CALIFORNIA FRUIT EXCHANGES. 



197 



if he discovered two or three days after ordering them 

 that he could buy a similar grade cheaper from some 

 other shipper, and thus many carloads of prime fruit 

 were rejected and a great loss fell on the shipper. 

 But not only the shipper was a loser by this slack 

 method of doing business, for frequently the dealer 

 who thus tried to " do up " the shipper was himself 

 " done up " in return. The orange grower having 

 shipped the fruit to a certain market, possibly small 

 and limited, finding after the fruit had started and 

 was near its destination that the dealer who had 

 ordered it would refuse to receive it on arrival, 

 hastily wired some opposition dealer in the same 

 place of the facts and probably offered him the fruit 

 at a price much lower than that for which it was 

 originally sold. This kind of an offer was usually 

 accepted and this resulted in dumping two carloads 

 of oranges on a market which one carload would 

 ordinarily glut, and resulted in a loss to both the 

 grower and the original purchaser. 



Under the Exchange the system of rejections is en- 

 tirely done away with. Any fruit dealer ordering a 

 car of oranges from one of the exchanges and refusing 

 to accept it on arrival, except for bad order, is 

 promptly black-listed by the Central Exchange-, and 

 he can buy no more oranges from any Exchange or 

 Association until he has set himself right by settling 

 for the rejected fruit, and the strength of the Fruit 

 Exchange is already so formidable, that no fruit 

 dealer would now attempt an old time rejection 

 unless he contemplated going out of business very 

 soon thereafter. 



The matter of price at which the fruit shall sell is 

 fixed by the Central Exchange after a close study of 

 the markets, the aim being to place the fruit on the 

 market at the opening of the season at a low figure 

 to stimulate demand, and then slowly advance the 

 price as the quality of the fruit improves and the 

 consumption grows stronger. 



A grave error was committed by the managers of 

 the Southern California Fruit Exchange last spring 

 in sharply advancing prices as soon as the full effect 

 of the freeze in Florida was announced. To advance 

 prices in the face of a limited supply and an un- 

 limited demand is the rule always in commercial 

 circles and in doing so the managers of the Fruit Ex- 

 change merely showed their human nature, but it 

 was a grave and costly error nevertheless; it created 

 a prejudice in the minds of Eastern people against 

 California fruit and California fruit growers, but the 

 mi.-take of 1895 will not be repeated while the present 

 management of the Fruit Exchange exists. 



This much of the Exchange System as an organi- 

 zation. 



THE METHODS OP HANDLING FRUIT. 



The method of handling the fruit and the standing 

 of the individual grower in the local associations has 

 been a question difficult of satisfactory solution, but 

 the following general plan has been adopted by nearly 

 all the associations: All the fruit belonging to the 

 members is pledged to and is under the absolute 

 control of the managers of the local association. It is 

 picked at such time and in such quantities as he 

 determines, this being done by the grower himself, 

 who delivers his fruit at the packing house in such 

 quantities as are called for. It is weighed on delivery, 

 is then carefully graded into " Fancy " " Choice " 

 and " Standard" and is also assorted as to sizes. The 

 damaged and over and under sized fruit is rejected 

 as culls and is charged back to the grower. He gets 



credit on account for a certain number of boxes of 

 each size and grade which he furnished for the car- 

 load or shipment, for which his fruit was picked. 

 All boxes of his fruit are marked with his individual 

 number and the car goes to the market directed by 

 the Central Exchange. When the returns from that 

 particular carload are in, all charges for selling,, 

 freight and packing are deducted and the balance is 

 placed to the credit of the growers, who check 

 against it at once, and so successful have these shin- 

 ments been during the present season that nearly all 

 banks doing business in orange growing centers have 

 this year made ready and liberal advances on pack- 

 ing house receipts for fruit delivered, even before 

 the oranges were packed ready for shipment. 



Before closing what is at best only an outline of a 

 system which has revolutionized the fruit industry of 

 Southern California I desire to quote a few words 

 from two gentlemen who are largely responsible for 

 the success of this new movement. 



Mr. A. H. Nafzger, of Los Angeles, President of 

 the Southern California Fruit Exchanges, said in an, 

 address delivered in March last: 



" We are not organized as a trust for the cornering 

 of markets, saying that we have all the oranges on 

 earth. We are not organized for war on the com- 

 mission men or any one else. We are organized 

 first, for the purpose of selling the goods f. o. b. in 

 California. 



" It is our belief that there is no warehouse or store 

 house or any other receptacle for oranges or other 

 products of California but California itself. The 

 old method of loading the fruit on the cars and send- 

 ing it 2000 miles away and putting it in the hands 

 of men we never saw and who have no interest in us 

 whatever, we want to do away with entirely. So that 

 whatever the goods may be worth it is not for us to- 

 say that the goods shall not be sold unless they bring 

 $3 or $5 a box but it is for us to say that the goods 

 shall be placed on the market at the lowest possible 

 cost and sold in the market at what the market can 

 afford to pay that is our undertaking. 



" We have decided so far as the orange growers of 

 Southern California are concerned, that it ia not 

 necessary to hire somebody to place our goods on 

 the Eastern market as we have been doing. Now can 

 we do the business. 



"We have found that the same business conditions 

 affect this business that affect any other business. 

 We have found that the same careful and economic al 

 methods are factors in this business to make it 

 profitable that will make any other business profit- 

 able. 



" We have concluded that if the orange gfowers of 

 Southern California have not sense enough to transact 

 their business, not only the care of the fruit, but to- 

 market it, they had better sell their ranches to men 

 who have sense enough to do so." 



To T. H. B. Chamblin, of Riverside, is due the 

 largest part of the credit for the organization of the 

 Southern California Fruit E.xchanges. In reviewing 

 the first year's work of the organization, and attempt- 

 ing to interest new growers in the movement he said 

 in a public address: 



"The Orange Exchange movement at that time 

 was more or less theoretical in character. It made 

 no promise but sought to get the growers solidly 

 into line upon a co-operative basis, in the hope to so 

 regulate shipments and prices as to extricate the 

 industry out of the slough of despond and place it on 

 a paying basis. It promised a measure of success 



