This gives the shipper the option of choosing between the two systems, consequently he is not compelled to accept the standard adopted by one, but on the contrary can avail himself of one or both if he so desires. In calling attention to this matter this board intends to be perfectly nonpartisan, but deems it their duty to state these facts for the benefit of the North Dakota shipper. We are attaching to this report a letter from the commissioner of Minnesota, Mr. C. F. Staples, relative to the commission merchants' law. (See Exhibit R.) This finishes our report, your excellency, and in conclusion we wish to say that while the time allotted to the investigation was not in proportion to the magnitude of the undertaking, however, we sincerely 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 appreciate the difficulties under which we labored. Notwithstanding all this, we believe we have accomplished some practical results, and we trust that you, the legislature, and all the people of our State, will appreciate and profit by them. A. R. THOMPSON, Chairman, E. D. WASHBURN, Board of Grain Commissioners for North Dakota. EXHIBIT O. LONDON CORN TRADE ASSOCIATION, EXCHANGE CHAMBERS, 28 ST. MARY AXE, London, E. C., February 15, 1908. Mr. PRESIDENT: I am instructed by the European International Committee on American Grain Certificates to communicate to you the following facts: There have been for some years past a general consensus of opinion among European buyers of grain that the operation of the present system of certificating grain for export is increasingly unsatisfactory, and that whatever may be its merits for the purposes of domestic trading, it no longer gives to European buyers the confidence and protection which is necessary in a trade where the only guarantee for reliable quality and condition in exchange for buyer's money is a paper certificate. Formerly buyers in buying from the United States of America were able, as they still are in their dealings in grain with other exporting countries, to recover from shippers any damage they sustained owing to defects in quality or condition, but since the introduction of the certificate system this is no longer possible. Even after its introduction, indeed, until comparatively recent times, it was seldom found that any serious abuses arose, 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 elsewhere; but whether from the increase of individual competition, or, what is probably more important, the rivalry between the older ports and their smaller and more recently established 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 business from interior points; and we in Europe feel that the burden of such departure from the more reliable and stricter method in force formerly has been borne chiefly by European importers, who, being far away, have no power of protecting themselves against errors, or worse, in the grading methods of recent years. The result is that American grain suffers as regards price when in competition with grain from other countries. The increasing dissatisfaction culminated some twelve months ago in a general request from the principal European grain centers that a conference should be summoned by the London Corn Trade Association to consider the best measures to adopt to remedy the defects of the present system of dealing in grain from the United States of America. The conference was held in London on the 8th of November, 1907, and was attended by delegates from all European importing countries. It was unanimously resolved that a 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 necessary improvements, and to negotiate with American grain trade for their adoption. This committee met and drew up a scheme (a copy of which I have the honor to append) which was submitted to the principal grain associations of the United States of America, but which, I regret to say, did not only prove unacceptable to the American exchange but even failed to draw any counter proposals from them. Indeed, the way in which this subject has been treated by some of the leading grain associations there would almost seem to indicate that there is no desire to recognize the undoubted fact that serious faults have arisen or that there is any need to amend a system which is responsible for abuses of which European importers universally complain. Traders here generally recognize that a reliable system of inspection and certificating presents many advantages, but that to be thoroughly reliable, it must depend not only upon the expert knowledge, integrity and independence of the inspection officials, but that the rules for grading by which these officials are bound must be uniform, applying equally to every port, and should be generally known not only in the various American but also in the principal European grain centers, and that wherever possible from time to time type samples should be sent to our leading grain associations. This is the system adopted by the agricultural department of His Majesty's Government in the Dominion of Canada, and has hitherto proved generally satisfactory. My committee observed with great satisfaction your reference to this important matter in your last presidential message, and there is before your Senate and House of Representatives at the present time a bill embodying some of the above suggestions. While they would, of course, have preferred to get their own suggestions accepted by American traders, they wish to be permitted to offer to you their sincere congratulations and thanks for the steps you are taking to remedy an undoubted evil, and to assure you the warm support of the European grain trade in your efforts. I have the honor to be, HOWARD'S WHEAT AND FLOUR TESTING LABORATORY, Chemical analysis of wheat sample received from M. O. Hall. Results given in percentages when practicable. Wheat sample milled to produce straight flour. Received 9-7-08. Schedule G. TESTS ON THE WHEAT. Weight per bushel, cleaned. "ARNAUTKA.” 