The herald., 1897-06-27

II thirty-seven associa tiona All the =
changes and practically all Of the aSDo
, Citations are incorporated.
THE BUSINESS BASIS
The basis Of the exchange system =
far ~ the business 10 concerned 10 th'
contract between the associations and
their members. the fruit growers. Thil
, Is supplemented by another contract be
teween the association and the local ex
change and another contract between
the local exchange and the central ex
change.
These contracts are similar and We
they differ somewhat to suit the peculi
arities of each situation. The origina
basis for forming the exchange was tha,
all members Should deliver their fruit:
to the association, which should pacl
and sell the same, and that each member
should receive for his fruit the average
net price received for all the fruit Of Q
given variety and grade handled by the
association. A modification Of this idea
was made by some OF the associations
which provided that each member was
to receive the average net price received
for each variety but not each grade
And still another association would
handle each mans fruit separately. In
this case If a carload was lost the loss
fell upon the owner. In the former cases
If carload was lost the loss fell upon
the association.
Each local exchange or each associa-
tion has the right to use any car or any
kind of car it may desire in sending its
fruit to market.
Each local exchange or each associa-
ton also has the right TO send its fruit
to market by any line of railroad 1t may
| desire Neither the local exchange nor
the central exchange has any power or
disposition to interfere with either CT
these propositions.
Each association, through its local ex-
change also has the right to sell its
fruit f. o. b. in California at point Of
shipment for cash, or its equivalent
fruit to be inspected and accepted at
time of shipment, and no back talk.
Each association has right to send
its fruit at any time to any point it may
desire, subject to such changes by the
central exchange as may be necessary to
prevent the overstocking of any given
market. This right of the central ex-
change is not exercised only as matter
of necessity.
No fruit shipper sells his fruit ex-
clusively +. o. b. in California. The lead
ing ones advertise or sell en- route or
upon arrival at point of destination II
not before sold. and If not so sold the
cars are frequently diverted to other
points.
COST OF THE WORK
The work of the exchange system has
resulted in better, more uniform and
more honest pack of the fruit, and the
cost of packing the fruit and placing II
on board the cars has been materially
lessened. Under the old system it cost
from 40 to so cents box to do this work.
Under the exchange system this cost has
been reduced to about 80 cents per box.
Under the old system the fruit grow
ers paid from s to 10 per cent commits
sion for selling the fruit. This percent
age was paid on the price for which the
fruit was sold at the other end Of the
line which, of course, covered the cost
of packing, freight and everything else.
Under the exchange system the cost the
past season has been only ~ cents
box, which is equal to about per cent
on Navels and less than 8 per cent on
seedlings. The old system of charging
would be about 25 cents box on Navels
and about II cents a box on seedlings.
Here is a saving of 171A cents box on
Navels ard 91a cents box on seedling7
or an average of about IA cents per box,
or total saving of 1924, 900 on an output
of 2, 100, 600 boxes.
A LITTLE HISTORY
When the orange crop in California
was light prices were good. Those good
prices were made better by the prosper
Gus condition of the country. During
those good times there was good de-
mand for the fruit and purchasers were
plenty and most of the fruit was sold in
the orchard or in the packing house
In 1888 the purchasing of fruit began
to decline and the consignment to COM
mission merchants began to increase.
During the season of 1923 nearly all
of the fruit was consigned and returns
were very unsatisfactory.
During the autumn Of 1898 the ex-
change system was organized and for
four years it has been in existence. AT
first the exchange adhered firmly to the
system of selling the fruit +. o. b. in Cali
fornia, but great difficulty was expert
enced. If the market advanced while
the fruit was en- route to the east the
purchaser was willing to take the fruit.
II the market had declined it was an easy
matter to trump up some excuse for re-
jecting the fruit and compelling the
owner to take a smaller sum for the car
load or throw it on the market for what
it would bring. The losses of the ex
change in this business were heavy and
the system was unsatisfactory to the
growers.
For two years past the t. o. b. system
has been abandoned, and the exchange
now sells on arrival in the east, having
reliable agents at all the principal points
to sell the fruit to arrive and this sys-
tenn has proved very satisfactory.
Good business men will frequently diff
fer as to the best method Of procedure
in business matters. If the reader will
look over the names Of the officers Of the
exchanges and associations published in
connection herewith he will see at a
glance that this list includes some of the
very best business men and financiers in
Southern California. Other men may
differ with them in opinion but it will
not do to say that such men do not know
what they are doing when they deliber-
ately abandon one system after two
years trial and adopt another system
which they say is good after another
two-years' trial.
The orange growers Of Southern Cal