182 SECOND ANNUAL MEETING. 



time, I find the price to have been thirty-three and one sixth cents per 

 pound, a difference of eight and one twenty-fourth cents per pound, 

 or a clear gain of six hundred and thirty-eight thousand two hundred 

 and thirty-three dollars to the dairy interests of the State. This dif 

 ference is, to a very great extent, traceable to the existence of the 

 Grange store in San Francisco, for several reasons : one being that, 

 to a very great extent, it prevents combinations against farmers to 

 break the market. On the contrary, it has a tendency to create a 

 sharp competition between the various dealers to get the highest 

 possible price for their products. 



One of the greatest wants of the dairy farmers is a bank that will 

 supply them with means for prosecuting their business, and, at the 

 same time, leave them free to sell their products as best they can. 

 The manner in which this borrowing business is done in California 

 is such that the commission merchants virtually own or control the 

 entire products of the State by the advances they have made. 



Banking and money loaning are no part of a legitimate commis 

 sion business, and the man who goes to a merchant to borrow 

 money on the article he is to sell, places himself at the mercy of 

 that merchant. Moreover, eve^ commission merchant is the agent 

 of the farmer fori whom he sells, and any business that is con 

 ducted in such a manner as to make a farmer s agent a speculator 

 in his products must breed corruption. 



Now, the proofs and illustrations. It has been the practice, since 

 the building of the railroad across the continent, of our largest dairy 

 produce commission houses, to send car-loads of butter East each 

 season, about February, March, or April, as the openness of our 

 winters enables us to make butter here much earlier than in the 

 East. It always so happens that the butter market here breaks 

 up &quot; just about the time our merchants get ready to ship East, and 

 the price suddenly drops from forty or fifty cents per pound to 

 twenty-five or thirty. And why not ? The agent of the dairymen 

 the commission man buys this butter, buys it of whom ? Of the 

 dairyman ? No, he buys it of himself, to ship on a speculation of 

 his own. This agent, then, fixes the price on the very article he 

 buys. It is simply this: Hegeler, a commission merchant, sells to 

 Hegeler, a speculator, ten tons of butter, and Hegeler, the merchant, 

 fixes the price to Hegeler, the speculator. If any one thinks the 

 dairymen profit by this kind of an arrangement, they see things in 

 a different light from myself. 



During the spring and summer much butter is packed, by both 

 farmers and speculating commission merchants, who pack much of 

 the butter consigned to them, and the process just explained of 

 buying of themselves is here repeated. If the product is supposed 

 to be short, every pound possible is bought, and prices are pur 

 posely held down till all is secured, which being done, the prices 

 are at once put up. Yet, the dairyman is in no wise profited by this 

 rise, as he has probably sold the products of his toil, while the 

 profits of all this, the farmers hard toiling, goes into the hands of 

 middle-men speculators. 



But you say it is not necessary always for the farmer to sell while 

 prices are low he, too, can hold on for the usual rise in price. 



