WHOLESALE DISTRIBUTION OF FRUITS AND VEGETABLES. 15 



AUCTION CHARGES. 



Auction service charges are from 2 to 15 per cent (usually 3 per 

 cent) on gross selling price. Where the selling charge is under 5 

 pen cent a " terminal charge " to cover costs of unloading and han- 

 dling is sometimes added. This terminal charge is paid by the buy- 

 ers and is simply a means for securing increased revenue, since busi- 

 ness reasons make it necessary for certain auctions to handle goods 

 on a very low selling charge, and some additional income is needed 

 to offset the costs of doing business. Since the auction itself oper- 

 ates strictly on a nonspeculative basis its costs are fixed, in a measure, 

 and as a rule consist of such charges as rental, interest on invest- 

 ment, and employment of help. 



AUCTION ABUSES. 



One weakness of auctions lies in the possibility of manipulating 

 the sales so that goods sold on certain days will not move at true 

 market prices. In some cases members of the distributing trade in 

 certain cities may be interested financially in the local auction. In 

 such cases it is possible that the business will be conducted so as 

 to favor those who are supporting the auction. Thus, those who are 

 interested financially may secure more or less extended credit, while 

 all others must deal on a strictly cash basis. This, of course, would 

 give an immense advantage to those especially favored and tend to 

 create dissatisfaction among the greater number of buyers. 



Another weakness lies in the possibility of tampering with sample 

 boxes in particular lines. However, in justice to the many reputable 

 auctions operating in different parts of the country, it should be said 

 that there is little evidence that any of the abuses mentioned affects 

 the great volume of business handled daily by them. 



ADVANTAGES OF THE AUCTION. 



Auction- offer quick outlets for fruits which must be kept moving 

 in :i more or less steady stream from producer to consumer. Large 

 quantities of citrus fruits are sold at auction on several of our large 

 markets. When this fruit stalls toward market there arises the 

 rity for keeping a steady si ream flowing to the consuming 

 public, and (In- auction provides one means whereby distributing 

 channels are continuously supplied. Auctions offer an outlet for sur- 

 plus holdings on well-stocked markets, ami, by attracting buyers, 

 fend to expand the market to a certain extent. They afford a good 



index of markei conditions, and when the auction company sells 



the major part of the supply of certain commodities or is patronized 



by most of the buyers, if lends to he ;i more or less accurate deter 



miner of basic v. holesale pricei . 



