18 BULLETIN .267, U. S. DEPARTMENT OP AGRICULTURE. 



commodities, and all transactions are in his own name. He may dic- 

 tate terms and methods of sale, but must obey instructions if given, 

 and he is responsible to the shipper only for a proper accounting in 

 the final terms. 



Commission men solicit shipments from growers, car-lot assem- 

 blers, and cooperative associations. It should be stated, however, 

 that cooperative associations do not favor the promiscuous consign- 

 ment of their products and seek to eliminate this method as far 

 as possible. Consigning is a very common means for disposing of 

 less than car-lot shipments and offers practically the only means for 

 disposing of poor, unstandardized products which could find no 

 direct sale to the wholesale trade. Commission merchants handle 

 goods for 5 to 10 per cent of the gross selling price. In many cases, 

 however, the dealer, by sharp practices, increases his margin to 15 

 per cent or over. As sales are made he presumably keeps a careful 

 record of each man's transactions, but may or may not give the con- 

 signor this detailed information as to the distribution of the ship- 

 ment. As soon as the shipment is " closed out " the commission man 

 deducts freight and other expenses and his charges and remits the 

 balance to the shipper, together with an " account sales." Costs of 

 doing business are much the same as for the car-lot receiver. 



ABUSES BY COMMISSION MERCHANTS. 



One charge made against dealers of this type is that they some- 

 times remit more than the market price to a new shipper in order to 

 get future business. As this does not give the shipper a fair idea of 

 the market and does give him a false impression of the dealer's abil- 

 ity as a salesman, it is a practice which should be regarded with 

 great disfavor by all interests in the market. Another malpractice 

 sometimes attributed to commission merchants is selling for more 

 than the market price and remitting to the shipper en the basis of the 

 market price. Many have regarded this practice as legitimate, be- 

 cause the increased selling price is not due to the superior quality of 

 the goods sold but to the dealer's excellent salesmanship. These 

 practices certainly are not common to most commission men and are 

 not universal, as is generally supposed. Much that the shipper con- 

 siders dishonest can be explained, his suspicions being due to mis- 

 understanding, or the trouble maybe traceable to the shipper himself. 



The commission merchant occupies a rather difficult position with 

 respect to his dealings with shippers and shipping associations. The 

 handling of large quantities of fruits and vegetables involves a 

 greater opportunity for mutual misunderstanding than almost any 

 other line of business. The very facts that the commission merchant 

 assumes complete charge of goods intrusted to him, that distribution 



