MARKETING HAY THROUGH TERMINAL MARKETS. 25 



ferent. As has been stated, the broker assumes no financial responsi- 

 bility for the commodity he handles, but always considers it as the 

 property of the shipper. On the other hand, in most instances the 

 hay does become the property of the commission merchant for a time. 



In general practice the hay is billed to him either on " open " bill- 

 ing, i. e., direct on a straight bill of lading, or on an " order" bill of 

 lading. On the open billing the shipper may or may not draw a draft 

 against the consignee for a part of the value of the hay. Some ship- 

 pers with large financial resources bill most of their hay to commis- 

 sion firms whom they consider reliable on open billing and do not 

 make a draft against the shipment, but await full payment when the 

 car has arrived at the market and has, been sold. The advantage of 

 this method is that when shipping to near-by markets demurrage or 

 storage charges seldom accrue because of the nonarrival of the bill 

 of lading, because the straight bill of lading is mailed direct to the 

 commission merchant and therefore almost always arrives ahead of 

 the shipment. On an " order " bill of lading the shipment is usually 

 billed to the shipper's order and notation made to notify the con- 

 signee, which in this case would be the commission merchant. 



While bills of lading are generally considered as representing the 

 goods and their possession as conferring ownership, certain restric- 

 tions placed upon order bills of lading make them more valuable to 

 those interested in their use. In the first place, since the shipment 

 is billed to the shipper's order the carrier will not release it until 

 the original bill of lading, properly indorsed by the shipper, is sur- 

 rendered to the carrier's agent at destination. Because of this regula- 

 tion this form of billing is especially advantageous to the shipper 

 and it has become the practice for hay shippers to bill their hay 

 " shipper's order " and to notify the commission firm which they 

 desire to handle their hay at the terminal market. When the shipper 

 obtains the bill of lading properly signed from the railroad freight 

 agent at point of loading he draws a " sight " or " arrival " draft 

 against the consignee for about 75 per cent of the value of the ship- 

 ment and, attaching it to the bill of lading, places both in his local 

 bank to be forwarded to the bank's correspondent or some other bank 

 at the place to which the car is billed. The local bank, in many in- 

 stances, enters the amount of the draft directly to the shipper's credit 

 and he can draw checks against it immediately. 



Banks prefer sight drafts payable to the payee upon presentation 

 to those drawn to be paid upon the arrival of the car, and in many 

 instances charge interest on the amount advanced from the date of 

 deposit until the proceeds of the draft are received. Whether drafts 

 are to be drawn at sight or upon arrival is a matter of agreement be- 

 tween the shipper and the commission merchant and the practice is 

 53884°— 21— Bull. 979 4 



