122 COOPERATIVE MARKETING 



district exchange is not attempting to make profit for itself : 

 by its very organization it could not possibly make profit, 

 for it is only allowed to retain enough from sales to cover 

 actual expenses, and what that brokerage shall be is 

 periodically determined by the board of directors, each of 

 whom is the representative of an association from whose 

 fruit the brokerage is to be withheld. Besides, the principal 

 items of expense of the district exchange are salaries and 

 telegraph charges, which cannot easily be concealed or 

 manipulated. This statement of the kinds of expense which 

 the district exchange has to meet precludes the possibility 

 of profits, for there are no contingent incomes, the stock 

 of the exchange is only nominal, and what little stock there 

 is belongs to the associations. Neither does the district 

 exchange have the slightest inducement toward sharp prac- 

 tice. Nobody connected with the exchange could make 

 anything by it, and any attempt would be like trying to 

 cheat yourself. 



The commission merchant's profits are greater the higher 

 the price he obtains for his client; the district exchange 

 retains a flat rate a box no matter what the price. From 

 this angle it might seem that the district exchange has little 

 incentive to work for advantageous sales. The commission 

 merchant will lose his clientele unless returns are satisfac- 

 tory, but his methods of procedure cannot be affected by 

 the desires of those who turn their products over to him. 

 In short, the consignor may change commission firms, but 

 he has no authority over the firm which he does select. 

 According to the agreement, associations cannot refuse to 

 sell through the district exchange, at least during any fruit 

 year, but if the manager and other officers of the exchange 

 are thought to be inefiicient they may be removed. More- 

 over, the sales policy and procedure of the exchange are 

 dictated by the shippers through their representatives, and 