60.0 Cleaning loss.. 1.2 Yield. 70.5 TESTS ON THe flour. Explanatory remarks: The cleaning loss is the amount removed by our small milling separator and scourer and is expressed in per cent. The yield is the percentage of straight flour made on our experimental mill and calculated on the cleaned wheat. With a No. 2 northern wheat we get from 65 to 70 per cent of straight flour, and results are comparative with each other and approximately proportional to the yields which would be obtained in a merchant mill. The ash is the percentage of mineral matter left after thorough burning, and is lowest in a true first patent and higher, as more of the branny particles are found being highest in the lowest grades of flour. In flours made from spring wheats and best first patents range from 25 per cent or 30 per cent to 40 per cent, second patents and straights from 35 per cent to 55 per cent, cut straights, etc., from 50 per cent upward. Acidity is the measure of the soundness of the flour. The acidity of this flour is considerable above that of flours made from ordinary spring wheat. The limit for such flours is 0.115 per cent. So that while this flour may be all right at present, it will not keep as well as if the acidity were lower. Soluble carbohydrates normal. Soluble carbohydrates (sugars, dextrins, etc.) are fermentible materials, and in sound flours do not usually exceed 6 per cent. The nitrogenous compounds are the materials which influence the expansion or volume of loaf which the flour will give. They include the two gluten compounds-gliadin and glutenin and other soluble nitrogenous compounds of little importance present usually in small amounts. This is a very high per cent of gluten, but it is of poor quality for bread-making purposes, as evidenced in the expansion of the baked loaf. The baking tests are made according to our usual method, using 12 ounces of flour. Colors are marked as follows: Patents, maximum 1, medium 1.5, minimum 2. Straights, maximum 2.5, medium 3, minimum 3.5. The average volume hard spring wheat flours is at present about 195 cubic inches. The weight of loaf and water used are at present averaging about 17 and 6.06 ounces, respectively. In general this wheat gives a flour yield equal to the ordinary springs, having the same weight per bushel; it has about the same water absorption and bread yield. The expansion of the loaf is decidedly below that of the ordinary springs, and also the keeping qualities of the flour. The ash is much higher and the color is the distinctive macaroni creamy-white color, and very good for this variety of wheat. EXHIBIT Q. The milling tests for the sample of wheat, Aronautka, laboratory No. 214, milled under date of September 5, were as follows, grade, No. 1 northern: Weight per bushel, uncleaned, 59 pounds. Weight per bushel, wheat cleaned, 614 pounds. Number of pounds milled, 137 pounds 9 ounces. Weight of patent flour, 70 pounds 6 ounces. Weight of second clear flour, 3 pounds 11 ounces. Weight of bran, 11 pounds 9 ounces. Weight of shorts, 31 pounds 13 ounces. Total weight recovered, 134 pounds 7 ounces. Percentage recovered in milling, 97.73. Yield of bushel per barrel, 4 bushels, 56 pounds. Baking tests for the three grades of flour in comparison with the regular laboratory standard were as follows: In many ways it is hardly possible to compare results with those of Howard's laboratory, 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 less amount of flour was used in the patent than in the standard, so that the volume of this particular flour was very good, while the volume for the first and second clear, as will be expected, is much less. The chemical work has not as yet been completed. Unfortunately one of my assistants was stricken down with typhoid fever and another, doing the flour work, was out of the laboratory for a week. This has put us quite a little behind in our work' but as soon as we can get the data completed I will send it to you. Yours, very truly, E. F. LADD. Under date of November 10 this board again wrote Professor Ladd for the balance of his report and received the following answer: M. O. HALL, Nicollet Hotel, Minneapolis, Minn. NOVEMBER 11, 1908. DEAR SIR: In the absence of Professor Ladd I am instructed to acknowledge receipt of your favor of November 10, and to say that Professor Ladd is now in the East and does not expect to return until about the 20th. ALMA JOHNSON, Stenographer. Yours, very truly, Hon. M. O. HALL, [No. 4286.] OFFICE OF RAILROAD AND WAREHOUSE COMMISSION. Secretary of the Grain Commission of North Dakota, Mohall, N. Dak. DEAR SIR: In compliance with the desire of your commission for information with reference to the operation of laws governing the handling of grain and other agricultural products by commission merchants in this State, and particularly with reference to the circumstances and facts which led up to the prosecution by this commission of the firm of Edwards-Wood & Co., for alleged violation of the provisions of chapter 225, General Laws, 1899, commonly known as the "commission merchants' law," I will first direct your attention to the law itself as it now stands, in revised form, on the statute books. COMMISSION MERCHANTS. 2114. Definition-License-Bond.--For the purpose of this subdivision a commission merchant is a person 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 sale on commission without first obtaining a license from the railroad and warehouse commission to carry on the business of a commission merchant, and executing and filing with the secretary of state a bond to the State for the benefit of his consignors, the amount of the bond to be fixed and sureties to be approved by the commission, who may increase or reduce the amount of the bond from time to time. ( ('99, c. 225, ss. 1, 4, 6.) (77-483, 80-633, 778; 94-225, 102-697.) 