.; steambijats, section 549. Code, 1906.

FUmda. — Marks and brands, including hides, sections 3334-3342; boilers, section
3800; fertilisers, section 1262; naval stores, sections 3131 et seq.; timber and lumber,
sections 1244. 1266. General Statutes. 1906.

Oeorjin.— Flonr, g*»in, corn meal, etc., section 1630 {inspection i* not obligaton',
but permissive); lumber, section 1595; fertilizers, section 1561; illuminating oib.

INWEOnON AND (HULDINQ 07 GBAI», EIO. 27

■ection 1588; liquota, sections 1&31--1535; pitch, tar, turpentine, and Tosin, sections
1596-1599; cotton and rice, sections 1601-1620. Code, 1895.

Idaho.— Sheep, eectioa 693; horticultural producla, section 760. Code, 1901.

IlHnoit. — Grain, 1594, section 146; coal oil, etc., 142, sections 1-8. fluid's Revised
Stetutcfl, 1905.

Indiana. — Grain, eections 8718, 8719: nurseriee, eections 7042a-T042jt,- oil, sections
6&96etBeq.; salt, flour, brands on bftirels, bales of hay, sections 7015etBeq.; tobacco,
sections 7029 et eeq. ; natural gas, sections 7504 et eeq. Bums's Annotated Statutes,
1901.

Iowa. — Sheep, sections 2343-2347; petroleum producla, sections 2503-2510; milk
and cream, sections 2524-2526; lumber and shingles, sections 3030-3033. Code, 1897.
Nursery stock, sections 2575«-2575/, Code, 1902.

Kantat, — Sheep, section 7388; diseased cattle, sections 7420, 7447; grain, section
3224; oils, section 4290; brandu on animals, section 7412. General Statutes, 1901.

£Vnfuaby.— Chapter 71, Kentucky Statutes, 1903, provides for inspection of tobacco,
flour, salt, salt beef and pork, lard, spirituous liquors, hydro-carbon oils, or oils made
from coal, petroleum, and well oil.

XiCminana.— Oils, act 37, E. S. 1877 and act 126, 1898; tobacco, sections 1823 ct seq.;
beef and pork, section 1848; flour, beef, and pork in parish of Jefferson, section 1869;
flour, for town of Washington, section 1872. Consolidated and Revised Laws, 1904.

ifoirtc.— Fish, section 5 et seq.; flour, section 1 et seq.; lime, section 2 et seq.;
leatfaer, section 15 et seq.; milk, section 9 et seq.; petroleum, section 9 et seq.; vine-
gar, section 17 et seq. Revised Slatutee, Maine, 1903.

if ar^IoTuf. -^Article 48 provides for inspection of illuminating oils, tobacco, trees
(for horticultural purpoeee), scaffolding, feed stufi (defined not to include hays and
straws, whole seeds or unmixed meals, nor wheat, rve, buckwheat, bran, or middlings;
but includee linseed and cotton-seed meal and nulls, pea meals, cocoanut meals,
gluten feeds, dried brewers' grains, chop feed, etc.), adulterated foods, vine^, fer-
tilizers, oysters, weights and meaauree. and cords of wood. Section 72 provides for
the inspection of wood and lumber. Public General Laws, 1904.

MassachuielU.^AninialB, ballast, fish, gas, hay and straw, lime, liquore, milk, and
petroleum. Revised Laws, 1902.

Miuisnppi. — Food and dru^ are inspected under chapter 53, Code Mississippi, 1906.

Alidnqan. — Bees, commercial fertilizers, feeding stuffs, food, meat, milk, oils, and
salt are inspected under Compiled Laws, 1906.

J/innwota.— Grain, section 2047 etseq.; oil, sections 1724-1733; food and animals,
eectioQ 1736 et seq. Revised Laws, 1905.

MUtouH.— Food, section 5508; beer, section 7693; grain, section 7624; petroleum,
section 7582; tobacco, aection 7598 et seq. Revised uiws,

Ntbraata. — Bees, page 187; gasoline, page 1149; oils, page 1145; sheep, page 116.
Compiled Statutes, 1907.

New ntmi.pthvt. — Animals, section 3S5; hay, section 393; milk, section 399 et seq.;
petroleum, section 395. Public Statutes, 1901.

New Jmey.—ln 1871 incorporated by act of legislature the Jersey City board ol
grain weighers and measurers.

New York. — Dairy products, pages 35, 37, 62; flour, etc., page 1815; diseased

1, page 3739.
New Vork ReviseH fftatutes, 1901.

North Coroiimi.— Bacon, section 4670; beet, sections 4655-4670; butter, section
4670; cheese, ibid.; concentrated commercial feeding atuffs, section 3967; cotton,
eections 4674, 4676; cottou-aeed meal, sections 3957, 3961; fertilizers, sections 3949-
3951, 3953, 3956; firewood, sections 4067, 4668; fish, sections 4655, 4657, 4670;
flaxseed, section 4655; flour, sections 3973-3976, 4670; lumber, sections 4936, 3660-
3663, 3665; food, sections 3973-3976, 4670; pitch, flections 4655, 4G58, 4666; pork,
4655, 4670; provisions and forage "or other article of commerce." eections 4G37, 4669;
rice, sections 4655, 4670; shingles, sections 4659, 4665; tar, sections 4655, 4658, 4666;
turpentine, sections 4655, 4658, 4666. Rcvisal ol 1905, chapter 99.

OAio.— Apiaries, beef and pork, biscuitjbutterandlard,candy, feed stuffs, fertilizers,
fish, flouTj food and drugs, intoxicating liquors, lumber, maple sugar, milk, butter and
cheese, oils, pot and pearl ashes, salt, soap and candles, tooacco, vinegar and wines.
Laning's Be^-ised Statutes, 1905, Title V, cnapter 8.

Fenntylvania.—'iiea.t and food products, under act approved May 25, 1907, vested in
state sanitary board .

Article 111, section 27, of the constitution of 3873, provides:

"No state office shall be continued or created lor the inspection or mfiasuring of any
metvllaDdise, manufacture, or commodity, but any county or municipality may

28 insn:ction and QRABINO OV obain, btc.

appoint Buch officera, when authorized by law." Held, to abolieh state iDBpectora.
(Pepper and Lewis's Digeet of Decisiooa: Ency. Law, 1898.)

Uiider ihe decisions the practicea of county or municipal inapectnis have nnwn up
and the inspection of anthracite and bituminous coal and otAer articles Ebb been
provided tor.

South Dakota.— Oi]B, sections 107-123; Annotated South Dakota Statul«B, 1901.

TenrtMiM.— Tobacco, sections 3379-3407; oils, etc., sections 340S-3434. Tennemee
Code, 1906.

Texiu.— Food, articles 422, 438; hides and animaU; sheep, sections 5357-5364; oils,
ucder act April 5, 1889. Sayles's Civil Texas Code, 1897.

IT'iaA,— Foods, sections 2446, 2450; liquors, ibid.; bees, sections 139-143; scales,
section 1534; fruit trees, section 1177. Reviied Statutes Utah, 1898.

Fir^nta.— Cattle, sections 2205-2215; flour and other commoditiea, section 1S44
et eeq. ; tobacco, section 1897 et seq. Hurst, Code Virrinia, 1905.

Fermont.— Flour, sections 4303-1314; hops, sections 4323-1326; iron and nails, sec-
tions 4315-4319; lime, sections 4320-1322; lumber and shingles, 3064; oils, sections
4710,4711. Vermont Statutes, 1894,

Witt Virginia. — Animals, section 368; oils, section 409; petroleum, sections 2S31,
2834. Code West Virginia, 1906.

IFucontin.— Tree bells, section 1471; oils, sections 1421a-Tn; logs, lumber, etc.,
sections 1731-1747; foods, page 644. Wisconsin Statutes, 1898.

Wyoming.^hive stock, including specialprovision tor sheep, sections 2048-2100;
oil, sections 1200-1208. Revised Statutes Wyoming, 1899.

New Jf«n(U.— Hides, chapter 41. -Acta 1900.

fSlxty-Ont CoDgrasi, noand aenloQ. H. R. 13432.]

Be itenaetidby the Senate and Himie of Repretentativet of the United State* of Amenta
in Congret* anemblrd, That the Secretary ol Agriculture shall organize in the Bureau
of Plant Industry ofhis department a section of grain inspection and grading, and shall,
according to the rules of tlie civil service, appoint such experts and other employees
as may be deemed by him necessary to carry out the provisions of this act.

Sec, 2. That said Secretary shall also appoint, in accordance with the rules of Oio
civil service, at each of the following cities, to wit, Portland, Maine; Boston; New
York; Philadelphia; Baltimore; Chicago; Minneapolis; Duluth; Superior; Kansas
City, Missouri; Saint Louis; New Orleans; Seattle;Tacoma; and San Francisco, and
at such other important centers of interstate trade and commerce in grain as he may
consider necessary or proper for carrying out the provisions of this act, one chief grain
inspector and such assistants as may be required to inspect and grade grains as herein
provided.

Sbc. 3. That said inspectora shall be paid a salary or compensation to be fixed by
the Secretary of Agriculture, which sbiul correspond as near ae possible to salariea
and compensations paid other officen or employees of the Government performing
similar duties.

Sbo. 4. That the Secretary of Agriculture shall make all needful rules and r^ula-
tions governing the inspection and grading herein provided for.

Sbc. 6. That said Secretary of Agriculture be, and he is hereby, authorized and
required, as soon as may be after the enactment hereof, to determine and fix, accord-
ing to such standards as he may provide, such claasificatione and Rrading of wheftt,
flax, com, rye, oats, barley and other grains as in his judgment the US^es of tnule
may warrant and permit. In the inauguration of the work herein provided he may,
if in his judgment thelaest interest of trade and commerce in said grains reauiie ft,
adopt the standards of claasification and grades now recognized by commercial usagca
or established by the laws of any State or by boards of trade or chambers of com-
merce, and may modify or change such classifications or grades from time to time aa
in his judsiiient shall be for the beet interest of interstate and export groin trade.

Sec. 6. That when such standards are fixed and the claasification and giadee deter-
mined upon the same shall be made matter of permanant record in (he Agricultural
Department, and public notice thereof shall be given in such manner as the SecT»>
tary shall direct, and thereafter such classification and grades shall be known as tha
United States standard.

Sec. 7. That from and after thirty days after such classifications and grades have
been determined upon and fixed, and duly placed on record as hereinafter provided,
such classification and grading shall be taken and held to be the standard in all int«r-
state commerce in grain.

iKSPEonoH Aim (mADiHO ov aoiiN, Bic. 29

Szc. S. That it sbftll be the duty of aoy railroad company, ateamehip company, or
other firm or corpoiKtion or private individual engaged in tne transportation of gmin
destined to any State, Territory, or country other uian that in which it is received for
iOBpection, or received from auv other State, Territory, or country than that to which
it IB c(»ungned, to notify the chief grain inspector at the place of destination of any
coDsigiunent of grain, within twenty-four nour« after its arrival, that a shipment,
ou;^, or load of grain is in ita, their, or hia hands and the place of destination of nid
gmn.

Ttiat it shall be unlawful for any person herein named to wUlfully unload or other-
wise dischai^ any load, catgo, or conHigmoent of gialn which hse been at any time
during the period of its transit an article of interstate commerce and which has not
been inspected in accordance with the provisions of this act until the same has been
inspected as provided herein.

Upon the receipt of such notice the said chief inspector shall cause the said grain
to be inspected and graded in accordance with the clAHeification and standards fixed
by said Secretary, and to issue and deliver a certificate of inspection showing such
(mule and classincation in such form as may be provided by rules prescribed by said
Secretary.

Sbc. B. That it shall be the duty of said inspectors to inspect and grade all giain
which at the time of inspecting and grading of the same has been Bhip[>ed from any
other Btat«, Territory, or country than the State, Territorv, or country in which the
same is inspected, or is intended for shipment into any otner State, Tenitory, or for*
eign country before the same is unloaded from the car, vessel, or other vehicle in which
the same was or is being transported, and to chatve and collect from the owner thereof
such fdes for the inspection or said grain as mav be fixed by the Secretary of Agricul-
ture, who shall have the power to fix the rate oi chareee for the inspection of grain and
the manner in which the same shall be collected, and which charges shall be reflated
in such manner as will, in the judgment of the Secretary of Agriculture, produce
sufficient revenue only to meet the neceeeary expenses of tne inspection service, said
fees to be covered into the Treasury of the United States as miscellaneous receipts in
the same manner as for other miscellaneous receipts.

Skc. 10. That no inspector or deputy inspector of grain shall, during his term of
service, beinterested,directly or indirectly, in the handlii^, storing, shipping, purchas-
ing, or selling of grain, nor shall he be in the employment of any peraon or corporation
interfiled in the handling, storing, shijjping, purchasing, or selliog of gmin.

Skc. 11. That any person interested in any consignment of grain inspected under
the provisionH of this act may appeal from an inspection made by any assiatant inspector
to the chief inspector at the jramt where such grain is inspected, and from said chief
inspector to the Secretary of Agriculture. Said Secretary shall make all needful
rules and rmilations to govern appeals.

Sbc. 12. That when any grain which havii^ been inspected and certidcate of
inspection issued hereunder is mixed with any other grain not inspected or with
grain which has been inspected and certified at a diSerent grade, the same shall not
be shipped out of the State where such mixing is done without being reinspected and
gradeai any such person or corporation shipping such grain as aforesaid without rein-
spection shall be deemed guilty of a misdemeanor.

Sac. 13. That the shipment or consignment of any grain aforesaid from any of the
places mentioned herein and at such other important centers of interstate trade and
commerce in grain neceeeary for carrying out the provisions of this act to another
State or fc«eign country without the same being inspected and graded as herein pro-
vided is hereby prohibited; but where grain nas been once inspected hereunder,
and remains unmixed with other grain and grades of grain, the same need not be
reinspected at the place from which it is exported: Proindtd, Aoic<vrr, That said
Secretary may, in his discretion, reinspect any cargo of such grain before the same is
exported.

Sbc. 14. That it shall be the duty of the inspectors and assistanls to investigate
the handling and weighing of grain inspected by them, and to make such report
thereon as the said Secretary may require; and it shall be the duty of every person
or coi^Kiration weighing such grain to allow inspection of such weighing and handliog
by said inspectors.

Sbc. 16. That when samples of grain are received for inspection and grading at any
of the places named herein, it shall be the duty of the chief inspector or his assistants
to inspect and fix a grade upton said groin and to make a report and transmit the same
totheowner of such sample of grain, and the Secretary of Agriculture is hereby author-
iaed to fix such chat^ as in his judgment is reasonable for the inspection ana grading
of such sample <^ gnun, such charges to be paid by the owner of such sample oi grain.

INBPEOTTON AND QRABINa OF ORAIN, ETC.

the proviaions ot thia act shall be deemed guilty o! a misdemeanor, and upon convic-
tion thereof shall be punished by a fine in a sum not to exceed five thousand dolian,
or by imprisonment not to exceed one year, or by both fine and imprisonment.

Sec. 17. Thnt for ealariee and for all other expenses in the city of Washington or
elsewhere deemed necessary by the Secretary of Agriculture to cafry out the provi-
sionB of this act there is hereby appropriated, out of any money in the Treasury not
Otherwise appropriated, eight hundreJ and fifty thousand dollars.

Sec. 18. That this act shall take effect and be in force from and after the firat day
of July, nineteen hundred and ten.

STATEHEHT OF lOt. OEOBOE 8. JACKSON, PRESIDENT OF THE
BAITmOEE CHAMBER OF COHHERCE, AND GRAIN INSFECTOR.

Mr. Wangee. First give your name and position to the reporter.
Mr. Jackson. I am president of the Chamber of Commerce of
Baltimore, and a grain inspector. The Baltimore Chamber of Com-
merce opposes this bill for several reasons. Amonfst others is the
absolute inability of the government ofJi'^ials properly to inspect
grain. It is a matter that re<]uireE more than writt«n laws to make
rules to inspect such a commodity as prrain. The grain that is grown
in the United States is grain produced in sections of the country
where the climate is so different, and where the kind of grain is so
different, and where the same seed planted in two or three different
sections produces crops so entirely different that if you are going to
grade grain under fixed rules, made bv people who do not understand
the grading of grain, you will immediately be in such hot- water that
it would be impossible to handle the crops of the United States except
under the most adverse conditions.

There is a great amount of talk about the complaints concerning
grading. The complaints that have been discussed in other com-
mittees have been under two heads; the complaints of the farmers
that they do not get their grading on their grain coming to the mar-
ket, and the complaints of people who have said that there are com-
plaints from foreign countries tnat our grain is not properly inspected
out, thereby making a falst^ market in Europe and other countries
for our grains. That is, that the farmers of this country by this
false inspection, as it is claimed, do not get the full value of the grain.
Now, gentlemen, it seems so foolish tt» think that the merchants of
this country who have grain to sell would do such things that they
would kill their own business, that it hardly seems worth trying to
contradict that statement. Now, when this question was first
mooted^ two years ago, I traveled all over Europe for the purpose
of lindmg out whether this complaint was well founded or not.
There was a complaint in Europe, but the complaint was this, that
every other country except America sells its grain on the inspec-
tion of the buyer; that the men in Argentina and Kussia sell tlieir
frain at a certain price, say 2 red, but they do not get that price,
ut do get the price that the man who buys it says it is entitled to
receive m Europe. The merchants in this country will not sell that

Two years a^o an effort was made in Europe to force the market
by calling our mspection certificate names in order to get the market
into that forced condition, and instead of selling our wheat at $1.10

IHSPEOTION AITD QBADINO OF QKAIN, BTC. 31

a man on the otlier side would s&y, "This is not No. 2 red wheat; it
is only worth $1.06." Now, Argentina and Russia sell their grain at
a higher price on paper than America, but they do not get that price.
America gets more tor its grain than any other country, because it
insists on the fact that it shall sell its ^ain on the American plan of
inspection, instead of upon the buyer's plan of inspection, who is

nffuenced lai^ely by the market when it arrives.
Mr. TowNSEND. You say the Argentina dealer gets
Mr. Jackson. Yes; he does not sell it at that price, however, as a

farmer, but sells at SI. 10 delivered at Liverpool, subject to its being
of that certain and specific quality. He does not have the say as to
whether it really is or that specific quality. It is the man at Liverpool
that says that.

Mr. Adamsoh. If it does not come up to the prescribed grade, the
man that buys it determines that fact, does he ?

Mr. Jackson. Yes. ■

Mr. TowNSEJfD. Is it not a fact that they do reduce the grade on
Argentina wheat when they get it over there ^

Mr. Jackson. Yes, sir. The average, I should say, is 87 per cent
of the arrivals where a reduction of grade is made after arrival.

Mr. Adauson. It is regraded because the article does not come up
to the supposed grade t

Mr. Jackson. Yes; they do not sell it on their own grade. They
sell it on the buyer's grade, and a committee of three mercliants, who
are appointed at this port, go to this ship and take samples of it, and
say what its value is below the selling pnce at the time the valuation
is made, and they determine that. We can not get justice over
there, because the people who do it are the buyers.

Mr. Tow.vsEND. What are the Argentina shippers doing about that )

Mr- Jackson. They give the farmer 10 cent a bushel under that
valuation of the grain, the merchant does, so as not to be caught in
this position. In America the merchant is satisfied with 2 c^nts,
and he knows what he is going to get for it, but the farmer in Argen-
tina and in Russia has to take 10 cents under the price, because the
merchant who buys never knows what he is going to get for his grain
until the ultimate buyer has |>assed upon it.

Mr. Sims. Do you mean to say that they fraudulently undervalue
it?

Mr. Jackson. I say the buyer will take eveiy advantage to make
money for himself.

Mr. Sims. That would seem to be an organized purpose not to give
the true value for it.

Mr. Jackson. They say it is not up to grade.

Mr. SiMS. That indicates a frauaulent combination among the
buyers not to give the grain a just grading?

Mr. Jackson. That is my opinion. -Vmerica will not sell in that
way, and therefore they try to attack the validity of our certificate.
My firm hea been shipping grain there thirty or forty years, and I
have hardly ever hearu complaints of the quality. They would like
us to sell tnem the grain on such a basis that they could determine
.what the ^ain is,and not ourselves. We do not settle the grading
of the gram. The chambers of commerce of the various markets
that we ship from fix the grades. If the foreign buyer could buy
OQ the American grade at tneir own inspection, just think what an

82 INSPECTION AND GBADINO OF GBAIN, BXO.

advantage they would have, because all grain will not cany in proper
condition.

Mr. Sacs. So far as American grain is concerned, I understand
the European purchaser accepts the grade as fixed here t

Mr. Jackbon. Yes, as final.

Mr. TowHSEND. As between the grain of Ai^ntina and United
States grain, which receives the better price 1

Mr. Jackson. The American grain. The farmer gets a better
price for the American grain.

Mr. TowNSEND. I am talking about the shipper, the man who
sells the wheat in Liverpool ?

Mr. Jaokson. As a matter of quotation price I should say ihe
Ai^ntine man does, because he guarantees that the wheat he sells
is what the buyer wants. The American only guarantees that it
shall be certified as of the grade he sells.

Mr. TowNSEND, So that the result of that is a benefit to the
Argentine shipper ?

Mr. Jaoeson. No, sir; because he does not actually get that money.

Mr. Adamson. After adjustmg the grades and making the setUe-
mente, who gets the most money t

Mr. Jackson. The American snipper, and consequently the Ameri-
can farmer gets more.

Mr. Adauson. The same thing appUes to cotton. If it is higher
or below good or middling the pnce is determined in accordance
with the grade. You have got to adjust the price according to what
itist

Mr. Jackson. Yes. The American merchant will not sell on the
buyer's inspection. He will only sell on the inspection of the port
he ships from.

Mr. Sims. Are the graui raisers of this country and the farmers
opposed to this bUl f

Mr. Jackson. I could not speak for them. I do not know.

Mr. SiHB. You say they get a better price under the present
method?

Mr. Jackson. Yes. If we had to pay for the grading on the other
side we would be compelled to pay much less to the farmer here for
that grain, because we could never know what we are going to get
for the grain until the grade is determined on the other side.

Mr. Adamson. You would regard the doubt in your own favor and
take off enough to allow for that t

Mr. Jackson. Yes. Otherwise we would have to go out of business.

Mr. SiHs. Does the wheat actually deteriorate between the Ameri-
can port and the foreign port 1

Mr. Jackson. No, sir; it does not.

Mr. EscH. Was not the American market damaged some time ago
by statements to the effect that shipments of com from Galveston
and Norfolk and other ports were found to be soft upon arrival on
the other side}

Mr. Jackson. I think so.

Mr. EsoH. Would a grain inspection prevent such shipments 1

Mr. Jackson. No, sir.

Mr.^ EsoH. And thus limit or lessen the injury to the reputation c^
American grain abroad ?

INSPECTION AND GRADING OF GRAIN, ETC. 83

Mr. Jackson. No. The fact that it is inspected by the GoverD-
ment would not make the com keep any better in transit.

Mr. EsCH. The injury conies from shipment ?

Mr. Jackson. Yes. Corn will change while crossing the ocean,
and it will change while it is in storage and while it is in your ware-
house.

Mr. Adahson. It changes by reason of coming in contact with
moisture 1

Mr. Jackson. I am not capable of s^ing what causes it. Tech-
nical people assign various causes, but I should say if you put it in
this room to-day find should come here next week you might find it
would have gotten soft.

Mr. Adahson. If it is exposed to damp weather it certainly will
become soft.

Mr. Jackson. Yes; and if it is exposed to heat it will chai:^.
Now most of the trouble we have found in the last year has oome
from the fact that the grain is loaded over the shaft of the steamer
crossing. The Government has had experts making tests on that
in the last year, and nearly all the complaint has been caused by the
heat in those shafts coming up into the com and changing it.

Mr. Sims. The complaint does not come so much as to wheat t

Mr. Jackson, No, sir; wheat is not affected by climatic change or
moisture or heat like com.

Mr. Sms. Is it affected at all i

Mr. Jackson. Of course if you subject it to a great heat it
would be, but corn is liable to undei^o a greater change. This
country is gradually getting out of the wheat export business. The
whole thing now would apply to wheat, which is a commodity which
changes in its nature by its surroundings and by its own inherent
qualities.

Mr. Sius. You say our exports of wheat are gradually declining
ail the time?

Mr. Jackson, Oh, yes; tremendously. There is hardly any ex-
port of wheat now,

Mr. Sims, When it gets so that we do not export any we might
import some occasionally ^

Mr. Jackson. We will certainly have to import it, sir, because
it is selling right across the Canadian border at 96 cents, and in
Liverpool at 95 cents, and in New York at $1.15, and in Cliicago
at $1.03,

Mr. Sims. What is the tariff in Canada?

Mr. Bartlett. Twenty-five cents a bushel, I tliink.

Mr. Sms. If we had no tariff on wheat the price would be cheaper
than it is now ?

Mr. Jackson. Yes; we would put the price of Canadian grain on
a parity with American.

Mr. Sims. We are complaining of the high cost of living and of
breadstuffs, and if the tariff were taken cm, the cost of flour would
be cheaper ?

Mr. Jackson. Yes, sir.

Mr. TowNSEND. Do you think that bread would be cheaper here
if we had free Canadian wheat 1

Mr. Jackson. I do.
45331t-10 3

34 INSPECTION AND GBADING OF GRAIN, ETC.

Mr. TowNSEMD. Is bread cheaper in London than it ia here i

Mr. Jackson. Yes. In Liverpool wheat was 97, and in Chicago
102.

Mr. Adamson. You can buy twice as much sugar in London as you
can here for the same money.

Mr. Stevens. Have you kept close track of Canadian wheat at
Winnipeg as compared with Minneapohs wheat or Duluth wheat t

Ml-. Jackson. Yes, air; that is my business.

Mr. Stevens. Don't you think that in the last five or six years
during some months of the year wheat has been actually higher in
Winnepeg than in Minneapohs or Duluth^

Mr. Jackson. Of course.

Mr. Stevens. So that it is not true that throughout the year there
is a sufficiently lower price at Winnipeg to warrant importations into
the United States ?

Mr. Jackson. Your question is rather misleading. You say it is
not true that it warrants it. Sometimes they do not grow any wheat
up there. Sometimes they have a famine.

Mr. Stevens. That has not been true for the last five or six years.

Mr. Jackson. On the average, wheat is so much lower in Winnipeg
than it is in the United States that it is almost always from 5 to 10
cents a bushel cheaper than in America.

The Chairman. There are about three or four months in the year,
as I recall, when wheat is actually higher in Winnipeg than it is in
Minneapolis or Duluth. Is not that true "i

Mr. Jackson. I could not say that, because Winnipeg gets her
wheat after those two. If the new crop had not come in at \Vinnipeg
it might be higher there than in Minneapolis, but from December to
July the price, on the average, at Chicago would be very much higher
than the price at Winnipeg.

Mr, Stevens, The freight rate, I see, is 12 cents from Winnipeg to
Minneapolis.

Mr. Bartlett. Twelve cents a hundred )

Mr. Stevens. Yes. If that were true it would be about what
difference "i

Mr. Jackson, Seven and one-fourth cents a bushel.

Mr. Stevens. That must be added now to the Canadian price in
order to get at the true value at Minneapolis, must it not ?

Mr. Jackson, Yes, That would be the difference.

Mr. Sims. Is there any difference in the freight ?

Mr. Stevens. Of course there ia. But is it not true that over a
majority of the year it would be impossible to import wheat into the
United States if there was not any tariff?

Mr. Jackson. No, sir; because the Canadian stuff would bring so
much more money than American wheat that you could import it
with ease.

Mr. Stevens. Is it better wheat ?

Mr, Jackson. Yes; it is much better, because it is raised from vir-
gin soil. It is much more valuable as a milling proposition; so much
so that the question of freight in there would be wiped out immedi-
atelv.

Mr. Adahson. When it is higher here, that is the best time to
import it here t

INSPECTION AND QBADING OF GRAIN, ETC. S5

ilr. Jackson. Yes, of course. The only time you can bring it
forward would be the time you could do it at a profit.

Mr. Wanqer, What has this to do with the inspection ?

Mr, Jackson. Nothing whatever. I am not an expert upon that
subject.

Mr. Adamson. Of course local and other conditions enter into the
problem, do they not ?

\[r. Wanobb. There are more people here than can be heard this
morning on the question of inspection; so please confine yourself to
the matter of inspection.

Mr. Sims. Is it not a le^timate question, Isir. Chairman, to ask if
Canadian wheat is intrinsically more valuable than American wheat!

Mr. Wanger. It would if it had reference to the question of inspec-
tion, and he says not. Have you anything to offer, Mr. Jackson?

lit, Jackson. I would like to offer a pamphlet which has been
prepared, which explains the difference in grades as they actually
exist.

Mr. Wangbb. Hand it to the reporter and it will be printed in
the hearings.

(Following is the pamphlet referred to:}

Grades and Grading op Gbaim.

The kind of grain — that ia to aay, wheat, corn, oate, etc. — is aerioiwly dependent
upon what one ahall plant. If com be planted, corn is produced. Tlie term "kind
01 grain " is frequently and inaccurately used to refer to the "grade of nain . ' ' Properly
ipeaking "kind of grain" refers only to the different varieties, whUe "grade" retera
to the commercial subdivisions of a particular kind.

The ^toTB determining the grade of grain are numerous and interdependent.
They may be said to be as foilows:

1. Tlu qualitt/ of the teed, — In inany ^Mirts of the country it has been the custom of
farmers to retain from their crops a portion thereof for ime as seed. The result Is
that the seed runs out (i. e,, loses ita force), and the productiveness is lessened both
in quality and in quantity.

2. The taru o/ planting, partiailaTly with relatwn to tht preceding and tuaxeding
eiimatie eonditiont.—U eitner of these conditions be adverse, there is a deleterious
eSect upon the crop. If the germination of the seed shall be retarded or unduly
advanced, the grain produced, if an^, can not be of superior quality.

3. Thecharatlero/thetmliUelf. — It is not only welt known but has been scientifically
demooBtrated that certain soil la peculiarly adapted for certain grains while the same
soil will not produce an advant^eoua crop of another grain. One soil may be con-
sidered sttong but yet not suited for a particular kind of ^in; neverthelesa, having
been tilled it will produce the grain, but grain necessarily uferior to that grown upon
an apiHopriate soil.

4. The Tolaiion of crops.— This (act is intimately connected with the preceding one
because of the weakness or strength which a preceding crop may have given the aoil.
Commercially speaking, the effect of rotation of crops is most seriously felt in the crop
of the first year when the rotation begins. Suppose that the previous crop has been
flax or buckwheat, as is the case with new soil, and the present crop is wheat or oate.
The flax or buckwheat hangs over to a greater or less extent, matures about the same
time a« the wheat or oats and becomes mixed with it, the percentage of flax or buck-
wheat varying with the amount which springe up.

Connected with the rotation of crops is the fallow land— that is to say, land which ii
permitted for a reasonable time to lie idle and recoup itself.

5. The climate.— THoB factor has a strong influence upon the grade of the crop and is
divisible into three subheads:

(a) The climate during growlh. — This may be favorable or adverse; it may be too hot
or too cold tor the particular grain, either during semunation, durin)^ growth, or at
harvest time. So, also, it may ne too moist or loo dry during any of sauf periods.

86 INSPECTION AND GBADINQ OF GRAIN, ETC.

(b) Th* climate itl and during harvetl.^Jt is doubted if dry warm weftther has ft dele-
terious effect upon grain durine the harvegt time. It, however, the grain becomes
wet during hiirveet or while in shock, the grain must be inferior.

(c) Climate during tmnaporiatinn.— 'What has been said resi>ecting climatic condi-
tiODB during the growth of grain ia true to a certain extent during the period of trans-
portation. Sudden changes of tem^rature, particularly in certain months, produce
chiui!^ in the grain inherent in their nature. This is ^ue of erain during the germi-
nating season. Com, for example, germinates in M&y, and if the month shall be a
moist damp one, com will commence to germinate, and "heat" to such an extent that
it will mold and become unfit, unless properly cared for (and the heating may become
BO pronounced that it can not thereafter be cared for), to such an extent that it is not
fit for consumption of either man or beast.

The "germinating season," being the months in which eiuin is customarily planted,
is a particularly hazardous time in which to traueport; this aea«on is from about the
biidale of Marcn to the middle of June, During this period grain has a natural and
Inherent tendency ta heat and get out of condition.

