It facilitates the storing and handling of commodities. East of the Rocky Mountains, for example, grain is com monly stored and handled in bulk, all grain of a particular grade being stored and handled in the same bins. Without inspection and grading, the operation of the modern grain elevator system. would be greatly hampered.
It makes possible the general warrant or negotiable ware house receipt system. Without systematic grading, all grain elevator receipts would have to represent specific lots of grain stored in special bins ; or, otherwise, all of the same variety would have to be indiscriminately mixed to the great detriment alike of growers, dealers and millers.
It tends in a measure to protect buyers and sellers from unscrupulous and dishonest practices. Inspection and grad ing services, particularly in the local or country markets, are not fully carried out, but so far as they are applied, they serve to guarantee that commodity prices shall vary in ac cordance with the quality or condition of the articles sold.
The efficiency of the inspection and grading system in a market, largely determines the size and prosperity of that market. The inspection must be carried on by reliable and competent men, and the grading must be honestly done. The difficulty of grading tobacco so that a definite contract grade could be established upon which trades for the future might be made, has limited the organization of a tobacco market. It is nearly impossible to keep track of individual lots of this commodity and prevent its being mixed with in ferior lots in the warehouse. Therefore no buyer will accept a certificate of inspection which purports to be a guarantee that the tobacco he buys is of a specified grade. The same is true also in regard to eggs, ap ples and potatoes.
10. State bureaus of inspection.—To win the con fidence of the public as regards the inspection of great staple commodities, many states have established bu reaus where the inspection is done by public officials. Grain inspectioh is a case in point. In Illinois, the State Board of Railroad and Warehouse Commissions supervises this work. In Minnesota, there is a simi lar commission. A certificate of inspection from a body like this is a state guarantee of excellence. In the export trade of Duluth it is particularly important that such a board be in charge, because, owing to the fact that the Duluth standard for grain is higher than that of the Atlantic seaboard, the temptation of sel lers to pass off poor grain is correspondingly greater. Therefore those who buy grain at Duluth to sell it in Europe, watch carefully to see that a poorer grade than they bought is not substituted between the time the grain leaves Buffalo and the time that it is loaded on the transatlantic steamer.
Each market has its own standard, and as a con sequence there are many different grades. Many at tempts have been made to establish for wheat a uni form grade that would apply to all markets, but with out much success.
11. Chicago and Liverpool grades of wheat—The following grading for wheat in a few of the large mar kets will illustrate to some extent at least, the variety of grades.
Chicago's "contract grades" of wheat, which form the basis for transactions in the pit, are No. 2 red winter wheat, No. 1 northern, and No. 2 hard winter. In Minneapolis the contract grade is No. 1 northern. In the Duluth market, No. 1 northern is the contract grade, but No. 2 northern may be delivered on con tracts at 5 cents a bushel under the price of the former. The contract grade in the Kansas City market is No. 2 hard winter wheat—not less than fifty-nine pounds —but the seller is allowed to deliver No. 2 red if he wishes to do so.
There are at least nine varieties of wheat deliver able on contracts in the Liverpool market. The fact that the wheat comes from all parts of the world makes the work of establishing,uniform grades very difficult. This important business of inspecting and grading devolves upon a special committee of fifteen members, which is elected by the directors of the Liverpool Corn Trade Association. There is perhaps no position in the business world where a man's judgment counts for more than it does in that of inspector and grader. It is the grader who decides by what standard the various products shall be measured. And when one considers the millions of bushels and millions of pounds of products that are entering the market, and the fact that their selling power is in a large part pre determined by the inspector's judgment, one can readily see how an incompetent or an unscrupulous in spector could establish a wrong purchasing power for products, by assigning them to a grade in which they do not belong. • 12. The Federal grain inspection law of 1916. Congress passed a law which became effective on August 11, 1916, giving the Federal Department of Agriculture, authority to establish grades for grain shipped in interstate commerce, and a system of li censes and inspection. Grades have been established for corn and wheat but not for oats and other grains.