MARKET METHODS AND PROBLEMS 539 



For example, a large proportion of the butter made in the 800 

 creameries of Minnesota is marketed in New York City, passing first 

 through the hands of a wholesale receiver, and then through the hands 

 of a jobber. The wholesale receiver specializes in the solicitation of 

 shipments from country creameries in Minnesota, the financing of 

 these creameries by allowing them to draw drafts on day of shipment, 

 the handling and storage of large lots of butter on arrival in New York, 

 and the rough sorting out according to quality. These functions 

 naturally constitute a business in itself. The jobber performs an 

 entirely different set of functions: he buys from the wholesale receiver 

 in round lots of say from twenty to fifty tubs at a time; he sends sales- 

 men around to innumerable stores in New York to find purchasers; 

 he sells one tub at a time, selecting just that quality of butter which 

 he knows each retailer, or delicatessen, or restaurant, or hotel, or 

 steamship company wants; he delivers the one tub at a time to 

 various parts of the city; and he very largely finances the retail 

 stores by giving them credit, and undertakes the necessary accounting 

 expenses and losses incident to dealing with scores of small retail 

 shops. All of the many functions now performed by the receiver 

 and the jobber may be performed by one firm and sometimes they 

 are but it has been found economical to subdivide these various 

 steps among two sets of middlemen for a large proportion of the trade, 

 each set specializing on one particular class of functions. 



Economists have been fond of praising the minute division of 

 labor in the packing plant, the shoe factory, etc., and also the high 

 degree of specialization of industrial plants, whereby one makes pig 

 iron, another makes steel, another structural forms, etc. Often the 

 same men who praise the economies made possible by this "age of 

 specialization," when they hear that there are middlemen called local 

 buyers, commission men, brokers, jobbers, etc., hold up their hands 

 in holy horror and exclaim that there are too many middlemen. 

 Possibly there are in some cases, and yet in still other cases the cost 

 of marketing might be reduced by adding more middlemen. For 

 instance, it would be cheaper for jobbers who buy butter from whole- 

 sale receivers and cut it up into one-pound prints, to have their cutting 

 done for them by other firms who could keep their machinery and 

 skilled labor constantly employed in cutting prints. These same 

 jobbers could also save on delivery expense by turning this function 

 over to a centralized or co-operative delivery system, which would 

 eliminate the vast duplication of delivery equipment and constant 