In the present method of transportation by rail, freig^it can are practically air tight;
no extensive circulation of air at least can ^t to the grain. The temperature of the
grain on the day on which it is loaded at point of origin may be practically the same
M- widely variant at deetination, all dependent upon changes in climate dunng transit.
When the transportation is by water, the temperature of the water, to a greater or
lees extent, changes the temperature of the grain in the veesel. If the vessel move
in the Gulf Stream, the warmth of the water is communicated t« the grain, causing
it to deteriorate more rapidly than if the transportation had been through water where
the warm currents do not prevail.

6. Method of harveiting and (AraiAiiij.— Slack, careless, and crude methods ol har-
vesting and thrashin)^ grain are not infrequently the cause of lower grades. If the
farmer is careleee or if the machinery be crude, the result will be a mixture with
the grain of dirt and dust, which ought not to be present. This is particularly true
in the newer sections of the country, where it is said on good authority that the grain
offered for sale has in it chunks of earth, roots, and other articles which could easily
have been removed by the exercise of the slightest care.

7. Mtlhodg of (raruportolion. — Some reference has heretofore been made to this
factor, and it is not necessary to elaborate on what has been said except that not only
the manner of transportation, but the relation of the time of transportation to the
condition of the grain, coupled with the climate, may or may not have as facterea
deleterious effect upon the grain.

8. MetKodt of handling. — ihii occurs upon the farm after harvesting, such as keep-
ing the grain dry, permitting it to pass through the "sweat," proper airing, and other

Erudent handling. The aaine care which should be used on the farm is neceseary
I the subsequent handling of the grain, whether at the country elevator, the tenninu
warehouse, or the elevator at the seaboard.

OF THE mPBHFECTlONS OV GRAIN.

Those things which make a certain lot or quantity of grain less valuable com-
mercially are divisible into two classes:

(1) I-nherent imperfections. — ^These inherent imperfections are those reasons for which
grain is not and can not be of the highest grade. Such imperfections are shriveled

grains (causing a bushel to weigh le^s than the standard of the particular grain);

caused probably by climatic conditions: the presence of ai

occasioneti either "by climatic conditions or by carelessuesa in harvest or handling;
absence of proper color, colled "stain," due to climatic conditions. None of these
inherent imperfections can be removed excejit by expensive procea", and then only
with slight success. The proceR'*es of "bleaching'' and "washing" and "scouring
will, to a certain extent, remove smut and change the color, while drying will drive
off excessive moisture. No process, however, will change shriveled grains and make
them merchantable.

(2) Foreign im/wr/ecttoti*.— These are such as dirt, dust, other grain than the par-
ticular grain under consideration, chaff, straws, stones, etc. These imperfections are
largely removable by the use of improved and expensive machinery, Dut at a small
relative cost per bushel. It is almost impossible to separate certain grains from each
otherbyrcoBonof the fact that the se\'eral kernels are ol substantially the same weight
and size. The process of separation of grain and diri is one by draft and gravity, all
machines tor the purpose depending upon these two forces.

INSPECTION AND QBADING OF GEAIN, ETC. 37

aUJN FROM THE FARM TO TBB EUROPEAN CONSUMER.

PerhapB no better way to consider the ^nding and handling of grain caa be used
dian lo follow three aamplea of the aame kind of grain from Ilie time it is sown until it
readtM a deetination in Euro[>e. Let there be plaoled upon the same farm three
fields of wheat, known, respectively, as N'o. 1, No. 2. aod No. 3. Let tbe seed, soil,
climate, rotation of crope, and other factors be particularly favoiable to Held No, 1.

Lot the seed and the other factors for No. 2 be to a greater or leee extent unfavorable
to the grain. Suppose tbe field is low, and therefore there is a surplus of moisture.
Suppose that field No. 3 had totally unfavorable factors, particularly in respect to the
growthof the crop of the previous year and carelessneee in the harvesting and handling
of the grain from thb field and urifBvoiable weather at the time of harvest. Finally.
let it be supposed that each field produces a carload of grain, and suppose that the
grain id wheat.

Wheat is of two kinds, winter and spiing; each of these are divisible into particular

Id the sale of wheat the farmer will ordinarily take a sample to the country elevator;
io tbe Buppoeed case he will take three samples. That from field No. 1 has a plump
berry, reAsonabl}^ clean, tests as much as 60 pounds or more to the measured bushel,
and is first class in every respect. Sample No. 2 will contain some shriveled grains,
a percentage of flax ^or oats), a considerable amount of dirt, chaff, straws, and sticks,
and will test 58 pounos to the measured bushel. Sample No. 3 is very much shriveled,
tests 55 [wundBlo the measured buxhel, has a large mixtureofotiier grains with it, and
contains a very large percentage of dirt and foreign articles.

The tanner receives the otIerB, technically "bids," of the dealer for the three cars.
By reason of the difference in qualitv, he must naturally make different bids for the
tluee cars. In making these bids the proposed purchsiser must rely upon his own
judgment concerning the price which the several cara will bring at the nearest teiv
mioal market. In otdet to ascertain this, he must use his best judgment concerning
what the grain will grade at the terminal market.

This determines the prire at destination; by subtracting therefrom tbe rate of
freight per bushel, he is able to make a reasonably intelligent offer for the jnain. If
the farmer be dissatisfied with the offer because he thinks the market is lavorabla
or because the dealer does not offer as much, in the judgment of the farmer, as tha
present market warrants (and the daily paper has told kim the market at the ter- -
minal), he consults the competing buyer at the town, if any. In any event the sale
BDOoer or later is made.

Not to digress, but it isafact that in certain sections of the country there are "lines"
of elevators controlled by large dealers at the terminal market. The man in charge
of the elevator is tbe agent of tbe laive buyer. He receives his ingtructions and the
only element of judgment exercised oy him in that event is whether or not the par-
ticular grain will be a certain grade at destination.

ttliere, however, the buyer is independent, he must pass judgment, not only upon
the market but also upon the grade. The investigation by the Interstate Commerce
Commission under joint resolution in 1906 whs with respect to the "line" elevatora.
In some places there are what are known as "farmera' plevators," being cooperative
concerns where the grain is put in by the several farmers and sold at a particuUr time.

To return, the local elevator man has purchased the 3 cars of wheat from the
three fields of the farmer. The grain from field No, 1 he classes as No. 1 . It is ready
for shipment and consumption without any process other than that of loading ana
transportation. That from field No. 2 needs cleaning in order to improve it. Put
through fane or suction draft or other improved machinery there is removed a con-
sideiBbleaumberof the light grains, alt of the duBt,dirt, chaff, straws, sticks, and other
lore^ articles, 80 that the remainii^ wheat is nearly, if not quite, as good as that from
the first field. The cost of this process will vary according to the loss in weight of the
foreign matter removed and the cost of operating the machinery; it will be impossible
to make an average because of the varying conditions by tbe process. However, the
elevator man is in a poeition, if he chooses, to run together the wheat from field No, 1
and that from field No. 2, after cleaning, and make 2 cars of fair No. 1 wheat. In
truth and in fact the process of cleaning is not done to any great extent at the country
elevators, for the reason that tbe machinery is expensive to purchase; also for the

further reason that the macbinerj- might not be in use continually vear t^ter year.
I. _. ... 1- - :_ ^g^ j^j a particular season and then not again needed lor two or three
■ results from the varying climate each season at a particular place.

This work, therefore, is usually done at the terminals.

But the country elevator man has the grain from No. 3 field. All this is shriveled
pain mixed with dirt and foreign grain, chaff, sticks, and stones; the wheat may be

38 INSPECTION AND GBADINO OP GRAIN, ETC.

emuttyor it may have garlic or rye mixed with it. By mechanical process the forei^
matter other than foreign grain (i. e,, dirt, duet, sticka, etc.) can be removed, but it is
almost impossible to remove garlic and some other foreijm articles (such as rye) from
wheat. All that the country elevator man can do is tb remove the dirt., sticks, atosee,
and other distinctly foreign articles. When that process has been done he has
improved the grain to the utmost. If this wheat is not badly shriveled, limited quan-
tities may be mixed with a wheat of a better grade, thereby increasing the market
price for the lot.

The mixing of different grades of grain is prohibited in Canada at the present time,
with the result that the lowetadesof grain sell for 5 cents per bu^elin Canada leas
than they do in this country right across the border. This figure is relative, not absolute.
Grain in Canada sells for lees than it does in this country under normal conditions, but
the difference in price between the grades before mixing was prohibited in Canada
was substantially the same in both countries.

Whether or not the grain is cleaned at the country elevator and whether or not it
is mixed, it is sold at or shipped on consigament to a terminal market. On arriving'
at the terminal market the car is inspected and sampled. For the purpose of sampling,
a device called a ' ' trier ' ' is placed down through the conlente of the car m several places,
BO tiiat the avenwe of the car is obtained. These samples are then taken to the board
of trade or chamber of commerce, where the goods are offered (or sale by the receiver.
The grain is rarely kept longer than the second day and is sold to a shipper, if for ship-
ment beyond, or to a local dealer, if for local consumption. Ordinarily the cont«ntB
of the car will be tiaoBferred to a so-called eastern car. In this event the actual tare
of the car can be obtained. In any event the grain is weighed either in the car or by
"hopper scales," if the grain goes into a terminal elevator.

Nearly every board of trade has it« inspection department for the purpose of inspect-
ing and grading grain. Some of these departments have been in existence for a long
number of years. Inspectors are under bond, and should they make an error in judg-
ment there is an appeal to the chief inspector and from him h> the board of directors
or t« a committee of the board of trade.

het us suppose that the wheat from the three fields has not been mixed or cleaned
ei^er at the country elevator or at the terminal market and let the three cars come
through to the seaboard, l^et all of the cars be delayed in tiansit and let there be
unusual changes in the weather during the transit period. That from field No. 1 will

. germinate; that from field No. 3 will have passed lo such a sta^of

germination that it is hot; in fact, hot enough to cook an egg placed within. On arrival
at the seaboard, whether consigned or sold, the three cars would pass throi^h the
same process as is stated for tbe terminal market.

At certain export ports there exist driers, the purpose of which is to drive off the
moisture from that grain which has a superabundance. In the illustration, giain from
fields No. 2 and No, 3 would doubtless be dried. When dried it will stand transpor-
tation for a long distance and without de(«riDration. The grain is to be sold upon
the other side. Hitherto it haJ^ had apparently only the competition of American
grain; in truth and in fact, it bad the competition of wheat from Arpientiiia, from
India, and Russia. This competition arises because of the fact that the Liverpool,
Hamburg, or other European markets are usually more or less "in line," i. e., in har-
mony, with the Chicago market. The sale is accomplished in Europe either by means
of offer from or to the dealer here. The terms of the sale are that the weight and
grade of the grain as per the board of trade or chamber of commerce of the American
trade shall govern; weights are guaranteed or may be insured. Qualities of grain may
be guaranteed by members of the board of trade or chamber of commerce. It there
be an error made in grading the chamber of commerce pays the claim, if it be a proper
one. Such was done some years ago to quite a large amount in certain shipments
from Newport News. Doubtle!>s fictitious claims are made, for it is the common
experience of mankind that when the market has declined the quality of the goods
has seriously deteriorated; in short, the market changes are largely a controlling mctur
in respect to claims for damages.

Wheat from other countries than the United States which is sold in the European
markets is sold upon what are called "rye terms," that is to say, tbe weights and qual-
ity of ^in is guaranteed at dci^tination, the vendor assuming the liability for deterio-
ration in transit. It will be obser\-ed that for some reason American grown grain baa
always been sold under such terms that the vendee assumeB the hazards of trans-
portation. The vessel and its csiko are insured against the hazards of the sea and
insurance may be obtained against deterioration of grain in transit. The general
custom of tbe trade, however, is that the hazards of transportation ar« assumed by
the vendee. This is also true with respect to grain purchased at a terminal market

INSPECTION AND QRAUIBO OP GRAIN, ETC. 39 •

in this country. The shipment from the country elevator to the terminal market ie
mtkdeoD the buia of gnde and wei^t at the terminal muket; such is the rule. Th«
technical name for Buch a ttanBacttoD would be "Chicago terms," Baltimore terms,"
etc. This deeignation, however, means more than the questiou of grade and weight,
because the several exchangee have certain rules respecting the acceptance oif a lower
grade of grain upon a contract for a higher grade.

To return to tne ^in about to be exported from the port; it may be a berth lot or a
caigo, the former being a part load, the latter a full load. Perhaps tne bottom may leak
a tnfle, perha^ the grain may be somewhat damp and be loaded near a bulkhead or
near the boilers. Periiape the transit of the vessel may be through the Gull Btream
for a long period of time, ae bom Galveeton or New Orleans. Perhaps the venel may
strain in rtArms; perhaps the vessel, upon arrival at destination, may be delayed a
week or two weeks before she can berth and discharge; all of these are poesibilitiee
and in all instancee some one of these factors is a probability. The grain takes serious
chances of deterioration. Against the grain has been drawn papers for the value
thereof; the consignee has atieast accepted the drafts if not paid tnem. If tJie^in
is out of condition, and eometimee when it has been proven to have been in condition,
the consignee makes a claim and his claim is, under the contract of purchase and
mle, only a legal one when he can satisfactorily prove that the grain l^ded on the
veeeel was not at the port of origin of the grade and auality which the certificate of
inepection showed it to be, or was of a dinerent weignt from that represented. By
the contract^ the vendoe assumes the risks of transportation, including deterioration
or depreciation. Having assumed these risks, he ought to abide hv his bargain; but
when the market has declined while the §oods are in transit, frail human nature is
prone to seek some relief from the adversities of a change in price due to commercial
conditions.

Mr. Sms. Your idea ia that the present bill will not benefit the
wheat industry or the wheat exporter in the United States ?

Mr. Jackbon. Yea. It would make the fanner dissatisfied. He
would not get any more result than he does now, and it would be
simply impossible to carry it out unless you had an inspector at
every railroad station in this country, because the fanner would say
that he did not get any better terms than he did before.

Representative Ghonna, of North Dakota. Mr. Chairman, may I
ask the witness a question on that point 1

Mr. Wangbe. Yes; go ahead.

Mr. Gbonna. You make the statement that Canadian wheat ia
much superior to American wheat ?

Mr. Jackson. Yes, sir.

Mr. Gbonna. Do you know that of your own knowledge!

Mr. Jackbon. I do.

Mr. Gronna. I want to say to the gentleman that I have raised
wheat for twenty-five years in North Dakota, and I take issue with
the gentleman on that point.

ilu. Adamson. That is right over the Canadian line, is it Dotf

Mr. Gronna. That depends on the year. One year you raise a
good quaUty of wheat, and other years not so good,

Mr. Adamson. That is so close to the Une that there can not be any
difference.

Mr. Jackson. Alberta wheat makes that weighs 67 pounds to the
bushel.

Mr. Gronna. I am surprised that any man who knows anything
about wheat should say tnat as to any wheat mixed, 67 pounds to
the bushel. I nant to make this point

Mr. Stevens. Let this gentleman finish first. I.<et one go on at a
time, Mr. Gronna.

Mr. Jackson. On the part of the Chamber of Commerce of Balti-
more, I have entered my protest against this, and have nothing more
to say, unless somebody wants to ask me a question.

,40 INSPECTION AND QEADING OF GBAIN, ETC.

Mr. Wanger, Now, Mr, Gronna, do you desire to be heard t
Mr. Grosna. If the gentlemen who are here want to go on first, I
am perfectly H-iUing to wait until later.

Blr. Wanger. In the regular order you would be heard first.

8TATEKEFI OF KB. JAMES L. KHra, REPRESEFTUrO THE COM-
KEBCIAL EZCHANOE OF PHILADELPHIA, PA.

Mr. KiNQ. Mr. Chairman, I would like to file, for the Commercial
Exchange of Philadelphia, the briefs we have prepared. We do not
consider it necessary to go into detail in this. We were here two
years ^o and entered our objections then in a rather elaborate way.
We have written our objections here, and I would like to submit
this brief to the committee. We are against these bills generally
because they are inimical to the interests of the grain trade and the
producers and purchasers of grain generally.

(The following was submitted by Mr. Kmg:)

The Cohmebcul Exciunoe op Philadbuhu.

(H. R. issn.)

The objection of the CommerciBl Exchange of Philadelphia to this bill ie, broadly
mieakiiig, that it provides for something that is unnecesa/y, and, r^^arding section 1,
that the authorized compensation would not warrant the employment m a bureau
chief, or chief inspector, competent to fill the position; second, that grain experts
require even more than three years of experience in inspecting and n^ing of grain
or buying grain, and that competent inspectors such as are employed to-day by the
Boarde of trade and exchangee seldom have experience in buying grain; third, that it
is believed to be impoesible to obtain enough good grain inepecturs to fill the poutiona
created by the bill, and that the two yeara of practical experience that are named
tm the requirement to appointment would not be sufficient training for the duties of
die position, if a requisite number of inspectors thus experienced could be Found;
furthermore, that if it were impoesible to find the adequate number of inspectots, it
would be equally impoesible to find the required number of deputies, having the »me

Sualiflcationa as inspectois; and that the fees collected at the place where the dutiee
ave been performed would be, in many cased, far short of amountii^ to sufficient
to pay the salaries, if the fees are to be reasonably based, as at preaent.

There would be no objection to the provisions of section 2, which require the in-
spectors to talce an oath of office, but it is su^eeted that the pay would scarcely com-
pensate an inspector engaging to pay all damages to any person or persona who may
be injured by reason of his neglect to comply with the laws or rulee or regulations.
The responsibility should be upon the Government behind the inspectors, just as it is
tt present upon the boards of Uade or exchangee by which the inspectors are employed .
Objection is iii^ed to the phrascoloey of sei'tion 3, which provides "'that it shall
be the duty of said inspectors and their deputies to inspect and grade all grain which
at the time of inspection and grading has been shipped from any other State, T»ri-
tory, or country than the Stale, Territory, or country in which the same is inspected,
or IS intended tor shipment into any other State, Torrilory, or foreign country befora
the same is unloaded from the car, vessel, or other vehicle in which the some was or
IB being transported," but nowhere says that tho grain shall be inspeclad wb(n
loaded or as loaditd; and further proWdee "that the inspection of any consignment
of ^inmay bn waived, as provided for in soctioneightof this act," which is decidedly
objectionable if the bill were otherwii>e acceptable, because if the bill is to permit
mrivers of the kind provided in section 8 it would soon be found Ihat ther« would be
ao need for the legislation or tho deparUnent. Facing this contingency, why enact
this law?

Section 4 is objected to because it gives too great discretion and power to the Secre-
tary of Agriculture and might result greatly to tho disadvantage of certain markets
where the charges have been reduced to a minimum. In fact, it might be m^ted
that the creation of a large and useless bureau, such as this is likely to become if the
law is enacted, would result in the overtaxation of trade with high charges that would
be made necessary to keep up an army of employees. While some markets would be

IKSPECTIOH AND GRADING OF GRAIN, ETC. 41

Belf-^ustaininR, there would be many other places at which inspectora would be requi-
Bi(e that would not beRin to produce etiough revenue to suatain them.

Section 5 is not objected to, except as a part of the whole unneceeaary acheme.

Section 6 aeema to preauppoee tliut the present system oE grading and classification
ougbt to be enlirely diacaided. thu« iutuualing that tlie appointees of a twO'yeai
experience, or the Secretary without any, can devise better grades than the exchanges
have evolved from half a century's experience.

Section 7 provides that the Secretary ahalt charge for the official or certified copies
of the clasaficatioD and grades, thus making an expense out of what the exchangea
now furnish free.

Section 8 provides a loophole where the whole acheme may he made abortive
in exceptions to the law. It would be an easy matter for large dealers to hire, buy,
or build private atorehousee or to store their grain in special bina io public warehausee.

Section 9 would seem to conflict with section 3, the ninth section providing for
inspection at destination, while the third section providee for inspection of all grain
which at the time has been shipped — or ia intended for shipment — before the aaine
in unloaded, etc. Does this mean that the grain will have to be inspected twice by
government inspectors and two fees paid, or ia the phraseology purposely made
vague to bide the defects of the measure?

Section 10 gives the Secretary the power to fix the chargee to the public and salariea
of the inspectors, both of which have been covered in section 4. It is unnecessary,
therefore, to do more than to repeat the objections urged againet section 4 and to
suggest that section 10 may have Wen put in to round out the printed page.

[R. H. 12432.]

Taking the bill b^ sections, (he objection of the Commercial Exchange of Phila-
delphia to lie first IS that it is believed neither tho Secretary of A^culture nor his
Bureau of Plant Industry has had the requisite experience to quality either for the
duties proposed in the bill if it were desirable to sutiniit to a test this experiment in
patemaliem .

The second section gives the Secretary of Agriculture the discretion to appoint
grain inspectors and assiatanta at certain named places and at such other important
centers aa he may consider necessary. I( ts objected to this section that it gives too
much authority to the Secretary, and miaht result in very serious injury to the com-
mercial interests of any community that the Secretary should see fit to discriminate
againsi under hia broad powera.

Section 3 providea that compensation and salaries shall be fixed by the Secrelauy
which shall correspond to other governmental salaries, etc. It might be urged against
this that those ciliea which under existing arrangements have very low inspection
charges might under the nrnposcd arrangement, or experiment, be aubjected M very
h^h rales, and thus be deprived of the advantages which they have evolved from
time and experience.

Section 4 gives the Secretarj' the power to prescribe rules and regulations governing
the inspection and grading, which is objected to. notwithstanding the respect which
this exchange has for the Secretarj' of Agriculture and the knowledKe it ha« of tho
excellence of the work that has been carried on under his name and in hi" de) artment
of the Government, becauw it Rive' entirely too much authority to the Rocretary,
who, bi>ing hun-an, can nni be iiif»Ilible.

Section 6 provides that the secretary shall fix and determine the Btandarda lor
claasifyine and grading wheat, flax, corn, rye, oats, barley, and other grains, according
to his judginent, and may modify or change such claflsifications or grades as his judg-
ment may dictate, for the best interest of interatate and export grain trade. The same
objection may be urged as to the preceding section, that too much power is pven the
•ecretary, who can not be omniBcieut. The present systems are not universally
satisfoctory. and have at times given very_ acrioua cause for complaint, but there is no
assurance that a governmental Dureau will be better, or that it will stand between
the buyer and poor grain accompanied with a federal certificate; while there are
evidences that the different trade bodies which have superiision over their own
inspection department!' are bettering their methods. Complaint* against local inspec-
'q the East at least, reduced t( "' '

Sections 6 and 7, providing that the standards when fixed shall become official, are
objected to perfunctorily as a part of the objection to the entire scheme of fedeml

Section 8 provide,' that it shall be the duty of those engaged in the transportation
of grain (in interstate commerce) "or country- other than tnat in which it ia received
tor inspection, or received from any other State, Territory, or country than that to
which It is consigned, to notify the cniet grain inspector at tne place of destination, of

42 INSPECTION AND GBADINO OF ORAIK, ETC.

any coQBif^ment of grain, within twenty-fnur houre aft«r its arrival, that a. ahipment.
cargo, or load of grain ie in hand andtheplaceof deHtination of such grain;" that it Bhall
be unlawful to unload such grain (in interstate commerce) unlepe lawfully inspected io
accordance with the act; and that the inspector shall issue the necessary certificate,
as prescribed by the secretary. Those familiar with the grain trade as done to-day,
win not need to be told that a very large proportion of the busineai in grain, whether
for mere int^ratate ttade or for export, is done upon the point of shipment inspection —
that is to say, weet«m inepection, at the time of loading; and that neither this section
8 nor section 9 clearly provides for any inspection at the time of loading, which inupec-
tion has become curtomary and neeeeeary in modem buaiQem transactions. Tating
section 9 into consideration at this juncture, the latter mys that it shall be the duty
of the inspectors to inspect and grade all grain which has been shipped from any
other State, Territory, etc., than the State, Territory, etc., in which the same is in-
spected, or is intended for shipment into any other State, etc., before the same is
unloaded from the car, vessel, or other vehicle in which the same was or is being
transported, and to charge and collect fees, et'^.

Possibly the reaaon why no provision is made for inspection at the time of loading,
or while grain is being loaded, is that the Federal Government does not or the framers
of this legislation do not claim the right to insDecI until after the grain shall have
entered into interstate commerce, or mistrust tneir power to interfere with private
business while it is still within the control of the shipper.

To revert to (he phraseology of section 8, that notice must be given of a shipment
of grain destined to any State, Territory, or country other than that in which it la
received for inspection, or received from any other State, Territory, or country than
that to which it is consigned, to the chief inspector within twenty-four hours after
its arrival, etc., it would be mleresting to know what would become of a shipment
of grain for export to Liverpool from Milwaukee, via Montreal, so far as the federal
inspection is concerned. Where is thatgrain lo be inspected under this bill? Inspec-
tors are not provided for in the bill at such important United Slatee ports as Galves-
ton. Norfolk, Newport News, or Portland, Orep., all more or less important to export
traae in grain. Assuredly the bill does not provide for inspectors at Montreal or
other Canadian ports through which American exporters now ship grain at times
and through which they will probably ship in much greater quantity if driven to do
so by unwise legislation. The point is, that many other customs which do not require
revision may be disturbed by the wholesale breaking up of the present inspection
syslems. just as the breaking of one wheel may slop the working of an entire mill,
and the question naturally anees whether the good to be gained from an entire reversal
of the old order will compensate for the disadvanta^ee and inequalitiee of the new
system?

Since it is unlawful for the United States to regulate (he transaction of businese
that is wholly intrastate, and it is believed that fully 90 per cent of those engaged
in 'he grain trade or production would be averse to federal inspection, it is only lair
to suggest that those engaged in intrastate transactions in gram would continue to
have their grain inspected by local officials and local innpection departments of the
exchanges, and thus make two seta of officials to compete for the business which is
now bemg done by one.

Section 10 would not be objected to if the rest of the bill became a law, as it is a
part of the present rules of the exchange.

Section 11 defines the right of appeal from an inspector to his superior, the chief
inspector, and from the latter to the Secretary of Agriculture. This section ia o|ien
to very serious objection in its conclusion, for without mentioning the supposition
that the Secretary of Agriculture is not necessarily a competent judge of Grain, or
sufficiently expert to decide when doctors disagree, it is usual in the case of appeals
from inspection to require very quick action, especially with perishable grain^ and
such action is not ordinarily obtainable from a high federal official, burdened with as
much as is superimposed upon the Secretarv of Agriculture, and especially one u]pon
whose time tnere is as much demand as there is upon that of the present official.
Appeals from inspection are not matters of everyday occurrence in any one market,
but there are some every day in some of the markets. Under present conditions in
our own market one may appeal to the chief inspector for reinspection, and if still
dissatisfied can appeal a^in to the grain committee, which consists of seven members
identified with the grain trade and familiar with grades. This method permits of an
examination of the grain in question and a settlement within a few hours, or within a
day at the utmost; but who can foretell how long it will take lo get from the inspector
at Seattle, Tacoma, or San Francisco (all named in Ihe bill) to the chief inspector and
thence to Cwsar at Washington? "Said Secretary shall make all needful regulations
to govern appeals. " If the foregoing provisions of this section have to be swallowed,
there is no reason to strain at the latter.

INSPECTION AND GRADING OF GRAIN, ETC. 43

There ig anather coadttion which mieht arise under federal inspection, which, while
Dot touched upon directly in the bill, anould be mentioned: Suppose ii case in point,
that a ahipment of 50,000 buahelB of com, No. 1 federal, for instance, should uniortu-
nately arrive at Boeton, for export, from Chicago, and be seriously out of coaditioa,
notwithstanding the certificste. Under the present conditione, the exporter of such
com, or his representative in Boston, would nuatle around for some good com to take
the place of the other and to fill the ocean freieht engagement; but S the federal sys-
tem were in vogue, could he or would he say, This is or has been No. 1 federal com,
and I have the certificate for it: therefore I willahipit as such?" The foreign buyer
(whoee interest the framers of tnis bill champion so loudly) would scarcely be better
pleased with poor or out^t-condition com, accompanied by a federal certificate, than
ne has been with unsatisfactory shipments with board of trade or other exchange cer-
tificatee, unless the federal certificate is to be considered as responsibte to the duyer
in Europe for any chan^ in character of the grain covered by it. This point of indem-
nity is not covered in the bill, and it would be important to know what liability the
Government would afsume in iceuing certificates of iospci'tion that, will displace other
c^lificatee, which at present in some ca^ea have back of them an appeal fund created
for the purpose of protecting holders from loss resulting from improper inspection.
Radical legislation, such as is contemplated by the present bill, oi^ht at least to be

Section 12 provides against mixing, without reinspection. grain that has been
inspected and need not be objected to.

Section 13 would seem to have been redrawn so as h) meet some objections pre-
viously urged, and in ite present form prohibits shipments "from any of the places
tnentioned herein and at such other important centers of interstate trade and com-
merce in grain * * * to another State or foreign countrv without the same being
inspected and graded as herein provided;" and provides tnat where grain has been
once inspected hereunder, and remains unmixed with other grain and grades of grain
the same need not be reinspected at the place from which it is exported; and it also

Erovidea that "said Secretary mav, in nis discretion, reinepect any cargo of grain
efore the same is exported. This seems to be the first departure from the pro-
vision set forth in section 8, requiring inspection at destination, and would certainly
add to the vast army of inspectors that would be reauisile if the bill became a lav,
besides giving to the Secretary, in his discretion, rights of reinspection which might
work great injury to a shipper who had bought his grain, for export or shipment in
interstate commerce, upon the point-of-shipmeiit federal inspection just above enu-
merated in this same section. A case of the kind is cited in the remarks upon section
XI, where an exporter might have a lot of com at Boston, destined for Europe, and
ncAwith standing that he might hold a certificate of federal inspection obtamed at
Chicago, if the Secretarv should, in his discretion, have it reinspected and de-graded
at Boston, to whom could the exporter turn Cor redress?

Section 14 makes it the duty of the inspector to investigate the weighing and
handling of grain inspected by them, and would not be objected to if the rest became
a law.

Section 15, providing for examination of samples and a charge for the inspection and
sampling, is not objectionable, and would not be objected to il the reet became a lav.

Section 16, providing for a penalty for breaking the law may be disposed of as in the
two preceding paragraphs.

SmHion 17 appropriates |S60,000 for the experiment, which might be objected to as
much too amaira sum. The whole scheme is rather too visionary to warrant any
accurate estimate of the number of employees that would be necessary or the number
of places at which inspectors would be needed, especially under the new sectioD 13.

The principal objection that we feel to this ie^slation. with all due respect to its
authors, is its uselessneee. According to the evidence given by Mr. Gronna before
this committee two years ago, his grievance was largely due to local conditions in his
own section of the country, which we would suggest could be remedied without the
disturbance of the whole country which the creation of a governmental department
of federal inspection would necessitate. The vast sum of mone^ which the Govern-
ment would devote to experimentation might with great propriety be used to pay
lecturers who could enlighten the northwestern victims of the present system upon
the grades of wheat, so that they need not sell their No. 1 as No. 2 and their No. 2 as
No. 3, etc. Or if the bill dioiild be amended by striking out all esceptii^ section 15
then the farmers of the Northwest might receive the benefit of the advice of the Gov-
ernment upon grades of their grain before letting the wicked elevator man take advan-
tage of their ignorance of quality.

H. D. Irwin,
Jas. L. Kino,
F. E. Marsball,

44 INSPECTION AND OBADINQ OP QBAIN, ETC.

Mr. "Wangeh. Do you desire to proceed now, Mr. Groona ?

STATEMEHT OF HON. ASLE J. OBOHNA, A KIPKESEHTATIVB IV
COHOBESS FROM TEE STATE OF NOSTH DAKOTA.

Mr. Gbonna. Yes, Mr. Chairman; I would like to m&ke a brief
statement.

Mr. Wangek. Proceed.

Mr, GROPfNA. I introduced in the House two years ago a bill for
the federal inspection and grading of grain. I again introduced
practically the same bill, on December 6, 1909, with some alight
chaises, the changes being that any producer of grain could send
samples of his grain to the nearest board of inspectors. That would,
in my judgment, be a, great convenience for the farmers of the western
countiT A^o live great distances away from the grain markets.

Mr. TowNSBND. Who would take advantage of that, Mr. Gronnat
Anybody but the largest grain growers ?

