American market has forced diversification in farm industry upon widely different localities, both at home and abroad. Where such diversification has not wholly abandoned grain farming it has driven it from the extensive to the more intensive methods of cereal culture, and so raised the yield per acre in the East to a level of, if not above, that of the West1 New Jersey, for instance, now produces "more wheat to the acre than any Western State." 1 No influence in our national commerce has so stimulated the Southern and Eastern farmer to improvement in methods and organization of farm economy as this movement of surplus grain has. It is not too much to say that this movement has revolutionized more than one-half of our national agriculture. 3. CEREAL DISTRIBUTION, INTERNAL AND FOREIGN.. The volume of the movement in question is but one of its main features. Tne proportion consumed on the farm and distributed within the country compared with what is sent abroad is also significant, as shown in the following table, covering the six years 1894-1899: a Year Book, 1898, pp. 678-679. b Distribution of Agricultural Products, pp. 114–122. c U. S. Dept. of Agriculture, Division of Statistics, 1899. d Summary of Finance and Commerce, pp. 1843-1844, 1899. Our cereal crop has increased nearly one-half since 1894; of this we have used domestically from 84 to 93 per cent and exported the balance. The exported proportion never has gone beyond 16 per cent of the yield. Hence our home consumption of cereals is over six times as important as is our foreign trade. But our foreign export has nearly doubled since 1894, when it was 241,000,000 bushels; now it is 463,000,000 bushels. In 1898 it was 522,000,000 bushels, a gain of 48 per cent. After all, then, the internal commerce of the United States in cereals is the main feature of the nation's commercial distribution. The surplus cereal movement within the United States takes three main directions of distribution: (1) Toward the Atlantic slope and to its seaboard cities for consumption and export; (2) toward the Gulf ports for export mainly; and (3) toward the Pacific ports mainly for foreign distribution. 4. THE WHEAT MOVEMENT IN THE WORLD'S MARKET. In the course of each year the wheat crop of the United States is divided into three main allotments. The farmer keeps one-third for consumption on the farm and for seed. The rest of the country consumes another third. The last third goes into the world's surplus to supply countries which do not produce as much as they consume. These proportions hold true in the long run, though for any given year we may spare more or less than this. Of the crop of 1895, for example, we exported only 27 per cent, and two years later almost 41 per cent. The tendency is rather to increase than to decrease the proportion of one-third. This is due to two main causes, likely to be temporary: First, the newer surplus-wheat countries south of the equator have not in recent years maintained their competitive importance in the world's wheat market; and secondly, a series of growing European deficits in wheat, occasioned by bad crops, has had a corresponding influence upon the price. This in turn expanded our wheat acreage to the high-water mark in our agricultural history-44,592,516 acres in 1899. 1 Industrial Commission, Agriculture, p. 93. The Wheat Movement," in McClure's Magazine, 1899. The disposition of the annual wheat crop for a series of 5 years is shown in the following table: Disposition of the wheat crop of the United States, by amounts and percentages. a Agricultural Year Book, 1896, p. 563. b Agricultural Year Book, 1898, p. 682. c 126, 443, 968 c 145, 124, 972c217, 306, 005 27.6 33.9 40.8 c New York Produce Exchange, 1898-99, p. 37. Wheat flour reduced to equivalents in wheat. The economic functions of the wheat crop are as far-reaching as they are fundamental in their importance, both in domestic industry and foreign commerce. In the first place, one-third of the country's wheat crop is retained as working capital required for farm operations. The other two-thirds represent the command of wheat farmers over the products of other industries. Of these two-thirds one is required for the bread of the nonrural portion of the people of the nation; the other third is credited to the nation's commercial account with other nations. Not only agricultural but domestic industry and foreign trade are vitally bound up with the action of wheat upon the whole range of modern enterprise. And in these fields of enterprise it is the wheat-eating peoples who, as a matter of history, have made the most of their economic opportunities. In the second place, wheat is an economic index of our international purchasing power. Though the estimated farm value of wheat in 1899 was just half of that of corn, and though we now send abroad as a rule a greater quantity of corn than we do of wheat, nevertheless the export value of wheat and wheat flour for the years 1894-1898 averaged just three times that of corn and corn meal, the next crop in commercial importance.' While, therefore, the five leading cereals might better be taken as the real measure of the commercial strength of agriculture, our commercial importance in the world market is measured by the ratio of our surplus wheat to the total foreign deficit in that commodity. This fact makes necessary an analysis of the world's wheat valuation as the key to the commercial position of American agriculture. 