808 READINGS IN RURAL ECONOMICS 



There is no place in the entire commercial world where men 

 compete more actively than do jobbers and commission men. 

 Few realize how keen competition is in this class of business. 

 In order to secure traffic they reach out to the local shipping 

 points and bid for produce. Competition is keen, not only within 

 a given market, but between different markets. Shippers watch 

 the quotations for the Twin Cities, Chicago, Philadelphia, and 

 New York and sell at the point that offers the best returns. 



As a result of competition between jobbers within a given 

 primary market as well as between different primary markets, 

 the margin on which business is conducted has gradually nar- 

 rowed until it is only a fraction of what it was ten or twenty 

 years ago. Where the net margin on eggs was formerly one and 

 one-half cents per dozen, it has now been reduced to a third or 

 a quarter of a cent per dozen. The same is true in the handling 

 of other produce as well. As the volume of business has in- 

 creased, competition has forced down the net profit per unit of 

 the product handled. 



The improvement of refrigerator systems and the rise of large 

 cold-storage firms has made possible other economies as well. 

 Jobbers handle produce for the future, as well as for the present, 

 market. In order to do so they must be able to finance the sup- 

 plies held in cold storage. Here the large cold-storage firm has 

 been of assistance. It is able to loan money to dealers patroniz- 

 ing the storage plant, and enable the small dealers to hold in 

 storage by giving them loans at a rate of say 6 per cent. Be- 

 cause of its superior credit the storage firm in turn borrows 

 money at 4}- or 5 per cent at the bank. The margin thus saved 

 of 1 1 per cent when computed on the total amount of loans ex- 

 tended means a source of profit which some firms have declared 

 sufficient to cover the office expenses for their entire business. 



Aside from the business of extending loans, these large firms 

 have also taken up the function of insurance. They insure the 

 products placed in their care for the short periods of time desired 

 and, in turn, take out with insurance companies longer-time 

 blanket policies in amounts sufficient to cover the risks involved. 