Mr. Gronna. I think, Mr. Chairman, that nearly all the farmers
would take advantage of it, because our farmers, you might aay, are
nearly all large farmers. Most of them farm from a half section to a
section of land, and tbey ship a great deal of their own grain.

I appeared before this committee two years ago and made a state-
ment which was taken down and was printed, and I really have
nothing new to add to that statement except this: I have a report
made by the board of grain commissioners of my State. This board
is, under the law, appointed by the governor of the State, and the
report goes into the question of the grading of grain. It shows the
methoaused by the terminal elevators in the inspection of grain. It
also shows the amount of wheat received of a certain grade, and gives
the number of bushels shipped out of the same elevator, and it also
gives the number of bushels shipped out of another grade. It also
gives the operating expenses of maintenance of these terminal -
elevators.

Mr. Sims. Do you want it all included in tlie hearing, Mr. Gronaa (

Mr. Ghonna. Yes; I would like to have it go in.

Mr. Sims. It is subheaded 1

Mr. Gronna. Yes; I would like to submit it, and have it printed.
It gives the report of Mr. Charles F. Staples, commissioner of the
State of Minnesota, a man who is very wellposted on the question of
grain, and I would like the committee to incorporate this report in
the hearii^.

(Following is the report referred to:)

Report op Board or Grain Couhihhion'ebs,

To hie excellency John Burke,

Goirmor of North Dalota.
Sib: The underxitcned, appointed by your excellency as a board of grain coinmi»-
Bionen, under the provisions of chapter 129 of the funeral laws of 1907, hereby respect-
fully submit the following report and recommendations:

OROANIEATION OF BOARD.

Pureuflnt to the provisionBof the statute providing for the appointment and designat-
ing the duties of thia board, we Reverally qualified by executing a bond in the penAl
sum of S5,0O0. running to the State of Norui Dakota, and conditinned upon the faith-
ful discharge of out duties aa members of said board of grain commixBioneis, said bonda
being od file in the otSce of the secretary of state.

INSPBCnOB" AND GBADINQ OP GRAIN, ETC. 45

On November 14, 1907, we met in the city ot Minaeapolie and organized by the
election of Mr. A. R. Thompson, chairman, and Ur. U. 0. Hall as aecretary of the

TTie bottrd immediately took up the matter of inveetigsting the system of termini]
eisin inspection and weighing in v<^e at Minneapolis, Duluth, and West Superior,
b^nnin^ their duties in this respect by an investigation of the state weighing system
in operation at the city of Minneapolis.

In puiBUance of this the board repaired to the office of Mr. P. P. Quiat, state weigh-
nuBt«rof grain, and informed him of thQirdeiiire and purpose, Mr, Qnist, in his capac-
ity as the chief of the Minneapolis weighing depardneot, rendered efficient and
accommodating service to this board in pursuing their investigation.

We first inspected the office of the weighing department. On the long countera
we found spr«id out for the use ot the public carbon copies ot the weighers' daily
rep<»1s which showed in detail the work of the previous day, giving car numbers,
initials, kinds of grain, and weights. Theee reports also showM notations of leaks
or anv other bad order condition ot the cars which might have resulted, or did result,
inasttortage. Whenleaky cars are discovered a special report is made by the weigher,
and the leak designated on the reverse side of the written report which has a diagram
of a freight car.

Our attention was called to the Minnesota statute which requires all shippers to
place a card tm the grain door of the car shipped giving the outweight, so that in
case of a discrepancy as between local weights and tennmal weights, an immediate
inveetigation can be made to determine such discrepancy, for it is very obvious that
such an investigation will be of more value if made at once instead ot after days or
weeks have elapxed.

If the name and address of the shipper appear on these shipping cards, and the
weighers report shows such car to be in bad oraer, a letter is at once sent to the address
given and a copy ot the weighers report incloeed, which can be used in making_ a
claim against the transporlation company for the grain lost in transit. Mr. Quist
assured us, in this connection, that a just claim accompanied by such an official report
is hardly ever rejected bv the transportation companies, but ufiually settled promptly.
We wish to emphasize the importance of this to our shippers — of weighing the grain
and incloping a card in the car showing the outweights, as a basis for recovery in case
ot shortage.

Mindful of the report made by the North Dakota Bankers' Association, referred to
in the preamble to the statute under which we were appointed, we were quite con-
cerned as (o the application of the so-called "auction system" and the manner in
which it affected grain that was being elevated from the bottom to the top of the ele-
vator; we have been informed that li;;ht grain and chafi were taken out of the grain
by suction before it was weighed. Mr. Quist informed us that on all occasions before
the State established weighing service at an elevator or mill a, complete test was made
by the state scale inspector, not only of the scales and spouts, but that this test also
included the suction Hyatem and no suction was permitted to be placed in the scale
hopper, or in any place where light grain or chaB could be drawn out before the grain
was weighed.

A visit was made by our board to elevator "C" at Minneapolis, where a. test was
made of the suction draft in our presence. At this elevator we discovered that the
suction draft, aa we found it in operation at that time, took out only fine dii.it, chaff,
and light straw aubfltances. There was no evidence that any grain, or even foul
seeds having any particular weEght, were removi'd by this draft. It was explained
to us that the modem suction system, as emplin-ed in the latt^ terminal houses, was
absolutely necewary to collect and carry away tijie and lieht dust, which is a menace
to the health of the employees and is aino dangerous expUMive, and that this auction
system is required by msu ranee companies.

We next vieited tne electric steel elevator at Minneapolis, which, as the name
thereof would indicate, is built entirely of steel, having round steel tanks for storage
purposes. This elevator, being fireproof, is exempt from the Minnesota law which
requires that all grain stored in public elevators must be insured in favor of the owner,
thus saving a great deal of money, as the insurance rate on grain is quite high. At
this elevator we made a very close inspection of the sj'stem of weighing in vogiie,
which is identical with the system generally in operation at Minneapolis. Superior,
and Duluth. An assistAnt state weigher was stationed on the groimd floor ot the
elevator; his duty is to keep a record of the seals of the cars about to be weighed. He
makes a careful examination of the car in order to detect any had order or leaky ceo-

46 INSPECTION AND GHADING OF GBAIN, ETC.

ditiona, and it ia also his duty to aee that the car is properly awept out after being
untooded. He then notifiee the state weigher, who ia atationed in the upper Bt«ry,
or cupola, of the elevator, that the car hae been unloaded and the contenta thereof
elevated. The acaleB in this elevator, aa in moat all other ol the terminal elevatora,
are located in the cupola, moat of them having a weighing capacity of from 85,000 to
120,000 pounds. The scales are of the so-called "hopper-acale " variety. The scale
beama are equipped with a re^iat«r device, which pnnla the weight on the ticket.
The scale hoppers are also provided with a Neale patent indicator, which is not only
a check against a teaky scale hopper, but against accidents and even dishonestv. In
weighing the grain, after it ia elevated into the hopper, two men are employea — one
is a state weigner, representing the State, and the other some employee repreeenting
the particular elevator company, or mill, where the grain is beiugaandled. Each
of theeo men keepe a separate record. They check up Uieir weights at the scale before
the grain is dropped from the hopper witn a view that no error can be made, and
eapecially when it ia further checlced by the eo-cakled automatic "lype-reBiater"
ticket. There is also a device which indicatea when the scale hopper has been opened,
and which makes it impoeaible to receive other grain into the hopper before the same
has been completely emptied. When the day's work ia ended, the state weigher
makea out a full report, m duplicate, of his day's work, which is sent to the state
wei^hmaater'e office, Ct^ether with the automatic register ticket, where they are
again checked by clerks with report sheets to detect any error that may have been made
in the report. Thia is done for the purpose of still further insuring the correctneea
of the official certificates to be issued by tne weighing department. These certificates
are issued in the first instance to the consignee of the grain in question, or upon appli-
cation in duplicate form to any person or persons who have any interest in the grain
90 weighed.

Our board next made a visit u> the Pillsbury "A" mill. Here we examined into
the condition of the caia that were standing in the milt yard preparatory to being
unloaded. Several of these cars showed indications of having leaked while in transit,
and were in a conditinu unfit for carrying grain. Investigation proved thai. Stale
employees had made this inBi>ection and had made a complete record of conditions.
The system of weighing tn vogue at thia mill was also inspected, and was found to be
about the same as that at the elevator just described. This mill has a daily capacity
of IT.OOO barrels of dour.

We neit visited the Phoenix mill, where the weighing of the gnun unloaded there
was done on a track scale, also under supervision of the state weighing department.
The system in vogue here we found to be this, that the gross weight of a car and con-
tents were first ascertained and then the grain is unl<«ided and the empty car re-
weighed to ascertain the tare. In no case is the stencil weight marked on the car
taken for the tare. No reliance is placed on the stencil weight on can. Moreover,
at these track scales all cars are detached from other cars while being weighed. We
were informed in this connection that about one-third of the different stations where
state weighing is in force at Mirmeapolis were equipped with such track acalca. Theee
track scales are equipped with the same safety devices and automatic legiaters that
are used on the hopper scales.

Our attention waa called to the fact that all state weighers are under 95,000 bonds,
conditioned upon the faithful and honest discharge of his duties as such. Again, our
attention was called to the fact that acide from the constant pcale supervision by an
experienced scale expert employed by the State, the ahipmenta from elevatora to
mills, or from scale to scale, where state weighing was in force were carefully watched
with a view of ascertaining whether these scales weighed the same. One of the pur-
poses of this is to detect any scale getting out of order

This practically concluded our investigation into the public weighing system at
Minoeapolia. A few daya later, however, we resumed such investigation as to the
system at Dututh and Superior, and there we found that practically the same system
was in operation, conducted in the same manner.

We found in pursuing thia investigation that an unusually large number of care are
received at terminal points in bad order, cars that are received in such condition that
it ia quite obvious that more or less loss has been sustained while in tnmeit — loseee
that m most cases perhaps should be borne by the transportation compaaiee, inas-
much as it is only right and proper that a tranafiortation company should in the fimt
instance furnish a car in good condition and deliver its contents intact to the con-
aignee. Reaponeibility for diacrepancies occurring while in transit should be in
most cases borne by the transportation companies. We also found that at Duluth
and Minneapolia86percent of all the grain was weighed on so-called "hopper scalee."
Furthermore, that it appears that there is a regular shrinkage of about 30 pounds per
thousand bushels, cause<l by hauling, as it is a well-recognized fact that grain can not

1K8PECT10N AND GRADING OF UBAIK, ETC. 47

be handled without a loss when elevated and weighed in hopper Bcale*, it appears to
this board that thin ie an injiistiee to the phipper, and we would recommend as aa
improvement to the present syplem of weighing, and in perfect fairneiw to the shipper
that all Rrain be weighed on tr^ck i<cale!i before unloading instead o( hopper scaler.

We have not the Superior ay stem Kuveming the duties of wei^hmaaleiH, etc., but
we underBtand they are practically the eame as the Minnesota aystem.

TEKMtKAI: INSPECTION OF OKAIN.

Our board next took up the matter of terminal iiupection of grain, and in this con-
nection mode careful and dilit^nt inquiry into the eyetem in vof^ue as to grade and to
dockage. The Minnesota terminal inapection system wa« eatabliahed by an act of
Qie legislature in 16S5, and haa been in operation since that time under the proviaiona
of the general law. aa amended from time to time. The terminal-inapection law waa
the outgrowth of a demand on thepart of the farmers of Minnesota for a system different
from commercial inspection, which obtained prior to the enactment of the Minnesota
grain and railroad laws of 18S5, Prior to thia time the inspection of grain at the Min-
neeota termini^ waa in the hands of men who were appointed by the chamber of com-
merce. It was claimed by shippera that such an arrangement was too one-sided,
giving the purchaser of the grain practically the sole privilege of fixing ite grade and
Its dockage. Under the preaent system the Stale becomes the arbiter between the
shipper aiid the buyer. As originally eatabliahed, this system was conducted almost
entirely on the basis of outside or car-door inspection. When a carload of grain
reached the terminal market it was placed by the railroad company upon special tracks
called inspection tracks, which were provided for in each railroad yard. A stato grain
sampler appeared in the morning aa soon as it was light enough to eee, accompanied by
an inspector. He first took a record of the car number and initials; also a record of th6
number of the car seal, which he had to break in order to enter the car. He then took
« hollow brass tube, called a probe, and by plunging this tube down through the grain
to the bottom of the car in live or more places ne secured a fair sample of the grain
throtighout the entire car. These several probes were deposited at the door of the car,
from which the inspector made his inspection and flxed the dockage. The sampler
then resealed the car, keeping a record of the state inspection seal, applied in place of
the broken railroad seal. U^ile a state inspector was determining the grade of the
grain in the car in question, a aam pier employed by the chamber of commerce at Min-
neapolis or the board of trade at Duluth and Superior also took a sample, which sam-
ple waa turned over to the consignee of the car for exhibition in the chamber or board
of ttade. The chamber of commerce and the board of trade also keep a complel* seal
record. Such waa the ayatom originally employed. In lat«r years the Minnesota
railroad and warehouse commission, who ore charged with the supervision, by law,
of the inspection and weighing departments, have made several innovations. The
most important ia doubtless the one that there is no more car-door or outside inspec-
tion. All grain is now inspected inside. The grain sampler, instead of depositing
the several probes of grain taken by him at the cor door, to be then and there inspected,
now deposits them in a small sack, called asampleaack; in thia sack, together with the
gtun, he places a ticket of the car on which has been marked the number of the car
and initials. The aample ia then taken or expressed to the stale inspection officer,
where, under light, it la inspected by expert inapectotB; the grain dockage, if there
be my docka^, is then determined b>; means of apparatus adapted to the work,
consiating of finely adjusted scales and sieves of different kinds.

In the event that the shipper or the consignee is not aatiafied with either grade or
dockage, aa the case may be, of the grain in the car in question, i1 ' '

call for a reinapection. The grain is then at once reinspected by the chief deputy
inspector or his assistant, using for their reinspection purposes the same sample as
originally based upon. In case either of the parties is still dissatisfied with the rein-
spiection, it ia his privilege to call for an appeal, which means that the merits of the
caee will then be considered by the state board of grain appeals, a board of nine mem-
bers, three of whom officiate at Minneapolis, three at Duluth, and three at Superior.
Thia is an entirely independent board, being appointed by the governor of the State,
while the inspectors and weighers are appointed either by the railroad and warehouae
commission uiemselvee or, with their consent, by the chief inspector of groin. In
Superior they are appointed by the state grain commissioners of Wisconsin. In caae
of controversy aa to the grade or dockage, a sample of the grain being submitted to the
board of appeals, an entirely new aample is procured from the same car. Thus while
the original inspector and the chief deputy inspector reviewing his inspection use
the same sample, the board of appeals procures an entirely new sample from the same

48 INSPECTION AND QBADING OF GRAIN, ETC.

In pureuance of the system of indoor inspection, and with a view of expediting
the disposition of cais upon anival M the terminals, thus alleviating the annual car
shorta^, the Minnesota commiBsion have eetabliahed sampling etations in interior
towns ID that State, Thus there is a sampling station at Wilmar, at Melroee, at Ca»
Lake, at Sandstone, and at Staples.

Grain smplers in the employ of the inepectioD department are stationed at these
places, which in all caaes are division points. Am the grain comes to these points, it
IS sidetracked, and the state samplers, together with the commercial samplers, obtain
samples of the grain in the sime manner as indicated above. These samples are then
inclosed in a strong wooden box, securely locked, to which there are two teya— one in
the possession of the aampline foreman at the interior point and the other in possessicm
of the inspection office at Minneapolis, or Duluth, as the case may be. The sampler
when so secured, are sent by express to the terrainai point, which is the destination w
the cars of grain of which they are samples. It thus quite frequently happiens that
the samples are received some time before the arrival of the car of grain that they
ftctually represent. This affords plenty of time for original inspection and reinspec-
tion, if required. In this manner all the preliminary details are settled when the car
arrives, and it can be immediately ordered to its final destination, thus assuring
prompt unloading and disposition for further use. The grade and dockage given by
the board of appeala m final.

Our board alao found that the rules that govern the grading and docking of grain at
the terminals in Minnesota are established at the h^inning of each grain year by the
members of the board of appeals. They are charged by law with meeting every year
and establishing such grades as, in their judgment, the conditions may warrant. As
soon as the grade and dockage of any carload of grain has been completed or finally
determined a certificate of inspection is issued by the state inspection department.
Thereafter Ihe carload of grain may be sold or delivered at any mill or elevator for
unloading. In thia connection we desire to state that it ia also made the duty of the
grain samplers during their work in the railroad yards to make a careful examination
of each car of grain with which they come in contact for the purpose of discovering
any leaky conditions that may exist, and they are also charged with reporting to the
office any indications on the surface of the grain in the car which would indicate that
any grain might have been removed either \^y leakage or otherwise from such car.

In connection with this, the department* have also established an important branch
of the state inspection and weighing system, that of watching or patrolling the terminal
yards, whereby cars loaded with grain are continually watched while going through
these yards, in order to detect leaky conditions tliat may exist, as well as to euard
against pilfering. The terminal railroad yards are usually located in ouu^'ing
districts where the vigilance of special watchmen is required. Very often leaky cars
are found and reported by these special watchmen that would not show to be leaky
except when in motion, for cars often leak in the yards when being switched about
whicn do not show any evidence of leakage when standing still. A great deal has
also been accomplished in this respect in protecting the property of shippers from
pilferage, a loss against which the local Bhipper would be almost powerless if it
occurred. These special watchmen cover the entire terminal system wherever cars
of grain are handled, and they alsosee to it that cars are properly swept at the different
unloading stations. These special watchmen, assigned to tais patrol service, are
empowered with police authority.

The commissioners were treated with all possible courtesy by the chiefs of Ihe
respective departments both in Wisconsin and Minnesota, and they apparcnily had
nothing to conceal.

Grain, after being inspected and weished, at terminals is disposed of by going to
mills or lerminal elevators. Some of the course grain is unloaded by teams from the
car. Grain that goes to the several mtllK, in most all case^, can be considered as sold to
theee mills for manufacturing purposes, as it stands to reason that a mill would not
buy grain that it did not intend to use for some purpose. As a matter of fact, over
95 per cent of all the grain that arrivefi at the terminals has passed from the oriKJnal
possession of the raiser of the grain into Ihe pn^^si^iou of the several line, independent,
or farmers' elevators that operate the local elevators on several railroads that lead to
these terminals.

Less than 5 per cent of the grain received at these terminals belongs to original
shippers or farmers. Investigation at local markets shows that most all fanna«
raising grain dispose of the same at the local markets, and their interest in terminal
' inspection, weigning, and prices ts mea.sured with the indirect effect of such condi-
tions. As these conditions are good or bad, they reflect themselves back on Ihe

IKSPECTION AND OBADINO OF OBAIB, ETC. 49

producers. The ahijiper of grain to the terminalB has his option^ if he deeiree to tem-
porarily Hlore bie grain, to patronize either public or eemipubiic terminal elevators.

The public elevators are licensed as such, and their businese ia under the jurisdiction
and eupervision of the railroad and warehouse commission of that State. Daily .reports
are m^e from these housee to the etate warehouse rEsistrar. These houeeij are not
permitted to mix grain of different grades together. Hhile it is permissible to mix
the grain of different owners, the grade being the same, it is not allowed tu mix that
of superior and inferior gradea. Thue, tbe identity of the grain stored is retained.
It ia inspected in by the state inspector and inepei.'ted out in the eame manner. The
weighing in and out is on the same plan, and under slAte supervision. Tbcse eleva-
tors offer an opportunity that independent shippers and otheis mav afford them-
selves of, who may consider their grain to be of superior quality, ana who desire to
dispoee of the same by special sale or otherwise.

By utilizing these public elevators, shippers can, if they bo desire, preserve the
identity of their grain by special binnii^ the same, this feature of speirial ware-
housing being given them by law. In view of this, it is quite rcmarluble that so
little uee by shippers is made of the public terminal elevators, particularly by those
raisers and sbippers of grain who are fortuuate in producins and owning the higher
gradea. It would seem that thev, above all others, would tabe advantage of an oppor-
tunity to get the higher prices that the superior grade of their grain entitles them t«.
Tbe Ifttter suggestion appears particularly pertinent, as it would affect North Dakota
farmers and snippers, wno, this board feels, arc the producers of the better grades of
grain.

At the present time there is one of these public elevators at Minneapolis and one at
Duluth. In addition to acquiring a license for the proper conduct of their business,
they are also bonded to the State of Minnesota in a sum suffieient to guarantee the
performance of their duties as public warehousemen in accordance with the pro-

In si>eafcinf! of semipublic elevators, we refer to those houses where grain is inspected
in anil out by state inspectors and also weighed in and out by state weighers. There
are a larcc number of these houses, mtet all of wbic-h are owned by private parties.
We refer to them as semipublic elevators under state pupervisicn of groaeN and weights.
This does not mean, however, that the identity of the grades of the grain going into
these houses must be preserved: that is optional with the owner of the grain. If he
so desires, be can mix grain of different gradei<. These semipublic houses handle a
ineat bulk of the grain that comes to the tenninala. While they have public inspec-
tion atid neighing, they are private in operation, inasmuch as the grain they handle
belonga either to the elevator, or to private parties tor whomjhey warthouse and
handle tbe same.

This ie a phase of the terminal grain business that has been quite generally misunder-
stood by our North Dakota shippers and farmers, who seem to think that all tbe eleva-
tors of Minneapolis and Duluth are public houses, where the identity of the grain
must be preserved aa received. We here desire to strongly emphasize the distinction
that exists as between public and semipublic houses.

Another class of terminal houses that invited and engrotised the attention of our
board are the so-called grain hoepitals or mixing houses. Of these there are quite a
number at the terminals. An their name su^estp, Ihey make a business of cleaning,
scouring, and mixing grain for profit. The grain thai is not in a warehouseable condi-
tion is conditioned, smutty grain is scoured, grain of inferior grade or of no grade is
mixed with grain of better grades, to insure the market grade or quality. Wheat that
ia too light in weight for a certain grade is mixed with heavier wheat, so that it may
acquire the proper weight. Smutty wheat, which in its dirty condition would h«
undt for human food, is scoured or washed, and brought up to a No. 2. or Hometimee
even a No. 1 grade. Foreign seeds and foul stuff are removed from the grain. On
tbe whole, the grain hospital system is a business practice whereby inferior. and
unmarketable grain is improved and made marketable. That this process requires
the mixing with the poor grain of some of the better, or perhaps even the bent, grain
is admitted.

It suggeetti itself to our board that the modern grain hoflpital. under proper super-
vision, would serve a good public purpose, providing the profits they made were indi-
rectly reflected back to the producer of the superior grade which they handled. These
bouses, together with the mills and semipublic houses, are also the beneficiaries of
the sale of tbe immense amount of screenings or dirty grain. This brings us to that
particular feature of our official duty which requires that we shall " make lull inq^iiiries
into the dockage of grain and the expense of cleaning grain, and the disposition of
screenings, and their approximate value." Screenings as here designated in the
law, are dm., foul stuff, and foreign seeds contained in the grain, as raised and brought
45331_]0 4

50 mSFECTION AND QBADING OF GRAIN, ETC.

to market. It preseutd one of the lamestable feftturee of local disputae ae between
the seller and the buyer.

In the early days, when the fanneni cleaned their grain and when because of new
and clean ground there waa little or no foreign stuff in the gnin, there was no docka^.
I«ter it became neceaaary, and to-day doclutge is recognized as a neceerary and l^fiti-
mate practice and has been officially sanctioned for years, Wheat, flaxseed, and rye
are now officially docked at the terminal. The last tew years have shown avery lai^
increase in dockage, as would appear from the records. Thus, in 1904 the aveia^
dockage was 21.1 ounces per bushel; in 1905 it was 18.6 ounces per bushel; in I90G it
was 27.0 ounces per bushel; in 1907 it was 32.2 ounces per bushel; and in 1908, 39.2
ounces per bushel. This latter is the record for the crop year ending August 31, 1908,

All of this emphasizes the growing importance ol this feature of the grain businese.
Not many years ago screeninoa or dockage were of little or no commercial value, being
burned, as a rule, under boilere in engine rooms of mills or elevators. To-day they
are used for various commen;ial piu'Doaea ranging in value from (7 to 916 per ton.

No absolutely reliable figures could be obSdned that would give the amount and
value of such screeninge. However, this board did ascertain through reports received
that the average amount of dockage taken at local elevators in the State of Hinneaots
was about eleven hundred bushels for the year ending June 30, 1907. There waa at
that time 1,723 local elevators in that State, and the amount of dockage obtained
in that State in wheat and flax, according to this average would aggregate 1,897,000
bushels, or approximately 57,000 tone, which, at an average vatiie ol (11 per ton
would be 162,700. This repreaenta only the off-fall or dockue from wheat or flax.
To this there would have to oe added an estimate as to the probable amount and valtie
of screenings obtained by the cleanins of other grain, sucn as rye, oats, and barley.
These figures and estimates are from Minnesota.

In our own state of North Dakota, owing t« practically no r^;ulation, this board
would feel warranted in doubling the figures. We have approxiroatelv the same
Dumber of local elevators in North Dakota as they have in Minnesota. This appeAn
to us altogether the more remarkable when we consider the fact that the North Dakota
lands are much newer, and ought to produce, and in our judgment do produce, cleaner
grain than Uie long farmed land of Minneeota. In view of this we feel justified in
estimating the commercial value of the screenings now practically given away by
North Dakota grain tBisers at not leaa than 1150.000 per year. The North Dakota
grain producer does not only give away this vast amount of screenings, but he ia in
addition taxed the r^ular amount of freight that accrues on shipments of grain in
which the same ia contained. It may ajipear impracticable but nevertheless the
waste of tiiis immense amount of atufi, which is suitable for food punMses for stock,
would suggest the idea that it should be kept at home, and used by our fiirmerB. instead
of being given away and paying freight on the same besides.

For instance, the farmers' elevators, or independent elevators, or even the line ele-
vators, might equip their houses wiib cleaning machinery, so that these screenings
might be kept at home and probably ground into feed. Screeninga, as now sold at
the terminals are used principally for the feeding of sheep and for the manufacture of
food. Thousands of tons of leed are annually shipped into this State, and it would
seem to be an act of wisdom to retain our own screenings right at home and use them
for such ptirpoees, instead of shipping them to Minneapolis, Duluth, and Superior,
paying the freight on same and tnen shipping the manufactured feed back into this
state, which seems to be the l<^cal, or rather tneillt^cal, consequences of our present

board of gram appeals. Formerly this was done by the railroad and warehc
miaaiou, but since 1899 this duty devolves on the sejiarate board appointed by the
governor of the State, which is in no wise connected with or responsible to the reuroad
and warehov"" -'■"■'"!—!'■-

This board in compliance with provisions in section 2062 of Uic revised laws of 19(ft.
did, on September 2, 190S, establish the following |;r^eH of grain, which are known as
Minnesota grades, the same to take efiect from and after that date.

Quoting a prominent Twin City gtain man: "Fixing price of wheat by committee
of chamber oi commerce and spread in price of grade is one of the greatest injustices
in the grain trade." Our board also inquired inlo the differences in price, as between
the several clasaea of wheat. There are three classifications of wheat which affect our
State, namely, that called northern spring wheat, durum or macaroni wheat, and
velvet chaff wneat. The latter whe&t aa yet has been raised in our State only in very
limited quantitiea. The taising of durum wheat has, however, assumed large propor-

INSPEOTION AND OBAOIHO OF OBAIN, BTQ. 61

tionn, the amount reportad ae bemg niaed in 1907 being IS, 822,630 bushels as uainst
50,658,389 bushek of northern spring trhe&t, as reported to the comminianer of agri-
culture bv the several licensed local elevators doin^ biuinew ia our State.

These figures suggest the importance that the nusing of durum wheat has assumed
in our State, and our board felt justified and warrantw in view of this to make cw«-
ful and diluent inquiries into the terminal giMling and prices, aa well as into local
nading and prices, as they af[ect«d the dispontion of thu wheat, niien we began
uuB investigation we found that this wheat was being gtaded under the separate
claasification at the terminals, namely, that of durum iMieat, Otherwise the inspec-
tion, dockage, and weighing ia done in the same manner as tliat for other wheat. We
also found that there was a large difference in the price of this wheat as compared
with the conenMHidiag grades of northem spring wheat.

On October 14, 1907, when we first took up this matter, the official difference in
price at Minneapolis between No. 1 northern spring wheat and No. 1 durum wheat
was 17} cents. This, we believe, was about the average diSerence that they obtained
at terminal markets during the grain season of 1907. At this time, November, 1008,
the difference in price between No. 1 spring wheat and No. 1 durum at twminals is
16 cents. We also found that the difference at local markets in North Dakote aa
between northem spring wheat and corresponding grades of durum wheat was tuUy
as large, and sometimce even larKer than the average, which we quote for the tenninalB.

In view of this fact, and of tne generally tecognued fact of the superiority of the
durum wheat, our producers are justified in inquiring and being informed as accu-
rately as possrble tmether this large discrimination in these two classes of wheat is
jiMified by their flour-making qualities and disposition as to sale, etc. Our board
devoted some little time to ■"■ting inquiriee along this line, and in pureuina this
course of this investigation we had two objects in view. First, to find out the relative
value of Ihese two wheats as to their flour-making qualities. In this respect we sub-
mit, together with this report, several scientific t«sts that have been made by compe-
tent a^vtical chemists, one of whom is Prof, E. F. Ladd, food commiaioner of
North DaJkota, and the other test was nuule by the Howard chemical laboratory, of
Hinne»polis. (6«e Bxhibita P and Q.)

The other obiect that we had in view was to discover, if possible, what becomes
of the durum wneat when it reaches the terminal markets. In this respect we desire
to say that it has been commonly reported that the large mills of Minneapolis were
grinding a great deal of this durum wheat tojgether with northem spring wheat. Our
efforts to ascertain this fact from the proprietors of the mills themselves were only
partially successful, although several of them did admit that they were grinding durum
wheat.

Prom the chamber of commerce we obtained the following figures, taken from the
Northwestern Hitler, as to receipts and the manufacture into flour of the following
classes of wheat for the crop year at Uinneapolis ending August 31, 1907. Theae
figures are as follows:

BiuMla.

Spring wheat 70,658,180

Durum wheat 9,900,560

Winter wheat 13, 1C6, 850

Mixed wheat 1,342,240

Weetera wheat 22,170

Prom the observations and inquiries that we made and the information that we
were able to obtain we are of the opinion that there is an uncalled for and unjust price
discrimiiiatian as between northem spring wheat and durum wheat. Inasmuch aa
this is a subject intimately connected with the matter of interstate commerce, we
would suggest that the Fedt^ral Government should carefully inquire into the loc^
and terminal purchase of durum wheat, and what becomes of the same after it leaves
local markets. We deem it quite eenential to the proper protection of the grain
KToweis who are raising durum wheat that they should receive the full market value
lor such wheat as demonstrated by its actual flour or food value. We are constrained
to believe that at this time they are not receiving such full value, but that large quan-
tities of this wheat are bein^ ground toeether with northem spring wheat and dis-
posed of in domestic and foreign markets lor the full price at value of northem spring
wheat flour.

In support of the ficuroB given above from the Northwpctern Millor as to the con-
sumption of durum wheat at Minncapolia. we quole ihn followinR from the report of
the Secretary of Agriculluro made lo ihc President for the ycai 1907. Speaking of
durum wheal, this report ctalos: "Twenty million bushels of las) year's crop wore
exported lo Europe. Of the remainder all except the seed reserve went rapidly into
domestic consumption, chiefly for broad flour. It ia certain, from oflicial figures,

62 INSPECTION AND GRADING OF GRAIN, ETC.

that over 6,000,000 bushela were ground in Minneapolis milli. Probably 10,000,000
bushels were used in the rountry millB of the Northwest. In Minneapolie a laiRe por-
tion of this wheat was bleoded with hard spring, althoiufh considerable unount of
■traight eemolina was made from macaroni factories. In the country milts a consider-
able quantity of pure durum wheat flour was made.

In a bulletin iceued by Secretary Wilson March, 1903. after he had seat a special
representative to investigate durum wheat in Minneapolis, he says "Fully 10,000,000
bushels of durum wheat are ground and mixed with domestic flour at Minneapolis."

