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bly easy, we find that the farmer was inclined, when he had secured the benefits of a revived local competition, to sit back and enjoy them rather than attempt further activities in a field that was at once far removed and little understood. Needless to say, the farmer did not cease to grumble about, or look with suspicion upon, the activities of the purchasing classes. That was his right and he exercised it at his pleasure, but the point not to be overlooked is that he did not carry to a conclusion the work of organizing and controlling the entire marketing system he made use of in transporting his grain to the consumer.33

This failure to complete the task may be ascribed to the fact that the movement itself was due, not in the least to the farmers, but was agitated and financed by outside firms who saw a profit in the movement provided it went no further than the supplying of a line of elevators which would insure for them a large business, and what was most important, equally large commissions. As the farmer had been led on in the early years of the last quarter of the nineteenth century by the Grangers, a political body, so three decades later he was again led over the same route by business men, and in that they understood the fundamental principles of the problem, they solved it, but the movement went no further than they cared to carry it.3

38 The consumer in this case is the miller and feeder.

34 It is true that an attempt was made by the Minnesota Farmers' Exchange, an organization of farmers in Clay County, Minnesota, to sell grain on the floor of the Minneapolis Chamber of Commerce, and although they purchased a membership they were refused the right to trade on the exchange because they had in their by-laws a rule permitting the distribution of profits to customers according to patronage. This rule was considered a rebate rule by the Exchange, and because of the abuses rebates had been the cause of in earlier periods the exchanges were very strict in the enforcement of anti-rebate regulations. (Rule 4 of "by-law 19 of the Winnipeg Grain Exchange 1906 is a representative sample of the non-rebate rule as enforced by the grain exchanges. See Report of the Royal Commission on the Grain Trade of Canada; 7-8 Edward VII, A 1908 sessional paper No. 59). The fact that the farmers formed this organization in no way detracts from the argument that they must be led. For had the men organizing this concern been able leaders in cooperation they would have removed the objectionable by-law

Thus we see that the third phase of the movement for the consolidation of the producers has yet to be accomplished. We shall review the development of this phase in the following chapters.

and distributed profits according to the number of shares held, but limited the number of shares to the business done with each shareholder. In Winnipeg where the situation was handled by business men, the farmers' companies after some hesitation went over to the share plan, and although the exchange endeavored, at a later date, to force them to the patronage plan, they continued on the share basis. See on this topic, Theo. D. Hammet, Cooperation in Marketing Kansas Wheat, p. 35; L. D. H. Weld, Cooperative Marketing of Grain in Western Canada, p. 100; C. E. Russell, The Story of the Non-Partisan League, p. 109 ff., for a description of the activities of the Minnesota Farmers' Exchange incorporated, 1903; Investigation of the Grain Exchanges, Minnesota Legislature, 1913, Minn. House Journal, p. 1754 ff.

CHAPTER II

THE EARLY AGRARIAN MOVEMENT IN THE STATE

In the preceding chapter we have noted, in a general way, the development of the grain trade; how the steps toward amalgamation were, at first, steps taken in self-defense and for protection against privileges, the exercise of which had become dangerous either to those dealing with the privileged persons or to the grain raisers in general. We have seen also how the revolt against those holding these privileges had taken both a political and an economic turn and that as long as the economic enterprises were kept strictly apart from the political ventures they were successful.

It was during this period of amalgamation and development in the grain trade, that is, between 1882 and 1896, that North Dakota was settled and grew to statehood.

Like the development of the South, the development of the North-central States and North Dakota in particular has been due to the invention and perfection of two machines, one, the La Croix purifier, which made possible the manufacture of a superior grade of white flour out of spring wheat by the better separation of the middlings from the flour; the other, the introduction of the Hungarian process of roller milling and the perfection of the chilled-iron roller which made it possible to mill hard spring wheat.1

The introduction of these two machines not only completely revolutionized the milling industry but changed the methods of settling and developing the western prairies. From this time on we see the great railroad systems that are being. built depart from the practice of merely bringing the already established frontiers into communication with the older parts of the country and themselves becoming pioneers, and not only accompanying the first settlers into the new country

1 W. C. Edgar, The Story of a Grain of Wheat, p. 155. Previous to the introduction of roller milling, hard spring wheat sold at a discount. It now began to sell at a premium.

but at times reaching on ahead of them and leading the way for settlement.

