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GRAIN TRADE. The complexity of the conditions of life in the 20th century may be well illustrated from the grain trade of the world. The ordinary bread sold in Great Britain represents, for example, produce of nearly every country in the world outside the tropics.

Wheat has been cultivated from remote antiquity. In a wild state it is practically unknown. It is alleged to have been found growing wild between the Euphrates and the Tigris; but the discovery has never been authenticated, and, unless the plant be sedulously cared for, the species General considerations. dies out in a surprisingly short space of time. Modern experiments in cross-fertilization in Lancashire by the Garton Brothers have evolved the most extraordinary “sports,” showing, it is claimed, that the plant has probably passed through stages of which until the present day there had been no conception. The tales that grains of wheat found in the cerements of Egyptian mummies have been planted and come to maturity are no longer credited, for the vital principle in the wheat berry is extremely evanescent; indeed, it is doubtful whether wheat twenty years old is capable of reproduction. The Garton artificial fertilization experiments have shown endless deviations from the ordinary type, ranging from minute seeds with a closely adhering husk to big berries almost as large as sloes and about as worthless. It is conjectured that the wheat plant, as now known, is a degenerate form of something much finer which flourished thousands of years ago, and that possibly it may be restored to its pristine excellence, yielding an increase twice or thrice as large as it now does, thus postponing to a distant period the famine doom prophesied by Sir W. Crookes in his presidential address to the British Association in 1898. Wheat well repays careful attention; contrast the produce of a carelessly tilled Russian or Indian field and the bountiful yield on a good Lincolnshire farm, the former with its average yield of 8 bushels, the latter with its 50 bushels per acre; or compare the quality, as regards the quantity and flavour of the flour from a fine sample of British wheat, such as is on sale at almost every agricultural show in Great Britain, with the produce of an Egyptian or Syrian field; the difference is so great as to cause one to doubt whether the berries are of the same species.

It may be stated roundly that an average quartern loaf in Great Britain is made from wheat grown in the following countries in the proportions named:—


U.S.A. U.K. Russia Argentina British
India
Canada Rumania-
Bulgaria
Australia Other
Countries
Oz. Oz. Oz. Oz. Oz. Oz. Oz. Oz. Oz.
26 13 9 5 4 3 2 1 1
Or expressed in percentages as follows:—
40 20 14 8 6 5 3 2 2

For details connected with grain and its handling see Agriculture, Corn Laws, Granaries, Flour, Baking, Wheat, &c.

Wheat occupies of all cereals the widest region of any food-stuff. Rice, which shares with millet the distinction of being the principal food-stuff of the greatest number of human beings, is not grown nearly as widely as is wheat, the staple food of the white races. Wheat grows as far south as Patagonia, and as far north as the edge of the Arctic Circle; it flourishes throughout Europe, and across the whole of northern Asia and in Japan; it is cultivated in Persia, and raised largely in India, as far south as the Nizam’s dominions. It is grown over nearly the whole of North America. In Canada a very fine wheat crop was raised in the autumn of 1898 as far north as the mission at Fort Providence, on the Mackenzie river, in a latitude above 62°—or less than 200 m. south of the latitude of Dawson City—the period between seed-time and harvest having been ninety-one days. In Africa it was an article of commerce in the days of Jacob, whose son Joseph may be said to have run the first and only successful “corner” in wheat. For many centuries Egypt was famous as a wheat raiser; it was a cargo of wheat from Alexandria which St Paul helped to jettison on one of his shipwrecks, as was also, in all probability, that of the “ship of Alexandria whose sign was Castor and Pollux,” named in the same narrative. General Gordon is quoted as having stated that the Sudan if properly settled would be capable of feeding the whole of Europe. Along the north coast of Africa are areas which, if properly irrigated, as was done in the days of Carthage, could produce enough wheat to feed half of the Caucasian race. For instance, the vilayet of Tripoli, with an area of 400,000 sq. m., or three times the extent of Great Britain and Ireland, according to the opinion of a British consul, could raise millions of acres of wheat. The cereal flourishes on all the high plateaus of South Africa, from Cape Town to the Zambezi. Land is being extensively put under wheat in the pampas of South America and in the prairies of Siberia.