It appears from this that the Federal Government has already made a b^nninF
io investigating the disposition and use of durum wheat for domestic purposes, and
this investigation ought Io be continued until it can be ascertained where every
bushel of this wheat grows, and for what purposes it is used or sold.

If this be true, and we believe it is true, then some way or means should be devised
which would afford to the raisorB of durum wheat that correct price to which they are
^titled. Durii^ the present year the Minnesota board of grain appeals has estab-
lished another classification of wheat, namely, that called "velvet chaff wheat."
TbJB is a comparatively new variety of wheat and, while the same has been grown
in Minnesota and Souui Dakota for some years, it has as yet not been very much in
our own State. However, it is quite probable that in the course of a few years, on
account of its hardiness and superior yield, it will be cxtcnBively raised m North
Dakota. Up to the present year rhis velvet chaff wheat was mixed by local buyers
with their northern spring wheat and disposed of as such , Millers grinding the same
claim to have discovered a perceptible inferiority as between this and the blue-stem
variety, and mainly at their request a new classificRtion was established.

The difference in the price of the corresponding grades of northern spring wheat and
velvet chaff at this time is 6 cents per bushel. We are not prepared to state as to
whether or not this is an unjust discrimination, as we have stated in regard to the
difference in prices between durum and northern spring wheat. However, we belli

also that in this instance careful inveftigation by the Federal Government ought to
establuih the correctness or incorrecthesp of the difference in price.

While perhaps not strictly germane to the dutie.i and functions of this board, we
assume the liberiy of briefly stating the modus operandi in vogue at the terminals
as to the purchase and sale of grain. This businepn is conducted almost entirely
through the agency of the Minneapfilis Chamber of Commerce and the Duluth and
Supenorboards of trade. These are organizations of men engaged in the grain business
for the purpose of facilitating such business, organized on the theory that a large volume
of grain that finds its way to these terminals necessitates some central place where
the same, or samples thereof, can bo presented for sale, and where seller and buyer can
meet advantageously to make the trades and purchases which their business necessi-
tates. This board is willing lo go on record an not favorable to so-called chambers
of commerce and boards of trade, nut until some better system is adopted they must be
tolerated.

These organizations employ grain samplers, whose duty it is to accompany the slate

rin sampleni and to procure proper samples of the grain in cars whicti are about lo
inspecled. These samples are presented on tables during the open sessions of the
chamber of commerce or board, with an official tag affixed showing what the state
inspection was as to such car. This affords a reliable way of presenting and selling
the several cars of grain as they are received from day to day— the sales so made by
members of these or^nizations, whose charge is 1 cent per bushel for all kinds of
gtain except oats, for which a charge is madeof one-half cent per bushel. Nodiecrimi-
nation is made in the sale of grain, the shipments of individuals receiving the same
attention from the commission men, who are members of these organizations, as those
of larger concerns.

A complete record is kept of all sales as to time, place, and price, and from this
record can he ascertained at any future time the exact price for which any carload
of grain may have been sold in the past. These organizations also exercise care as
to the financial standing of the several members connecl«d therewith who do a com-
mission business and who solicit consignments of grain from shippers.

In reference to the marketing of the grain raised in North Dakota it would be proper
tostatethatan action has been commenced in the courts of Minnesota by tbeattomey-
gencral, the decision of which will greatly affect the ri^ts of the people of this State.

When the Farmers' Exchange waaonranlzed a few years ago one of its objects was to
secure the marketing of the grain of Minnesota and the Dakotas in such a way as to
secure the beet results to the producers. For that purpose it was proposed, if possible.

INSPECTION AND (mADINO OF OEAIN, ETC.

io the mguiizAtioD. There was ftlso a provision in the constitution that the net profitii
vising from the businesB at the end of the yeai should be diatribuled among the mem-
ben pro rata. This oiKanization Btart«d biuineoB by opening an offlce at llinneapolia
and another at Duluth. They were unable to obtain a memberahip at either place
on the grain exchange, mainl)[ because of the provision in the charter of the company
that the net profits of the buaimeHB was to be aivided among the producers who cihu-
poaed this. There is a rigid rule in fame at the Chamber of Conunerce at Minne-
apolis and also in the Board of Trade at Duluth prohibiting any member from doing
biuineoB with an outsider for leas than a fixed conuaiasion for services and also pro-

ject to a fine of a thousand dollarB and expulsion from the chamber or board ai
the case may be. By reason of this rule the Farmers' Exchange, though it received
laige Bhipmente of grain from Xorth Dakota and Minnesota, was unable to roake any

Kfit on the businesa because it was required to pav the same comminion to the mem-
of the chamber for handling it that any other shipper was obliged to pay, and thia
without regard to the volume of businen that it furnished the conunuBion house.
It is, of courae, unneceeeary to say that no one but a member can sell grain on the flooi
either of the chamber of commerce or the board of trade, and that all the grain busincM
of Minneapolis is con&ned to the chamber of commerce, and all of the grain business
ot Duluth is confined to the board of trade, except the sale of such coarae grain ■■ ia
needed for home cunaumption.

The action that has been brought by the attorney-general of the State of Uirmeaota
and is DOW pendins in the supreme court of that State is one wherein it is claimed
that the practice of the board of trade at Duluth, which requires all the members to
charge the same rat« of commission and the same rate of interest on advances, and
prohibits them from competing with each other either as to commission or interest rat«e,
ts a violation of the antitrust law of the State, If thia action is decided in favor of
the State, as it is hoped it will be, it will so a long way toward restoring an open market
at both Duluth and Minneapolis, and will permit the members of tho grain exchange to
compete with each other tor buHinese by chaining only such commission for their
service as ia reasonably compensatory, and not such commiseiun aa the board of trade
may insist upon. Competition between the members would naturally reduce the com-
mission chaige and the ialerest charge very much below what the^ are now, and will
effectuate a great saving to the grain producers of tiie States of Minnesota and North
Dakota.

The attorneys who have handled this litigation on behalf of the State are Attomey-
Qeneral Young, Aaaistant Attorney-General Loyal A. Stone, and Assistant Attorney-
General George W. Peterson.

LOCAL WABEBOUSINO, ORADING, DOCKAOE, AND WBIOKINO OF ORAIK.

Viliile the act under which this board was created and appointed did not contain
any direct provision for an investigation of local elevator and grain conditions in this
State, we nevertheless felt it our duty that in order to present a report we be at least
fairly complete as to any existing unsatisfactory commendations that it would be
neceaaary for us lo give some little attention to local conditions, being limited as we
were by a small appropriation and by a time limit of fifty days during the ^ear 1907,
we found it impoasible to devote as much time as we should nave desired m mitkin g
an investigation ol local elevator conditiona. Finding no proviaion in the law govern-
ing our appointment, giving us such authority, we presumed upon the good will
and official authority o( the railroad commiseioneis of this Slate, whom the law charges
with the supervision of local elevators, and who in their capacity as commissioners
have access to the books and records of such elevators. This authority on the part of
the commissioners was secured through the good offices of your excellency.

In this manner we were given an opportunity to make careful investigation ol the
tnain buaineas ae conducted by the several local elevaluni at different pointJ< in this
State, and while we are not prepared to insist that the busineas tranaacled by the
several local warehouses at these several stations would be an absolutely fair criterion
of the local grain business of the State of North Dakota, still we believe that it ia
fairly so. and that the result of our inve^tigatiun in this respect indicates very grave
and serious local troubles that should receive careful legislative consideration.

In this respect we take the liberty to sugge.^t that while the lawmakets of our StAt«
can not go beyond its borders in the matter of regulation, modification, or change

54 INSPECTION AND OBADINQ Of OSAIN, ETC.

of syBtems (A inapection, be they under fedenl or Btet« control, thev cui and have
full power to remed;^ any_ local troubles that are found to esiat and which, in our
judgment, eeriouBly impair the proaperity of the grain growers of our State. Local
elevators are modem means of receiving and handling grain. Our lawB have desig-
nated tbem as public elevator*. They are public in this aenee, that their buBineea
is subject to public euperviiion and regulation. Our laws deftne fairly well what
their hinctionB and privilages are, aa well aa the privilegea of thorn tor whom tbey
tianaact business.

There appears to be rather well-defined opinion prevailing that the buBineaa of an
elevator man, aa fares the handlii^ and purchase of^min, ia one and the same. 7%ia,
however, ia a mistake. Public elevators in North Dakota, as deSned by our law, are
licensed for the handling, storage, and shipment of grain, not for the purchase of the
same. The buying and selling of grain ia an entirely different matter and one which
at all times should remain open to any person or penons who desire to engage in such
bnaineM. The fact that the public elevator man ia fortunate enough to receive at
devatweiteonorofCarigbtof way does not in any manner entitle him toamonnpioly
6f the purchase of grain. Hie bueineee, ae defined b^ law, is to receive, store, and
deliver grain at the option of the owner thereof, for a stipulated compensation for such

All of our la wa are predicated on this propodtion. It is aaeumed that elevator eitee

be granted and elevators erected commensurate with the local amount of grain tribu-
tary to such stations and that the aroount of grain received bv the several houses will
raaaonably compenmte them by exacting the legal charge wnich is provided for the
handling, storage, and insurance of grain. When this is followed by such housee no
just complaint can be made. However, we are conatiained to believe that the local
devaton of North IMcota are not moving within that reaeonable limit which terminal
sradee, terminal dockage, terminal pricee, and the freight rate between terminal and
local points would suggest.

Our deduction in tnu reapect ia baaed upon this propoeition, which we believe to be
fair and reasonable to both the producer and the local elevator man; First, our grain
practically all going to the Minnesota and Supwior terminals, it ia necenary that it be
received, graded, and docked locally on a buda of such inapection and dockage. As
lo^ aa tniB ayatem prevails, we are Dound to conform to that as a reasonable commer-
dafneceMity . In the States of Hinneeota and Wisconsin thia ia obligatory on the local
elevator man. There they must confwm to the l«rminal grades, and it clearly ouf^t
to be made the obli^tion of every local elevator man in the State of North Dakota to
do likewise as long aa theee systems previdl. Moreover, local pricee should be fixed
and governed by terminal prices, minus freight chai^, regular elevaUw charges,
charges for terminal inmection, switching, and weighing, and such reasonable chwes
for a commiasion to sell the grain upon arrival at the terminals. Theee faclSj alT of
which can be easily ascertained at all times through the method of price quotations in
the public press and through infonnation at the several freight offices, ought to make
the margin of difference in price that should exist between twminal and local marketa.
Iliat such is not the case at this time, or that auch was not the case a year ago, we
Mcertained<]uitefully in thelimited investigation that we made as to local inspection,
dock^, weighing, and price conditions.

Tliere are also mdicabona of overagea in local warehouses, but we are not prepared
to state whether the same occurred by reason of overdockage or incorrect weiKbta. In
either event this is a loea to the producer. In the matter of local pricee paid, we dii-
covered what ia perhaps the greatest factor through which the local producer sustains
Idea, namely, underpayment as comi^ared with the terminal prices.

It would be difficult from the limited investigation that we made to fix any very
definite amount es to what ibia loss may amount to on an average, but it would appear
to range anywhere from 1 to 10 cente per bushel, according (o the presence or abeence
of locu competition, as the case might be. We repeat that it ia our opinion that some
remedy can and should be here applied by enforcement of existing laws or by the
enactment of new laws that have tliis end in view. While it ia manifestly impos-
rible to enact laws giving anyone Authority to fix terminal or local prices, it would
appear, however, to be ol necessity that effective means should be provided for by
legislative enactment that would make it possible for the producer to escape unpre^
itable market conditions, at local marketa to which they are contribulore.

Correct local dockage and weights, we believe, can tie established and enforced by
competent and thorough local supervision, and it is not impossible to compel terminal
d^verjr of grain handled tbrougn local houses by individual shippers for the purpoae
of securing correct terminal pricee. If this avenue of escape is legally established and
qiened to the North Dakota grain producer, it will enable him to evade the necenity

INSPECTION ASD QKADIItQ OF QBAIN, 810. 55

of MlUng hie gisin at local pointe to local buyera, unlen the price they offer bim u
tttteUctory.

It appean to thie board ihaX Buch a law would be only fair and right and would have
a UaiAtaiey U> effectively remedy existing local troubles. The very fact that the pto-
duccr could circumvent and get away from conditions that did not suit him, or which
in hie judgment were unreaeooable and unfair, would of neceoeity bring about better
cendiliona. We incloee detailed exhibits of our local Inveetigation,

Before departing from the matter of local inveetigation. we leel that we are justified
in appendii^ a few euggeetioiis relative to the local grain DueineeB in our State. From
Sgujee received from the conunisBioner of sericulture we find that the farmen of North
DakoU produced a total of 110,000,000 buahele of grain duringthe crop eeaaon of 1907.
The loee or gain of a cent per bushel on (hie grain means |I01,000 sa the case might be.
Tliie uoount ie eaaily loet or gained by favorable or unfavorable conditions, nor ia
there any i^uatan^ tlutt euch loee would etop at this figure.

All of thia auggeele that every proviuioa tliat human ingenuity can invent «hould be
employed to insure auch reasonable protection to the North Dakota grain growers a*
they are reasonably entitled to. Giain raising and the profita reeulting therefrom are
the preeentand future basia of prosperity in this State. We are essentially an agricul-

tural or grain growing people, andanything that in any manner detiftcts from the profit

'*" ~ t rightly belongs to and should go to the man who raises the gtain is detiactitu

a the presperitv and reward to which the farmer is entitled. Becogniiiing thit

the protection of those who are. At tl
we feel certain would repay it manv ti
States hae demonstrated the uselulnei

fact, we again emphasize the urgent necessity of better and more stringent local r^u-
lation and Bupervieion.

Itienate > - - >

performance , ___ . _,

with full and proper authority should, from time to time,inquire as to how well they
comply with Uie laws already enacted for their government in regulation, and those
which hereafter may be enacted. In other woras, the lawa governing Ihia businen
should be enforced , and that can only be done by keeping in official contact with the
several places of business, in order to ascertain whether ot not they are doing rig^t.

As to the method tor such local aupervisian, that is a matter that should occasion
careful legislative consideration and inquiry. Perhaps the division of our Slate in
districts m^t afford a reasonable plan, and then to carry out this work it will of
coulee require a collection or appropriation of the nececeary funds. All of theee funds
should be acquired by tax or a acense from the ones engaged in the grun businett, as
it would be manifestly unfair to tax such as are not ennaed in the grain business tor
rotection of those who are. At the utmost it woula be a small tax and one that
~mee over in a short time. Experience in other

_ _. . . e of careful local auperviaioni and there is no

reason why the same benefits should not manifest themselves in this State. In this
connection we suggest another idea, and that is compulsory annual reports from all
local elevator men doing businees in this State. These reports should show the
amount of nain received, how graded, the dockage, and disposition of the aame, also
the terminu weight, grade, and dockage.

This would enable those who are in chance of the department of auperviaion to
ascertain with reasonable accuracy aa to how well local elevator men do conform to
terminal conditions.

BECOHMBKUATIONS— aSQUlRBn LEOIBLATION.

After careful inquirj^ inio the provisions of our state laws which now apply to the
i^ulation of local grain busineee in this State, our board arrived at the following
conclusions in a general wav as to the required legislation; part of the suggestions
herewith made are covered by existing law, and oUiers will require the enactment
of a new law;

First. The enactment of a general law covering all the subjects herewith alluded
to, and then repealing existing laws that caver the same subject, would be the prac-
tical way to solve this proposition. In our judgment the proper supervision and regu-
lation of lo<^ Ef^ business for this State requires a law tiiat fint should embrace
offiriaJ jurisdiction and supervision. The railroad commission of this Sta1« should
be given full power to regulate and supervise the local, as well as any terminal, eiain
busmeae established under our laws. They should issue all licensee required by local
or terminal elevator men, and the^ should be given full power to revoke or annul
such licensee for cause, also to receive, pass upon and accept or reject the bonds exe-
cuted by elevator men under the requirements of the law.

Second. The supervision and r^pilation of the local and terminal grain business
of this State will cause more or less expense. This should be borne by those directly

INSPECTION AND OBADING OF GRAIN, ETC.

uid inteneted in the giaiit buBineM. The moat {Hectical way to raise the
money eo requiretl will be from a graduated license fee to be paid by the local elevatiw
men in accwnluice with the capacity of the elevator which tney opentc. The money
ao collected should be gathered into a special fund to be known ae the "state Krain
fond," and out of this dtould be defrayed, wholly or in part, the expense of local
and terminal min supervision.

Third. By lepl enactment tbere should be eatablished and defined what shall
constitule public local and terminal elevators. Terminal elevators should be eatah-
Jished by purchase or tease at torminal cities on the main railroad lines immediately
iidioining the Minnesota border, or at Minneapolis, Doluth, and Superior. Undw
punlic local elevat<as should be defined all elevators and wvehotiaes in which grain
IB received, stored, shipped, or handled, which are situated on the tight of way m any
nuboad company or adjacent thereto to be used in connection with tts line of railway
at any slAtion or siding other than at such places within the Stato which may have
been designated as tAminal markets; also all elevatora and warehouses where graiit'ts
received, stored, diipped, or handled, situated at any boat landing on any river
within the State.

Fonrth. The enactment of a law providing for a legal form of elevator or storage
receipt tor grain. This act to provide for a uniform form of receipt to be used by all
public local elevators in the State. One of the features of ^id receipt to be the ci

pulsory delivery of grain stored at the initiatorv elevator or at a terminal elevator, at
the option of the holder of the receipt. Also the enactment by law of a form of sur-
render receipt to be issued to the holder of storage receipt upon a surrender of the
same to a local elevator man, together with a demand for terminal delivery of the
grain covered by such receipt-
Fifth. The enactment of a law providing for the appointment and employment
by the railroad commission of this State of a compet«nt scale expert or experts, who
shall have power to inspect and report as to the condition of scales used in public
local or terminal elevators within the State, the commission to have power to condemn
scales found to be unlit for use or out of order, and to prohibit the use of any such
scales until properly repaired. We believe this to be far better than the method
mployed which requirea the sheriff of each county to perfram this duty.
' The e ■ • • ■.■ - . i

Sixth. The enactment of a law providing for annuu reports of all the ousinees
traasacted by local elevator men ana of dailv or weekly reports of business transacted
by terminal elevator men, such reports to be made to the railroad commission, and
by them kept on file for the inspection of all parties interested. Also a provision
nude in such law for weekly reports of all receipts and shipments made by local
warehousemen during the period from August 1 in each year to November 1 of the
same year, these reports to show the amount of grain received during the preceding
week of all kinds and its^rade; alao the amount of dockage applied; also the amount

of emin of all grades shipped, and destination, giving date of shipment, number
ana initials of the car. Tne commixsion shall during thin period employ some person
whose duty it shall be to ascertain the terminal grades, dockage, and sale price of

such shipments for the purpose of comparison of local grades, dockage, and sale pricee.
This law also to contain a provision for special reports at any time the commission,
in their judement, deem such special report necessary.

Seventh. The exaction of an adequate bond from all parties engaxed in the local
or terminal elevator businesB, such bond to be given for the faithful performance
of their duties and obligations as public elevator men and to be graduated in amount
in accordance with the volume of buainess to be transacted.

Eighth. A law providing for a system of publicity, under which the railroad com-
mission shall acquire and keep on file or publish, as in their judgment may seem
necessary, constant knowledge of grain prices as paid at the several local and
term inal markets .

Ninth. The enactment of a law providing for personal, official supervision of the
local and terminal business of this State, either by the members of the railrowd com-
mission themselves or by such agents and experts as they may employ for such pur-
pose. The coramiaaion, or its agents, to have full power to enter upon the premises
of any local or terminal elevator and to cause such elevator and the business thereof,
and the mode of conducting the rame. to be inspected whenever in their judgment
such inspection seems proper; and for such purpose all such elevator property, its
ijooks, records, accounts, and papers shall at all limes during business nours be
subject to such inspection. The necessity for such local supervision and inspection
au^ests to our board the ad\'isability of dividing the State into two or more clistricts
ana putting these districts under the supervision of individual members of the
commission, or of agents whom they find it necessary to employ for such purpose in
order to exercise more diligent and constant nupervisiou.

iNSFEcrnoN AND obasiho of obain, etc.

State of North DftkoU u unJortuuktely so ntUAtod ^eof^phicalljr that it does not
contun within its txmiera Buch Uige ci>mmerci»l pointa that by virtue of tbeir geo-
gnphical locstioD, or because of truuportation ceotralization, nuzbt be deewnated
M tominal nurketB, The real l«rmiiwl marketa for the gisin raised in North Dakota

Jation might be

ecouncfl< — ' " '

J, „_ „ la at those p.,—

We have given thia matter a great deal of thought and «>naideratioD and have
decided to recommend the leeelng of terminjU elevators at Mlnneapoiia and one at
the head of the lakes. In coimectioD with thia recommendation, we consider it our
duty to report an incident of Minnesota iegislation of the same nature, which, while
it may detract from the feasibility and practicability of our recommendation in this
respect, we neverthelen feel ou^t to be broiwfat (o your attention and to the atten-
tioD of the legiebture which would have to take proper action in this matter.

In 1893 the legislature of Minnesota enacted a law providing for the purchase of
a rite and the construction thweon and operation thereof, throu^ its railroad and
warehouse commission, of a terminal elevator at Duluth, die same to be of a capacity
o( 1,000,000 buritels. litis site was dtilv purchased bv the commisnon, ana they
were about to let the contract for the construction of an elevator when they w«e
slopped by injunction proceedings commenced by a citizen of that Stats in an action
entitled "Rippe «. Becker" in the district court of Ramsey County, Minn. The
district court held in favor of the State, but on appeal was reversed by the Hinmesota
supreme court. (Rippe v. Becker, 56 Minn., 100.)

The Minnesota supreme court held that the State, through the act in question, was
preparing to engage in the grain businen, and thai this was in conflict with the con-
stitution. The court affirmed the right of the State to "regulate" such businese, but
not to engage in it. The site so purchased is still owned by the State of Minnesota
but no further attempt has been made by (he legislature of thia State, or by its railroad
and warehouse commission, to engf^ in the grain business.

We state this fact for the purpose of brine^ng it to the attention of competent legal
authority as to whether or not our constitutiDQ allows our State to engage in the grain
business. Should it be found that such in the case, and that the constitution of North
Dakota., the same as that of Minnesota, would prohibit our State from engaging in such
businesB, then our board would recommend the designation of sevetal cities in our
State near the Minnesota border as terminal markets and that the elevators situated
at such points be defined and declared to be public terminal elevators.

Our ctHnmittee inquired into the matter of cost of purchasing or buildinga terminal
elevator as per insiructions in the law providing for our appointment. The cost of
purcharing orbuildini; would perhaps be very nearly the same, t^ing intoconrideiation
the depreciation of old terminal elevators which are for sale. As to the cost of a new
building, it would at this time approximate the following figures:

Elevator to be built of iron or concrete, 1,000,000 bushels ca-
pacity, 30 cents per bushel (300,000

Iron or concrete, 1,500,000 bushels capacity, 25 cents per

bushel 375,000

To build elevators of the same capacity, the material being wood, would coet lees.

jt of the site, that is a matter that varies according to the location.

this respect our committee ascertained that adequate and well-located sites can be
purchased at from |1,000 to 110,000 per acre.

In 1803 the railroad commission of the Slate of Minnesota, under direction of a
statute which had then been passed, purchased a terminal elevator site at Dututh.
This site is still in posspivtion of the State, It is advantageously located, and com-

5 rises 2 acres of ground. The purchase price of this site at that time was (17,000.
t has never been used and we nave an offer from the state auditor of Minnesota for
the purchase of this site. However, before such sale could be consummated it will
require l^iislative sanction, and a previous appraisal by some authority from that
State.

58 IHBPfiCTIOS AKD OBADINO OF QBAIN, BTC.

OrBRATlNa BZFEN8KB AHD MAINTBNANOB OF TKRMINAL KLBV4TOK8.

We find that the expeiiM of muDtoiuice tad die opetfttioD of a tenniuk) devktor
witl be ftboul <3.60& per mwtb. To tfais, however, muet be added Itie expeiue tor
fin ioBuianca, liatAity iiuuniice, boiler iuannace, utd ttxee. The opefating «z-
penMi per moDth would be divided aomewhat a* followa:

1 euperinteiideDt CM

1 foreman , 100

1 engineer 75

Imfllwright S5

2 weighetB 170

1 fireman 66

1 electrician 90

2BweeperB 100

8 workers 600

1 watchouui 60

lOOUmiotcoftl 460

Office exf^inee 260

Btatiooery 10

It midi a hoiue is to nm day and niriit, the time expense will increaae accordingly.
Id the event of opeiadng a tenninal nouee or houaee under a leaae the ezpenM, of
cooree, would be relatively the same, excepting the payment of taxes. In c

tiaa with the forwoing we here deeire to report uiat there waa offo^d to our cc

Bion a termini elevator with a capacity at 960,000 hiinhrjii, ctxMtructed of wood, in
good condition, ntuated adjacent to the Unsfw yarde in the city <d Hinneajwlia,
together with 6 acrea of ground, all in modem runnmg condititn, tai 9100,000.

While complying with proviaioiiB of the law ae to aacertaining Oie coat of buildiiig
ca purchasing a terminal elevator, our board, after full and mature deliberation and
in view of the uncertainty ae to whether it would be as feasible and practicable for
a State to engage in the grain busineei, and after consulting with various grain pro-
ducers in our own State who ore intMreated in this project, have decided to recom-
mend the lease of terminal elevators— one at Minneapolis and one at the h€ttd of
the Lakes — as an experiment in this respect. We re^rd this as the safer method,
in view of the fact that it will be an experiment. Should this prove satlsfacttwy, it
will not be difficult in the future to procure a site, «nct terminal hoiisee, or acqaiTe
such rite and elevator by purchase. The expense of leasing such houses will be
about 4 per cent of the coet of the buildins.

In another place in this report we have deecribed the busineH of the so-called grain
"haepitals" or mixing housce. The improvement (rf grain bv this process has become
quite modem, and in our judgment permanent, and we woula suggest that the benefits
of thus improving grain ou^t to be within the reach of birmen and Hhippere from our
State. With this end in view^ we would suggeet the acquirement cc opoatioD of

Cm hospitals — one to be at Minneapolie and the other at the head of the Lakes, to
operated in connection with our tenninal elevators. Tliis would aftbrd an oppor-
tunity for our Neath Dakota farmen, or shippers, who are unfoctunate to come into
poeeenion of or laiee smutty gmin, ot whose gnin has been damaged by inctem«nt
weather, or who have not the facilities for cleaning grain before delivering sune
at the local market, to ship tiieir grain to these houses tor the purpoae of improvemeU,
they to become the benenciariee of the increased market value bv reason ot such im-
provement, and to be recompensed in a reaaonable manner (or toe off-bU from such
grain.

Weinquiredinto the cost of cleaningand improving grain at these houses, and found
that such cost ranges from one-halt to 2) cents per bushel, according to the condition
of the grain handled. For original cleaning the usual cha^ is from one-half to 1 cent
per biuhel, but if it becomes necessary to scour or wash grain, the cost is materialljr
mcreased, being from 2 to 2i^ cents t>er bushel. However, in view ot the Iwgely in-
creased market value of grain treated in this manner, it is quite obvious that still largor
profits should accrue to those who would avail themselves of the opportunity td thus
improving their grain.

FEDEBAI. OBAIN INSPKCnON RBCOMNBNDBD.

Thi! board, after very carefully' cotvdderii^; the matter, have no hesitancy in indwe-
ing the tedeial inspection of grain, and believe if it became law, would be more ntie-
factory than anv of the ^ireaent systems. The following are a few of the reasons:

Firxt. Federal inspection, if adopted, would cxtablish a uniform standard of giadee
over the entire country, and there would not be tJie friction which now exists by

INBPBOTIQK Am (mADlSQ OF CBLUIT, BIO.

uunoction tfao HDiibte now mmmg ftmn so many difierant eyst«iiu would be obvutod.

Sectmd. Afl has been stated before, 06 per cent of tbe gmn imiaed by the (annera of
Nwlli Dakota is dupoeed of at local elevatot, where no nyBtem of inspection and
dockagfl prevailed, but on tbe contrary every local buyer adopts hie own etandaid.
Under fedeikl inapection the i»oduGW would get the- benefit by bringing the inspec-
tion within his reach.

Third. On investigaticm we found that the pieeent eystem of delivering gnin for
eiport (HI ronttact mdes, or certiflcatce of inapection imued by the Hinneeota inspec-
ti<» department, nave proved very unatiBfacton b> the fixeign buyers, and also
works a Dardship on the North Dakota farmer for the reason that the ^ades inspected
out for export are inferior to the Krades inspected into tenninal elevators, and the
price paid for the inferior grades, fixes the price on the better grades raised by (he
Nortti Dakota brmer. We believe that the federal inopectian would correct this
wrong.

Fourth . Federal inspection would tend to restore the confidence of the grain srowM*
of North Dakota, which has been sadly lacking under the present system of docksM
and inspecting grain at the tenninal markets. For this and other reasons which mig£t
be given, we itnnigly indone federal inspection and urge the people of North Dakota

As furthci evidence, i

inspection bill now pendiiiB in Congress (see p. 260, Hearing before the Committee on
' gricultnre and Forestry, United States Senate);

Now, that same carload is taken into the elevabn. The purchaser has boiuht it

Agricultnre and F

'Now, that same ^JKAIUKU IB I*KCU IUVJ bUC ClOVHIAM. ±i 2 ^ _-

>t a jlade leas than it ia worth. He does not aend that same carload on and finally
sell It at die Mme grade abroad. He mixes it with three carloads of No. 3 or No. 4
and he afaipe that abroad (or to the consumer) ae No, 1. He did not even pay_ for it
■a No. 1 in the first instance, but he has mixed it and sent it abroad. When it geta
ov^ thoe they will give only, we will aay, a No. 2 price (or it; but the ahipper haa
got in three tfmee as many bushels of No. 3 and No. 4. He has paid for tae other
atuS that he put int« the No, 1 only GO centa or 60 cents a bushel. Then the con-
sumer over there refuses to pav the No, 1 price. He pays us a No, 3 price. That
makes all of our No, 1 grain — wnat is really No. I grain — sell for what would naturally
be the No, 3 price when you compare it with the No, 1 of other countriee.

I wish to inaen here another table, taken fmm the recorda of the weishin^ depart-
ment of the State of Minneeota, showinKthe amount of each grade, weighed m at, the
amount weighed out of, the elevator at Duluth during the yean 1902, 1903, and 1904.
Tlie table la as follows: (From annual Kporta Minnesota grain in^>ector for years
named, Duluth weighing department,)

Whtat (buAeU).

Ym««MntAtmP*tll~

Omde.

woe.

IMS.

IKK.

R«dTCd.

BhlppHl.

B«md,

ShlKKd.

RMdted.

Sblppnl.

W iHard

19.888; 187
'I'oTl'aS

i,628,eei

21.905.842

112:8*0

90, ua

W,«B,BBT
10,29^172

2',mo.xa

109 138

S::SSSSS::::::::::;:;:;

No. 3 Northern

"•^ia

I have not the record for the subsequent years, but thia will anawer the purpose, I
call your attention especially that in 1903, 15,000,000 bushels of No, 1 Northern were
received and about 20,000,000 bushels of No. 2 N(»lhem were ahipped out. At the
«me time 20,000,000 buahelsof No. 2 Northern were shipped in and about 15.000,000
buciielBsldppedoiit. Inotherwords, about 5,000,000 buahelsof No, 2 Northern chaiwed
" tely to No. 1 as soon as it was entered into the elevator. (See Exhibit O!)

INSPECTION AND OBADINO OP GRAIN, ETC.
Condition qfeart, Dtduth terminalintpeetion artd wti^tTtg.

ISS.

October,

OmnHlaarlMk

1«

i,m

3,m

3,044

4.B18

WISCONStN GRAIN AND WAKBHOUSB COmnSStON, SUPBRIOS, WIS.

Condition of can received during October, 1908 (10,Stt eart receivtd). — The following
^UTM ahow tne condition of can weighed by Wisconsin-N'orth Dakota weighers during
the month of October, 1908, 4,832 in leaky condition, as foltowa:

Grain door leaks 3, 478

End leaks 1,760

Side leaks 807

Corner leaks 44S

Draw bar leaks 240

Bottom leaks 72

Report made on all new work of this kind, whether done befora or aft«r grain was
loadec, to be determined upon by shipper and railroad company.