Other causes also were not lacking to give momentum to the development of this region. For years prior to the introduction of the new methods of manufacturing flour the millers of the country had been engaged in the most severe competition, goaded on by the flour broker and their own suspicions. Competition at times became so keen that there was no margin of profit. To add to the already unbearable situation the " patent shark" had made his appearance and was collecting or attempting to collect enormous royalties on certain necessary appliances of the trade. The danger

from the latter had, for a time, thrown the millers of the country together, and thus being thrown together for defense, and being generally successful, they were led during years of high wheat prices to agree upon minimum prices for flour, and sometimes to curtail the output. Yet in spite of these agreements the suspicions of the millers were too dark and the invested capital too great for this cooperation to continue. New, larger and more efficient mills were continually being built or more efficient machinery was being installed in the older establishments.

This kind of competition led the millers of Minneapolis, who

The Weekly North Western Miller, Feb. 1, 1889, p. 132, speech of Dr. E. T. Noel before the assembled Southern Millers, called together to form an association, Jan. 23, 1889; Ibid., Feb. 15, 1889, p. 200.

* Ibid., Feb. 1, 1889. Speech of Mr. Alex. H. Smith, Secretary of the Central Millers' Association, delivered before the National Millers' Association at Indianapolis, Feb. 5, 1889. He said, in part: "The National Millers' Association was formed in 1877 especially to join the millers in defense against patent claims, exceeding the value of the mills, if conceded. After the patent cases were disposed of favorably the National busied itself in an educational campaign advising millers in the same localities to unite on prices to charge, thus securing to themselves a profit in the home trade, which should be the most profitable. These simple conditions, faithfully observed, have saved and made a lot of money in sections which had been, before, on the verge of bankruptcy. The remedy is alike applicable to the whole country. The central association should be composed of representatives elected by the localities and should look after the general welfare, even in time, to having a single representative look after foreign business."

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had almost unlimited power from the falls of St. Anthony, to expand, and with their expansion there came a still greater demand for wheat followed after the introduction of the new process of roller milling by an even larger demand for hard spring wheat. The capacity of the Minneapolis mills increased immensely, urged on by a corresponding demand for flour, both in America and Europe. The cheap white flour made from hard spring wheat was unexcelled in the markets of the world."

It is needless to mention that there were other factors, of almost equal importance in the expansion of the northwestern frontiers. Not the least among these was the introduction of the twine-using self-binder, which made it possible for one man to harvest tens of acres of grain for every acre he had formerly harvested with the cradle.

From the foregoing it is therefore evident that the railroads were warranted in their eagerness to push on ahead of the frontiers and lead the way for the people of the older states and Europe in their quest for free and fertile lands. It would, therefore, be needless to say that the prime purpose of these railroads was to insure to their terminal an ample supply of wheat, and to accomplish this object the millers and financiers of the Northwest bent their every effort. No opportunity was passed which might make that supply more certain or larger."

In the development of this territory the railroads were

‘Ibid., Jan. 11, 1889, vol. xxvii, No. 2.

See tables showing output and foreign exportation of the Minneapolis Mills, 1880-1923, in Appendix V.

This excellence was due, not only to its pure white color or to its expansive power which was in turn due to its high glutin content, but also to its ability to absorb water. This combination of qualities made it a flour highly prized by bakers the world over. The mean absorption ability of all varieties of wheat grown in the State during the years 1907-1914 was 56.35 per cent. with a maximum of 61.3 per cent. and a minimum of 49.27 per cent. See E. F. Ladd, North Dakota Agricultural Exp. Stat. Bull. 114, Chemical and Physical Constants for Wheat and Mill Products, pp. 288-289.

C. A. Lounsberry, History of North Dakota, pp. 336-346; John Lee Coulter, History of the Red River Valley, N. Dakota Historical Collection, vol. iii, p. 587.

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