﻿38 BULLETIN 1150, U. S. DEPARTMENT OF AGRICULTURE. 



and the danger of overemphasizing the importance of minor details 

 or drawing conclusions from an extreme instance is reduced. 



Whether the expenses are reduced to one rate per 100 pounds or 

 split up into several rates and applied on different bases, present prac- 

 tice seems to favor having each shipment bear its own expenses. 

 There is some tendency, however, particularly among the older asso- 

 ciations, to favor a fixed rate of expense applying over a period of 

 time. The chief argument in favor of this method is that it spreads 

 the risk of variations in expenses over a larger number of cars. The 

 variations in the expenses of different shipments are likely to be 

 greater in the case of small associations than large ones because of 

 the greater difficulty in getting enough live stock to make a full load 

 without excessively delaying shipments. Differences as high as 20 

 cents per 100 pounds arc not uncommon. Certainly it is no fault 

 of the shipper when his live stock happens to be included in a ship- 

 ment which, because of short weight or for other reasons, incurs rela- 

 tively high expenses. It seems entirely logical to spread this risk 

 over a number of cars, just as the risk of loss due to dead or crippled 

 animals is spread. 



Another argument in favor of this method is that the shipper 

 knows beforehand just what it will cost to ship. Furthermore the 

 work involved in prorating is reduced to the minimum. 



If the fixed rate is to be applied fairly, however, it must take into 

 consideration differences in the costs of shipping the different species 

 of live stock both in straight and mixed loads, seasonal differences 

 in costs, and differences in the costs of shipping to the different acces- 

 sible markets. Many associations apply, even on carlot shipments 

 owned by a single shipper, rates which reflect the difference in the 

 amount of service required in handling them. 



FILLING OUT THE PRORATING SHEET. 



The steps followed in calculating the returns for shipment No. 

 Ill, the prorating sheet for which appears in Figure 3 on page 7, 

 are as follows : 



1. Insert shipment number, date, shipping point, car number and 

 railway in the spaces provided therefor. 



2. Fill in the blanks under "expenses." The freight and ter- 

 minal expenses will be obtained from the account sales received 

 from the commission company and in this case amount to $103.63. 



Assume the home expenses to be as follows : 



Manager's commission (6 cents per 100 pounds on market weight of 



15,905 pounds) $9. 54 



Insurance fund, (one-half of 1 per cent of gross market value of 



$1,556.36) 7. 78 



Local car expense (8 bushels corn at 50 cents) 4.00 



Dues (State association) .50 



Total 21.82 



3. Calculate the rate of expense per 100 pounds by dividing the 

 total expense, $125.45, by the market weight, 15,905 pounds (market 

 weight includes dockage, if any), which gives a result of 78.87 cents 

 per 100 pounds. 



To avoid the awkward fraction in figuring the expenses, a rate 

 of 79 cents per 100 pounds is used in calculating each snipper's 

 expenses in this illustration. 