Cars reported newly nailed, patched, or cleated 1. 162

Cars with leaks stuffed with lags, waste, paper, or grass 44

Cars showing depression in grain line 13

Reporled in bad order on end or sides 21

Il«ported as having been loads from wrecked cars 2

Evidence of having been repaired en route 4

Car with no side doors 53

No end doore 4

With side door nailed 10

Seal record.

Oars no end seals 1,038

No side seals 503

Broken seals 117

Cars end dooraopen 16ft

Care side dooiB open 113

H. A. JiraBAU, Chief Wei^maler.

We also wish to state in this connection that there is now in operation at Superior,
Wis., a eyslem of inspecting docking and weighlne of grain, under the supervision
and laws of the Slate of Wisconsin, of which any snipper of grain can avail himself
ii he so desires. . The chief inapector ia a North Dakota man. and our State ia also
represented by one of three of the stale board of ^rain commi-nsi oners, as well as one
member on the board of appeals. Anyone shipping grain to the head of the Lakee^
not being satisfied with Minnesota inspection, can get the Wisconsin inspection by
calling for ii, or he can obtain both if he wishes by paying for the same.

IK&^TION AND (HIADINO OF QBAIN, ETC. 61

This gives the ahipper the option of chooeing betweeo the two systema, cooaequentljr
he is not compelled U) Accept the Htondsi'd wlopled by one, but on the coDtrary cut
avail himaelf of one or both if he so desiree. In c»11iiig attention to thia matter this
board inCeuds to be perfectly nonpartisan, but deems it their duly to state these facts
for the benefit of the Nortb Dakota shipper.

We are attaching to this report a letter from the connnisBioner of Minnesota, Mr. C. F.
Staples, relative to the conunissioii merchants' law. (See Exhibit R.)

TDiB Sniehes our report, vour excellency, and in concluaion we wiah to eay that
while the time allotted to iJie investigation was not in prupurtion to the maenitude
oi the undertakiuf;. however, we aiucerelv hope that our labors have not been in vain.
Realizing as you do that we were not allotted with any authority by law whereby
we could demand certain important things in our investigation, you at once appre-
ciate the difficultii» under wnich we labored. Notwithstanding all thia, we believe
we have accomplished some practical results, and we trust that you, the It^slature,
and all the people of our State, will appreciate and profit by them.

A. R. Thomfeon, Chairman,
M. 0. Hajj,, Serrelan/,
E. D. Washburm,
Board qfOrain Commu*wner$ /or North Dakota.

Exhibit O.

London Corn Tradb Association,
ExcHANOB Chambers, 28 St. Mart Axe,

London, B. C, Frbmary IS, 1908.

Ur. pRsaiDBNT: I am instructed by the Europeau International Committee on
Americui Grain t'ertificatea to communicate to you the following facta;

There have been for some years past a general consensus of opinion among European
buyers of grain that the operation of the preaent Byntcm of certificating grain for export
is increaaingly unsatisfactory, and that whatever may be its merits for the purpoaea
of domestic trading, it no longer gives to European buyera the confidence and j)rotec-
tion which is necessary in a trade where Ihe only guarantee for reliable quality and
condition in exchange for buyer's money is a paper certificate. Formerly buyera in
buying from the United States of America were able, as they slill are in their dealings
in gram with other exporting countries, to recover from snippers any damage they
Bustained owing to defects in quality or condition, but since the introduction of the
certiScate system this is no longer possible. Even after its introduction, indeed,
until comparatively recent times, it was seldom found that any serious abuses aroee,
and trusting to their belief in the reliability of the grading system, buyers were willing
to continue trading with America on less favorable terms than they demanded else-
where; but whether from the increase of individual competition, or, what is probably
moreimportaiit, the rivalry between the older porta and their smaller and more recently
eatabli^ed competitors, there seems little doubt but that the standard of grading has
been lowered, either temporarily or in some cases permanently, in order to attract
buaineea from interior points; and we in Europe feel that the burden of such departure
from the more reliable and stricter method m force formerly has been borne chiefly
by European importers, who, being far awav, have no power of protecting themselves
agaimit errors, or worse, in the eiading metnods of recent years. The result is that
American grain sufEets as r^ards price when in competition with grain from other
countriea. The increasing dissalistaction culminated some twelve months ago in a
general request from the principal European grain centers that a conference should be
lummoned by the London Com Trade Aaeociation to consider the best meaflures to
adopt to remedy the defects of the present system of dealing in grain from the United
Statee of Amenca.

The conference was held in London on theSthof November, 1907, and was attended
by delegates from all European importing countries. It was unanimously resolved
thata committee be appointed, consisting of seven members from the United Kingdom
and an equal number from other European countries (the latter being represented
as follows):

Belgium 1, France 1, Germany 3, Holland 1, and Scandinavia 1, to suggest neces-
aa^ improvements, and lo n^otiat« with American grain trade for tbeir adoption.

This committee met and drew up a scheme (a copy of which 1 have the honor to
append) which was submitted to the principal grain associations of the tlnited States
01 America, butwhich, I regret tosay, aid notonly prove unacceptable to the American
exchange but even bdted todiawany counter propomls from them. Indeed, the way

62 INSPECTION AND OBADINO OF OBAIN, BTC.

in iriiich thig subject baa b«en treated b^ eome of the leading giain aaeociatioDS there
would almoet »eem to indicate that there ia do dedre to recognue the undoubted fact
that Hriooa bulta have ariaeD or that there ia any need to amend a ayatem which ia
respoiudble for abuaee of whidi European importera universally complain.

Tradets here generally recognize that a reliable syatem of inapection and certificating
preaenta many advantages, but that to be thoroughly reliable, it must depend a '

from time to time type

Thia ia the ayatem adopted by the agricultural department oIHiaHajeaty's Qovem-
ment in the Dominion ot Canada, and haa hitherto proved generally satiafactory.

Hy committee obaerved with great satisfaction your reference to thia important
matter in your last preeidentiat message , and there is before your Senate and Houae
of Repreaentativea at the pnaent time a bill embodying some of the above suggeetiona.
While they would, of coana, have prefened to get their own au^geetiona accepted by
American traders, they wiah to be permitted to oBer to you theirautcere ctoigratulatiooa
and tbanka for the slepa you are taking to remedy an undoubted evil, and to aaanre
you the warm support of the European grain trade in your eSorta.

I have the honor to be.

Your moat humble and obedient servant,

BOBBBT A. FATTBBaON,

CAoo-num European Inltmalional Committee

On Amenean Oram (^tificaltt.
To Prkbidbht,

Whiu Hoiut, WaAmgUm, U. 8. A.

Exhibit P.

Howard's Whbat and Flouh Tmtino Labobatort,

UirmtapolU, Uinrt., September II, 1906.
Chemical analyaia of wheat sample received from M. O. Hall.
Reeulta given in percentages when practicable. Wheat sample milled to produce
atraight Sour. Received E)-7-0S. Schedule O.

"Abnadtka."
tbbt8 on th= wheat.

Weight per buahel, cleaned 00.0

Cleaning loae 1.2

Yield TO. 6

Acidity 220

Soluble carbohydrates 2. 7

Total nitrogenoua compounda 16.7

Gliadin 9.8

Glutenin 4, 6

Other nitrogenous compounda 2.3

Gluten 14. 4

Color, poor 1,5

Volume of loaf cu, in.. 142

Weight of loaf oz . . 17.13

Water used o*., 6.13

Explanatory remarka: The cleaning loea is the amount removed by our small mill-
ing separator and scourer aod is expressed in per cent. The yield is the percentage
of strai^t flour made on our experimental mill and calculated on (he cleaned wheat.
With a No. 2 northern wheat we get from 65 to 70 per cent of stiaight flour, and reaulta
are comparative with each other aud approximately proportional to the yidds which
would be obtained in a merchant mill.

Tfaeashiathepercentageof mineral matter leftafter thorough burning, and ialoweat
in a true lirat patent and higher, as more of the branny particles are found being hii^eet

INSPEOnON Aim OBADINQ 07 OBAIK, BTO. 63

in Ui« loweet etMlea of flour. In Houtb made from spring wheats and beet fint patrats
nnge from 25 per cent or 30 per cant to 40 per cent, second pfttents >nd etnj^ti
from 3!S per cent to 66 per cent, cut Etraigfata, etc., from ^ per cent upward.

Acidity ia the meuure of the Boundnen of the flour. The acidity of this flour is
considenble above that of floura made from ordinary eprins wheat. The limit iot
such flours isO. 115 percent. SolhatwhilethiBflour may beallrlsht at present, it will
not keep Be well as if the acidity were lower. Soluble carbchydratee normal. Sol-
uble carbohydrates (tugars, dextrins, etc.) are fermentible materials, and in sound
flouTsdonot usually exceed 6 percent.

The nitrogenous compounds are the materials which influence the expansion or
volume (rf ]<^ which the flour will give. They include the two gluten compounds —
gliadin and glutenin — and other soluble nitrogenous compounds of little importance
preeent ueuuly in small amonnla. This is a very high per cent of gluten, but it is of

The baking Veale are made according to our usual method, using 12 ounces of flour,
CotfWB are marked as follows: Patents, maximum 1, medium 1.5, minimum 2.
Straights, maximum 2,5, medium 3, minimum 3,5. The avenge volume hard s[«iiiff
wheat flouiB is at present about 105 cubic inches. The weirht of loaf and water naea
are at present averasio); about IT and 6.06 ounces, respectively.

In general this wheat gives a flour yield equal to the ordinary sprines, having the
Mune weight per bushel; it has about the same water abaotptKoi and bread yield.
The expansion of the loaf is decidedly below that of the ordinary springs^ and aim
the keeping qualitiee of the flour. The aah is much hi^ei and the color is the dia-
tinctive macaroni creamy-white color, and very good for this variety of wheat.

le milling tests for the sample of wheat, Aronautka, laboratnry No. 214, milled
T date of September G, were as follows, nade, Ko. 1 UMthem:

Weight per bushel, uncleaned, 59 pounds.

Weight per bushel, whe&t cleaned, SIJ pounds.

Number of pounds milled, 137 pounds ouncee.

Weight of patent flour, 70 pounds 6 ouncee.

Weight of second clear flour, 3 pounds 11 ounces.

Weight of total flour, 91 pounds 1 ounce.

Per cent of total flour, 67.73.

Weight of bran, 11 pounds 9 ouncee.

B^ing tests for the three grades
standard went as follows:

of flour

m comparison

with the

Suaple.

VohUM

olloal

t«ra).

Cotot.

TMture.

Nombn

Number

Bbutdud

m.<i\ MizH

:!;;;

?SnS*?.-.-.-."::

"■»

In many ways it is hardly possible to compare results with those of Howard's labora-
tory, since he used the straight flour.

In expansion as indicated by the volume the patent for the durum fell a little
below the standard, which is fife and blue stem, and one that has been used for several
months in this laboratory.

It will be noticed, however, that a slightly lees amount of flour was used in the
pMfDt than in the standard, bo that the volume of this particular fiour was very good,
iriijil« Uie volume for the first and second clear, as will be expected, is much leas.

64 INSPBCTION AND OKiJDlNQ OP QHAIN, ETC.

The chemical work has not ae yet been completed. Unfortunately one of vay
aflrietanta was stricken down with typhoid fever and another, doing th« flour work, waa
out of the labonUory for a week. Thia has put ua quite a little behind in ourworic*
but aa Boon as we can get the data completed 1 will send it to you.
Youre, very truly,

E. F. Ladd.

Under date of November 10 this board again wrote Profeasoi I^dd for the balance
of his report and received the following answer:

NOVBMBBR 11, 1908.
M. O. Hall,

NieotUt HoUl, MintieajtoHi, Minn.
Dbak Sib: IntheabsenceofProfeaBor Ladd 1 am instructed to acknowledge receipt
of your &vor of November 10, and to say that Professor Ladd is now in the East and
does not expect to return until about the 20th.

Yours, very truly, Alma Josnbon, Stenographer.

[No. 43M.)

Office of Railboad and Wabbhouse CoMitiBsioN.
Hon.M.O. Hall,

Secretary of the Grain Commission of North Dakota, Uohatl, N. Dak,
Dear Sir: In compliance with the desire of your commission for information with
reference to the operation o( laws governing the handling of grain and other agricultunit
products by commission merchants in this State, and particularly with reference to the
circurantances and factn which led up to the prosecution b^ this commission of the firm
ot EdwardH-Wood & Co., for alleged violation of the provisions of chapter 225, General
Laws, \S'.I9, commonly known as the "^ommbaion merchants' law," 1 will flrst direct
your attention to the law itself its it now stands, in revised form, on the statute books.

2114. Dfjinition— Lkertse — BoTirf.— For the purpose of thifi subdivision a commission
merchant is a pereon who may receive for sale, for account of the consignor, any
agricultural products or farm produce. No person shall sell or receive or solicit
consignments of such commodities for sole on commission without first obtaining a
license from the railroad and warehouse commission to carrj' on the buetneoe of a
commission merchant, and executing and filing with the secretary of state a bond to
the State for the benefit of his consif^noni, the amount of the bond to be fixed and
sureties to be approved by the commission, who mav increase or reduce the amount
of the bond from lime to time. ('99, c. 225, ss. 1,4, 6.) (77-*B3, 80-633,778; 94-225,
102-697.)

2115. Af

tion for lictiim.- DUAii \iv LU niiuij^, r,idi.c f,iic L iruiuiuu ii.ica lui v, iity ii iti.vim.- VJ n:il ID

wanted, and give the busineee address of the applicant and the estimated volume of
business to be done monthly. If he desires a license which shall authorize him to
sell grain, the bond shall be conditioned that he report to all persons consigning grain
to him, and pay to them the proceeds of its sale, less commissions and actual dis-
bursements; otherwise the bond shall be conditioned for the faithful performance of
his duties as commission merchant. All licenses shall expire May 31 of each year.
The fee for each license shall be one dollar. Such license may be revoked by the
commission for cause upon notice and hearing. {'99, c. 225, se. 1, 4.)

211G, Commimon may require confidential ilalemenU.— For the purpoee ot fixing or
changing the amount of a bond the commission shall require statements of his business
from the licensee, and, if be fail to render such statements or to fumi^ any new bond
required, the commission may revoke his license. All such statement* shall be for
the exclusive information of the commissioners, unless they shall be required for use
in court, in which case the commiwionera shall produce them. (99 c. 225, s. 4.)

2117, Slate7iMn(o/(Af coiuignor.^Whenever a licensee sells any BfaJn he shall render
a true statement in writing to the consider within twenty-four hours of the amount
aold, price received, name and address of the purchaser, and the day, hour, and
minute of the sale, and shall forward vouchers lor all chaiges and expenses. (99 c.
22S, B. 2.) (94-225, 202-697,)

2118. Com^iioint — Investigation—Report. — Whenever a consignor of a commodity
otherthangrain, after a demand therefor, shall have received no remittance or report of
its sale, or shall he dissatisfied with the remittance, sale, or report, he may compndn in
writing, under oath, to the commission, who shall investigate the matter comfriained
of. In making the investigation the commission may compel the Ucmuee to produce

INSPECTION AND CffiADINQ OF Q&AIN, ETC. 65

all intormation, books, records, and memonnda concerning the matter, and Uiey ahall

Ce th« complaintuit m written report of the inveatiKation. Thia report shall be prima
te evidence of tlie matters therein contained. (1899, c. 22S, a. 3.)

2119. Actum on bond. — If any licenaee shall fail to account for any consignment of
any of the commodities mentioned in this Bubdivieion, or b> [my to the coosiaiior
moneyH due on such consignment, the conainior or hia agent, within ninety daya of the
date of shioment, may file with the commteaion an affidavit aettine forth the mattera
complained of. Thereupon auch conaignor, within a year after the cause of action
accrues, may bring an action upon the bond of the licenaee, and recover the amount
due him on account of auch consigameat. If auch licensee hsa become liable to more
than one consignor, and the amount of his bond be insufficient Co pay the entire
liability, the conaiKnora shall be compenaated in proportion to their several claims.
(1899, c 226, !. 5; 1901, c. 227.)

2120. Violatiom, -penalty, etc. — Any peraon engaged in selling any property aa
herein specified, who fails or neglects to comply with any of the provisions of this
aubdivisinn, shall be guilty of a misdemeanor, and on conviction thereof, shall be
punished by a fine of not leas than 125; and the commission, either upon such convic-
tion or upon its own findings after investigation, if the facts warrant it, may cancel
the license of any person guilty of any violation of law, or of conduct prejudicial to
the inleresia of those making cdnaignmenta to him to be sold on commiieion. Where
a license has been canceled, the cammission may refuse to issue aey license to audi
person for a term of one year. Whenever requested to do so by any interested shipper,
the commiaaion shall have power to in\'e3ligato any Jale or trinsiiction carried on by
any person licensed hereunder, and for tiiat purpose ahall have the rieht to examine
the books and accounts of any licensed commission merchant which in any manner
relate to such aale or transaction. Any licensed commission merchant, or any agent
in charge of such booka or accounta, who shall fail or refuae to submit auch hooka or
accounts for the examination of the commission, ahall be guilty of a misdemeanor.
(1899 c. 225. s. 7.) (94-22^., 202-697.)

iirther with your reouest, f will state that an action was commenced by
n against Eaward«-Wood A Co. in December. 1903, which was baaed
upon a complaint entered by Victor (^Ison, a shipper residing at Uallock, Uinn.,
this bein^ but one of a large number of similar complaints received from various
shippers in northern Minnenota and North Dakota, wnich had been filed with the
commission, in each of which it was alleged that false returna had been made by aaid
defendants, with the result that they had been defrauded of the true value of their
coneignmenta of grain and flaxseed shipped to said defendants who were engaged
in the business of grain commiaaion merctianta at Dututh, Minn., being duly licensed
as such under the law. On December S, 1903, the defetidantb were arraigned in the
Duluth municipal court to answer to the charge of said Victor Carlson, that they had
failed to make a true report, within twenty-four hours, stating the true price of the
sale of a certain car of flaxseed which had been consigned fay said Carlson to said
defendants at Duhith, to be sold on commission for his account. On January &, 1904,
the case came on for trial before a jury, resultinr in a verdict of guilty. In this case
Mr. Carlson consigned a carload of nax to E d wards- Wood <& Co. for sale on commission;
the car arrived in Duluth on January 19, 1903, On that day flax opened at $1,184,
went up to |1.19i. Edwarda-Wood 4 Co. claim that they offered on the Duluth
board at|1.19^, but failed to make a sale, and then purchased it themselvGH, On the
next day they sold the flax to the Ifall Elevator Company for J1.20, and reported to
Ur. Carlson the sale of the day before at 11.19}. The court instructed the jury as
follows:

"The offense charged against the defendants in this proceeding is that of failing to
make a true report within twenty-four hours, stating the true pnce of the sale of the
car of flax, which it is claimed was consigned by Carlson to defendants to be sold

"The offense charged is that of omitting to perform a positive duty enjoined upon
commission merchants by the law of the State.

"When grain is consigned to a commission merchant to be sold on commission, it is
the duty of the commission merchant to sell it in the open market for the beat ^rice
obtainanle, and to remit to the shipper the amount of the same, less his commission
and the neceeeary disbursements. The commiaaion merchant has no right in law,
when grain has been consigned to him to be sold on commission, to purchase the grain
himself; an attempt by him to make a purchase of such grain is not binding upon the
shipper; and if any such attempt is made, and thereafter the grain is sold to an actutd
purchaser, the law requires the commission merchant to mute a true report of the
UDOunt received at the sale to the actual purchaser within twenty-four houie there-
after."

45331—10 6

lB6 INSPECTION AND OBADINO OF OBAIN, ETC.

The attorneys for the defendant entered a, motion tor a new trial, which waa denied.
An appeal from thia order wbb token to the Htat« Huprome court, which rendered ita
decision on February 17, 1905, in which no error was found in the iuatructiooa (»'
luUngB of the tricil court, and il« order was accordingly affirmed. This wae followed
bv the impoeition of a fine of $100 on each member of the defendant firm, or a total
01 $400 and costg, this being the maximum penalty f(ff such offenses.

The importance of the result in this case can be beet appreciated when it is cod-
■idered that this firm was conductin); an extensive buaineee with a network of aRCn-
ciea, about two hundred and forty m all, scattered through Che Northwest. After
the final proceedings were closed the numerous branch ofScee of Edwards-Wood
A Co. at die outside points were n«dually closed, and in the course of a short time
the firm retired from busineas. Other similar systems have extended their bi»nch
offices into this great agricultunl district, but no further complaints of a like char-
acter have reached this office.

At the present time there are at Minneapolis, St. Paul, and Dulutb, approximately,
two hundred persona, firms or corporations engaged in the business of commisBitai
merchants, who handle grain and agricultural products on commission. On the other
hand, there are many country shippers comprising farmers' elevator companies, also
independent buyers and individueJ shippers, sggr^ating a vast number of peisons
and mtereeta that must of necessity market Uieir grain mrough the agency of theee
commission merchants, and who are almost wholly dependent upon their integrity
In the handling and disposition of these shipments. It is pleasing, however, in thu
connection, and only just, to say (hatcases of default among the commission merchants
at the terminal points comparatively sfieaking have been extremely few in number,
there having been at all times manifested a general disposition on the part of th»
officera and membeni of the great commercial bodies in the cities to aid the commission
in enforcing the laws and weeding out insularities, thus maintaining their loi^-
establiehed reputation for integrity of purpose and fair dealing. The requirement
that bonds shall be furnished by commission merchants to indemnify shippers a^inst
loss, also minimizes to a great extent the risk to which they mi^t otherwise bo sub-
jected.

In the trial of this case, the question also of the relations between consignora and
consignees and the obligations of commission merchants under the law was exhaus-
tively diacuned and developed, and the immediate eSect was to stimulate a deaiie
on their part to become better acquainted with the laws affecting their bugineK.
Another important result from this case was to firmly establish beyond question that
the law is valid in all its parts, and that the careful observance of its provisions can
not be evaded with impunity. It has placed the commission merchants' business
on a more stable and satisfactory basis than before, bv insuring a greater degree (tf
{irotection to riiippeis, and establishing an increased feeling of confidence on idl

Very respectfully, yours,

Chablbs F. Stapus,

St, Paul, Mink., November 2S, 1908.

Mr. Stevens. What are the names of those comimaaioQers, Mr.
Gronna ?

Mr. Gronna. The names of the present commissioners t

Mr. Stevens. No; I want the names of those who submit that
report. I have the report here, and I wanted to know if it was the
same report.

Mr. GrRONNA. This report was made in the fall of 1908. It is a
late report. M. O. Half was chairman of the board,

Mr. Stevens. M. O- Hall, M. R. Thompson, and E. D. Washbnm.

Mr. Gbonna. We have two new commissioners now. That is, Mr.

Brown and Mr. Thompson, I think hia name is.

Mr. Wanqer. You can hand it to the reporter and it will be printed
as a part of the hearing.

Mr. Gronna. Yes; I have done so. And I also have a newspaper
clipping here which is taken from one of the Minneapolis papers, and I
think the committee would have no objection to having that inserted
in the record. It is simply a report.

IHSPSCnOM A»D OaAIUNQ or QBAIN, ETC. ^1

Mr. Stevens. A report of what I

Mr. GbonnA'. a report that this hoard or committee has made; a
brief statement of the report.
Mr. Wanobb. It is a summary of the report you were referring tot
Mr. Gronna. Yes.
(F(41owing ia the newspaper extract referred to :>

inte Hinneaoto Ryrtem of state grain ioepection has com« off acot-free sftw a leaKb-
ioK inquiiy by the special board oiKiain commuBioiieie apirainted in 1907 by Qovemor
Jobn BuTie, of North Dakotft. The report of thii commiaHion has juat been inued,
and IB highly pleadog to the Mianeaota officials, who have all aloDg declared the
accimtioDB made by Senator McCnmber to be unjust. The commiMion's finding!
do not bear out the Senator's statements made in a speech on the federal Rrain inepce-
tioD bill, tiioush the commisaion also goee on record for a f ed(ml lyetem of inepecUrai.

The North Dakota investigation was made by A. R. Thompaon, 41. 0. Hall, ud
E. D. Wadibum, and it was a moet eearching inquiry, made under instructions which
called for careful examination of such questions aa the "auction draft" svHtem in
terminal elevaton, dockage, the dinradtion of screeninge and their value. iIm 'report
is thorough on these subjects and finds no wrong done to the gnin shipper which he
is not able himself to prevent. The courtesy of the Minneeota officials ia acknowledged,
also their frankness in giving the visitors access to everything, and the North Dakotans
eay that their hosts "apparently hod nothing to conceal."

loenNcnoM not

The repwt says that North J)akotans need to distinguish between the public ele-
vators and the terminals and the semipublic houses, which handle the bulk of tlw
grain and are not prohibited from mixing difierent consignments t<^ether.

"This," savs the report, "is a phase of the tennioal groin business that bos been
quite generally misunderstood bv our North Dakota shippers and farmen, who saeot
to think that all the elevators of Minneapolis are public nouses, where the identity^ ftf
the grain must be preserved as received." Some conunent ia made nn the mixing
houses or "grain hospitals," which are not condemned. "On the whole," the report
aays, "the gnin-hospital system is a busineas practice wherebv inferior and uiunarket-
^le grain is improved and made marketable. It iHauggealed that these places would
aerve a good pubUc purpoee providing the profits they make ore indirectly reflected
back to the producer of the superior grades which they handle. Tbe}[ arealeo bene-
ficiaries of the sale of the screenings. The report finds that dockage is increasing as
grain becomea more foul with other seeds, but in 1908 was only an average of 32.6
ounces to the bushel. Screenings are now sold at from |T to S15 a ton, and it is esti-
mated that in this way North Dakota grain raisers practically give away 1150,000 a
year. In addition they pay freight on all this volume of dockage, for which they get
no nioney.

"It may appear impracticable," the

. this immense amount of stuff, whic ..._.. _ ..... .. _.. ,

suf^est the idea that it should be kept at home and used by the farmers instead ot
bemg given away and payint; treipht on the same besides."

The report explains the Mmnesota inspection system in detail. It tetls how sam-
plee are taken, and in each case saved for inside inspection, and for reinspcctioa when
called tor. These are taken when possible while en route, samplers being stationed
at Willmor, Melrose, Staples, Cass Lake, and Sandstone. In this way inspection ia
generally made before the car arrives at terminal, and appeal may be taken without
holding delivery of the car very long. It is explained tnat in case of appeals a new
sample is taken and inspected by a board of three men, appointed by the governor
and not under the railroad and warehouse commission. Gram dockage is determined
by finely adjusted scales and sieves.

The state weighing system comes in for a chapter, which is also tree from criticism.
Attention is called to the Minnesota statute, which requires a card giving the out-
weight to be placed on the door, so if there is a discrepancy it con he looked into
immediately. This is recommended as a good practice for North Dakota.

IKBPECTION AKD OEADINQ 07 OBAIN, BTC.

The "miction aystom," bo rounilly condemned by the North Dakota Banken'
Aaeociation, was investigated and found to be a very proper and necessary process.
The comraiHsionera found that suction is not applied before weighing, so no li^t
gr&in ia loet, and the subject is then dismined in uie following manner:

"A visit was made by our board to ElevatAr C at Minneapolis, where a test was
made of the auction draft in our presence. At thi« elevator we discovered that the
suction draft, aa we found it in oi>eration at that time, took »ut only fine duat, chaS,
and light-Hti&w suhstancee. There wae no evidence that any grain, or even foul seeds
having any particular weight, were removed by this draft. It was explained tc us
-that the modem suction system, as employed in the large terminal houaea, was abso-
lutely necessary to collect and carry away fine and light duet, which is a menace to
the health of the employees and is also a dangerous explosive, and that this suction
system is required by insurance compaaiea."

The process of weighing is described, showing that everything ie done under euper-
vision of bonded state weighers. Some loaded cars were found oy the Pillsbury A"
mill that had leaked and were unfit to canry grain. "Inveatigation proved that state
fflnployeee had made this inspection," says the board, "ana had made a complete
record of conditions." It la recommended that the railroads be required to stand
loaeee by leakage from such cars. The board finds there is a regular shrinkage of
30 pounds to tiie thousand from hauling, and also that there is a lose in elevatins to
hopper scales. Hence it is su^eeted tmit all grain be weighed on track scales belom
unloading.

The report goes into the question of terminal markets, and nhile it does not favor
board of trade methods, the system actually employed is described and not criticised
in detail at all. On this the ci " '

"While perhaps not strictly germane to the duties and functions of this board, wa
assume the liberty of briefiy statins the modus operandi in vogue at the terminals as
to the purchase and sale of grain. Thie busineae le conducted almost entirety throu^
tiie agency of the Minneapolia chamber of commerce and the Duluth and Stmenor
hoards of trade. These are organiEations of men engaged in the grain business for the
purpoee of facilitating such business, oiganized on the theory t^t a laige volume of
grain that finds its way to these terminals necessitates some central place where the
same, or samples thereof, can be presented for sale, and where seller and buyer can
meet advantageously to make the trades and purchases which their business neces-
sitates. This board is willing to go on record as not favorable to so-called chambers
of commerce and hoards of t^e, but until some better Bystero is adopted they must
be tolerated.

"These organi

Lzations employ grain samplers and to procure proper samplee of the
ich are about to be inspected. These aamplee are presented on tablen

durinc the openine sessions oi tne chamber of commerce or board, with an otncial tag
affixed showing what the state inspection was aa to such car. This affords a reliable
way of presenting and selling the several cara of grain as they are received from day
to day. The sales so made by members of these organizations , whose chaige ia 1 cent
a buuiel for all kinds of gr^ except oats, for which a charge is made of U cents a
bushel. No discrimination is made in the sale of grain, the shipments of individuals
receiving the same attention from the commission men who are members of these
organizations as those of larger concerns.

A complete record is kept of all salee as to time, place, and price, and from tlus
record can be ascertained at anv future time the exact price for which any carload ot
grain may have been sold in toe past. These otganizations also exercise care as to
tile financial standing of the several members connected therewith who do a commis-
sion business and who solicit consignments of grain from shippere."

STATE SHOCLD LXASE TERMUULS.

The report recommends that North Dakota as a State shall lease terminal elevators
at Minneapolis and one at the head of the lakes for the marketii^ of North Dakota
grain. It advises building "grain hospitals" in connection with these. It urges a
state law for inspection of local elevators, such as MinneBOta has; also legal forms for
storage receipts, scale inspectors, and reports from all grain warehousee.

Federal giain inspection is recommended, first because it would make a unitonn
standard ofKiadeB over the country; second, because 95 per cent of the grain raised
in North D^ota, is sold outright at local elevatoie, where there is no system of inspec-

IKBPECTION AND OBADINO OF OBAIN, ETC. 69

tlon or dockage: third, because gntdea iiupected out for export are inferioi to gradeB
iiwpected in, which worka a. huduiip on the producer of the beet grades; and, fourth,
because "federal iiupection would tend to restore the confidence of the gnin poven
«f North Dakota, wmch has been sadly lacking under the present system of dockage
and inspecting gnin at terminal markets."

Mr. TowNSEND. Briefly, now, of what do you complain }

Mt.Ghonna, Wecomplain of this: That our grain, which generally
is of a sood quality', is shipped to the terminal elevators and mixed
with inlerior grain, reshipped to the foreign markets, and sold at a
higher grade than it was< bought at in the terminal elevator. That
is the complaint. I have read in the consular reports, one or two of
the consular reports, where the consuls said that the United Statea
is being discriminated t^ainst, that the wheat of this country is
being discriminated against because the grading of the wheat does
not come up to the grade put on it in the certmcate, and I believe
if the Federal Government had charge of this business it would con-
duct it more honestly. They would nave to see that every cargo of
wheat, every carload of wheat that went into a cargo, would nave
to come up m weight and color, and the quality would have to be the
quality that it is said to be in the certificate.

Mr. Babtlett. One question. You get the price for the wheat you
raise in North Dakota, whatever the standard may be, don't yout
You get the price )

Mr. Gbokna. We do not. We do not get the price. That is what
we are complaining of.

Mr. Babtlett. How does the fact that they have bought first-class
wheat from you and paid you the market price affect the price if, after
they get it to Minneapolis or Chicago or somewhere else, they grade it
ditferently and send it abroad )

Mr. Gbonna. .We have shown, Mr. Bartlett, that thousands of bush-
els have gone into the terminal elevators at a low grade and been
shipped out as a higher grade, and for that reason we do not get the
price. We get paid for a lower grade.

