MARKET METHODS AND PROBLEMS 527 



These men perform the absolutely essential functions of acting as 

 primary distributors of produce arriving at market in car lots. Any 

 reforms which may be accomplished in distributive methods must take 

 into consideration the fact that some definite agency must undertake 

 the work of breaking car lots and starting distribution at market 

 centers. 



The commission merchant is a special agent whose business is the 

 selling of goods on commission. He has possession of the commodities, 

 and all transactions are in his own name. He may dictate terms and 

 methods of sale, but must obey instructions if given, and he is respon- 

 sible to the shipper only for a proper accounting in the final terms. 



Commission men solicit shipments from growers, car-lot assem- 

 blers, and co-operative associations. It should be stated, however, 

 that co-operative associations do not favor the promiscuous consign- 

 ment of their products and seek to eliminate this method as far as 

 possible. Commission merchants handle goods for 5 to 10 per cent 

 of the gross selling price. In many cases, however, the dealer, by 

 sharp practices, increases his margin to 15 per cent or over. As soon 

 as the shipment is "closed out" the commission man deducts freight 

 and other expenses and his charges and remits the balance to the 

 shipper, together with an "account sales." 



One charge made against dealers of this type is that they some- 

 times remit more than the market price to a new shipper in order to 

 get future business. As this does not give the shipper a fair idea of 

 the market and does give him a false impression of the dealer's ability 

 as a salesman, it is a practice which should be regarded with great 

 disfavor by all interests in the market. Another malpractice some- 

 times attributed to commission merchants is selling for more than the 

 market price and remitting to the shipper on the basis of the market 

 price. Many have regarded this practice as legitimate, because the 

 increased selling price is not due to the superior quality of the goods 

 sold but to the dealer's excellent salesmanship. These practices cer- 

 tainly are not common to most commission men and are not universal, 

 as is generally supposed. Much that the shipper considers dishonest 

 can be explained, his suspicions being due to misunderstanding, or 

 the trouble may be traceable to the shipper himself. 



It is not because commission men as a class have proven to be 

 dishonest, but the very fact that the commission man has great oppor- 

 tunities for dishonesty, if he chooses to avail himself of them, has 



