22 BULLETIN 861, U. S. DEPARTMENT OF AGRICULTURE. 



" F. o. b." is an abbreviation of the phrase " free on board," which 

 means loaded in the car, ready for shipment, with no attachments to 

 the stock. From the definition it will be seen that a car may as well 

 be f. o. b. Kansas City, Mo., as f. o. b. Lawton, Mich., and so, while 

 this phrase is used almost without exception in this industry as re- 

 ferring to shipping points, the exact station where cars are loaded 

 should be specified in all cases. 



Sales made on an f. o. b. basis imply contracts, either written or 

 understood, between the shipper and the buyer, which cover a wide 

 variety of clauses and conditions, but which have been standardized 

 into three general types: Carloads f. o. b. usual terms; carloads 

 f. o. b. cash track; and joint or open account sales. The volume of 

 less than carload shipments of grapes is so small that carloads are 

 regarded as the unit. 



CARLOADS F. O. B. USUAL TERMS. 



The great majority of the Michigan crop is sold on the basis of 

 " f. o. b. usual terms," and this type of trade has reached a high stage 

 of development in Berrien and Van Buren Counties. 



The shippers in this section, who are for the most part brokers 

 and cooperative associations, keep in close touch with all possible 

 market outlets, sending out daily quotations by wire to any available 

 consuming center where they think they can place a car. Whenever 

 one of these bids is accepted by a city buyer, assuming of course that 

 his reputation for business integrity and financial soundness is satis- 

 factory, they telegraph acceptance of his order, usually giving the 

 number and initials of the car used to fill it, as well as the number 

 and varieties of the baskets included. The buyer, with his order, 

 has furnished shipping directions, according to which the car is 

 billed out and turned over to the transportation company. The 

 shipper then takes the bill of lading, received from the railroad, 

 to his banker, and instructs him to draw a sight draft on the buyer. 

 The banks in this section are usually willing to finance these dealers 

 and advance them cash for 75 per cent of the face value of this draft, 

 accepting the bill of lading as security. The bill of lading, with the 

 sight draft attached, is then mailed to the correspondent bank 

 through which the buyer deals, if possible in the city to which the 

 cars are destined. The arrival of the sight draft attached to the bill 

 of lading is usually approximately coincident with the arrival of 

 the car, and the buyer is informed in each Case. He then inspects the 

 car, which is permitted in the standard form of contract and bill of 

 lading. If he believes that the grade and quality are up to the 

 standard agreed upon he accepts it. He does this by going to'the 

 city bank and " taking up " the sight draft. He pays its face value, 

 receives the bill of lading, and thereupon accepts title to the shipment. 