Mr. Babtlett. Does the farmer sell liis wheat abroad, or do you
sell it to the middleman 1

Mr. Gbonna. We sell it to the middleman.

Mr. Babtleti. You sell it before this mixing of grain is done t

Mr. Gbonna. Yes, sir.

Mr. EscH. You have the Dakota inspection now, have you not,
Mr. Gronna?

Mr. Gbonna. Yes; but the gentleman from Minnesota, I believe,
can tell you about that. W^e have to sell our wheat according to the
Minnesota inspection. All the grain that is not being used by the
small mills in the State is shipped either to Duluth or Minneapolis.

Mr. EscH. So that it is subject to Minnesota inspection t

Mr. Gbonna. Entirely so.

Mr. Eacu. And then your price is fixed by the Minnesota inspection,
instead of your own inspection ?

Mr. Gbonna. Yea.

Mr. Babtlett. That is the same thii^ that the Supreme Court
declared upon in the coffee case, that the coffee was graded according
to New York inspection, regardless of what the tariff classificatioa
was. That case is in 102 U. S.

Mt-. Wangeb. Is there anything else, Mr. Gronna t

70 INBPECnON AND ORADtNQ O? QAAIN, BTO.

Mr. Gbonna. Not unless there is some question from some of thess
gentlemea who are opposed to the bill.

Mr. Vincent. Is it not a fact that there is a representation of two
members from the State of North Dakota in the Minnesota board
of inspection now?

Mr. Qronna. We tried to have two of our men from our State
appointed on that board, but if I understand it correctly tiiev are
not legally members of that board. If I am mistaken in Uiat I wish
Mr. Stevens would correct me.

Mr. Stevens. The gentleman from North Dakota is correct.
North Dakota has a representative at Minneapolis, but he is not an
official member of the board. Some of the Minnesota buyers have
established a branch inspection at Valley City, N. Dak.

Mr. Gronna. That is right,

Mr. Vincent, You are opposed to the mixing houses, are you I

Mr. Gronna, I am not opposed to them. We do not care what
they do with this wheat if they allow us what our wheat is worth.
I am opposed to having our good wheat bought at a low price and
mixed with inferior gram ana then shipped out again at tne higher
grade.

Mr. Vincent. Two years ago you referred to the question of
dockage. You have not referred to it to-day- Has there been any
change in that)

&fr. Gronna. I will say that the dockage has nothing to do with
the quality of the wheat.

Mr. Vincent. There are 10 pounds of dirt and seed in 60 pounds
of wheat, and the wheat in the mixture is equal to No. 1 wheat. But
the wheat and the seed together are not No. 1.

Mr. Gronna. Oh, no; not at all. The gentleman knows that we
are docked. I want to say on that question that the farmer is the
one that loses most on that. He has to pay the freight on that foreign
matter. All we ask to be paid for is the wheat. No one can improve
upon that wheat. If it is grown No, 1 wheat you can not change it,
and if it is grown No. 2 wheat you can not change it or improve it, so
far as the wheat is concerned.

Mr. Bartlett, You get the price of the wheat less the frei^t from
North Dakota to Chicago— the market price, I mean *

Mr. Gronna. Our pnce is based on the Minneapolis and Duluth
market.

Mr. Bartlett. You get that price less the freight!

Mr. Gronna. Yes; and the farmer is the heavy loser if he ships
wheat that contams a great deal of foreign matter, I want to say to
the gentleman that I myself shipped wheat in the early days and
shipped flax that has contained a good deal of dirt, speakmg roughly.
Now, what is called foreign matter does not consist of seeds or dirt;
it may be grain. If it is oats in wheat you are docked for the oats.
You do not get any pay for the oats, but it goes in as dockage. If
there is flax in that wheat you are docked for that flax and vice versa.
If there is wheat in the flax you are docked for the wheat.

Mr. Bartlett. What is done when a carload of wheat or a bushel
of wheat that has a certain amount of oats or flax in it comes to th«
elevator; what is done about it}

Mr. Gronna. Of course if th«re is more of wheat than any other
grain it will be called wheat. If there is a larger per cent ot wheat

INSPGCnON AKD QBADINO OF GRAIN, ETC. ?1

it will be bought for wheat. If there is & lai^er per cent of oats, it
will be bought for oats.

Mr. Bartlett." How do oats and flax get into a bushel of wheat f

Mr. Gronna. From mixed seed gram. It does not take many
kernels, you know, of oats mixed with wheat before it will make a
Itatn amount.

Mr. Babtlbtt. And it gets in without any intention on the part
of the farmer to adulterate the grain t

Mr. Gbokna. The fanners are taking every precaution to get
clean seed.

Mr. Baktlett. Ordinarily from your experience what would be
the percentage of the oats or the flax in a bushel of wheats

Mr. Qbonna. Well, we are not troubled with it as much to-day as
we were in the early days, because now every farmer will have a
good fanning mill and will clean his seed two or three times, and thai
they are careful in cleaning their feed. Understand, if you feed a
horse oats and sow wheat, in the droppings there will be oats and
that will grow. Now, as a rule, the farmer grinds the feed.

Mr. Babtlett. There is no process by which the oats can be gotten
from this wheat in cleaning or fanning before you sell it t Is there
any process, any mechanical means, by which you get rid of the oats
from the wheats

Mr. Gronna. Yes. As I say, we are not shipping so much of the
grain mixed. The farmers have granaries, and they are cleaning
their grain before they shifj it; many of them do. But when grain is
ratsea in enormous quantities you realize it is an enormous work.
Some of the farmers take it to the elevator and pay the elevator for
cleanii^ it.

Mr. Bartlett. What becomes of the oats or the flax that comea
out of the wheat f

Mr. Gronna. If the farmer cleans it, he uses it for feed. If the
elevator man does it, he turns it back to the farmer, and the farmer
pays the elevator so much for cleaning. If it is shipped to the ter-
minal elevators, they sell it or use it for feeding and ttie farmer gets
nothing for it.

Mr. EscB. Two years ago there was considerable testimony
adduced before the committee to the effect that grain shipped from
the United States to Great Britain and the Netherlands was of such
character as to injure the reputation of the American trade. Do yoo
know whether that state or facts is true to-day and whether it nas
had any effect on the exportation of American grain t

Mr. Gronna. I do not know of my own knowledge. All I can say,
Mr. Each, is that I have had a copy of a consular report where the
consul made the statement that there is no improvement; that the
American wheat is being shipped in practically the same condition
that it was before, and that they are going either to Argentina or the
Danubes, and sometimes to Russia, to buy their wheat in preference
to the United States.

Mr. Wakobk. What was the date of that report %

Mr. Gbonna. It was printed some time last year.

Mr. Wanoeb. What consul was it t

Mr. Gbonna. If you will leave that blank, T will furnish you with
that report and have it incorporated in my remarks.

72 Inspection and obadinq of OBAnr, eio.

Mr. Babtixtt. I understand it was the consul at Antwerp, In
BeMum.

(Following is the report referred to:)

Consul Thomas R. Wallace, in a report from Crefeld, says that the ^lain dealen in
northern and western Europe have been holding meetings, the principal purooee of
which seems to be to take united action with reKard to a chanM in the ruies and
methods of transacting bueinees with the United States in Iheirline and to cmect
abuses now existing in the same. The consul continues:

"The grain trade from the United States with this district has been declining for
some time, and if such dissatisfaction becomes general throughout Europe the loseee
to the people of America in this important branch of their export trade will be enor-
mous. To gain some idea of the causee of the complaints regarding the grain exported
from the United Stales I have made personal inquiry among the millers and dealers
in these products, and am told that the conditions complained of here are the same
all over Europe.

"The dealers say they have suffered excessive losses through the purchase of grain
from America by its not fading up to the standard given in the inspector's certificate
in kind, quality, or condition when received. Wheat eold as good winter wheat, and
BO certifiai to by the inspector, is very often found to be new wheat mixed with old
and often wormy wheat. Grain often arrives in very bad condition. Wheat pur-
chased as new is found weevily — very good wheat wiui badly damaged grain muted

"They eay, further, that the American ahippeie well know these tacts, but of hXo
years refuse to take these precautions, and because of the rule that the inspector's
certificate is final the purchaaer ia compelled to suffer the loss arising from this negli-
gence of the shipper. If the purchaser presents a claim for loss caused by grain received
o' bad condition, or of inferior quality from that certified to by the inspector, he
-■ — no Batisfaction from the shipper.

"I am informed that such conditions have become worae; that the purchaser here
does not receive what he buys, and that no reliance can be placed on the inspector'!
certificate. The result is the miller has ceased to buy American grain for his mill
and the farmer for hia stock. Itisfurthersaidthatgrain received from South America,
Russia, or Roumauia arrives in good condition, that received from the United States
alone being bad,

"A general meeting of those engaged in the grain trade was held in 1905 by repre-
senlativoe from Holland and Germany. A met ting wsa held in Ixindon fn November
last, in which appeared rcpreseotatives from Germany, Franco. Holland, Belgium,
Denmark, Italy, and England, Ireland, and Scotland, and still another meeting was
held on December 12 at Berlin. At all of these assemblies the principal topic for dis-
cussion was methods to correct the alleged abuses in the grain trade with mo United
Statea.

! HEABURBS THSEATBNKO.

"The dealers having radical or axtremo views do not believe that an amicable
settlement of the matter can be made with the shipnera unless coercive measures
are used, and this is one of the reasons of the international character o[ these aaaem-
blies. It is said by them that some of the same conditions prevailed in the grain trade
with Russia some time ago. The Russian dealers were invited to Berlin to a con-
ference, but treated the action willi indifference, whereupon the German dealers
refused to buy any Russian grain, and in a short time Russia asked for a meeting.

"The seriouflneasof this movement, threatening the loss of trade in this important
branch of American exports, should not be undereatimaied. It is genaral in its char-
acter and covers the countries buying about all of the surplus crops of the United
Sutes.

"The unanimity of sentiment expressed at these meetings indicates there must
be good cause for complaint, and as representatives of nearly all the nations of Europe
are taking port in these assemblies and the meetings have become international m
character, it is time the American people, who are interested in this great and impor-
tant branch of the nation's industries and commerce, should take some action to pre-
serve it from further losses."

INSPECTION AND (WADING OF GEAIN, BTO. 73

FAULTY AMEBICAN OBAIH-INSPBCnON HBTBODS.

Consul-General Bobert P. Skinner, of Marseille, thinks it is highlj^ desirable that
certain facts in regard Ut American min-aelling; methods be given immediate and
wide circulation, and that something be done, either by action of Oongrees or by the
concerted action of American commercial bodiee, to reform or, rather, aiaodardize the
^rstem under which the great cereal exfiorting busineee has been created. Mr,
dinner writes:

"There in little popular knowledge in the United States in regard to the fact that
wheat, com, grease, and similar products of American origin are not now sold abroad
by sample, but by nominal grade. The European buyer knows nothing of the mer-
chandise whatever before it reaches his poBBcsaion. He imports and resells various
clawee of merchandise, the quality or grade of which is certified to him, not by the
merchant who has sold him the article, but by the official inspector of a board of
tnde or other equivalent body at the port of shipment. He pays for the goods before
he receives them, and when the exporter in the United States deli vera to him a certifi-
cate of ioefiection. declaring the goods to be of a given grade, he has no alternative
but to honor the arafts. The bai^n is absolutely final upon the production to him
of this certificate of inspection.

"btbenocs oBiBcnoNS.

"Of late yean the murmurs against this system have been increasing in Europe,
and whereas a short time ago they took the form of isolated private complainta
that goods did not always conform to the certified grade, they now take
the form of organized protests. I have before me not merely private correspondence
TunninB; through a number of yean, but the recent proceedings of the London Com
Trade Association and the proceedings of a delfwate conference held on December 12
at the Berlin bourse, the general tenor of which is that fnrei^ importers are vexed
with prevailing conditions in the United States and are determine to force an im-
provement. At the^e two conferences a great many harsh things were said in I'egard
to American certiflcatei, and specific instances of irregularities were mentioned. The
vital point, which it will be well te separate from so much context, is this:

"'Mr. Friedberg (Hamburg) stated: It imperfectly clear thnt it an American iospec-
lor certifies we have no right to doubt, or if we do we are asked, "Why do you go on
buyii^!?" 1 may assure this meeting that a good many of us are not going on buying.
We have none of this trouble in South America, ^'or the general trade 1 think that
there are reapeclable people enough in America, and I am wondering why they do
not stop the glaring abuses that are complained of.'

"This instability is naturally one of the conditions of American business that
is leaet acceptable to foreign importers, and. what with rivalry between ports for
export business, it has created not only bitter feeling abroad, but definite diflerencee
in the prices at which grain of the same nominal grade is offered for sale at the different
ports of shipment. There are 'easy ports 'and good ports,' and sometimes the 'easy
ports ' are penalized as thus explained in a recent letter from an importer to an officer
of an American commercial organ ix at ion :

"'As you know, at pre^ient importers have great difficulty selling on certificates,
but where quality is reasonably assured they are willing to pay a premium over lower
inspections. Newport N'ews and Norfolk wer? excluded on the London and Liverpool
contracts because of last year's (l*Oii) No. 2 com shipments, while, as you know,
your inspection maintained a premium all last season over the Atlantic'

"The remedy soi^:ht is so easy of application and the demand for its application
is so entirely reasonable that to the importer protracted resistance is incomprehensible.
The proper remedy may be applied either by the American Oovemment or by the
cooperation of American trade bodies. The starting point of the reform would be,
naturally, the establishment of standard descriptions by law. This done, if the
Government were characd with the issuance of inspection certificates the service would
be removed from local influences, and the so-called official American certificates
would be rehabilitated. If this very rational proposition be objected to, the surest
means of effectively combating it would be the holding of a conference of American
giain-inspecting bodies for the adoption of grain standards and for the adoption of
ways and means of drawing standara samples, to be depo.>iited in American consulates
at greet European ports, or to be issued upon demand to importers; and to provide fur

ff4 INBI>EC910)!t AHD OBADIKQ OF QOAIN, ETC.

» board of inapecUire. th« memben thereof to be tnosfeiTed at intervklB and libemtod
from everv form of lomi pressure,"

Consul-Qeneral Skiiuier, of Maneille, Fnwce, under date of J»nuary 10, 1907,
mitte ae foUowa:

"In coDtinuation of mv report, dated December 18, 1906, I wish to say that my
Utention had been caJlea to a. report preeented to the Syndical Chamber of Grain
and Flour, at Pbtib, by Gooi^ Lefebvre, dele^t« to the International Reunion,
CHganiied by the London Com Trade Aaeociation. This report ha« been sent to
me by a Drominent Maiseille miller, and I take it that it resumes the sentimenta
of the trade in this (^ity which haa not actod upoo the Hubject as yet in an official
manner, although at thu port the Rieat bulk of Amoican hard-wheat exportations
are received. The report of H. Lefebvre is quite long, and 1 translate merely the
salient pasaaKee aa follows:

'"I nave the honor to render an account of my mission as your reprceeutative at
the conference of November 8, organized by the London Com Trace Aasociation,
for the purpose of considering final certificates covering grain eiportations from
America. The conference was attended by not lees than lorty-five members, whose
opinions were unanimous as to the necessity of reforming the actual system. Some
wished to ameliorate it, and otheni to abolish it. Complaints were made of a detailed
nature, which I have no need here to repeat, except as to two cases, which deserve
to be set forth.

" 'Complaint was made in regard to the delivery of hard winter wheat No. 2, in
which not only the old and the new crop were mixed, but in which there was to be
found also a considerable quantity oF senouaiy damaged wheat. From the American
inspectors who delivered the certificates the only answer received was this, "We
consider our principal duty ie to secure the consumption of our crop."

" 'Corn certified as No. 2, or "sail grade" (the ouality capable oi supporting a voy-
age in sailing ships), and which should have been able to endurealong voyage, arrived
in a completely bad condition after a rather short journey. The complaint made
was met by the reply that, "It is the fault of the buyers, who purchase during the
months when com germinates."

" 'Mr. Montgomery, of Liverpool, speaking first, declared that the inspection service
was badly established in the United Stat^; that the European buyer, renouncing
any right of appeal ae to quality when an inspector has delivered a certificate, thus
constitutes the insfiector an arbiter between the seller in America and the receiver
n Europe.

" 'The abuses concerning which complainle arise from all parts of Europe prove that
the buyers must come to an understanding in order to determine the methods b^
which this business should be handled bstwean America and the Old World. Thu
conference is probably the first effort along these lines between the interested countries.

" 'Firdt of all, what is it that is called an "official " certificate of inspection as to
quality? This is a very broad definition. There is not in the trade any definition
ot the word "official," and in conseouence every certificate of an inspector wlko holda
an official position must be acceptea by the buyer.' "

"ORABB BIED IB BEINO DOPKD WtTH ADtJLTE RATIONS rHOH CAHAOA.

"WABHiNflTON, February 13, 1907. — The Department of Agriculture has issued a
circular relative to the investigation of the adulteration of orohaid grass, bluegraas.
clover, and alfalfa seed. The department ^tbered seed from all parts of the United
States, buying in the open market, and of the seed examined about one-third w»
found adulterated. The degrees of adulteration varied from 10 per cent to 76 per cent.
The names of upirard of a nundred firms which the department alleges are selling
adulterated seeds are printed in the circular. It is estimated that 700,000 pounds rt
Canadian blu^raee seed are annually imported into the United States and mixed
.with Kentucky bluegrass seed and sold as the latter. A similar amount of trefoil b
imported from England, mixed with alfalfa seeds, and sold at a corresponding advance,
mye the circular.

ScOTLANn.
AWBRICAN rU>VR HURT BT UlBBKANDtNO.

Consul R. W. Austin, of Glasgow, writes that the friends of American flour in Scot-
land are elated over the passage by Congress of "the food and drugs act of June 80,
1906," and are predicting that with the enforcement of the law mentioned the Ameri-

IHK>ECTION AKD OBASINO OF (^AJU, ETC. 7(^

caa flour will rw>m its old-time raputeUottand bareatored t« tite head of the list, which
it occupied io Great Brilaia prior to IMM. Mr. Austin continuee:

"At that time no flour — home or foreign — equaled the American article, which had
growQ in popular favor to such an extent that It had no real competitor.

"The American wheat crop of 1904 bein)t short enabled the continental mill* to
introduce their flour into Scotland, many of t^iem not hesitating to use popular Ameri-
can labele. This scheme was worked succeaHfuU^ for some time, to the injury of the
American trade and the excellent reputation of its flour. Finally a vigorous protest
under the British 'sale of goods act' was made, and this practice of the millets of the
CiHitinent discontinued, nltile this afforded relief, American flour is, and has been
for several years, seriously injured in Greftt Britain by its being misbianded or labeled
before leaving Ajnerica, and this unfair method, it is hoped, will be discontinued by
an observance of the 'food and drugs act.' "

Mr, Stevens. In that connection I will ask leave of the committee
to submit a copy of the official report of the North Dakota legislation
and the Minnesota legislation in connection with Mr. Oronna^s state-
ment, in which report is embodied a statement concerning grain
inspection.

Mr. Wanobb. Very well. Let it be submitted and incorporated.

(Following is the report referred to :)

Annoal Reports or raa Cbikp Inupbctor or Grain or Minnesota; Also of ths
State Wkiabmabtbrb, Warbbousb Rboistbr, and Svpsrvising Ivspector
Ix>CAL Warbhoubeb, to the Railroad and ^ abehoubk ('ommission for thb
Crop Year ending AnausT 31, 1907.

ORAIN-IN8FIICTION UBFABTHENT.

State of iliNNEeoTA,
OmcB OF Cbibf Inhfector of Grain,

SI. Paul, Minn., NoveaJttr I, 1907.
To tht Railroad and Wanhtnut Commitmon, St. Paul, ifin

Gentlkwbn: I herewith transmit to your honorable board the Twentv-necond
> ■ n ^ .. .L_ 1. — ^_.7_ . . — r. . — 1_..-_. ..^ detail ih

.-.--. - .- T -^ - ■ - . JingreporU

for the same period of the weighing and rt^i^tiation dcpartmentB at the several te^

Annual Report of the State Grain Inspection Department, embracing in aetail its
businew and transactions for the crop year ending August 31, 1907, including rt

minal points: alw the second annual report of the hay inspection and weighing
department for the year ending August 31, 1907.

In my last report 1 look occasion to give a brief history of Minnesota inspection at
Superior, Wis., explaining the controver^ that had arisen at the head uf the lakes, and
in this connection mentioned the new Wisconaln inspection law, which provided for
1 board of three commieaioners — one from Wisconsin, one from New York, and one

from North Dakota. It is not my desire or purpose to reopen the controversy that
t of Iheaf ■ ■ ■ • "'

inated in the enactment of the above-mentioned law and its subsequent &ulure
of practical operation.

This controversy had, however^ been exploited by persona interested, and others
ignorant of the r^ facts, until it received the official action of the North Dakota
legialature in the passage of a concurrent resolution, copies of which were duly trans-
mitted to the president of our state senate and the speaJtar of the house of representa-

Tbis concurrent resolution embodied certain charges and requests affecting the
gntin intwestt of this State, and in particular the operation of the department of which
1 have the honor of being the chief.

Our legislature, mindful of its respect to the demands and representations of the
legislature of a neighboring Slate, took due notice of this resolution b_y the appoint-
ment of a joint special committee on the part of the senate and house, with instrucIioiiB
to investigate and repMt to the senate and bouee its findings and conclusions. Aft«r a
most thorough invest igation of the whole aubject-matler involved, this joint committee
■Mde its report; the same received the unanimous sanction of the senate and house and
was duly transmitted \a the legislature of North Dakota. I append the North Dakot*
rsmlutioii and the legislative reply thereto, and submit that the reply is not tmly a
complete exoneration of our Minnesota inspection and weighing system from any real
at implied wroi^, but that it is in the highest degree commendatory thereof, a fact
which I take pnde in bringing to the official attention of the commission.

76 INSPECTION AND OBADIKG OP QaAIN, ETC.

[BnuM bill No. n.— iDtraducad by Hi. Cubel.]
CONCURRENT RESOLDTIOM.

St it Toolved by the tenaU of tlit State of North Dakota, Iht house ootmrring:

Whareae the WiBconsin grain grading and inspection law at Superior, Wiaconsm,
is the Ie^Uv eatablished nuiket for the gnina of this State, the State being Tepresen ted
by a commisfdoner on the board tbat regulatea tLe same, to whom it contributei »

portion of hia salary; and

Whereas the operations of the law are now tied up In the courta and inoperative,
being bitterly opposed by the railroads, elevators, and boards of trade operating under
the Minnesota grain grading and inspection law, thereby deatroying competition to
the great injury of the farmeis of this State; and

whereas the Minnesota law is not satisfactorv in its dockage and in allowing te>
minal elevators to doctor wheat by scouring and mixing inferior grades, thereby ad-
g the grades and shipping out a greater amount of higher grades of wheat than

rebilei

world: and

Whereas there are frequentlv losses to shippers through defective care, being ao
either when loaded or by rougn handling when in transit or in the lerminal yards,
causing numerous losses not accounted for; Therefore be it

Raolved, That this legislative assembly, composed of the repreeentativea of the
farmers and business interests of the State, believing that there snould be free, open,
competitive markets for our products and that we ehould receive just value therefor,
do respectfully requeet and urge:

First. That all ojiposition be withdrawn from the establishment of an equitable
grain grading and inspection law at Superior, WieconsiD, giving to us a competitive
market.

Second. That the l^islative assembly of the State of Minnesota be requested to
amend its grain grading and inspection laws, establishing grain hospitals for customera
only, and prohibiting terminal elevators from shipping out more grain of a given
grade than was received in.

Third. That the l^islative aeeembly of the State of Wisconsin be also requested to
amend its grain grading and inspection laws to harmouiKe with the requests set forth
in the second article of (his resolution, and to prohibit a few persons from controlling
the storage capacity of an elevator to the detriment of the many.

Fourth. That the suction draft be prohibited before grain is weighed and dockage
taken, and that the value of the dockage be accounted for and paid to the owner of
the grain from which it was taken.

if'ilth. That a car inspection be established in each of these States to ascertain the
exact condition of cars arriving, loaded with graiu, and that all defective cars be
specifically noted and reported to the head of the grain inspection department where
they entered, and a duplicate notice thereof sent to the company to which the car
belonged; and be it furUier

Reiolved, That should we fail through these recommendations and requests to pro-
cure a redress of these grievances, we respectfully urge the grain growers of this State
to cooperate for the purpose of building local and terminal elevators; and be it further

Resolved, That we favor a national ^in grading and inspection law that will be
uniform in all the States, thus abolishing the special system in each State; and be it
further

Resolved. That the secretary of state be requested to seud a copy of theee reeolutioDS
to each of our representatives in both branches of Congress, also one each to the secre-
tary of state, the president of the senate and the speaker of the house of representatives
of the States of Wisconsin and Minnesota, and to the presidents of the boards of trade
of Superior, Wisconsin, and Duluth, Minnesota.

(Signed) E. S. ts\naPta<dent of the Senate.

Trbadwbll Twichell, Speaiv qfihe House.
James W. Foley, Secreum/ qf the Senate.
P. D. Norton, Chief CUrt t^ the Bouse.

I, James W. Foley, secretary of the senate, do hereby certify that the foregoing

tive assembly of Ute State of North Dakota and was concurred in by the house m rep-
resentatives.

Jambs W. Foley, Seemary i^the Semite.

INflPBOnOll AND OBADING OF QBAIN, ETC. 77

[SUto d MtiuieagU. Thlity'Dtth mmIoii. B. V. No. MB. IBtradnced bv Committal on Qnin aid
WanlMiue, If uoh 4, 1«0T.]

CONCCRRXKT RESOLUTION lUktlnc to gnlD laqMCtion.

RMolved bf the koUMt, the teriate amcwrmg. Whereas the senate and house of
lepreaentativea of the tenth legiahitive asBembly of the State of ^orth Dakota adopted
a certain concurreiit resolution, copies of which were duly tranBiuitted to the speaker
of thia house and the preoident of the senate of this legislature, and whereae such
concurrent reeolution contains certain chaigea and niakee certain requests afiecting
the gisin interests of this State and the state grain inspection and weighing depait-
menta, and whereas such charges and requests call for a reply from this legislature.
BO far as the same affect thia State, its grain intereete, and its grain inspection ana
WMslung departmenta; Therefore be it

Eetolved, That the following is the reply of tliis legislature to the several reeolu-
tione contained in the said concurrent resolutitm, bansmitted by the North Dakota
lenslature:

Repl^ to resolution first: There ia not now nor has there been at any time any
opposition on thejiart of any legal authority of this StAte and particularly on the [wrt
ol the Minneaota inspection department, to tbe eetabliahmenl of what said resolution
firat tenna an "equilable grain inspection law at Superior," nor haa anything been
done by any legal authority or on the part of the Minnesota inspection department
to prevent a competitive market at Superior.

Reply to resolution second: The Minnesota insp^tion and weighing laws wer©
enacted in 1S85 in response to a demand from the grain producers of this State; theev
laws have been amended and improved from time to time until t<Mlay they are
considered by the grain bade to be the best and most efficient laws of their kind in
vogue. Slinnesota inspection and weighing certificates are accepted the world over
as prima facie evidence of what they aland for.

The Minnesota inspection and weighing laws have proved themselves acceptable
to the grain producers of this and other States, and as there is no discriminatioiv prac-
ticed on the part of the officials in charge of our inspection system, it naturally should
follow that our laws in thia reepect ahould prove equally acceptable to shippers from
all pointa. No complaint of this nature has come from Soutn Dakota or any other
State.

As to "grain hoepitals," so-called, otherwise known as " mixing houses, " they are by
no means inimical to the grain trade. The function of a ^ain hospital or mixing
house, is to improve the condition of low-^rade grain, which in its original condition,
might be unmerchantable. Instead of being an injurv to the grain trade, and to the
producer, who finds himaeli with a damaged crop on hia hands, the grain hcepital (V
mixing house, is a benefit. It can hardly be considered a crime to improve the com-
merciiu value of any deteriorated commodity. Minneeota mixing houses have

2 roved the condition of hundreds of thouBands of bushels of Minnesota and North
Ota wheat, and it follows quite naturally that the owner or operator of such a
mixing hoiue is entitled to a just reward for his labor, and this he received in the
higher price which he obtains for the better grade of Riain that he haa established.
The business is perfectly legitimate from both a legal and commercial standpoint.
No mixing of grain is permitted in any of the public terminal elevatore of this State.

We are, therefore, constrained to respectfully decline the request to amend our
inspection laws in tnis respect.

Reply to reeolution third. No evidence of any kind is at hand that would prove
the implied charge in this resolution that a few persons control the storage capacity
c^ terminal elevators in this State to the detriment ol the many. There is nothing
in our Minnesota laws that prevents the erection and operation of terminal elevators
by any person or persons so dispoeed. We here again must decline to accede to a
requeet for a change in our laws.

Reply to resolution fourth. Evidence submitted to this l(^lature shows that the
suction draft, so called, does not in a material manner aSect the weight of grain and
the dockage taken. With a view of correctly ascertaining the effect of the suction
draft a aubcommittee of the committeen on grain and warehouse of this legislature made
a careful inspection of this apparatus, while in operation, and found it working satis-
bctorily. ^^o grain whatever is drawn from the conveyors by this draft; it absorba
and coUecta only the very fine light duat, which ia a menace to the health of the
employeeeand adangerous explosive in case of fire. Aa to the weight of such dust, the
committee ascertained that from car No. 53346 (Milwaukee), weighing 63,090 pounds,
there was collected a total waste of 4 pounds and 7 ounces. The subcommittee viewed
the remoWl of the grain from this car from the time the doors were opened until the
contents of the same were deposited in the hopper scalee at the top floor of the elevator.

^^a

78 nrePBCrroir akd imiawnq or OKAur, bto.

Ab U) Bscettuaine the value of dockage, »a a commercial commodity and accounUne
for the mme to the owner of the grain trom whom it is taken the preponder&nce d
«vidence sugMcU that such a aystem it impracticable. The Mlution of diifl problem,
however, oi^t not to be of a Berious oature. If producen in the fiiat inatance, and
primary elevaton in the second instance, would clean the grain before loaded in can
kr ^ipment, there would be very little dockaee to account for at terminal points. It
is difficult to conceive of a remedy for a condition at terminal points which has it*
inception at the primary market or with the producer himself. It seeme that many
ppoduceTB persist in marketing unclean grain without anv regard to the commercial
"Value of the dockage, and as long as they are ready and wiuing to donate auch dockage
BB their grain contains rather than go to the expense of cleaning the tame there can
be no recourse.

Our Minnesota dockage of grain ia applied under the most liberal rulee to the ablppv,
who is given the benefit of any doubt there may be as to the amount of docka^ to be
taken; there ia nothing to indicate that our system of dockage is generally unsatisfac-
tory to the grain producers of our own State, and aa the docbkge is applied to all grain
coming to our terminal markets without diacrimination, it should prove equally
acceptable and satisfactory to the shippers and producers of North Dakota. The
average dockage per bushel for wheat for ten yeara in this State waa 19.3 ouDcea.
Surely this amount of dockage can not be called exceeeive.

We are, therefore, acain obliged to decline the amendments <d our laws or the enact-
ment of new laws for Uie further r^ulation ol grain dockage in this State.

Reply to resolution fifth. There was eetablished in this State, under the provtaiona
of our grain and warehouse laws, a system of car inspection for ' ' liad order " can many
years sgo. This system has been improved upon until it stands in the front rank it
all such inspection syBtems that are in operation in the large grain markets <4 this
country.

Section 2082 of the Revised Statutes tor Minneoota (or 1905 reads aa foUows:

"Sac. 20S2, Inspectors to examine cars. The chief inspector of pain aikd any
dei>uty or officials serving under him, before opening any can containing grain upca
their arrival at any of the several placee designated by law aa terminal pointa in thia
State, for the purpose of inspecting the same, shall first ascertain the condition at such
cars uid determine whether any leakages have occurred while said cars were in transil;
also whether or not the doors are properly secured and sealed, making a record of such
facta in all cases, and recording the same in a proper book to he kept for the purpose.
After such examination ahall have been duly made and recorded and the inspectioB
of such grain has been made, the aaid officials o( the state grain inspection deparbnent
above mentioned shall securely cloce and reeeal such doors 'aa have been opened by
ttiem. using a special seal of the said grain inspection department tor the purpose. A
record of bA original seals broken by said ofnciala and the time when broken, also a
record of all state seals substituted therefor, and the time when such state eeajs were
submitted, tocether with a full description of said seats, with their numbers, ehall ba
made by said officials."

