MARKETING HAY THROUGH TERMINAL MARKETS. 27 



The number of receivers in the markets varies with the character 

 of business conducted. Some markets are almost entirely consign- 

 ment markets and the greater number of the dealers are, therefore, 

 commission merchants. There are several large markets, however, 

 including Kansas City and Memphis, in which the dealers prefer to 

 buy their hay outright from the shipper. When receivers have rep- 

 resentatives in the producing sections to buy from shippers, the hay 

 is usually bought shipper's track, the price paid being determined 

 by the buyer's judgment as to the market grade of the hay. When 

 buyers do not go into the territory the trades are made by letter 

 and wire and the terms generally provide that destination weights 

 and grades, market grades and destination weights, or market grades 

 and weights shall be accepted by the shipper. 



The shipper seemingly encounters more difficulty and dissatis- 

 faction in marketing his hay by the last-named terms than by any 

 other. The advantages of using these terms have already been de- 

 scribed; the difficulties encountered are caused principally by the 

 lack of uniformity in the application of the market grades. The 

 manner in which misunderstandings arise can best be illustrated by 

 a. description of two sales made under different market conditions. 



Mr. A. is a country shipper and Mr. B. is a receiver located in a 

 terminal market, let us say Chicago. Having decided to sell some 

 hay at Chicago Mr. A. writes to Mr. B. who he has been informed is 

 a reliable receiver, asking for an offer on two cars of No. 1 timothy. 

 Mr. B. immediately wires Mr. A. an offer of $25 per ton for the two 

 cars of No. 1 timothy, prompt shipment, delivered at Chicago. Since 

 no terms are mentioned it is understood that Chicago weights and 

 grades are to govern the settlement. Mr. A. accepts the offer, loads 

 and ships the hay immediately, and it arrives in Chicago in due time. 

 In the meantime, light receipts and an urgent demand cause the 

 market to advance $2 per ton between the date on which the hay 

 was purchased and the time it arrives. The cars are placed upon 

 the sales tracks and Mr. B. goes out to inspect and sell the hay. 

 Upon personal inspection he finds good timothy hay of uniform 

 quality, but scarcely good enough for No. 1 timothy. However, 

 because of the demand he is able to get an offer of $1 more per ton 

 for the hay as it shows at the car door, than he had expected when he 

 bought the hay. He, therefore, accepts the offer and feels that he 

 has made both a good purchase and a good sale. As soon as the hay 

 is unloaded and the weights are obtained, returns are made to the 

 shipper at the contract price. Mr. B. says nothing about the grade 

 of the hay and since he made a satisfactory sale does not have it 

 officially inspected. 



About two months later Mr. A. notices that the market shows 

 signs of weakening and decides to offer two more cars of hay to Mr. 



