Annual Reports of the War Department

A great means of intercommunication like the central water-line, which will, by cheapening the cost of their delivery, cheapen the cost to consumers of the important articles of food and fuel, which are necessaries of life for all, both rich and poor, while not diminishing but increasing the receipts of producers, becomes an object of the greatest interest to the nation.

By cheapening the cost of delivery of many of the chief articles of export, at the great commercial cities of the Atlantic, it facilitates our competition in foreign markets, and assists in giving us the balance of trade, and becomes in this view also a most interesting object from a national stand-point, and well worthy of the attention and assistance of the National Government.

Some interesting extracts are introduced below, taken from a speech of the Hon. W. Lawrence, of Ohio, delivered in the House of Representatives May 23, 1870. The object of the speech was to demonstrate the necessity for the provision of additional means of transportation for the products of the Northwest, and to show the greater cheapness of transportation by water over that by rail.

The ultimate object of the speech was to induce congressional action in the direction of gaining free access to the ocean for western products by the way of the Canadian canals and the St. Lawrence River.

His arguments as to the necessity for additional means of exit to the ocean, and as to the greater cheapness of a water-route over the railroad, apply equally to the central water-line and to the line whose adoption he was advocating; but the central water-line has the great advantages of shortness, comparative non-interruption by ice, and freedom from the dangers of the navigation of the lakes and St. Lawrence River, and of being in the heart of our own country.

Extracts from the speech of Hon. W. Lawrence, of Ohio, in the House of Representatives, May 23, 1870.

But in regulating trade on this continent, as well as with the nations of Europe and Asia, we should not overlook the great interests of the producing and laboring portions of our citizens.

GRAIN-PRODUCING STATES.

The great grain-producing States of the central West are Ohio, Indiana, Illinois, Michigan, Wisconsin, Minnesota, and Iowa, with a population of probably eleven millions.

The grain product of the United States, including wheat, corn, rye, oats, &c., in the year 1865, was 1,343,027,868 bushels, valued at $1,118,904,376. Of this, the product of wheat was 151,999,906, and of corn 867,946,295 bushels.

The wheat product of 1868 was 224,000,000 bushels, of which 32,000,000 were used for seed, 164,000,000 consumed in the United States, and 28,000,000 exported. The population, product, amount consumed, and surplus, were, in the States bordering on the lakes, as follows:

PRICES-HOW DETERMINED.

The amount which a western farmer realizes for a bushel of wheat depends on two circumstances, the price in the controlling market and the cost of transporting it there. Though England buys but a small part of our wheat product, yet she consumes the largest part of our wheat export, and the Liverpool wheat market controls the price in New York, Toledo, and Chicago, very much as the price of our national bonds at Amsterdam and Threadneedle street determine the price in the United States, or as Wall street determines the price of gold at Cincinnati. The gentleman from Missouri (Mr. Asper) has shown this in his speech of March 30, by quotations from the New York Journal of Commerce of March 22.

The price of wheat, then, in Liverpool has an effect upon the whole wheat product of our country far beyond the export demand. With this, then, as the initial point in fixing prices, it requires no argument to prove that the cost of carrying wheat from the place where it is produced to Liverpool will be deducted from the Liverpool price, and the producing farmer will receive only the residue.

Dr. William Elder, until recently in the Treasury Department, recognizing this fact, in a pamphlet just issued in favor of a protective tariff, says:

Putting a bushel of red winter wheat at $1 30, (nine shillings per one hundred pounds,) its price in Liverpool on Christmas Eve, 1869, we find its value in gold to the western farmer by the following deduction:

To this must be added the expense of placing it in Chicago, (from place where produced :)

Currency.

5 cents. cent.

10 cents. 3 cents.

184 cents,

Total deduction from price in Liverpool, 69 cents. Leaving to the farmer 61 cents in gold-73 cents currency-per bushel.

FREIGHT AND DEALER'S PROFITS-MODE OF TRANSPORTATION.

The secretary of the Chicago Board of Trade has furnished to the Bureau of Statistics a table showing that during the winter months, in the absence of canal and lake competition, railroad freight from Chicago to New York reaches nearly thirty cents a bushel for wheat.

The great cost of constructing and operating railroads is such that they cannot compete with canal, lake, river, or ocean transportation for heavy freight. In a report made by Hon. Israel T. Hatch to the Secretary of the Treasury, in January, 1867, he says, in House Executive Document No. 78, second session Thirty-ninth Congress, page 4:

"An elaborate investigation shows the following results as exemplified by a fair comparison of the relative cost of transportation by rail and the other means of conveyance best known in the United States:

"By rail costs 733.3 per cent. greater than ocean transportation; by rail costs 525 per cent. greater than over great lakes; by rail costs 215 per cent. greater than Erie Canal, (enlarged ;) by rail costs 400 per cent. greater than over Hudson River."

But the western producer is liable to suffer, not merely by reason of the necessarily great cost of railroad transportation, but by extortionate charges rendered practicable by the monopoly of the recent immense railroad combinations and by the want of adequate rival and competing routes and modes of transportation.

With railroad freight costing about 30 cents to transport a bushel of wheat from Chicago to New York, besides other charges, by far too large a share of the product is taken from the farmer, and he needs cheaper transportation.

Will it be said the lakes, the Erie Canal, and the Hudson to New York do or will furnish all that is necessary?

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The annual tax now imposed upon the people of the West-these enormous charges for tolls and freight, profits of dealers, all deducted from the final market price of products, reducing the amount the producers receive-ought not to be longer endured if it be practicable to avoid it.

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Freights can be reduced, and thus, even without any increase in the price of wheat at its ultimate market, give to the producer more of that price than he now receives.

The gentleman from New York (Mr. Bennett) has told us that "in 1836 the surplus breadstuffs exported by the lake and the Erie Canal were altogether 1,239,351 bushels, including flour estimated as wheat. In 1860 the movement eastward by every avenueby canal, by railroad, and by the St. Lawrence River had attained the magnitude of 78,652,486 bushels, and in 1862 its enormous aggregate was 137,667,870."

And referring to Ohio, Indiana, Illinois, Michigan, Wisconsin, Iowa, and Minnesota, he says:

"In 1840 the cereal products of these States amounted to 267,265,877 bushels; in 1850 they had increased to 434,862,661 bushels; in 1860 to 670,031,559 bushels; and in 1870 we shall probably find them aggregating about a thousand million bushels."

A considerable portion of all this increasing product must find an eastern market, and to all this must be added lumber, wool, and other products of western soil, mines, forests, workshops, and factories.

The export of Indian corn to foreign countries in 1868 was 11,147,490 bushels, valued at $13,094,036, and 336,508 barrels of Indian meal, of the value of $2,068,430. With the rapid growth of western products for export, more and greater routes of transportation must speedily be opened up. Already we have a memorial asking the "central wateraid of Congress for a ship-canal between the lakes and the Mississippi, by way of Wisconsin and Fox Rivers, and the country is discussing the project of a line from the Ohio River to the Virginia capes, connecting the Kanawha and James rivers," one of the publications in advocacy of which says:

"Cheap transportation is the great necessity of the West. Its products exceed in amount the means at command of cheap outlet to the sea-board, and millions of western producers are placed under the power of carriers."

The gentleman from New York (Mr. Bennett) estimates that the reduction on freights by the enlargement of the locks of the Erie Canal "would equal a saving of $15,000,000 per annum on the present movement of grain eastward by the water routes." On the eastward movement of other articles it would be a very large sum. On the westward movement of articles, the cost of which would be reduced to western consumers, the saving would be a vast sum also.