All cars arriving at our Minnesota terminals loaded with grain are twice inspected *b
to the condition tney arrive in, and a report is made of all defective or bad-orda cars,
and the consignee (o whom such car or cars were shipped is notified of such facts. The
records of the inspection and weighing departments show all bad-order cam that have
been received. Our Minnesota syalem of palrolling the railroad yards and prohibiting
the stealing of grain from cars is the most complete of any system of its kind and costs
the state grain inBpection department of this State approximately five thousand dollars
per annum. We can nut conceive of any reason, therefore, why we should enact any
new laws or amend any existiiig law in relation to this subject.

In conclusion, we respectfully make these representations and brliw them to the
official notice of your honorable legislature: On the 11th, 12th, and 13th days of I>ecem-
ber, 1906, there was held in the cily of Chicago, under the auspices of the Grain Dealers'
National Asaociatiimi a congress for the purpose of considering the advisability of
adopting uniform national gradea. After having agreed to adopt such uniform national
grades, subject In the ratilicBtion by the several grain exchiinges there represented,
there was adopted a standard of uniform grades tor grain, which are practically the
official grades that are now in force in this Slate. This congrees reflected the buoinea
judgment and experience of practical grain men, many of whom had devoted a life-
time to the business of purchasing, handling, or inspecting grain at the Urge grain
centers of the Cnited States.

Furthermore, a del(^(atc convention recently held in Lfmdon, England, after dne
deliberation, approved of Manitoba and Minnesota inspection o( grain to the excluaioii
of any other ajTteins.

We submit that the action of these bodies in determining and approving standaid
uniform grades ore highly complimentary to our Minnesota system of official inspec-

IR8PB07ION Aim OBtAMHQ OP (HUFN, BTO.

id BUggMt thRt in the event of n iwtio
ja will be adopted u the standard piadee ..

Ab ilTugtrating our Minaesola system of ioapectin^ and weichiog grain, at terminal
points, we transmit herewith Exhibit A, showing m detail How grain is handled
tinder state supervision."

And be it/urt/ier rtmlvtd. That the secretary of state be requested to send a aem of
these resolutions to the honoiwble president ca the BeDat« and the speaker of the house
of the State of NiHlh Dakota, one copy to each of our Senators and Repiesentativee ia
the Congress of the United States, one copy each to the secreUry of state of the States
of North Dakota and Wisconsin, one copy each to the president of the senate and the
speaker of the assembly of the legislature of the State oi Wisconsin, and one copy each
to the presidents of the boards of trade cA SuperlOT, Wisconsin, and Hinneapous and
Duluth, Minnesola.

Approved March 6, 1907.

Mr. EscH. Do you know to what extent the lessened reputation
of AmericaD grain is due to the lessened virginity of the soil in
America producing that grain %

Mr. Gbonna. Will you ask that question again, Mr. Each }

Mr. EsOB. To what extent is the lessened reputation of American
grain due to the depletion of the American bou in the production of
f^rainl

Mr. Oronna. Well, I do not know that I oould give you the ow-
oentage. !No one who is familiar with the raising o? wheat will amy
that you can impair the fertility of the soil and the character of the
product hy contmually raising wheat or any other grain, by taking
the different ashes out of the soil, without again sowing it to tame
grasses such as clover, which is the best grass that I know of — that is,
the best outside of alfalfa — to redeposit nitrogen and oxygen in
tjtke ground. We do not deny but that the grade of wheat produced
will be inferior to that produced on virgin soil, if it is a producer of
grain, and I believe I produce as much grain as any individual in the
United States outside of any corporation. I am not here to adver-
tise my farming business at all, but I want to say to the committee

The Chaikmak. We congratulate you, sir.

Mr. Gbonna. I want to say to the committee that last year I hod
between 8,000 and 9,000 acres of grain and I have the same this
year.

The Chairhan. We congratulate you.

Mr. Gronna. I do not know all about grain, but I know some-
thing about it.

Mr. Baktlbtt. Does not that difference in the price of wheat in
Liverpool and in America tend to diminish or curtad the exportation
of wheat, wheat being in this country over a dollar a bushel and
cheaper in Liverpool now, is it not %

Mr. Gbonna. I am not familiar with the Liverpool price to-day.
But right on that I do not agree with the gentleman who preceded
me in regard to the price of wheat in Winnipeg. If he takes the
report for last October he will find that during that entire month,
not every day, but twenty days out of the thirty, or two-thirds of
the time, there was not to exceed 2 cents a bushel difference in the
price of grain at Winnipeg and the price at Duluth and Minneapolis,
and at one time grain was three-quarters of a cent higher in Winni-
peg than in Duluth or Minneapolis.

Mr. Jackson. There was not any grain in Winnip^ at that time,
because it had not been harvested. You could make the price
anything.

80 mBFECTIOJT AND OBAClKa OP QBALS, ETC.

Mr. Gbonna. I am simply stating facts, and I am not talking p<^-
tica at all. I am in favor of a tanS on grain. In fact, I favored a
duty of 25 cents a bushel on srain. ■■

Mr. Jackson. I am not taUung politics either. I am just stating
facts.

Mr. EscE. To what extent do the farmers of North Dakota do
their own elevating, and to what extent are they trying to ship directly
to the exporting markets ?

Mr. Gbonna. It woxild be impossible to give it accurately — that is,
as to the amount being marketed bv themselves. You understand
we farm on a big scale. There is no place that you can take your grain
with any more convenience than to the elevator. Time is what costs
money with us. We are paying $3 a day and board to the common
laborer during the fall and summer, l^e paid that laat year. We
run the grain from a thrashing machine into large tanks that hold
from 125 to 140 bushels, and haul those tanks to the elevator, and all
we have to do is to open the end gate and the wheat runs out, and it
does not take two mmutes to unload the whole load.

It is not an easy matter for a farmer to build an elevator of that
kind where you can have that convenience in unloading^ so that
1 would say that most of the grain that is marketed is bemg taken
to the elevators. But a lai^ number of these elevators are owned
by the farmers' elevator companies. That is, there are quite a
number of farmers' elevators. Of couree q^iite a number of them
are called farmers' elevators that are not in fact faruiers' elevators.
They are owned by small corporations. We do not complain against
the elevators of our countiy. We have no particular complaint
aeainst them; that is, as a system. I believe that the men who own
these elevators are doing the very best they can to get for the farmera
the highest price possible. I believe it is their aim to do that. It is
natural that they want to buy on a margin and not lose money on
their business transactions. It costs a lot of money to build an
elevator, and it costs a lot of money to operate one, and this bill
that I have introduced would not, in my opmion, affect the elevator
business at all. It will not affect any legitmaate grain business. All
that this wd! affect and all that it seeks to change and to stop is the
practice that has been going on with these terminal elevators, at least
some of them, that buy grain at a certain grade, say No. 2, and it
has been proven that it has been shipped out again as No. 1.

Now that works two ways. In the first place, the farmer does not
get the price he is entitled to. In the second place, if the grain is
mixed, ii some good grain is mixed with poor grain, and it is being
shipped to a foreign country and sold as good grain, it is naturu
that the buyers in that country will discriminate against us, because
they have found that our grain will not come up to the standard, and
that is the real complaint that I have to make against the practice
of these terminal elevators and the people who export grain; that
they mix it. If it was not a loss to the foreigner, he would continue
to send his orders to America and buy his wheat here. It is just the
same with us farmers as it is with a wholesale house. We want all
the orders we can get.

Mr. BABTLETt. Would the foreigner buy wheat in America at SI .02
and then have to add the freight if he could buy it abroad, at Liver-
pool or elsewhere, at 98 ! Would the foreigner buy any sort of wheat,

IHBPECTION AND QBADING OP QBAIH, ETC. 81

whether mixed or unmixed, or No. 2, or No. 1, if the export price was
over $1 and you had to add ttie freight ? Could he buy wheat in
America if the price in Liverpool was under that, without freight ?

Mr. Oronna. I will aay to the gentleman that if there was no
wheat in Liverpool it would have to come from America, Argentina,
the Danubes. or from Russia. As I understand it, very little wheat
is raised in England.

Mr. Babtlett. I understand that, but Uverpool fixes the market
price for wheat, does it not ^

Mr. Gbonna. To a certain extent, of course; but if they have no
grain; if they are short of grain, I take it that the price will be based
upon the supply and demand.

Mr. Bartlbtt. So long as wheat is high in America and foreign
countries, unless the supply runs short, they would be more apt to
buy it where it was cheaper, would thev not?

Mr, Gronna. Oh, yes; certainly. I nope the day will come when
we will consume all our grain in America, so that we will not have to
export a single bushel of wheat.

Mr. Bartlett. Do you know how much you exported last yearl

Mr. Gkonna. I thinx about 10 per cent of what we produced. We
would hke to export every pound of it ground into flour. That is
what we ought to do.

The Chairman. Is that all, Mr. Gronna ?

Mr. Gronna. That is all.

Representative Gili,, of Maryland. Mr. Gronna, you have state
inspection in the State of N'orth Dakota, have you not %

Mr. Gronna. Yes; but the inspection of our State does not amount
to anything. There is very little grain sold in our State. Only a
little of it sold to local mills.

Mr. Gill. There is state inspection in the State of Minnesota,
where you ship your wheat, is tnere not ?

Mr. Gronna. Yes.

Mr. Gill. Is that inspection satisfactory?

Mr. Gronna, We have, of course, had our tilta with the Minnesota
inspection ; but they have always seemed to be fair and willing to meet
us naif way, and I have no complaint to mf^e so far as the rules of
inspection are concerned.

Mr. Gn.L. I asked the question in regard to state inspection because
in our State of Maryland both the farmers and the handlers of grain in
the city of Baltimore found Uie state inspection very bad, so bad that
they petitioned the legislature, of which I was a member at the time,
to repeal the law of state inspection, and all the farmers in our State,
as well as the business men, have found that that change was benefi-
cial, both to the shipper and the producer. I asked the question so
as to get vour opinion as to whether you think any government inspec-
tion is v^uable aad if it is not at all affected by what you and I knoiv
of as political appointments ?

Mr. Gronna. I will say that we have been greatly benefited by
the changes in laws of the State of Minnesota in regard to inspection.
I think the gentleman from Minnesota will bear me out in the state-
ment that while we formerly had trouble with the Minnesota inspec-
tion, and it has been up tJefore the legislature several times, yet I
think the law has b^n improve*!. Every time it has been changed
I believe it has been impnived, and it has been in the interest of the
45331—10 6

82 INSPECTION AND OBADINQ OF QBAIN, ETC.

farmer that the inspection has been made more rigid. The changes
eveiy time have really been in the interest of the producer, and we
shall certainly be opposed to repealing the law even for state inspec-
tion.

Mr. QiLL. You desire the state inspection to remain 1

Mr. Geonna. Yes.

Mr. Gill. Then I ask you if you have a satisfactory state inspec-
tiou and on top of that you ask a goTeriunent inspection^ inasmuch
as we can not pass a law here to take the place of the state inspection,
won't it impose a double cost of inspection on the producer 1

Mr. Gbonna. Not necessarily, because the State can cooperate with
the Federal Government. I do not think there would be any trouble
ahoat that. The gentleman knows that in the case I refer to, the
shipment of grain to foreign countries, the State can not possibly
give the inspection that is required, because they have not the
authority. When grain is handled in interstate commerce, they have
nothing to do with that, nothing to do with anything except the
inspection within the State.

The Chairman. That is all. I have been asked by several parties,
Mr. Gronna and Mr. Pearre, as to whether it would be well to have
subsequent hearings on these bills. The understanding then was that
this was not to be the final hearing.

Mr. Gkonna. Yes. I thank the chairman for that statement. I
telegraphed the Society of Equity, the ofhcers of the Society of
Equity in my State, Mr. U. G. Pierson, who is president, and Mr.
J. M. Anderson, who is secretary, both living at Casseltonj N, Dak.,
and I received a reply from both of them that it would be impossible
for them to attend, and it seemed impossible to get anyone to come
at this particular time, because the farmers are all busy. I spoke to
the chairman, and be was kind enough to assure us that the hearings
would go on in accordance with his statement.

The C^isHAN. This is an important matter, and full opportunity
on both sides will be afforded before action is taken.

Mr. Stevens. Before this report is printed I think Mr. Gronna and
I should look it over. Some of it does not need to be printed.

Mr. Gronna. I shall be glad to do that.

Mr. Wangee. The Philadelphia Chamber of Commerce has pre-
sented a brief and does not care to be heard from further.

STATEMEBT OF MB. H. D. IBWIN, BEPBESEirTINe THE COK-
HEBCIAI EX(^AHQE OF PHILADELPHIA, PA.

The Chairman. Whom do you represent, Mr. Irwin?

Mr. Irwin. The Commercial Exciianire of Philadelphia. I would
like to ask you, Mr. Gronna, does tlie country elevator sell wheat, or
does the farmer sell it to the Minneapolis or l)uhith market?

Mr. Gkoxna. Oh, ves; a large proportion of it.

Mr. Irwin. Does the country elevator man clean that wheat before
he ships it into Duluth or Minneapolis?

Mr. Gronna. At the present time I believe most of them do it and
have done that in recent years.

Mr, Irwin. Are the fnriners interested in these country elevators
to a great extent?

Mr. Gronna. In some instances they are interested.

INSPECTION AND QBADINO OF OBAIN, ETC. 83

Mr. Ibwin. Those country elevators pay a pretty good profit on
the business they have, do you think 1

Mr. GsoNNA. In some years they do, and in some years they do
not. I have not been interceted m elevators myself. My son has
been interested to the extent of a couple of thousand dollars in one,
but he sold his stock last year and said ne did not make any profit at
all. He got tired of it and sold out.

Mr. Irwin. Under this bill would the Government inspect grain,
for instance, at the original point of shipment in North Dakota ?

Mr. Gronna. Not at all.

Mr. Irwin. They would have no jurisdiction over that?

Mr. Gronna. Not at all.

Mr. Ibwin. What would happen on an export grain shipment
leaving from Iowa or North Dakota and inspected at Chica^ aa
No. 1 federal inspection, when it reaches Boston out of condition,
when the Boston exporter had bought it, and it had received federal
inspection at Chicago, and is sold abroad at thatt It reaches Bos-
ton, and the bill provides that it need not be reinspected. The
but also provides that it can be reinspected. But let us suppose
that the Boston shipper shipped it without reiospection, and the
Liverpool buyer has no redress whatever.

Mr. Gronna. You refer now to com ?

Mr. Irwin. Yes.

Mr. Gronna. I must confess my ignorance as to corn. We only

firoduce corn in small quantities in North Dakota. But it is hardly
air to speak of com m the same way as with wheat. You can
throw wheat out on the open ground and let it stay for thirty days,
and it will not spoil unless the weather is hot.

The Chaibuan. Mr. Irwin, we do not permit examinations of that
kind except for information. Your whole question was a mere matter
of argument.

Mr. Ibwin. I did not mean it that way. I was asking for infor-
mation.

The Chairman. You were asking a supposititious case of what
might happen. That is a matter of argument. If you want to be
heard on ttiis subject we will hear you, but we will not permit the
examination of a witness that way as a matter of argument.

Mr. Gronna, I thank vou, Mr. Chairman.

The Chairman. Are triere any other witnesses who desire to be
heard «

Mr. Daish. There is a gentleman from Baltimore who wants to be
heard, Mr. Vincent. He has made careful investigations in regard
to this whole matter.

STATEUEHT OF H&. J. C. VINCENT, QBAIS INSPECTOB, OF
BAITIUOBE, HS.

The Chairman. Please give your full name, Mr. Vincent, and the
position you occupy.

Mr. Vincent, My name is J. C. Vinc#nt, of Baltimore; grain
inspector, member of the board of directors of the chamber of com-
merce, I am liere as one of the committee representing Baltimore.

I want to open the subject by stating that for some yeacs federal
inspection has beon agitated, but until within the last two years those

84 INSPECTION AND GEADIKQ OF QBAIN, ETO.

in the trade took do interest in the subject — that is, at the terminal
markets. It was supposed, so far as we could ascertain, to be a fi^t
between Minnesota and North Dakota. It was a matter in which
the question of North Dakota came up, the question of rates, whereby
the people in North Dakota felt that tnere was an injustice done them.
Parties took hold of it. The Government in 1892, through Secretary
Rusk, suggested inspection as a panacea for the benefit of the farmers.
It did not seem to make much headway until about 1906.

At that time there was a change in the duty on com to Germany,
going into effect on the Ist of March, when the duty on com was
raised from 7 cents to about 18 cents a bushel against America, and
at the same time Russian barley, which before had been 30 marks,
was reduced to 13, making a handicap of 20 cents a bushel against
American com since 1906 as compared with the condition previous
to that time. Before the duty went into effect the whole of Europe
felt that com would go up. The Germans bought lai^ely. In look-
ing over the figures I see that from Baltimore in December, 1905, and
January, 1906, we shipped more com than we shipped in the whole
of last year, and more com than we shipped the year before. We
shipped 11,000,000 bushels in three months, and in the year we
shipped 16,000,000 bushels. Nearly every other port on the Atlantic
seaboard shipped com. The purchases had been made by the Ger-
mans, all expecting that the market would go up. They bought
more than they could take care of. The steamers arrived and were
delayed in unloading; some of them made long trips, and the larger
proportion of the com was out of condition. A large proptortion of
the com had been sold in what we call dry hulls, sold by western
men of St. Louis and Kansas City, with condition guaranteed on
arrival.

That meant that on the arrival of the vessels and discharge of the
cargoes sealed samples would be taken and sent to London, to be arbi-
trated in the manner that was spoken about as to other grain by Mr.
Jackson. They might get one shilling and a quarter, or one shilling
six, based on the judgment of whoever sat on those samples. But
com when it goes out of condition until it gets mahogony is hard to
hold, unless it is properly handled and handled in a way that in
Europe they have no facilities for. The result was that the com was
put in scows, and a great deal of it had been sold originally to go up
mto the interior and sold as sound com and good com, American No.
2 com. The buyers who were consumers would not take it at a reduc-
tion, and when the sample was sent to London it had dried out some.
The decisions were rendered in London, and, accordingto the contracts,
the decision had to be accepted. The result of it, however, was that
the original buyer and the importer secured, in his judpnent, the dif-
ference in value on account of the com going out of condition. What-
ever the decision was, whatever the amount of damages given by that
tribunal was, the American paid for it, those who had sold it on those
terms. Most of the com from the Gulf was sold on those terms.

Now at that time Denmark came in, having the same trouble, but
to a less extent. The men from Germany naturally became very
much soured on American com. At that time the agitation about
the McCumber bill and the Gronna bill was in force here. Now here,
as I take it, basing my opinion on Mr. Gronna's statement two years

INK>BCI10N AND QBADINO OF OBAIN, ETC. 86

ago — where he had introduced his bil], as he said, for Mr. McCumber —
we can call Mr. Gronna and Mr. McCumber partners in this inspection
business. I have heard what Mr. Gronna stated to-day, and I have
read where he did not wish to state anything but facts. We have
not had an opportunity until to-dav to state some facts gainst the
aspersions that have been cast on tne exporters, both on this side of
the water and on the other side of the water, by the advocates of
federal inspection, by govt rnment officials either on this side or reporta
of what they have heard from some of the consuls on the other side,
all of which has gone into print and has been sown broadcast through-
out this country; and what has been printed, to niy mind, has been
only what will uphold the idea of the necessity for federal inspection.

Now, gentlemen, mentioning Mr. McCumber mentioning the fact,
as stated by Mr. Gronna regarding the last bill, that it was virtually
the same bill as this and that he was doing it for that gentleman, I
want to call your attention to what happened at the hearings that
were held heretofore on this subject. There was a report from the
Senate committee to the Senate, and on the floor of tne Senate the
port of Baltimore was attacked.

The Chairman. I may tell vou that you will not be permitted to
make any references here to wnat was said on the floor ot the Senate.

Mr. Vincent. Very good, sir. I was leading up to some informa-
tion that I wanted to put before you. In IdOS in the printed pam-
phlets you will find references have been made to corresponaenca
with the London Com Trade Association, In reply to one of those
letters it is stated that there is unjust inspection on this side and that
the exporters here are not honest, and one reference is made in one
of the letters from the other side to the effect that the American
exchanges had not, aa they thought, taken cognizance of the corre-
spondence which had been sent to this side. I want to say that in
1906, following the statements from the other side regarding the
damage to the com, the Baltimore Chamber of Commerce sent out,
on July 16, 1906, the following circular:

ACTION or BOARD OP DIRECTORS, BALTIUORB CBAUBSR OF COHHBRCB, JOLT 16, 1906.

To uhom it may eoneem:

Jt has been brought to our notice that the Danish newspaper "Boreeu," published
an article criticizinf; the official iaspcctioii of com shipped from the Atlantic porta,
and suggesting a governmental investigation, in which it includes Baltimore.

It is a tact that one condition in the American grain contract stipuIateB "official
certificate to be final aa to qaftlity," but we deny that the "calamity and the danger

of Uie whole business is solely on account of this clause," aa applying to Baltimore.

It is self-evident that merchanta can not afford to be derelict in protecting their
customers, if they expect to hold their business; and as this amociation was founded
primarily "to inculcate and maintain just and ef^uitable principles ot trade," the
board of directors gladly welcomes any investigation desired respecting ita methods
of inspection.

Those familiar with the handling of com must recognize that this cereal is subject
to deterioration from climatic and atmospheric influences at certain seaaons and under
varying conditions, and it sometimes happens that damage is reported in the hold of
a steamer next to the stoke hole, when other holds turn out in good condition, and all
of said grain was passed by the same ioEipector,

This IS a matter that our exporters havp lately brought to the attention ot the board
of underwriters, with results which should minimiae risks in ihe future.

It has also been claimed that com reached Europe in apparently good condition
when landed ex ship, but afterwards depreciated when forwarded to the interior, thus
showing conditions can arise in Europe over which an inspector or shipper on this

INSPECTION AND OBADINQ OF GRAIN, ETC.

e from the atmosphere, and this, with

e pDsitiaQ they hold,
it familitr with our workings, we give the follow-

The board of directora appoints a chief ioBpector and such other aaaiettuit inspectora
as mav be deemed necesKuy, to serve for one year uulece otherwise removed.

It also appoints a com committee of five members, actively engaged in the buaineM,
coavenaut with the cereal, and repreaentii^, as nearly as poasibie, the seven!
branches of the trade, whose duties are prescmied in Article X of the by-laws, and are
as follows:

"Sec. 7. The respective grain committees shall, as early as practicable, estsblidi
standards of the grades of grain, and may make changes therein, but no change shall

be made until notice of the same shall have been posted for thirty days on the bulletin
board of the chamber; they shall hear and determine all appeals from the decision of
the insnector (subject to a fiirther appeal to the board), and shall keep records of their
proceedings. It shall be the duty of the wheat, com, oats, and rye committees to visit
the eLcvatora when,in the judginent of the chairman, a majority of the committee, or of
the board of directors, it shall be deemed necessan' U> examine the grain in the eleva-
tors, and to see that the inspection is conducted in accordance with the standards
eatablidied, and they shall report in writing to the board at each regular meeting."

Besides snme, we have a bureau of inspection and weighing, comprised of the
president, together with the chairman of the com and wheat committees. These three
gentlemen have supervision over the inspectora and weighers, and issue instructions
lor their guidance m the discharge of their respective duties, as covered by Articles
XI and XXVI of the by-laws, as herewith:

Article XJ.

"Sec, 2. The duty of the chief inspector shall be (o supervise (he inspection of all

Kin, hay, and straw arriving at the various elevators, and such other public slore-
lees as may be established from time to time, or by vessels, at such places an may
be designated. He shall furnish certificates of inspection when desired. He shall
report to the board of directors all evasions of the rules regulating inspection and all
attempts to deliver grain, hay, and straw of a tower grade than that called for by the
warehouse receipts, and shall report monthly in detail to the board the workings of
this department.

"Sec. 3. The assistant inspectors shall inspect all Krain, hay, and straw arriving at
the poinU where they may at the time be stalionea, and shall perform their duties
under the direction and supervision of the chief inspector. The first assistant shall

Krform the duties of the chief inspector in Iheab.seuce ot the latter; in the absence of
th the duties Bhall devolve upon the seeimd afHistant,

"Sec. 4. All inspectors of grain, hay, and straw, and weighers of grain shall, before
entering upon the discharge of their duties, take and Bubscrioe an oath before a notary
public that they will faitiifullv and Impartially discharge their duties and abide bv
all the provisions of this article of the by-laws. The inHpectora and weighers shall
give bond for the faithful and impartial performance of their duties. The oaths of
the several inspectors and weighers shall be attached to their respective bonds. The
penalty of the bond of the chief inspector shall be $5,000, that of the first assistant
^,000, and that of each of the other inspectors $1 000, and that of the chief weigher
12,500, and each assistant 91,000. They shall nut oe directly or indirectly connacted
with the business ot dealing in or handling grain, hay, or straw for their own account,
Ot in the employ of others, and shall not place themselves under pecuniary obliga-
tions to parties engaged in the businessof receiving or shipping grain, hay, or stj^w,"

Abticle XXVI.

INSPECTION HULBB.

" Skction 1. No outward certificate of inspection Bhall be issued for grain which is
not equal in every reepect to the average of the stock in the export elevators, of the
Hune grade as that for which the certilicate is issued. This same rule to apply to
all shipments made either from afloat or uptown elevators.

ISSPECTION AND GEADING OP GRAIN, ETC. 87

"Bbo. 2, When tlie crop yenr ie stipulated in the certificate issoed, the grain must
be of that crop.

"Sbc. 3. No mow-bumt wheat ehall be allowed to so into the ^ades of No. 2 red
western or No. 2 red winter; and no damaged rejected com iota tne grades lA No. 2
white or mixed com.

"Sec. 4. No stock wheat shall be mixed for a higher grade than that for which it
was originally put into stock,

■'" !. 5. No n ■ ■

e allowed in No. 2 white com or mixed com during the
germinating season— from April 1 to July 1 of each year.

"Sec. 6. The various ^de committeee shall fumish the board of directMS copy
of all rules formulated with regard to grading.

"Sec. 7. The bureau of inapection and weighing shall chan^ the inspectors,
between the various export elevators, with great frequency and without notice. No
inflpector shall be at any one export elevator longer tiian two consecutive months.

Sec. 8. The chief inspector shall give close penoaal supervision of mixturae,
also keep a record of all mixtures made m the export elevators, together with date and

It should b „ .

stuffs, so there is no occasion to ship back to the interior for cattle fodder, although
we of len times ship coastwise.

Baltimore has taken the lead in the export of com from the United States for yean,
and 1^ built up a reputation for fair and honest dealing, so that we feel that the
aapeiBions on her merchants should not he allowed to go unchallenged, aa we have
aimed to place all the safeguards possible around our ofScial certificates.

Our chief inspector has been associated with this chamber for over thirty years,
and^has lately been elected president of the National Chief (>rain Inspectors' Asso-
ciation for these United States, which shows the general confidence and esteem in
which he is held.

Some of the subordinates have been with the department from ten to twenty-six
years, and we have apprentices in the service who are promoted to inspectore as
their ability and experience woirant.

We are not infallible and regret that occasionally some Baltimore shipments have
turned out unsatisfactory in spile of all the safeguards which we have found it poni-
ble t« use; but we do claim that we have as nearly perfect a syBtem of inspection
and supervision as can be eelabliehed, and that our business is carried on with boneet
effort to promote eood relataoos whh all parts of the world.

By order of the board.

DoDOLAS M. WrUB, Prttident.
Hbnrt a. Wrotb, Seerelary.

Now, that was sent broadcast throughout Europe. That was July
16, 1906. On October 15, 1906, this was sent out:

[Action of tha board ol dlreoton at apedml meeUiiE held on abors da^.]

7b whom it may cojtcem;

Keferring to our circular letter of July 16,
this port, we now wish to advise foreign buven

taken up the matter of grading ^rain with the iieiiarunem oi Agncuiture at vvasning-
ton, and persuaded it to establish at this port one of the two laboratories (provided
for in appropriation made by Congrees) for experimenting with and testing the moin-

There is no intention of making this a government inspection, but the aim is to
assist our inspection department and the commercial organizations in securing a mora
uniform grading of com, which can only he done by experimenting for probably
several yeare, as they have no basis themselves for knowing what maximum moisture
in com will make it safe to carry under varying conditions or climatic influence.

The government official will work closely with our inspectors and the com com-
mittee, and give the benefit of any sug]:;C!^ions that may be deduced as the work
progresses, to saf^uard the interests of ^1 concerned.

INSPECTION AND OBADINQ OF OBAIN, BTO.

mure i^uamDor oi vx>mmerce win do uie oniy cenmcBce laeuea, as nereioiore.

It is intereating to kziow from the Wasbingbm officittls that of 35 ehipmenta aggre-

Sting 124,626 tons, which their repiesentfttive «S»mined on itrnval in Europe, bom
nuary to May, 1906, that 10 ehipm«nl8 from Bkltunore, repreeenting 42,125 tone, <x
over 30 per cent of the total, i)howed a much emaller percentage of damage than from
any other Atlantic pwt.

In thia connection, however, we would alate that specific mentioo was mode <A
5 car^oea of tbie lot, showing main damage was in the holds adjoining boilers and
machine roonu. This shows that Che action taken by our exporters this summer, in
getting the board of underwriters to formulate rules regaidii^ rentilatiou, wu
warranted.

We (eel confident, that our work, oe outlined above, will show intending buyen
that we consider their and our intereate mutual; and we expect to maintain our posi-
tion ae the leading cora export market of the United Stat«e.

By wder,

DOUQLAB M. WtLIB,

Preiidmt.
Henrt a. WaoTB,

SeertlaTy.

Now, that was information given to Europe. On April 9, 1907,
this letter was sent to Mr. Robert A. Patterson, chairman of the
Em'Opean national committee of the London Corn Trade Association:

Baltimore, April 9, 1907.
Mr. RoBBBT A. Paitbrson,

Chairman European Intematitmal Committee,

London Com Tradt Aetofiation, London, E. C, England.

Dear Sir: Rafening to your communication of January 25, addreeoed to the presi-
dent of this chamber, I beg to advise you, ofliciaily, that the fallowing reply was
adopted by the board of directors at a meeting held this day, to wit:

Section I, Your European committee calLi< upon our chamber of commerce, as well
as others, to draw up uniform rulen for grading gjntin to be approved by you. We have
rules applying to this market, and copies of same were sent to Europe July 16, 1906.
Therefore your commercial bodies should be familiar with some, and as far as we know
there has been no criticism or commcDtaH to these rulen, unless it be to express sur-
prise that BO many safeguardH, previoiifly imknown to you, are in existence in this
market! Our boud has alrt.ady advised Europe that we courted full investigation
as to our system; but, as this chamber can not control the grading in other markets,
W4 are not able to enforce uniform grading as applied to other United States markets.

Sec. 2. As far as wu know, "association" contractn in l^ndon, Liverpool, and
elsewhere are drawn up and changed at will by the membent of said aeeociation, with-
out consultation with Americans, who arr simply notified when «ame will be effective.
We believe that the commercial bodies on tnis side are more capable of l^risUting
for the existing conditions in America, made necessaiy by a variety of reasons unknown
to most foreigners. We can not, therefore, a^ree to allow European buyers to establish
rules for American wllerB. Supply and demand will always regii late the terms between
the buyers and the aellern.

Sec. 3. We agree that inspection certificates of railroad elevators or private tisding
companies, or persons, should not rank with official certificates of well-known organi-
zatiooa, but if the buyers arc willing to accept same, based on the established repu-
tation of the seller, it would be a matter of agreement.

Sec, 4, To make, at the b^inning of the season, samples of grain to be sent to
Europe, and kejit as a basis ofgrnde, is impo»<ihle, oa the grain moves From such a
vast area ol territory. Some aectiona ship earl^ and some later, the grain from differ-
ent sections varying more or less in color, size of berry, and (leneral appearance.
Absolute uniformity throughout the season can not therefore be maintained.