In the raising of the standard of farming to an English level the volume of the world’s crop would be trebled, another fact which Sir William Crookes seems to have overlooked. The experiments of the late Sir J. B. Lawes in Hertfordshire have proved that the natural fruitfulness of the wheat plant can be increased threefold by the application of the proper fertilizer. The results of these experiments will be found in a compendium issued from the Rothamsted Agricultural Experimental Station.

It is by no means, however, the wheat which yields the greatest number of bushels per acre which is the most valuable from a miller’s standpoint, for the thinness of the bran and the fineness and strength of the flour are with him important considerations, too often overlooked by the farmer when buying his seed. Nevertheless it is the deficient quantity of the wheat raised in the British Islands, and not the quality of the grain, which has been the cause of so much anxiety to economists and statesmen.

Sir J. Caird, writing in the year 1880, expressed the opinion that arable land in Great Britain would always command a substantial rent of at least 30s. per acre. His figures were based on the assumption that wheat was imported duty free. He calculated that the cost of carriage from Freight rates. abroad of wheat, or the equivalent of the product of an acre of good wheat land in Great Britain, would not be less than 30s. per ton. But freights had come down by 1900 to half the rates predicated by Caird; indeed, during a portion of the interval they ruled very close to zero, as far as steamer freights from America were concerned. In 1900 an all-round freight rate for wheat might be taken at 15s. per ton (a ton representing approximately the produce of an acre of good wheat land in England), say from 10s. for Atlantic American and Russian, to 30s. for Pacific American and Australian; about midway between these two extremes we find Indian and Argentine, the greatest bulk coming at about the 15s. rate. Inferior land bearing less than 41/2 quarters per acre would not be protected to the same extent, and moreover, seeing that a portion of the British wheat crop has to stand a charge as heavy for land carriage across a county as that borne by foreign wheat across a continent or an ocean, the protection is not nearly so substantial as Caird would make out. The compilation showing the changes in the rates of charges for the railway and other transportation services issued by the Division of Statistics, Department of Agriculture, U.S.A. (Miscellaneous series, Bulletin No. 15, 1898), is a valuable reference book. From its pages are culled the following facts relating to the changes in the rates of freight up to the year 1897.[1] In Table 3 the average rates per ton per mile in cents are shown since 1846. For the Fitchburg Railroad the rate for that year was 4.523 cents per ton per mile, since when a great and almost continuous fall has been taking place, until in 1897, the latest year given, the rate had declined to .870 of a cent per ton per mile. The railway which shows the greatest fall is the Chesapeake & Ohio, for the charge has fallen from over 7 cents in 1862 and 1863 to .419 of a cent in 1897, whereas the Erie rates have fallen only from 1.948 in 1852 to .609 in 1897. Putting the rates of the twelve returning railways together, we find the average freight in the two years 1859–1860 was 3.006 cents per ton per mile, and that in 1896–1897 the average rate had fallen to .797 of a cent per ton per mile. This difference is very large compared with the smallness of the unit. Coming to the rates on grain, we find (in Table 23) a record for the forty years 1858–1897 of the charge on wheat from Chicago to New York, via all rail from 1858, and via lake and rail since 1868, the authority being the secretary of the Chicago Board of Trade. From 1858 to 1862 the rate varied between 42.37 and 34.80 cents per bushel for the whole trip of roundly 1000 m., the average rate in the quinquennium being 38.43. In the five years immediately prior to the time at which Sir J. Caird expressed the opinion that the cost of carriage from abroad would always protect the British grower, the average all-rail freight from Chicago to New York was 17.76 cents, while the summer rate (partly by water) was 13.17 cents. These rates in 1897, the last year shown on the table, had fallen to 12.50 and 7.42 respectively. The rates have been as follows in quinquennial periods, via all rail:—

Chicago to New York in Cents per Bushel.

1858–
1862.
1863–
1867.
1868–
1872.
1873–
1877.
1878–
1882.
1883–
1887.
1888–
1892.
1893–
1897.
38.43 31.42 27.91 21.29 16.77 14.67 14.52 12.88

Calculating roundly a cent as equal to a halfpenny, and eight bushels to the quarter, the above would appear in English currency as follows:—

Chicago to New York in Shillings and Pence per Quarter.

