24 



BULLETIN 861, IT. S. DEPARTMENT OF AGRICULTURE. 



the buyer to deposit money at the shipper's bank, allowing draft to be 

 made at the time of shipment, or even to have his own bank guarantee 

 a credit up to a certain amount and have draft made directly upon 

 the city bank. Thus sales made " shipping point acceptance, bank 

 guarantee " are in reality a type of " cash track sales." 



RELATION OF " CASH TRACK " AND " USUAL TERMS " SALES. 



The primary difference between " cash track " and " usual terms " 

 sales is the place in the transaction where the actual change of owner- 

 ship occurs. Of the two methods, sales made on the basis of " car- 

 loads f . o. b. cash track " are to the benefit of the seller or shipper, 

 and sales made on the basis of "carloads f. o. b. usual terms" are to 



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Fig. 3. — Grapes arriving at the terminal market. 



the benefit of the buyer or receiver. In the former case the buyer 

 assumes a risk as to the honesty and business integrity of the shipper, 

 and in the latter case the shipper assumes a risk as to the honesty 

 and financial ability of the receiver. Further, in " f . o. b. cash track " 

 sales the buyer assumes all risks of deterioration in transit, delays, 

 etc., and the shipper is relieved of these risks, while in the case of 

 " f . o. b. usual terms " sales, at least in present-day commercial prac- 

 tices, the case is reversed, and the shipper takes the risk. In many 

 cases these risks cause one of the parties heavy losses. 



Thus we find shippers anxious to sell "cash track" even at a 

 slightly lower price and buyers trying to make purchases on the 

 basis of "usual terms." Which of these may succeed in this com- 

 mercial competition depends on the organization of either class of 

 factors and upon the conditions of supply and demand. In years 



