2.2 per cent of the value to the consumer, and the producer 97.8 per cent. For a distance of 100 miles the railroad receives 2.9 per cent of the value and the producer 97.1 per cent. For a distance of 200 miles the railroad receives 4.1 per cent for its services and the producer 95.9 per cent. This is for distribution within the State. The expenses of distribution from Alabama and Mississippi points to North Carolina mills show that the total cost of distribution, including commissions and freight, is 9.1 per cent of the value to the consumer, and the producer receives 90.9 per cent of what the consumer pays. For 1 cent per pound many interior towns in the cotton territory can put cotton into the ordinary course of transit and deliver it, through port of shipment in England or on the Continent, at the consumer's mill. The handling of cotton by way of St. Louis as a market nets the producer from 83 to 87 per cent of its value. In shipping cotton to Japan by way of Galveston the distributer does the work for about 5.3 per cent of the cost to the consumer in Japan, and the producer gets 94.7 per cent of the cost to the consumer.

At present, with the high freight rates on ocean trade, a pound of cotton is carried from New Orleans to Chemnitz, Saxony, direct to consumers, for the combined expense of 1.25 cents. The expenses are shown in a statement in the body of the report (p. 187).

EXPENSES OF MARKETING LIVE STOCK.

(Part Fifth.)

Live stock, the second in value among the items of farm investment, performs functions in farm economy that materially affect the market. By means of live stock the producer adjusts production to the changes of the market; at one time by grazing, at another time by fattening on surplus grain, at another time by dairying. Marketing live stock from a distance at any of the four great centers in the West involves a variety of expenses, including commission, yardage, feeding en route, and freight. A steer that cost the slaughter house $75 is sent 160 miles to St. Louis at an expense of $5.66, or 7.5 per cent of the consumer's cost, leaving 92.5 per cent for the producer. The producer seldom gets much if any less than 90 per cent of the cost to the consumer by shipping to this market.

On live stock shipped to the seaboard cities the published rates have not changed since 1892, so that this feature of expense has been practically constant for Eastern consumers and for exporters. In exporting a 1,500 pounds steer from Ames, Nebr., the distributive expenses are 27 per cent of value of the steer in Europe; the producer in Nebraska gets 73 per cent of this value.

As a rule, it may be stated that one-fourth of the foreign value of cattle goes to distributive expenses; one-tenth of the value at interior markets goes for such expenses. Marketing cattle from, say, Nebraska points, in seaboard cities, is done at an approximate expense of 15 to 20 per cent of their value.

The expenses of marketing a 1,000 pounds steer at St. Louis were analyzed still further to show the proportions that are absorbed by the railways, by commissions, and by maintenance charges on live stock. The results are as follows: Comparison of marketing expenses by distances based on a 1,000-pound dressed-beef steer.

DISTRIBUTION OF DAIRY PRODUCTS.

(Part Sixth.)

The entire development of dairying shows marked tendency toward a division of the industry between the milk trade on the one hand and the creamery system of local manufacture of butter on the other. The milk trade-the second in magnitude among dairying interests-is much in need of improvement from the producer's side of the trade. The expenses of distributing a 40-quart can of milk to tenement families in New York City are 68 per cent of its cost to the consumer, the producer receiving 32 per cent of that value. The wholesale price to producers is nominally much higher than what the producer really receives, because the wholesale rate is subject to deductions for station charges, etc. Milk which is quoted at 2.75 cents per quart netted the producer from zone C, who shipped to the New York market, 21 per cent less, or only 2.175 cents per quart after deductions were taken off.

The freight rates on butter from the West have not changed to any considerable extent in recent years. From Elgin, Ill., the great creamery center, to New York, the identical rate is in force now that was charged in 1880. Therefore much of the talk about the universal and continuous decline of railway rates is not based on fact. The diagram (Part Sixth) illustrates the relation of rates on butter and prices for butter of the Elgin grade from 1880 to 1900. The noticeable feature is that for later years prices tend toward an all-year-round level and do not show the variation between summer and winter prices of 20 years ago. Prices of butter are lower but more regular. The best prices are paid for Eastern butter sold to private customers, to whom it is expressed from producer to consumer direct, without middlemen of any kind having a hand in its distribution. On this account Eastern butter could not be profitably exported; the lower-priced butter from Ohio and farther West has to be depended upon for foreign markets. The low price of American butter in foreign markets is not hard to account for when we remember that 12 per cent of what was exported from New York in the year 1899-1900 was returned to this country again as in some respects below the commercial standard it was represented to be.

On the cost of distribution of Elgin butter it may be said that the standing difference in the wholesale price between Elgin quotations and Philadelphia quotations is 1 cent per pound. If butter sells at Elgin at 20, its Philadelphia equivalent is 21 cents. If the consumer pays, as a rule, 25 cents, on this basis the whole outlay per pound is 5 cents between the Elgin producer and the Philadelphia consumer-that is, 20 per cent of the value to consumers goes to distributive expenses, and this is most probably divided up about equally between transportation and commissions on the one hand and profits of retailing on the other.

