and using it to trade grain. In 1874 he joined the Minneapolis Millers Associ-
ation, where he conceived of an audacious plan to divert theflow of wheat
away from Iowa and through Minneapolis. He persuaded the company to
build a network of warehouses and elevators along the Chicago–Minneapolis–
Saint Paul Railway, and then extended his network along other rail lines
(Morgan 1979, pp. 54–5).
Building the capacity to store grain in quantities that would allow the
barons to influence the market was technologically challenging. Since their
introduction in the mid-1800s, elevators have been constructed using com-
bustible timber. By the end of the nineteenth century, the risk offire made
them virtually uninsurable. In early 1899, Peavey and engineer Charles
F. Haglin began investigating the possibility of using reinforced concrete, a
relatively new material, to construct grain elevators.
Their prototype, the Peavey–Haglin Experimental Concrete Grain Elevator,
was completed in 1900 in St Louis Park, Minnesota, alongside the tracks of the
Northern Pacific. The success of the experiment encouraged Peavey’s com-
pany to commit to the construction of a 34-metre-high concrete elevator at
Duluth, Minnesota, on Lake Superior, at the western end of the St Lawrence
Seaway. With a capacity of 3.5 million bushels it would have been capable of
storingathirdofSouthAustralia’sannualwheatcrop.Withinadecade,anetwork
of majestic concrete elevators spanned the Midwest plains like rural skyscrapers.
An Australian visitor to the USA marvelled at the efficiency of the competi-
tive grain-handling system:
There are no fewer than 36 elevator companies in Minneapolis, controlling
1,862 country elevators with a combined capacity of nearly 50,000,000 bushels
of wheat...
These elevators are distributed along nearly every railroad line touching
Minneapolis, and they form a network of business enterprise coveringfive States.
Every part of every system vibrates in instant sympathy with the controlling
head at Minneapolis, and deals are made with a rapidity fairly dizzying to the
outsider.
The manager of a local house may buy a thousand bushels a day. The central
office at Minneapolis is immediately informed of the amount by telegraph, and
within an hour every bushel is sold on thefloor of the Chamber of Commerce...
Perhaps no one thing so simplifies and facilitates the movement of wheat as the
present rigid system of inspection and grading. In former times a load of grain must
needs be carefully examined by every prospective purchaser, were he miller or
commission man; and if this buyer sold again, a second examination became
necessary, with its attendant disagreement as to quality.
The business of wheat-buying, indeed, was full of time-consuming details, and
in the end neither party to a trade was likely to be satisfied.
As a consequence, the state government, or, in some primary markets, the local
chamber of commerce, stepped in, and assumed charge of the whole system ofBarons versus Bureaucrats