1858–
1862.
1863–
1867.
1868–
1872.
1873–
1877.
1878–
1882.
1883–
1887.
1888–
1892.
1893–
1897.
s. d. s. d. s. d. s. d. s. d. s. d. s. d. s. d.
12 8 10 6 9 3 7 1 5 7 4 101/2 4 10 4 3

Another table (No. 38) shows the average rates from Chicago to New York by lakes, canal and river. These in their quinquennial periods are given for the season as follows:—

In Cents per Bushel of 60 ℔.

1857–1861. 1876–1880. 1893–1897.
22.15 10.47 4.92

In Shillings and Pence per Quarter of 480 ℔.

1857–1861. 1876–1880. 1893–1897.
s. d. s. d. s. d.
7 4 3 6 1 7

In Shillings and Pence per Ton of 2240 ℔.

1857–1861. 1876–1880. 1893–1897.
s. d. s. d. s. d.
34 6 16 6 7 6

This latter mode is the cheapest by which grain can be carried to the eastern seaboard from the American prairies, and it can now be done at a cost of 7s. 6d. per ton. The ocean freight has to be added before the grain can be delivered free on the quay at Liverpool. A rate from New York to Liverpool of 21/2d. per bushel, or 7s. 10d. per ton, a low rate, reached in Dec. 1900, is yet sufficiently high, it is claimed, to leave a profit; indeed, there have frequently been times when the rate was as low as 1d. per bushel, or 3s. 1d. per ton; and in periods of great trade depression wheat is carried from New York to Liverpool as ballast, being paid for by the ship-owner. Another route worked more cheaply than formerly is that by river, from the centre of the winter wheat belt, say at St Louis, to New Orleans, and thence by steamer to Liverpool. The river rate has fallen below five cents per bushel, or 7s. per ton, 2240 ℔. In Table No. 71 the cost of transportation is compared year by year with the export price of the two leading cereals in the States as follows:—

Wheat and Corn—Export Prices and Transportation Rates compared.

Year. Wheat. Corn.
Export
Price per
Bushel.
Rate, Chicago
to New York
by Lake
and Canal,
per Bushel.
Number
of Bushels
carried
for Price
of One
Bushel.
Export
Price per
Bushel.
Rate, Chicago
to New York
by Lake
and Canal,
per Bushel.
Number
of Bushels
carried
for Price
of One
Bushel.
    Cents.     Cents.  
1867 $0.92 15.95 5.77  $0.72 14.58 4.94
1868 1.36 16.23 8.38 .84.1 13.57 6.20
1869 1.05 17.20 6.10 .72.8 14.98 4.86
1870 1.12 14.85 7.54 .80.5 13.78 5.84
1871 1.18 17.75 6.65 .67.9 16.53 4.11
1872 1.31 21.55 6.08 .61.8 19.62 3.15
1873 1.15 16.89 6.81 .54.3 15.39 3.53
1874 1.29 12.75 10.12 .64.7 11.29 5.73
1875 .97 9.90 9.80 .73.8 8.93 8.26
1876 1.11 8.63 12.86 .60.3 7.93 7.60
1877 1.12 10.76 10.41 .56.0 9.41 5.95
1878 1.33 9.10 14.62 .55.8 8.27 6.75
1879 1.07 11.60 9.22 .47.1 10.43 4.52
1880 1.25 12.27 10.19 .54.3 11.14 4.87
1881 1.11 8.19 13.55 .55.2 7.26 7.60
1882 1.19 7.89 15.08 .66.8 7.23 9.24
1883 1.13 8.37 13.50 .68.4 7.66 8.93
1884 1.07 6.31 16.96 .61.1 5.64 10.83
1885 .86 5.87 14.65 .54.0 5.38 10.04
1886 .87 8.71 9.99 .49.8 7.98 6.24
1887 .89 8.51 10.46 .47.9 7.88 6.08
1888 .85 5.93 14.33 .55.0 5.41 10.17
1889 .90 6.89 13.06 .47.4 6.19 7.66
1890 .83 5.86 14.16 .41.8 5.10 8.20
1891 .93 5.96 15.60 .57.4 5.36 10.71
1892 1.03 5.61 18.36 .55   5.03 10.93
1893 .80 6.31 12.68 .53   5.71 9.28
1894 .67 4.44 15.09 .46   3.99 11.53
1895 .58 4.11 14.11 .53   3.71 14.29
1896 .65 5.38 12.08 .38   4.94 7.69
1897 .75 4.35 17.24 .31   3.79 8.18

