throw the enterprises entirely upon their appropriations, apparently hoping that the appropriations would soon be exhausted, that nothing would be accomplished and that they would have the opportunity of going before the people and making a showing that the entire undertaking had run upon the rocks of bankruptcy. Instead, they find that the work of organization in all three of these departments under the Industrial Commission has made especially favorable progress; that on the whole it is as far advanced as it would have been if the sale of bonds had not beendelayed; that only a very small portion of the appropriations provided have been used; and that the total receipts amount to *$28,000 more than the total expenditures of the commission in the the conduct of the business of all these enterprises. This is the record. And on this record the Industrial Commission, the government of the State of North Dakota, the farmers' organization and the people of the State may very well claim a complete vindication of the soundness of their Industrial Program and the honesty of their purposes. *Since this report was written the net profits of the Bank of North Dakota have increased to $178,790.13, at the close of business on June 15th. This is $28,790.13 in excess of the estimate given for the year which ends July 28th., To the State Value of the Mill and Elevator Service It has been shown that the saving effected to farmers and consumers in North Dakota by the small mill already in operation is $39,825 a year. When the Grand Forks plant is in operation, on the basis of a 300 day run per year it will turn out 900,000 barrels of flour and 33,300 tons of mill feed, consuming 4,122,000 bushels of wheat. It will be able to produce flour at a cost of at least 50c per barrel below the cost of production in the Drake mill. That will enable the association to make further reductions in the selling prices of flour and mill feeds and further increases in the buying prices of wheat, and at the same time to make a slight increase to its rate of profit in order to accumulate a safe operating surplus, and to guard against the possibility of any burden being thrown upon the taxpayers of the State during a period of low production or business depression. It will be safe to say that the price of wheat can be increased by at least 50 per cent over the increases paid by the Drake millthat is to 18c per bushel over the average prices paid by private buyers. That will mean an annual saving to wheat growers of $741,960. At a rate of reduction on the price of mill feeds equal to that now made by the Drake mill the saving on 33,000 tons will be $249,750. On the basis of consumption of one barrel of flour per person, or 800,000 barrels for the entire State, the saving to consumers on flour, at 50c per barrel, will be $400,000, giving a total annual saving through the operation of the Grand Forks mill of $1,391,710. This is to say nothing of the value of storage services, the cleaning and distribution of seed or the possibilities of the operation of a cold storage plant in connection with the elevator and mill. If this industry should be expanded so as to handle and manufacture all wheat produced in the State, on the basis of an annual production of 125,000,000 bushels the saving to growers at 18c per bushel will be $22,500,000-giving, with the saving on flour and mill feeds consumed in the State, a total of $23,825,000. If all mill feeds produced by the manufacture of all the wheat grown in the State were consumed at home the saving on mill feeds alone would be $7,000,000, making a total of $29,500,000. If all other grains produced were handled, manufactured and sold at a like saving, and if seed were bought, cleaned and returned to the farmer at the cost of the service, the total would easily be brought up to $35,000,000. These are in no sense vague possibilities, to be realized only by a complete overturning of existing industrial organizations, and on the assumption of the elimination of the self-interest underlying business transactions. These estimates are based upon the figures of experts, derived from a first hand study of conditions in the State and of plants that have been in successful operation for years. Here is how Dr. Ladd, of the North Dakota Agriculture College, puts the situation, on the basis of an annual production of a surplus of 100,000,000 bushels of wheat. "One hundred million bushels of wheat would furnish an average of approximately 1,119,000 tons of screenings or dockage that would be returned to the farmers of North Dakota and there converted into butter, bacon and eggs. "We would make, if all were ground within the State, over 21,000,000 barrels of flour and we would have approximately 900,000 tons of mill feed, bran and shorts. At $16.50 per barrel the flour alone would be worth $353,871,421. The feed, if sold at $40.00 a ton, would be worth an additional $36,000,000. At the prevailing prices it would be worth considerably more. The screenings at $40.00 per ton are worth $4,788,000. "If the farmer received $2.60 per bushel, the crop would be worth $260,000,000. At the prevailing prices the value would be more than $300,000,000. If North Dakota had had its terminal elevators this year, so as to handle the wheat crop, and had bought in the fall at $2.60 per bushel and sold at the present prices of $3.00 or better, it