SECURITY IX COOPERATIVK SOCIETIES. 231 



Wheat is good security the world over; the demand is 

 universal, and it will keep for years; but a larger margin is 

 necessary in California than in Chicago or Liverpool, because 

 it is farther from market. Indian corn is far better security 

 in Illinois than in California, because the demand is greater 

 there ; on the contrary, any one can see that a car-load of fresh 

 fruit is worthless as security ; it is not accepted as security 

 even for freight. All produce is better, as security, in the 

 hands of a trader, on the way to market, than in the warehouse 

 of the producer, unsold. 



Dried fruit is a very important product of California, but 

 until recently has not been considered proper security for 

 sound banks to accept, except in the hands of dealers and in 

 the process of marketing ; in the hands of growers it has been 

 practically worthless as security outside of one or two local- 

 ities where the interests were so large as to compel bankers to 

 familiarize themselves with its value. The stability of the 

 demand has not been assured, and it is very liable to deterio- 

 ration in unskilled hands; it is entirely unsafe to carry over to 

 the second year, as old fruit always sells at a discount. 



The fiict that the result of the labor and investment of the 

 California fruit-grower has resulted in a perishable or a semi- 

 perishable product, regarded as unfit for security, together 

 wnth the great distance of California from the great markets, 

 has placed the fruit-growers of that state in a very serious 

 position, for which cooperation seems to be the only remedy. 

 The cooperative societies, however, are subjected to a compe- 

 tition from commission houses so severe as to be sometimes 

 actually vicious and unscrupulous; the strongest weapon of 

 commission houses is the "advances" which they make to 

 growers; in many cases they advance cash to cultivate the 

 crops, taking crop mortgages; this they do largely from their 

 own capital, bank loans not being always available for that 

 use; the moment, however, the dried product is ready, bank- 

 ing capital can be had through commission houses to " move" 

 it, up to the amount of perhaps three-fourths its current value, 

 and even more; with any such amount of advance as that 

 upon it, however, it must be Irpt moviitg and got into the 



