196 



THE IRRIGATION AGE. 



in the hands of the consumers. They made 

 no attempt to open houses in the East 

 for the sale of their product, either by the 

 box or by the dozen. But they decided at one blow 

 to wipe out the system which had grown up of hiring 

 their packing and shipping done by men who had 

 little or no capital at stake, who assumed no risks, 

 and who were making small fortunes by handling 

 capital which belonged to the producers themselves. 

 . They had no desire to wipe out the great fruit ship- 

 ping firms and men who have done so much to build 

 up the fruit trade of California by introducing it in 

 the East and by popularizing it. Their fight was 

 mainly against the small fry commission men whose 

 main capital was honeyed words and whose principal 

 coin was unkept promises. 



Out of this absolute necessity the fruit exchanges 

 of Southern California were born. It was absolutely 

 necessary to change the system of marketing the 

 crop or dig up the orange trees. The initial steps in 

 the new organization were taken by a small band of 

 Riverside gentlemen some three years ago, although 

 nothing definite was accomplished the first year. 

 The new movement naturally met with much op- 

 position from the men whose business it aimed to do 

 away with. The work of organization also was slow 

 the first year, because the growers as a rule wanted 

 to see the affair succeed before pledging their fruit to 

 its care. There were naturally many jealousies of 

 the men organizing the movement, their motives be- 

 ing misconstrued in some instances and often mis- 

 represented by interested parties in others. But after 

 a long struggle the system is finally in a fair way to 

 become absolutely successful. 



During the season of 1895 it has secured the 

 support of more than one thousand orange growers 

 in the five counties of Southern California and shipped 

 to market more than one-half of the total output of 

 8,000 carloads of the crop of 1895. If in two years 

 this new organization has secured control of one-half 

 of the orange crop of California it is an exceedingly 

 simple problem in arithmetic to determine how long 

 it will be before it will absolutely control every box 

 of oranges grown in the Golden State. 



The numerous carloads of oranges handled by 

 the fruit Exchanges were sold on the Eastern markets 

 for about three millions of dollars. Of this a little 

 over one million was paid to the railroad companies 

 for freight, about one-half million was consumed in 

 expenses of picking and packing and about one and 

 one-half millions was divided up among its one 

 thousand members, an average of about $1,500 each. 

 In no one thing has the Exchange System shown 

 its value more pointedly than in the cost of packing 

 and marketing the fruit. It has reduced the cost of 

 packing from the old commission system average of 

 43 cents per box to a present rate of 28 cents, a saving 

 to the growers of nearly $200,000 in packing alone. 

 The Exchange charges the growers only actual cost 

 for handling and selling the fruit, which this year 

 has been about 4$, which is in sharp contrast to the 

 old time commission system charge of ten per cent, a 

 saving of a full $150,000 this yeaf to the growers. 



But the one thing which ground most heavily into 

 the tender flesh of the California fruit producer was 

 that he not only paid heavy transportation charges to 

 get his fruit to market but he was compelled to pay 

 the commission men a full ten to twelve per cent 

 commission on this freight rate besides. For the 

 dealer, in handling the crop for his California 

 customer charged him a commission on the gross 



price at which the box of oranges sold in market. If 

 the sale was at $2.00 the charge against the producer 

 was itemized thus: 



Picking and packing $ .43 



Freight 1.00 



Cartage and Warehouse 10 



Commission . . .24 



Total Charges $1.77 



And the grower got a balance of 23 cents per box, 

 sometimes less, occasionally more. Thus his freight 

 rate was not only the $1.00 which the railroad 

 company charged for hauling but 12 cents were- 

 added by the commission man for a percentage on the 

 freight rate. 



EXCHANGE ORGANIZATION. 



The Southern California Fruit Exchange is the 

 central organization or Executive Board representing 

 eight county or sectional exchanges. These eight 

 county exchanges are the central organizations of 

 some thirty local associations . These associations 

 are not all organized on the same plan, nor are they 

 all governed by precisely the same rules, although all 

 are working to a common end the benefit of the fruit 

 producers of California. 



The general plan is that all the growers in one 

 locality or settlement desirous of joining the J x- 

 change shall form an' association selecting a local 

 name for it and electing a Board of Directors and a 

 Manager. Each Association Manager is a member 

 ex-officio of what is known as the County Exchange. 

 This County Exchange is incorporated under the 

 State law and the members of all the local associations 

 being members and stockholders and having a vote 

 in accordance with their orange acreage. These Ex- 

 change officers control the output of their several 

 associations, suggesting points to which shipments 

 shall be made and as a corporation, guaranteeing the 

 contents of every box of fruit bearing their individual 

 Exchange brand. These County Exchanges are in 

 turn controlled by what is known as the Southern 

 California Fruit Exchange, which is really an 

 Executive Committee composed of eight members,, 

 one selected by each county or sectional exchange. 

 In this central body is vested the power of directing 

 shipments and fixing prices. This central organi- 

 zation has an office in Los Angeles and is in daily 

 telegraphic communication with every fruit market 

 in the United States, and its shipments to the various 

 markets are so regulated that only a reasonable 

 supply of fruit is shipped to any market. 



The original idea in organizing was only to pick and 

 pack the freight, selling everything f . o. b., thus avoid- 

 ing all responsibility for freight rates, damage to fruit 

 en route and other losses incident to green fruit ship- 

 ments. But this was soon found impracticable, as- 

 the commission men who were opposed to the system, 

 still controlling nearly one-half of the total output of 

 the State, constantly under-bid the Exchange on its 

 own ground and sold on the Eastern markets at a lower 

 rate. To meet this opposition the Exchange found it 

 necessary to make Eastern shipments, sending a 

 reliable agent to the central Eastern market, guaran- 

 teeing safe arrival of fruit and in every case warrant- 

 ing the fruit to be strictly as graded by the box 

 marks. 



Under the old-time system of indiscriminate ship- 

 ments the Eastern dealer who ordered a carload of 

 oranges by wire did not feel compelled to take them,. 