would have made net profits of $40,000,000, which would have enabled it to build all the mills and elevators necessary to take care of the entire wheat crop of the State. "Let us summarize and see how much wealth might have been retained in the State, if North Dakota had purchased the wheat at $2.60 per bushel and sold the flour and by-products at prevailing prices. Our returns would be as follows: Flour Total receipts $353,871,421 4,788,000 $394,659,421 "The wheat cost $260,000,000; the net gain would then be $134,659,421." It is apparent that Dr. Ladd has figured the difference between the cost of wheat and the selling price of the products as clear gain. Considering all the advantages to the State of manufacturing its own products and returning the by-products to the soil, this conclusion would be more than justified. How would it work out on a business basis? It is claimed by the trade that the present cost of milling and selling flour is $1.25 per barrel. This is probably at least 20 per cent too high. But using this figure and allowing for the cost of handling the wheat from the local elevator to the mill, freight commission,etc., amounting to 21 cents per bushel, there will be a total cost of $30,660,000, leaving a net gain of $103,929,421. There would be even greater advantages from the carrying out of this policy of manufacturing farm products at home, which cannot as yet be definitely put into figures. More land would be brought into cultivation. Production on land already in cultivation would be greatly intensified, thus increasing the number of people that would be directly supported on the land. The diversification of crops made possible by the return of by-products to the farm would greatly increase the yield per acre and would go a long way toward reducing crop losses, thus eliminating the greater part of the risk from agricultural industry and all other industry and business dependent upon it. The manufacture of farm products in the State would directly give employment to thousands of people; and to serve the needs of the increased number of farmers that would be brought into the State, the mercantile business would have to be expanded by several hundred per cent. Lastly, and most important of all, the manufacture of these products at home would stop the removal of the fertility from the farms. According to Dr. Ladd the amount of valuable fertilizers taken from North Dakota land each year by the removal of the entire product from the farm and from the state is: 46,018,440 pounds of Nitrogen 44,648,760 pounds of phosphoric acid 1,787,280 pounds of lime All of these ingredients would be returned to the soil, if the by-products from the manufacture of North Dakota wheat were returned to the farms. On the other hand, the removal of this vast amount of fertility from the soil every year would soon so greatly reduce its productivity that the land could be made to produce profitably only by the use of costly commercial fertiliz ers. The present practice of sending these products out of the state is not only unprofitable to the present generation of farmers, but it is a robbery of their posterity. The continuance of this policy in North Dakota and other western states would in no great while so reduce the productivity of the land upon which the entire nation and a great part of the world depends for its staple foods that the whole of the economic system would be endangered. Will it be practicable for the State to build up a marketing and manufacturing service such as will bring these tremendous advantages to the people and lead the way towards the estab· lishment of its entire agriculture system on a sound foundation? There is every reason to believe that this can be done. Similar policies have been successfully carried out in other countries, especially in Denmark and in some of the Australian states. In this country the port of New Orleans, established, owned and operated by the state, has the largest cotton warehouse in the world and the most efficient grain elevator in existence, as well as up-to-date water-front facilities and railway terminals, which have practically eliminated all charges for terminal service. It has tremendously reduced the costs of handling these products and at no charge to the taxpayers of the state. A similar success has been achieved by the Porth of Seattle. North Dakota has the experience of those other countries and of these states to guide it. Their history has been studied. It has been found that in every case opposition similar to that which is now being met in North Dakota has arisen and has been overcome. All these things have been considered, and all the uncertainties of the situation have been foreseen and discounted. A careful study of the existing food situation and of present trade conditions has led to the conclusion that it will be impossible to destroy the state industries by unfair competition or by political intrigue. The State will have plants and facilities for buying, moving, milling and selling farm products superior to those possessed by the largest and most successful private concerns engaged in similar business. It will have the support of growers in the State, not only because of their loyalty to their own public enterprises, but because of better service that is being proved out from the beginning. It will be more profitable for them to sell |