The farmers of the United States have now to meet a greatly increased output from Canada—the cost of transport from that country to England being much the same as from the United States. So much improved is the position of the farmer in North America compared with what it was about 1870, that the transport companies in 1901 carried 171/4 bushels of his grain to the seaboard in exchange for the value of one bushel, whereas in 1867 he had to give up one bushel in every six in return for the service. As regards the British farmer, it does not appear as if he had improved his position; for he has to send his wheat to greater distances, owing to the collapse of many country millers or their removal to the seaboard, while railway rates have fallen only to a very small extent; again the farmer’s wheat is worth only half of what it was formerly; it may be said that the British farmer has to give up one bushel in nine to the railway company for the purpose of transportation, whereas in the ’seventies he gave up one in eighteen only. Enough has been said to prove that the advantage of position claimed for the British farmer by Caird was somewhat illusory. Speaking broadly, the Kansas or Minnesota farmer’s wheat does not have to pay for carriage to Liverpool more than 2s. 6d. to 7s. 6d. per ton in excess of the rate paid by a Yorkshire farmer; this, it will be admitted, does not go very far towards enabling the latter to pay rent, tithes and rates and taxes.

The subject of the rates of ocean carriage at different periods requires consideration if a proper understanding of the working of the foreign grain trade is to be obtained. Only a very small proportion of the decline in the price of wheat since 1880 is due to cheapened transport rates; for while the mileage rate has been falling, the length of haulage has been extending, until in 1900 the principal wheat fields of America were 2000 m. farther from the eastern seaboard than was the case in 1870, and consequently, notwithstanding the fall in the mileage rate of 50 to 75%, it still costs the United Kingdom nearly as much to have its quota of foreign wheat fetched from abroad as it did then. The difference in the cost of the operation is shown in the following tabular statement, both the cost in the aggregate on a year’s imports and the cost per quarter:—

Quantity of Wheat and Wheaten Flour (as wheat) imported into the
United Kingdom from various sources during the calendar year
1900, together with the average rate of freight.

1900.
Countries of Origin. Quantities.
Qrs. 480 ℔
Ocean Freight
to United
Kingdom.
Per 480 ℔.
Total Cost
of Ocean
Carriage.
    s.   d. £
Atlantic America 11,171,100 2   3 1,257,100
South Russia 569,000 2   2 62,000
Pacific America 2,389,900 8   1 966,000
Canada 1,877,100 2   8 250,000
Rumania 176,400 2   6 22,000
Argentina and Uruguay  4,322,300 4   10 1,045,000
France 251,900 1   3 16,000
Bulgaria and Rumelia 30,600 2   6 4,000
India 2,200 4   0 400
Austria-Hungary 389,300 1   9 34,000
Chile 600 .. ..
North Russia 462,700 1   6 35,000
Germany 438,700 1   6 33,000
Australasia 883,900 6   5 284,000
Minor Countries 225,100 2   6 28,000
Total 23,190,800 Average 3s. 6d. £4,036,500

Comparing these figures with a similar statement for the year 1872, the most remote year for which similar facts are available, it will be found that the actual total cost per quarter for ocean carriage has not much decreased.

Quantity of Wheat and Wheaten Flour (as wheat) imported into the
United Kingdom from various sources during the calendar year
1872, together with the average rate of freight.