Sec. 5. This chamber does not and can not specify on what basis contracts
shall be made between its members and foreign buyers — the basis of contracts is
entirely one of mutual agreement between the contractin); parties. Under our
inspection rules, however, any buyer of j^raded grain ha» the right to appeal within
three days from the dale of inaprction. This right of appeal is open to all, and the
contracts being made on basis of "official certificate of inspection final," this period
of three daysluUy covers the case. To agree to arbitration as to the correctneee of
inspection after the arrival of the grain in Europe would of course nullify the preeent

IN8FKCTI0H AMD OBADING OF GBAIN, ETC. 80

I bub of ''inepection certificate final," Ho lo:ig, therefore, aji rontracts
ue made on the baaia of "inspection ccrtilicBte dnal," the principle of arbitration
in Europe as to quality can not enter into considetation.

CuBtonu, lon^ eaCabUahed, should not be changed for light or trannent retuonn, but
if abusee exist it is right and proper to provide new aafeeuardH for future xecurity.

K«feTence is made to the "ayeteui with ilafaullaand failings," but we consider the
system, aa carried out in thia market, fulfills the requiiemente of Europe nearer than
any other market; and although one of the pnrposea of thia organitation ia to eatabliah
and mniTii<iin uniformity of commercial uaage, we can not arrogate to oureelvee to tell
other bodies as to what shall govern their n^e of buainesa. The inference "that the
conference at Chicago in December ahowa general iliaaatiafaction on thia aide," ia not
warranted, aa it was the outgrowth of efforta that have been in embryo for several yean
past on thie side to bring about uniformity in grading as far an poanblc; but it ia
generally conceded tliat uniformity in description only ia feaaibte, and application
only in a general way.

"nie United Stat«a laboratory work at thia port, which was alarted previous to the
London conference, ahould show Eiu^ipe that tnis organization is eameBl in its endeav-
on to find out "the faults and failings in the exiating aystem," if any, in the grading
of maize. We can safely aay from facts already gained that »ome of the theories
advanced in America and in Europe are not tenable, and bv the end
we shall probably be able to demonstrate what is feasible, both -to the n
and the European buyer.

We feel aure that many of the European grain trade, repreaented by Mr. Patterson,
recognize the difficulties to be encountered on thia aide in enfotcitig any arbitrary
action, for it has already been proven that some buyers are able and do discriminate
when making purchaaee, and they will continue lo do so, basing Iheir purchaaee on
thoee official certificates in which thei^ have confidence.

When buying on certificate, they are justified in believing that any official certificate
shall bithfully represent the quality of the grades, and so sustain the integrity of beth
the seller and the organization that iaauea it.

We consider the beet method for Europe to adopt would be to send del^atee to
America, including, if possible, some of the trade who are already familiar with the
system of handling grain here, who can then inveatigat« the methods in vogue in the
various markets, confer with the trade bodies separately, point out abuses, suggest
remedies, and so decide for themselves with whom they prefer to trade.

The whole subject in the end resolves itself into the question On what baaia can
Europe buy American grain on the beat favorable terma, all thiuga considered?

Without attempting to deny that individual cases of improper inspection might occur,
it yet remains true that auch casea represent a very small percentage of the great
volume of business done on tliia baeis. Should aellers in America ever agree to change
the basia of contract as suggested, the coat to foreign buyers would be sharply increased
on each and every transaction to cover the additional risk assumed.

In the end we aredecidedlvof the opinion that the present basis of sale, "certificate
of inepection final, " will be lound to be more favorable to European buyers than the
proposed contract, which aeeka to do away with the condition.

Ilie commercial bodiea in America issuing such certificates should be, and we
believe are, fully alive to their responsibility in this respect, holding aa they do a
neutral poaition between the aeller and the buyer, and owing quite aa much obligation
to the one as to the other. Certainly the Baltimore Chamber of Commerce so under-
stands, and ita object ia at all times to surround iU iiiapection with every poaaible
aaf^^uard, both as a moral duty and for the further reason that it knowa that a apirit
of mir dealing must always be the foundation stone of which all permanent trade
relations are to be built up.

Very reapectfully, .

Now, I want to say that in the letter from Mr, Patterson to Mr.
Douglas M. Wylie, under date of February 15, 1908, and in the corre-
spondence wliich some of tliese gentlemen have been Iiaving with the
other side, I see that Mr. Patterson makes some suggestions, and he
says, "This has been found practicable, in Canadian government
inspection, and doubtless will be found so with you." Reference baa
also been made to the question of our quality of wheat, so that I think
if you will permit me I would like to read a word or two, because it
hoa been used as an argument, by those who are in favor of govern-
ment Inapection, that they had it in Canada.

90 INSPECTION AND GHADING OP GRAIN, BTO.

The Chaibman. We would be very glad for any of tihe witnesses to
give us infonuatioa, but arpiments we do not care for.

Mr. Vincent. Then I will pass this map up, and I would like you
gentlemen to see it. That ia a map [exhibiting same] covering the
railroads of Canada, and I want to tell you that the bulk of the grad-
ing of grain is done at one point, and that is Wiimip^. Now, it is
a very difTerent proposition to have a government inspection in a
country where only a few grades of grain are brought for export, where
the movement is largely by the railroad trains and is not so diversified
OS it is in the United States, where they can make up whole train-
loads, miles of cars, which they do, and that grain goes through one
point.

The Chairman. What difference is there so far as the admimstra-
tion is concerned ?

Mr. Vincent. I claim it is impossible to have government inspec-
tion under the conditions that we have to meet, and it is absurd to
put Canada up as a basis or model for inspection in the United
States. Because the system works in Canaaa is no reason why it
should work in the United States, when the grain moves from all
parts of the country and goes north and south and east and west.

The Chaibman. That would be merely a matter of expense.

Mr. Vincent. I think it would be impossible, myself.

Mr. Wanger. Is it your point that there would be a lack of uni-
formity t

Mr. Vincent. Yes; it would be impossible to have uniformity in
the United States, to my mind.

The Chaibman. It would be more nearly possible to have uni-
formity if the United States were inspecting grain, would it not, than
if a whole lot of different institutions were inspecting grain at differ-
ent points?

Mr. Vincent. They can not do it as thej» do it in Winnipeg.

The Chairman. Do you think the uncorrelated forces would be
more hkely to have unitormity than the correlated forces making the
inspection ?

Mr. Vincent, One inspection can only be made at one place.
Now, I have got statistics here as to the dockage on the elevators,
and so forth, and I have saniples here which represent 220,000 bush-
els of wheat shipped from North Dakota to Baltimore by rail that
have not been through any mixing house. I can give you samples
showing the dirt and seeds that were shipped by the Dakota fanners
or dealers, or railway people, shipped to the seaboard without trans-
fer, and where it had to be cleaned and blown.

The Chairman. Give us those figures.

Mr. Vincent. And the result of that was that it was wheat graded
No. 2 and No. 3, but it went out as No. 1. There was no cheating
about it and nothing was done but what was right. The farmer
received the proceeds of the screenings, less the cost involved in it,
but we enabled him to fulfill his contract.

The Chairman. I understand you to say you could give the facts
and the samples. I supposed you had them.

Mr. Vincent. I will sliow them to you right here. The question
was also raised during the previous hearings regarding the quality of
the wheat. I will show you samples of Canadian wheat as against
Minnesota wheat. This is Dakota wheat [exhibiting sample]. Here

IS^ECTiOH AKD 13raADIN0 OF OBAIN, ETC. 91

is No. 1 wheat. Over 46,000 pountjs of that atuff [indioatiug waste
matter] was taken out of that.

Mr. Wanger. These are extractions from shipments? They do
not represent the shipments ? They do not represent the stuff that
was forwarded 1

Mr, EscH. They are detractions.

Mr, ViKCENT. That was the shipment that was sent out [submit-
ting specimen], with that all mixea together. It ia No. 1 wheat when
that material has been taken out. It is No. 1 wheat in that form,
and there is no cheating in that. Those samples have been sent on
purpose to be used down in Washington. We tried to get up before
the committee at the last session, but we did not hare our chance
except for a few minutes.

Mr. Gronna. May I aak the gentleman a question, Mr. Chairman t

The Chairman. Yes.

Mr. Gronna. You do not claim that this is a pure sample of any
one grade of wheat f

Mr. Vincent. I claim it is a sample of No. 1 durum wheat, Balti-
more inspection.

Mr. Gronna. Do you claim it is pure durum wheat? You will
admit it is a mixed sample of wheat ?

Mr. Vincent. I never saw a sample of wheat that was not mixed;
it ie mixed in the field^ to begin with.

Mr. Gronna. The idea I wanted to convey is this: We can take
soft wheat, sow it in the Northwest and, by raising it for at least five
years, we can produce a hard (juality of wheat. This is not what is
generally called hard wheat; it is durum wheat, which originally was
a soft variety of wheat, known so all over the world; but it has been
produced year after vear in that northwestern climate until it has
been acclimated and Deeome a hard variety of wheat, a No. 1 wheat,
or rather, a hard wheat. But strictly speaking it could not be called
a hard wheat, could it [indicating sample]^

Mr. Vincent. I call it durum wheat; it is durum wheat. It is a
wheat that the Agricultural Department has done good work with for
six or seven years, and has increased it — that is, the growing of it — to
the benefit of the farmers.

Mr. Gronna. It is also a mixed wheat, is it not?

Mr. Vincent. There is a little white wheat in it; that is, in all the
samples I have seen. I wanted to show those samples as a proof
that wheat which grades No. 3 or No. '2 can be taken into the ele-
vators, the stuff taken out— the <iirt and seeds — and be made No. 1.
That has been used in the ai^uments — not by Mr. Gronna — but used
by others as one of the reasons or necessities for government inspec-
tion. It has been talked about all over the UnitedStates and printed
about that the farmers were being cheated. There is the grain that
the formers shippec! to us as No. 1 wheat [indicating sample]. Now,
we have treated them right; we always tiy to treat them right.

The Chairman. You say it was shipped to you as No. 1 wheat!
Who had graded it as No. 1 wheat !

Mr. Vincent. I say the farmers, I suppose, shipped it as No. 1 .

The CHAraMAN. The farmers ship the wheat, but they <lo not grade
the wheat.

Mr. Vincent. Well, the country elevators, I suppose; they sold it
as No. 1 wheat.

92 INSPECTION AND QRADINO 01* OBAIN, BTO.

The Chaibhan. Wheat ia sold that way. is it not— sold on sample %

Mr. Vincent. We bought it as No. 1 wheat.

The Chaibhan. Ia it not sold on sample?

Mr. Vincent. Mr. Gronna may tell you,

The Chairman. You can tell me. You are in the grain huBineas
in Baltimore.

Mr. Vincent. I say we bought it on grade on Baltimore inspection
No. 1 durum wheat.

The Chairman. You bought it after it had been inspected in
Baltimore, then?

Mr. Vincent. No.

The Chaibhan. The wheat is shipped to Baltimore to be sold on
the exchange there. Is it sold by sample t

Mr. Vincent. It ia generally graded beforehand. A western man
will sell us so much wheat and so much com for such end such
deliveiy.

Mr. Gronna. You say this is No. 1 wheat [indicating]?

Mr. Vincent. Yes, sir.

Mr. Gronna. Do you mean No. 1 hard wheat)

Mr. Vincent. No; No, 1 durum wheat.

Mr. Gronna. What is the difference in price of ■ the durum wheat
and the No. 1 Saskatchewan Fife ?

Mr. Vincent. Now, I should judge it was about 20 cents a bushel;
that is, as far as (ijown in the United States.

Mr. Gronna. That is the way it is exported?

Mr. Vincent. Not always; it has been within 5 cents.

Mr. Gronna. It has been sold as close as 5 cents to the Saskatche-
wan hard wheat ?

Mr. ^'iNCENT. I do not know what you call Saskatchewan wheat.
You are speaking of Saskatchewan; you mean No. 1 Fife, not grown
in Saskatchewan?

Mr. Gronna. No, sir; not at all. The reason I ask that question
is this: The farmers have to sell this wheat all the way from 10 to 20
cents a bushel less than the Fife wheat.

The Chairman. All of the wheat that is sold on the exchange
ia either sold on sample or else based upon the grade that it receives
at Baltimore )

Mr. Vincent. I said all this had the Baltimore grade, but until that
arrived the man shipped it

The Chairman. And he took chances on having it graded in
Baltimore ?

Mr. Vincent. Yes, we trust him to ship us the wheat.

The Chairman. But you do not trust him that it will grade No. 1
Durum until you get the grade ?

Mr. Vincent. Certainly not But we could never do an export
business if we could not buy it beforehand, and bring it from a thou-
sand to fifteen hundred miles, and until we had the wheat, until the
grain had arrived to see whether it graded or not.

The Chairman. Suppose it did not grade No. 1, you would take it
and pay for it I suppose (

Mr. Vincent. We generally leave a margin on the draft.

The Chairman. Youdonnt take their statements for it, then, unless
it does so grade ?

INSPECTION AHD QBADING OF QBAIN, ETC. 98

Mr. ViKCBNT. When it comes there it has got to pass, of course.
That is what I wanted to show you, that there were 28,000 bushela
that did not pass, and we handled it for their account and took the
dirt and seeds out. I simply mentioned that to show that it is how
business is done all over the country. It is legitimate, and it is for
the benefit of the farmers. Now, I will refer U> the corn and I will
also refer to the pamphlets or statements that were sent to Europe
regarding the laboratory work. The first United States laboratory
for commercial use was opened in Baltimore November 13, 1906.
Some of the su^estions I have made have been carried out and some
that I have made have not been carried out. The Government at the
outstart thought, or I think the officials of the Agricultural Depart-
ment thought, that within twelve months they would be able to
adduce something that would enable us to have an uniform inspection.
We have been working now about three years and a half and it has not
been proven yet that uniformity is possible in grading grain.

Mr, EscH. Does the laboratory recommend the drying of com
before shipment ^

Mr. Vincent. I do not know that they have made any recom-
mendations at present. I had a talk with their technologist the other
dav and he seemed to have the idea that if we could get com wi^
only 10 or 15 per cent of moisture then it would be safe.

Mr. EsoH. Id the testimony given two years ago 14 per cent was
considered safe.

Mr. Vincent. Well, they have been getting down. Various west-
em men were working for uniformity of grades as to moisture and
most all thought that 19 was all right; they did not want 18 per cent
for the No. 3 com. Within the last few months the Illinois people
went to Chicago to investigate, and it was claimed that even 19 per
cent of moisture in com was too little, it should have more.

The Chaihman. When you say the Illinois people, to whom have
you reference?

Mr. Vincent. The grain dealers.

The Chairman. What Illinois grain dealers ?

Mr. Vincent. The Grain Dealers' A.>4sociation. They have an asso-
ciation there, and a delegation went there. I want to say we were
all figuring upon bringing about a better understanding between the
western sellers and the seaboard, and by teaching the western man
that he should look after his grain before he shipped it to market,
instead of complaining to the receivers at the seaboard, when it
reached the market )iot or rotten, that it would do us all good.

The Chairman. In your opinion has this laboratory at Baltimore,
the government laboratory, oeen a good thing *

Mr. Vincent. Yes, sir.

The Chairman. And done a successful work ?

Mr. Vincent. Yes, sir; though they have not done as much as we
would like. You see, they started with the idea they could fbc the
grades for grain within a j'ear, but I argued it would take two or
three years.

The Chairman. They argued before us it would take longer than
that. If you have any inronnation to show us that they thought
it could be done in a shorter time, I would like to have it.

Mr. Vincent. This was when they first started. I have the
correspondence here with Doctor Galloway and the department,

94 INSPECTION AND QBADIHG OF OBAIN, BIO.

which I can show. I want to bring this in because the claim has been
in print, and sent to Europe, that the exporters Irom the seaboard
markets are not treating the buyers right; they were not treating the
importers on the other side right. We have in Baltimore only a few
exporters, but within thirtv-nve years Baltimore has shipped one
thousand million busheb of grain on Baltimore inspection, and we
do not propose to sit still and have it intimated

The Chairman. We are much more interested in getting informa-
tion than in vindicating the character of the Baltimore exchange.

Mr. Vincent. I only wanted to lead up to it. Here is information
that will show that Baltimore has been seeking to do what it can,
not only for this country but for the other side. Here is the report
of the Baltimore Grain Standardization Laboratory to the chairman
of the laboratory committee of the Baltimore Chamber of Commerce,
ending December 31, 1909:

Ab the objects of the laboratory were fully diecueaed in a report mode to Hr. J. C.
Vincent, chairman of the laboratmy committee, dated January 31, 1909, it is not
thought necenary to enumeiBte them here. In February of thia year the first experi-
mente were b^un to determine the causes of deterioration of com while in storage.

And then some particulars are given. I have a copy of this, which
I will pass to your stenographer. What I want to call attention to
is this:

In carrying on the special investigations enumerated above we have had the cordial
cooperation ol the Baltimore Chamber of Commerce, and its various committees,
through the chairman of the laboratory committee, and also the transportation via
elevator companies, who have furnished facilities for carrying on the expeiiments.

In addition to the ciperimental work a large number of eamples were submitted
te the laboratory by the trade for analyais, on all of which reports were iaaued. The
number of samples eiibmitted by the trade from the time the laboratory was estab-
lished in November, 1906, until December 31, 1»09, is as follows.

It gives it in detail, making a total of S,I34 samples. Then they
say:

In addition to the above samples submitted by the trade, 10 per cent of the receipts
and exports were examined by repre-'tentatives o! the laboratory during the year 1908,
and 1,342 samples were secured, making a grand total of 9,476 samples analyzed and
tested in the laboratory from November 13, lEKKi, to December 31, 1909, representing
approximately 70,000,000 bushels of grain.

There has not been a shipment from Baltimore since that labora-
ton' was established but what a sample was tested in the laboratory
before it went to Europe.

The Chairman. Wliy have they done that J

Mr. Vincent. We have done it for a check on our^lves and a
check on our own inspection.

The Chairman. Why should the Government inspect that grain
for you ?

\u-. Vincent. They asked ua to furnish samples.

The Chairman. They inspected it, did they noti

Mr. Vincent. No, sir.

The Chairman. They inspected the sam])les, did they not?

Mr. Vincent. Certainly they did; they wanted samples to work
on; thev wanted it straight and abovelioard, and we gave it to them.

The Chairman. Why aliould they take samples of all the corn
sent out of Baltimore and give you the result of the inspection of
those samples ?

Mr. Vincent. No reason except tliey wanted it.

Inspection and gbading of qbain, etc. 95

The Chairuan. Did vou want it ?

Mr. Vincent. We di^ not want it tlie first time, but we are satis-
fied to have it now.

The Chaibuan. Do you want it now t

The Chaibhan. They do not get it in all the other exporting
countries, do they ? They do not have laboratories in ail these
exporting places t

Mr. Vincent. Not all ; some have, but not all ; some of them do not
like it for that reason.

The Chajbman. It looks to me like a wholly useless expense to
examine the grain shipped out of Baltimore.

Mr. Vincent. You would do more good to the country if you
would spend all the money proposed in this impection business by

fmtting up laboratories all over the country. Our claim was those
aboratoriea should be out West, and they are putting them out
West now.

The Chairman. Do you want the one at Baltimore continued ?

Mr. Vincent. We are not particular.

The Chairman. Tlie Baltimore people would be willing to have
that laboratory abolished t

Mr. Vincent. I would; yes, sir.

The Chairman. Is that the feeUng of all the others?

Mr. Vincent. I would like you to hear what the others have to say.

The Chairman. You do not care anything about government
inspection at Baltimore !

Mr, Vincent, No, sir. We have done our best to help them,
because we wanted to give them the benefit of the commercial expe-
rience; if it was going to be of any use it should be on a commercial
basis, not on a theoretical basis.

The Chairman. What I am trying to ascertain is whether that
laboratory is of any value to anyone or not.

Mr. Kacu. As the resuit of the inspection of over 9,000 samples,
representing 70,000,000 bushels of gram, what concrete deductions or
recommendations can tlie laboratory now make 1

Mr. Vincent. Tliey could not do it now.

Mr. EscH. Nothing?

Mr. Vincent. Tliey can say that above a certain point corn should
not be shipped.

Mr. EscH, Have thev fixed that point ?

Mr. Vincent. No; tlipy can not do it.

Mr. EscH. Well, have they fixed it within limits i

Mr. Vincent. We have proven that com will go with 17 per cent
or 18 por cent of moisture all right, and that corn with 16 per cent
won't go all right; there are fii'tors outside of the moisture; some
aeem to think moisture is everything, but it is not.

Mr. Escir. So, as a matter of fact, there are no vahiable deductions
that can be drawn from this va«t number of inspectioiLs a.s yet ?

Mr. Vincent. I think .so; T think it helps.

Mr. EscH. What valuable d('<luctions can be drawn?

Mr. Vincent. It helps the western man. If he says it ought to
grade No, 2, and if we put it in the laboratorv and it has 25 per cent
of moistiii-e in it we got a certificate and send it to the western man,
and the western man stops hollering.

96 IXSPECTION AND QBADINO OF GRAIN, ETC,

Mr. EscH. Then it has some advantage, has it !

Mr. Vincent. Oh, certainly.

Mr. EsoH. It has some advantage to Baltimore as an exporting cen-
ter, has it not t Does it not make the farmers of the West more con-
tented with you market t

Mr. Vincent. That I do not know, I am sure.

Mr. Escn. You said it was to make them more contented, and that
Baltimore ought to hang on to the government lahoratory.

Mr. Vincent. We are satisfied one way or the other. I am. Of
course there are some people that do not agree with me; we do not
always think alike. .We nave worked faithfully and stood by the
men who have been there, and this report shows it, in order to do what
is best for the country. Right at tne present time there are some
things going on which we wanted them to do for twelve months and
they have not done them yet. They say they have not enough
men; that is, making tests in the driers, putting the com into driers
to ascertain how much temperature and how much draft it takes.
No one knows yet how much draft and how much temperature it takes
to take 5 per cent of moisture out of com or 4 per cent or 3 percent.

Mr. Eacn. Has the laboratory demonstrated that com grown south
of a certain parallel of latituae contains more moisture than com
grown above that parallel of latitude ?

"Mr. Vincent. No, sir. We have a machine in use in Baltimore
called the Zeleny machine, with which we can test the individual
grains of com. I have made experiments with the head of the labora-
tory at Baltimore, the government official, on 50 grams. We divided
a sample; he took one 50 and I took the other 50. One was put in
the toting apparatus, the government testing apparatus; and we
were able, then, through this electrical machine, to take the mois-
ture in every individual kernel of that other 50. We kept the whit©
separate from the yellow, and there were about 164 or 165 grains in
the 50 grams. We then added it up, averaged it, and secured the
result. There was about five-eighths of 1 per cent difference only in
the two tests, but we did prove that there was a difference of 6 p«r
cent in tlie individual grains of com in that one sample — that is,
between the highest and the lowest mobture.

Mr. EscH. That information is of value, is it not?

Mr. Vincent. That was not government work; that was what
we showed the Government, that their moisture and their talk of
uniformity of inspection was about what we said at the start, almost
impossible. You can educate people: we can get to a basis which
is better and learn something, and we ought to advance as we go
along, if you will use technical knowledge, without prejudice, and
get what you can out of it, instead of opposing anvthiing that is
brought out on that line. And we feel rattier proud in Baltimore
that we have done something toward helping out the United States
to do what was right in the inspection business. It is not up where
it ought to be at present, we presume. Now, the question was
asked about the Ijiverpool market; 1 think Mr. Gronna spoke about
that. The market value of American grain is made by the quanti-
ties that are for sale and the prices in all other parts of the world.
This year Russia has made the price.

Mr. EscH. When a cargo of corn which has been tested by the
government laboratory is shipped from Baltimore, does the knowl-
edge of that fad come to the buyer abroad t

INSPECTION AND OBADINO OF QBAIN, ETC. 97

Mr. Vincent, No, air.

Mr. Escu. Does the exporter take pains to disclose to hia pur-
chaser abroad the fact that there has been a laboratory test made by
the Government ?

Mr. Vincent. No, sir. I have put in data here. You gentlemen
can see what we said. We said we were not going to liave it as gov-
wnmeot inspection. We know what we are doing.

Mr. EscH. Do the foreign buyers know that there is a government
laboratory at Baltimore miich makes tests }

Mr. Vincent. We bad copies made in German and French and
sent over several thousand in 1906.

Mr. EsCH. When it was established !

Mr. Vincent. Yes; we have not hit it. I had a gentleman from
GlHsgow in town only two or three days ago, and I showed it to him
and he thought it was fine. The Government suggests now, or the
intimation is, drawing some deductions from the trip to Europe of
Mr. Shanahan and this other ^ntleman, and moisture testing, that
we should sell based on the diiference in the moisture on arrival at
the other side ; well, we are not going to stand for anything of that sort.

Mr. EscH. This laboratory only testa com ?

Mr. Vincent. No, they work on wheat, too.

Mr. EsCH. Their deductions as to wheat are more reliable, are they?

Mr, Vincent. I should judge so; we seldom have any samples
tested; some of the other gentlemen can teil you; I liave not had
any t^ted. I referred to these Illinois gentlemen because it has been
in print within the last two or three weeks that this government
laboratory and testing machine was not of any account, because
you could take three samples out of one sample and put them into
three different macliines and there would be three different results,
and the farmer can not understand; if he sends us a sample of one
kind and gets a report of 19 per cent from one man, 19i per cent
from another man, and somebody else says 18 per cent, he can not
understand that; so they do not like it, apparently do not like it.
How can you expect to get uniformity when these three samples,
taken out of one ntiier sample, will all vary on moisture ! When I
can prove and can swear tnat you can take one sample and you
can take 100 grains and make several per cent of variation in the
individual grams — now, it can not be uniform. All of it does not
grow in the same field, and that which grows in one held varies from
that which grows in another held, and that which grows in the
center of the field will be different from that which grows in the
comers of the field. So when we talk about uniformity it is
one of the things we think the men who have been brought up in
the business, who liave given it their life study, know sometiiing
about, although they may not make themaelves plain to those wlio
are not familiar; however, the intention I had in coming here was
to explain things so that you could grasp them.

The Chaibhan. Is it your judgment that an expert can sample
grain better by the sight of it and by tlip physical examination of it
than a laboratory can sample it through tfic methods they use ?

Sir, Vincent. Well, our experience

The Chairman. That is an easy question to answer.

Mr. Vincent, In our business I would say I think we can ilo just
as well as the laboratory.
45331—10 7

98 INSPECTION AND GRADING GP QBAIN, ETC.

The Chairman. Do vou think vou can do it better than the labora-
tory ?

Mr. Vincent. Well, I would not want to say that.

The Chairman. Has the work of this laboratorr progressed to that
point where, in your judgment, they have established grades that they
can follow i

Mr. Vincent. No; every day shows that they are as far off as they
were at the beginning.

The Chairman. Has the work progressed to tlie extent that they
can come nearer in establishing fijced grades than these experts can
who rely upon samples and upon the rules of the exchange ?

Mr. \iNOENT. \o; I do not think so.

The Chairman. You think the experts grading grain at Baltimore
and the exerts at Chicago are much more likely to reach unifonnity,
if they desire to, by the examination by sight and touch than the
laboratory can ?

Mr. Vincent. I think so; yes, sir. I would say this, that the
exchanges have all been working and doing their best to try to meet
on some common ground of uniformity for perhaps a few grades.
If there is nothing that is equal to that grade then you can not oandle
it, but we do not propose to take any grade the Government might
give us; we feel tnis way, that that Bill precludes the individual
rights of a citizen' to do business in grain unless it is under the Giov-
emment. I, for one, feel very sore on that.

The Chaibhan. The Democratic members of the committee are not
here, and you should appeal to them on the state rights proposition.

Mr. Vincent. No, Mr. Chairman, you do not unc&rstand me.

The Chairman. Yes, I do.

Mr. Vincent. Will you allow me to finish ? I would be willing to
give the whole country government inspection to-morrow if they allow
me to do my export business without let or hindrance. Do as I did it
thirty-five years ago, sell on my reputation and on samples with cer-
tificates.

The Chairman. Do you do that now*

Mr. Vincent, No, because

The Ceiaibman. Why do you not do it now? There is no law to
prevent it.

Mr, Vincent. I can not do it now.

The Chairman. They won't buy it that way, will they*

Mr. Vincent. Not at the moment. You mean to say they won't
buy it on reputation* Now they do.

The Chairman. Can you sell any grain abroad except on the basis
of their examination of the grain when it reaches the other side or a
grade that is fixed by one of the bodies here that fixes grades*

Mr. Vincent. I have done it; yes, air.

The Chairman. Do you do it now*

Mr. Vincent. There is no business passing now.

The Chairman. Oh, y&s; there is ^rain going abroad.

Mr. Vincent. Very little. We ship rejected com, but they do not
see any sample; there is a variation of that in color; that is sold sim-
ply on its representation.

The Chairman. I do not think you can get very far by simply
saying the grain will be so and so, without any opportunity of ven-
fying that.

INSPECTION AND O&ADINO OF GBAIN, BIO. 99

Mr. ViMcBNT. Well, it has been done.

The Chairuan. It may have been done, but it is not done now,
and never will be done again.

Mr. Vincent. Becauae the inapection haa been so good by the
commercial oTganizations, they are willing to take those certificates
as final.

Mr. Daisq. Mr. Chairman, Mr. Each asked a question concerning
the laboratory work in reference to wheat. Mr. Dennis has had some
wheat exammed and will explain just what they do with wheat,
which, I am informed, is different than what ia done with com.

STATEXEFT OF HR. J0H5 X. DEHVIS, OF BALTIHORE, HD.

Mr. Dennis. In the laboratory work in wheat the question of mois-
ture in wheat, as a rule, is not very important. In wheat the analysis
is generally for foreign matter, like seeds, oats, or admixtures of dirt,
like this you see here [indicating sample]. We do not have any
trouble in carrying wheat. The examination is only for foreign mat-
ter in it. The laboratory does not look for moisture in wheat like it
does in com, becauae wheat will cany all right.

Mr. EscH. No matter whether it is soft wheat or not 1

Mr. Dennis. Well, we have, I think, the softest wheat that is
raised in the United States, raised right in Maryland; I do not think
there is any wheat that ia softer than ours.

Mr. Escu. That makes a fairly good shipping article, does it t
Mr, Dennis, We have a low grade there, called steamer wheat, it
is really very damp, and even that will carry to Europe safely, although
it containa a very large per cent of water.

The Chaibman. If no one else wiahes to be heard this morning
the committee will adjourn to meet Tuesday, May 24, 1910.

Baltdiobb, Md., May tl, 1910,

Dbas Sib: In the flurry yesterday I omitted to giv« you gome dkta requested:

First. Referring to the ecreeninge Erom the durum wheat from North Dakota, I
mentioned that we bought about 220,000 buafaels of No. 1, Baltimore inspection.
About 30 core would not grade, 2 cars went rejected, and were sold at 10 cents
discount.

We cleaned and screened 28,252.10 buahela, which noded Noe. 2 and 3 on arrival
and took out 4S,780 pounds — 779.40 bushels of stufi snown the committee before it
would pade No. 1.

This u wanted clear.

Second. When I produced the map of Canada showing the four trunk linea and
elevatore marked, I referred to a paper that I had of government act covering the
"Inspection and sale of grain, amendment act, 1908," and Baid I could not file it.

1 would like to say there that I referred to 7-8 Edward VII, chapter 36, No. 8, sec-
tion 123, and that it covered all grain produced in the provinces of Manitoba, Sas-
katchewan, and Alberta, and the Northwest provincea, passing through the Winnipeg
district en route to the points east thereof, should be inspected at Winnipeg,

Third, ^lien I referred to the Illinois people complaining of the moisture teat at
Chicago, I stated it was the lUinoiB Grain Dealers' Associatinn, and I would like to
insert (see American Grain and Elevator Journal March 15, IBIO, p. 494).

If it is in order and regular, I would like to have a copy of your notes on my testi-
mony submitted to me so that I can correct any technical expreeeions that may not
have been underetood.

How ia that? I will return promptly.

Yours, truly, J. C. Vincbht,

603

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Full text of "Hearings before the Committee on Interstate and Foreign Commerce of the House of Representatives on safety appliances. February 5-6 and 13, 1909"

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