5. THE WORLD'S WHEAT SITUATION. The degree of exchange power which the wheat crop gives to the United States among commercial nations is quite exactly measurable. The world's wheat crop averages now in round numbers 2,500,000,000 bushels. In 1898 the yield was nearer 3,000.000.000 bushels, or less than half a billion above the average. In exact figures this crop was 2,879,923,000 bushels. There are certain conditions in the world's wheat situation which help to explain why so low a level of prices prevails for American wheat in foreign markets, as a rule. These conditions include the distant separation of surplus countries from deficit countries, the largeness and regularity of the American surplus in proportion to the world's surplus, the fact that harvests over most of the world occur during 3 months near the middle of the year, and the fact that the world's demand for surplus wheat is met week by week throughout the course of the year. Under these conditions the central problem in the distribution of surplus farm products lies in moving about 400,000,000 bushels of wheat (strictly 387,000,000 1 U.S. Dept. of Agriculture, Distribution of Exports, 1894-1898, pp. 117–121. bushels) from the surplus countries to the deficit countries. From the standpoint of each surplus country this movement must be made within the least possible time after harvest in order to reach the market in advance of competing surpluses from other countries. From the standpoint of each deficit country it is to its interest to postpone buying until the arrival of competing stocks bears down the level of prices. Thus the selling and the buying countries form two great groups of bargainers separated, one may say, by half the circuit of the earth. The geographical scope of the problem of wheat distribution is indicated by the following list of countries involved in these two groups and by their location on the map: The share of the different grand divisions in the wheat trade between countries is shown below. The world's yield of 2,897,924,000 bushels in 1898 was divided among six continental areas of production. About 87 per cent of the world's wheat never leaves the country in which it is grown, and simply enters into the internal commerce of these respective countries. The other 13 per cent comprises the wheat of international commerce. Proportion of world's export movement from North America.. Per cent. 60.4 56.2 68 25 17.8 The United States furnished over half (56.2 per cent) of the wheat required to make up the deficit of other nations. North and South America supplied 68 per cent of this deficit. The larger the proportion supplied by any country the greater its influence on the foreign price. For the year 1898 the United States was the leading country in production of a surplus. Europe was deficient and so was Asia. Hence the price for the United States wheat was greatly improved. The value of cereal surpluses in the United States is also affected by the position of its harvest season in the calendar of the world's series of cereal harvests. Ninety-five per cent of the wheat crop of the world is produced in the northern hemisphere. The world's cereal harvests, beginning in the southern hemisphere, gradually move northward until in the months of June, July, and August they reach a climax, throwing upon the world's markets three-fourths of the world's total production within the last ninety days of the close of the calendar year. Naturally during this time prices strike rock bottom. The superabundance of other foods than grain foods in the autumn helps to hold prices down. And the almost universal practice of selling the surplus immediately after harvest still further reduces the level of prices at which this surplus of the farm passes into the world's visible supply. Calendar of world's wheat harvests, by months and yield. The surplus in the year 1898 is 386,512,000 bushels, and three-fourths of it, or 290,000,000 bushels, are harvested within 90 days, most of which enters into the visible supply within the next month or two. This gives the world a publicly known stock of possibly 200,000,000 bushels, but the table below shows that the deficit countries draw on this stock, so far as it is carried by water, at the rate of less than eight million bushels per week. Under these conditions the consumer has the advantage of the producer, because the former buys only as he needs wheat. This condition materially influences prices to consumers, (1) by keeping them to the level of producer's price plus distributing expenses, determined by competition among traders, and (2) by giving to traders the benefit of a rise or imposing on them the loss from a fall in prices. The slow rate of distribution of this quickly accumulated surplus is shown in the world's weekly wheat shipments. Bradstreet's report of the world's weekly wheat shipments by sea. Corn is the most valuable product of our agriculture. For 1899 its value is placed at $629,000,000. Hay ranks next at $412,000,000. The feeding crops-corn, hay, and oats-together amount to $1,240,000,000. The food crops-wheat, rye, barley, and potatoes-have a total value of only $450,000,000. Thus out of the |