1872.
Countries of Origin. Quantities.
Qrs.
Ocean Freight
to United
Kingdom.
Per qr.
Total Cost
of Carriage.
    s.   d. £
South Russia 3,678,000 8   6 1,563,000
United States 2,030,000 6   6 659,000
Germany 910,000 2   0 91,000
France 660,000 3   0 99,000
Egypt 536,000 4   6 120,000
North Russia 490,000 2   0 49,000
Canada 400,000 7   6 150,000
Chile 330,000 120 198,000
Turkey 195,000 7   6 72,000
Spain 130,000 3   6 23,000
Scandinavia 160,000 2   0 16,000
Total, Chief Countries 9,519,000 Average 6s. 5d. £3,040,000

N.B.—A trifling quantity of Californian and Australian wheat was imported in the period in question, but the Board of Trade records do not distinguish the quantities, therefore they cannot be given. The freight in that year from those countries averaged about 13s. per quarter.

The exact difference between the average freight for the years 1872 and 1900 amounts to about 2s. 11d. per quarter (480 ℔), a trifle in comparison with the actual fall in the price of wheat during the same years.

The following data bearing upon the subject, for selected periods, are partly taken from the Corn Trade Year-Book:—

Year. United Kingdom
Annual Imports.
Wheat and Flour.
Qrs.
Ocean Freight
to United
ingdom.
Per qr.
Aggregate Cost
of Carriage.
    s.   d. £
1872  9,469,000 6   5 3,040,000
1882 14,850,000 7   4 5,420,000
1894 16,229,000 3   9 3,041,000
1895 25,197,000 3   0 3,825,000
1896 23,431,000 2   9 3,258,000
1900 23,196,000 3   6 4,036,000
In passing, it may be pointed out that for a period of four years,

from 1871 to 1874, the price of wheat averaged 56s. per quarter (or 7s. per bushel), with the charge for ocean carriage at 6s. 5d. per quarter, whereas in 1901 wheat was sold in England at 28s. (or 3s. 6d. per bushel), and the charge for ocean carriage was 3s. 6d. per quarter; the ocean transport companies carried eight bushels of wheat across the seas in 1901 for the value of one bushel, or exactly at the same ratio as in 1872.

The contrast between the case of railway freight and ocean freight is to be explained by the greater length of the present ocean voyage, which now extends to 10,000 miles in the case of Europe’s importation of white wheat from the Pacific Coast of the United States and Australia, in contrast with the short voyage from the Black Sea or across the English Channel or German Ocean. It is largely due to the overlooking of this phase of the question that an American statistician has fallen into the error of stating that about 16s. per quarter of the fall in the price of wheat, which happened between 1880 and 1894, is attributable to the lessened cost of transport.

Wheat Prices

The following figures show the fluctuations from year to year of English wheat, chiefly according to a record published by Mr T. Smith, Melford, the period covered being from 1656 to 1905:

Price per Quarter

s.   d. s.   d. s.   d. s.   d. s.   d.
1656 38   2 1706 23   1 1756 40   1 1806 79   1 1856 69   2
1657 41   5 1707 25   4 1757 53   4 1807 75   4 1857 56   4
1658 57   9 1708 36   10 1758 44   5 1808 84   4 1858 44   2
1659 58   8 1709 69   9 1759 35   3 1809 97   4 1859 43   9
1660 50   2 1710 69   4 1760 32   5 1810 106   5 1860 53   3
1661 62   2 1711 48   0 1761 26   9 1811 95   3 1861 55   4
1662 65   9 1712 41   2 1762 34   8 1812 126   6 1862 55   5
1663 50   8 1713 45   4 1763 36   1 1813 109   9 1863 44   9
1664 36   0 1714 44   9 1764 41   5 1814 74   4 1864 40   2
1665 43   10 1715 38   2 1765 48   0 1815 65   7 1865 41   10
1666 32   0 1716 42   8 1766 43   1 1816 78   6 1866 49   11
1667 32   0 1717 40   7 1767 57   4 1817 96   11 1867 64   5
1668 35   6 1718 34   6 1768 53   9 1818 86   3 1868 63   9
1669 39   5 1719 31   1 1769 40   7 1819 74   6 1869 48   2
1670 37   0 1720 32   10 1770 43   6 1820 67   10 1870 46   11
1671 37   4 1721 33   4 1771 47   2 1821 56   1 1871 56   8
1672 36   5 1722 32   0 1772 50   8 1822 44   7 1872 57   0
1673 41   5 1723 30   10 1773 51   0 1823 53   4 1873 58   8
1674 61   0 1724 32   10 1774 52   8 1824 63   11 1874 55   9
1675 57   5 1725 43   1 1775 48   4 1825 68   6 1875 45   2
1676 33   9 1726 40   10 1776 38   2 1826 58   8 1876 46   2
1677 37   4 1727 37   4 1777 45   6 1827 60   6 1877 56   9
1678 52   5 1728 48   5 1778 42   0 1828 60   5 1878 46   5
1679 53   4 1729 41   7 1779 33   8 1829 66   3 1879 43   10
1680 40   0 1730 32   5 1780 35   8 1830 64   3 1880 44   4
1681 41   5 1731 29   2 1781 44   8 1831 66   4 1881 45   4
1682 39   1 1732 23   8 1782 47   10 1832 58   8 1882 45   1
1683 35   6 1733 25   2 1783 52   8 1833 52   11 1883 41   7
1684 39   1 1734 34   6 1784 48   10 1834 46   2 1884 35   8
1685 41   5 1735 38   2 1785 51   10 1835 49   4 1885 32   10
1686 30   2 1736 35   10 1786 38   10 1836 48   6 1886 31   0
1687 22   4 1737 33   9 1787 41   2 1837 55   0 1887 32   6
1688 40   10 1738 31   6 1788 45   0 1838 64   7 1888 31   10
1689 26   8 1739 34   2 1789 51   2 1839 70   8 1889 29   9
1690 30   9 1740 45   1 1790 54   9 1840 66   4 1890 31   11
1691 30   2 1741 41   5 1791 48   7 1841 64   4 1891 37   0
1692 41   5 1742 30   2 1792 43   0 1842 57   3 1892 30   3
1693 60   1 1743 22   1 1793 49   3 1843 50   1 1893 26   4
1694 56   10 1744 22   1 1794 52   3 1844 51   3 1894 22   10
1695 47   1 1745 24   5 1795 75   2 1845 50   10 1895 23   1
1696 63   1 1746 34   8 1796 78   7 1846 54   8 1896 26   2
1697 53   4 1747 30   11 1797 53   9 1847 69   9 1897 30   2
1698 60   9 1748 32   10 1798 51   10 1848 50   6 1898 34   0
1699 56   10 1749 32   10 1799 69   0 1849 44   3 1899 25   8
1700 35   6 1750 28   10 1800 113   10 1850 40   3 1900 26   11
1701 33   5 1751 34   2 1801 119   6 1851 38   6 1901 26   9
1702 26   2 1752 37   2 1802 69   10 1852 40   9 1902 28   1
1703 32   0 1753 39   8 1803 58   10 1853 53   3 1903 26   9
1704 41   4 1754 30   9 1804 62   3 1854 72   5 1904 28   4
1705 26   8 1755 30   1 1805 89   9 1855 74   8 1905 29   8
 Average
 50
 years
42   10   36   0   51   9   65   10   *42   7

 * Average for 46 years only.

Thus, whatever the cause of the decline in the price of wheat may be, it cannot be attributed solely to the fall in the rate of rail or ocean freights. Incidental charges are lower than they were in 1870; handling charges, brokers’ commissions and insurance premiums have been in many instances reduced, but all these economies when combined only amount to about 2s. per quarter. Now if we add together all these savings in the rate of rail and ocean freights and incidental expenses, we arrive at an aggregate economy of 8s. per quarter, or not one-third of the actual difference between the average price of wheat in 1872 and 1900. To what the remaining difference was due it is difficult to say with certitude; there are some who argue that the tendency of prices to fall is inherent, and that the constant whittling away of intermediaries’ profits is sufficient explanation, while bi-metallists have maintained that the phenomenon is clearly to be traced to the action of the German government in demonetizing silver in 1872.

  1. Valuable information will also be found in Bulletin No. 38 (1905), “Crop Export Movement and Port Facilities on the Atlantic and Gulf Coasts”; in Bulletin No. 49 (1907), “Cost of Hauling Crops from Farms to Shipping Points”; and in Bulletin No. 69 (1908), “European Grain Trade.”