COLD STORAGE AND PRICES.

(Part Seventh.)

The part of cold storage in improving prices to producers and consumers is that of evening out the course of prices by laying up stocks when the supply is too abundant to maintain prices and by marketing these stored-up stocks when the supply is too small to prevent a rise in prices to consumers. This new factor in farm prices and consumers' prices is an important one, destined to development which will improve materially the system of marketing certain products of the farm.

EXPENSES OF MARKETING TOBACCO.

(Part Eighth.)

The expenses of marketing tobacco in the South are as follows: From North Carolina planter to Richmond (Va.) consumer, by way of warehouse market, with bonded inspection, the distributive expenses are 14.3 per cent of the cost to

the consumer; the producer gets the difference, 85.7 per cent. Without bonded inspection the producer gets 88.4 per cent on the grade of tobacco in question. (See Grade A in report.) On higher grades the producer's receipts net him as high as 94.8 per cent. (See C grade, costing 20 cents per pound, in report.) Generally the producer receives net between 85 and 95 per cent of the cost to consumer at the factory.

EXPENSES OF MARKETING WOOL.

(Part Ninth.)

Western wool reaches the Eastern manufacturer at Philadelphia at a cost of from 3 to 4 cents per pound. At 20 cents per pound to the Philadelphia factory the distributing agencies would receive 20 per cent of its value and the producer 80 per cent, at a cost of 4 cents per pound for distribution. At a cost of 3 cents distributers would receive only 15 per cent and producers 85 per cent of its value to consumers. If the price falls to 16 cents to consumers the distributive expenses would amount to 25 per cent of its value, and the producer would get 75 per cent.

DEFICIENCY OF PUBLIC MARKETS.

(Part Tenth.)

Selected cities show the expenses of distributing various articles of domestic consumption. The schedules of expenses explain themselves. The striking feature of these results is the low proportion of the cost to consumers that goes to producers. Furthermore, the absence of public markets administered in the interest of producers and consumers, and not wholly in the interest of distributers, is a noteworthy feature of American city markets. The poor have to bear a heavy tax on account of the lack of public markets well managed. The experience of New York is typical. The commissioner of markets there says:

"The original scheme was to establish a common ground for the producer and purchaser, and thus obtain food products cheaper than otherwise; but the practical management of them has been a failure. Stands are now let by the city at a nominal rate and relet to the stand owners, who have to pay substantial prices for them. The purpose is defeated, and the middlemen make money out of them without rendering any benefit."

Such markets as those which prevail in the towns of eastern Pennsylvania make the expenses of living materially lower than the system of expensive corner stores, whose proprietors the community supports because there is no foresight in the municipal policy.

On the whole, nine-tenths of our cities are behind the distributive experience of the best-fed communities for want of proper facilities for bringing producers and consumers together at some convenient place or places at regular times. THE PRODUCER'S POSITION IN CITY MILK MARKETS. (Part Eleventh.)

The milk trade in cities is, on the whole, conducted more advantageously to both consumers and producers in smaller cities than in the larger ones, so far as price is concerned. Producers for large city markets, unless they have alternative facilities for converting milk into butter or cheese, are so much at the mercy of the wholesale trade that the producer may be selling milk below cost just because he has no other way of utilizing it than sending it to the city. The remedy for this is association of producers to make better terms with wholesale contractors and a judicious development of creamery facilities or farm dairying side by side with wholesaling milk for the daily city supply. The expenses of distribution are detailed in this part of the report. Generally, however, the producer's position in supplying milk for cities is in need of improvement.

COST OF MARKETING BROOM CORN.

(Part Twelfth.)

In the broom-corn trade Illinois is the leading State, and Evansville, Ind., one of the leading markets at this date. At a cost to the consumer of $68 per ton the cost of distribution from the Illinois farm to the Evansville factory is $8 per ton$2 for local buyer's charge, $4 for freight to Evansville, and $2 more for hauling and storage. The producer thus gets 88 per cent of the value to the consumer and the distributers get 12 per cent.

EXPENSES OF MARKETING HAY.

(Part Thirteenth.)

The cost of marketing hay at New York from up-State producers is high, the producer receiving but 60 per cent of the value to the consumer, on the basis of our figures obtained at New York, at first hand. At Kansas City the producer receives from 38 to 56 per cent of the cost to the consumer; at St. Louis, from 56 to 83 per cent; at Macon, Ga., from 50 to 59 per cent of the Chicago price, but possibly not more than 40 per cent of what the Southern consumer pays.

THE CALIFORNIA FRUIT TRADE.

(Part Fourteenth.)