2115. Application for license-Conditions of bonds—Additional bonds.-The application for license shall be in writing, state the commodities for which license to sell is wanted, and give the business 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 disbursements; 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, ss. 1, 4.) 2116. Commission may require confidential statements. For the purpose of fixing or changing the amount of a bond the commission shall require statements of his business from the licensee, and, if he fail to render such statements or to furnish any new bond required, the commission may revoke his license. All such statements shall be for the exclusive information of the commissioners, unless they shall be required for use in court, in which case the commissioners shall produce them. (99 c. 225, s. 4.) 2117. Statement of the consignor.-Whenever a licensee sells any grain he shall render a true statement in writing to the consignor within twenty-four hours of the amount sold, price received, name and address of the purchaser, and the day, hour, and minute of the sale, and shall forward vouchers for all charges and expenses. (99 c. 225, s. 2.) (94-225, 202–697.) 2118. Complaint Investigation-Report. Whenever a consignor of a commodity other than grain, after a demand therefor, shall have received no remittance or report of its sale, or shall be dissatisfied with the remittance, sale, or report, he may complain in writing, under oath, to the commission, who shall investigate the matter complained of. In making the investigation the commission may compel the licensee to produce all information, books, records, and memoranda concerning the matter, and they shall give the complainant a written report of the investigation. This report shall be prima facie evidence of the matters therein contained. (1899, c. 225, s. 3.) 2119. Action on bond.-If any licensee shall fail to account for any consignment of any of the commodities mentioned in this subdivision, or to pay to the consignor moneys due on such consignment, the consignor or his agent, within ninety days of the date of shipment, may file with the commission an affidavit setting forth the matters complained of. Thereupon such consignor, within a year after the cause of action accrues, may bring an action upon the bond of the licensee, and recover the amount due him on account of such consignment. If such licensee has become liable to more than one consignor, and the amount of his bond be insufficient to pay the entire liability, the consignors shall be compensated in proportion to their several claims. (1899, c 225, s. 5; 1901, c. 227.) 2120. Violations, penalty, etc.-Any person engaged in selling any property as herein specified, who fails or neglects to comply with any of the provisions of this subdivision, shall be guilty of a misdemeanor, and on conviction thereof, shall be punished by a fine of not less than $25; and the commission, either upon such conviction 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 interests of those making consignments to him to be sold on commission. Where a license has been canceled, the commission may refuse to issue any license to such person for a term of one year. Whenever requested to do so by any interested shipper, the commission shall have power to investigate any sale or transaction carried on by any person licensed hereunder, and for that purpose shall have the right to examine the books and accounts of any licensed commission merchant which in any manner relate to such sale or transaction. Any licensed commission merchant, or any agent in charge of such books or accounts, who shall fail or refuse to submit such books or accounts for the examination of the commission, shall be guilty of a misdemeanor. (1899 c. 225, s. 7.) (94-225, 202-697.) Complying further with your request, I will state that an action was commenced by the commission against Edwards-Wood & Co. in December, 1903, which was based upon a complaint entered by Victor Carlson, a shipper residing at Hallock, Minn., this being but one of a large number of similar complaints received from various shippers in northern Minnesota and North Dakota, which had been filed with the commission, in each of which it was alleged that false returns had been made by said defendants, with the result that they had been defrauded of the true value of their consignments of grain and flaxseed shipped to said defendants who were engaged in the business of grain commission merchants at Duluth, Minn., being duly licensed as such under the law. On December 8, 1903, the defendant's 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 by said Carlson to said defendants at Duluth, to be sold on commission for his account. On January 5, 1904, the case came on for trial before a jury, resulting in a verdict of guilty. In this case Mr. Carlson consigned a carload of flax to Edwards-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 $1.194. Edwards-Wood & Co. claim that they offered on the Duluth board at $1.194, but failed to make a sale, and then purchased it themselves. On the next day they sold the flax to the Hall Elevator Company for $1.20, and reported to Mr. Carlson the sale of the day before at $1.194. 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 price of the sale of the car of flax, which it is claimed was consigned by Carlson to defendants to be sold on commission. "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 best price obtainable, and to remit to the shipper the amount of the same, less his commission and the necessary disbursements. The commission 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 actual purchaser, the law requires the commission merchant to make a true report of the amount received at the sale to the actual purchaser within twenty-four hours thereafter." 45331-10-5 |