The most noteworthy development in the direction of improving the system of marketing fruits and orchard products is that of the California growers of the products peculiar to that section of the country. The results of their experience are well worthy of study by all producers interested in better commercial methods of reaching the consumer. The rate of transportation in oranges is about 90 cents per box from California to all points east of Colorado; to London it is $1.60 per box. Boxing and cartage cost 35 cents per box; commission, 10 cents, and refrigeration from April to November 25 cents, making a total of $1.60 for distribution to the wholesale dealer. The price to the consumer depends so much on quality and size that it is difficult to figure his share in distribution. If, however, the fruit dealer pays $3.20 for a box of oranges, which he sells at the rate of two for 3 cents, or $3.60 per box containing 240 oranges, he makes 40 cents on the box, which is all that many of the corner fruit stands make. Allowing that the producer gets $1 a box net, we have $2.60 as distributive expenses of all kinds, or 72 per cent. The producer gets the difference, or 28 per cent, of the consumer's price. This corresponds approximately with the results reached by special inquiries made in several cities.

On the cost of marketing vegetables the results are found in the schedules under this section. Roughly grouping these results, vegetables on the average cost fully 50 per cent of their value to consumers to be distributed from producers to consumers in cities without public markets.

DEFECTIVE FEATURES IN AMERICAN DISTRIBUTION.

(Part Fifteenth.)

There are certain special features in our system of reaching markets that make the methods burdensome to producers and consumers alike. First, the expenses of hauling are high. We do not utilize our intermunicipal trolley lines to any extent for supplying markets with fresher and more varied kinds of farm products, such as vegetables and fruits. Here lies an undeveloped resource. Our roads are poor, and it is too expensive to use them often. The average expense of hauling farm produce to the primary shipping point in West Virginia is over $4 166A-01--2

per ton. Farmers can hardly prosper at this expense, nor can consumers get what they would otherwise consume.

Our retailing system in many smaller towns in the East is preying on consumers and producers for want of a public market where consumers and producers could meet and deal directly. While there is a necessary and a legitimate sphere for the retailer, the class is more prone to multiply its numbers than any other part of our distributive arrangement. Public markets will tend to eliminate the useless members and improve the services of the survivors, but no community should depend solely on its retailers alone for handling its supply of farm products. If it does so, it does it at the heavy expense of the poor and the less capable class of

consumers.

The consuming public is far behind scientific progress in the matter of its choice of foods. Vegetable foods could in many cases be substituted for animal foods at much less cost to consumers, thereby stimulating the demand for the less expensive foods. A watchman's family in New York, for example, paid $5.69 for animal food, whereas they could have bought with $1.25 the amount of vegetable food which would have afforded the same quantity and quality of nourishment. By educating the consumer the development of the demand for less expensive and the more economical food supplies may be accomplished.

The following gentlemen served with much credit as special agents at different places where inquiries were made:

Mr. Cuthbert Powell, Kansas City, Mo.; Mr. E. S. Tompkins, St. Douis, Mo.; Mr. James Peabody, Chicago, Ill.; Dr. C. E. Peck, Chicago, Ill.; Mr. N. I. Stone, New York City; Mr. W. G. M. Stone, Denver, Colo.; Mr. Will Owen Jones, Lincoln, Nebr.; Mr. John C. Hanley, St. Paul, Minn.; Mr. James B. Hunnicutt, Atlanta, Ga.: Mr. John Hart, Nutley, N. J.; Mr. S. A. Roach, Cleveland, Ohio; Mr. E. W. Wright, Portland, Ore.; Mr. Levi Chubbuck, St. Louis, Mo.; Mr. Henry A. Forchheimer, Mobile, Ala.; Mr. D. Brugman, Little Rock, Ark.; Mr. Dean Gordon, Wichita, Kans.; Mr. J. F. Jackson, Richmond, Va.; Mr. H. J. Bass, Durham, N. C.; Mr. William M. Hardcastle, Washington, D. C.; Mr. N. F. Porter, New York City; Mr. J. Halleck Crowell, York, Pa.; Mr. D. W. Willson, Elgin, Ill.; Mr. Sam C. James, Evansville, Ind.; Mr. Joseph D. Morten, Cincinnati, Ohio; Mr. Vories P. Brown, San Antonio, Tex.; Mr. M. T. Smith, Richmond, Va.; Mr. E. O. Hubbard, Milwaukee, Wis.; Mr. L. W. Zatman, Grant Park, Ill.; Mr. A. A. Munro, Makison, Wis.; Mr. Will Payne, Chicago, Ill.; Mr. F. C. Friedlander, San Francisco, Cal., and Mr. Walter Whately, Crozet, Va.

Mr. H. W. Holmes, New York City, served acceptably in the capacity of stenographer and typewriter, and Mr. H. Kaplan, of the same place, performed difficult clerical duties. To many others not mentioned by name the thanks of the Commission are equally due for their part in the results achieved. Respectfully submitted.

WASHINGTON, January 11, 1901.

JOHN FRANKLIN CROWELL, Expert Agent.