ANALYSIS OF TOBACCO GROWERS ' ASSOCIATION 11 



baskets or piles in long rows on the auction floor. The buyers, from 

 a few to a dozen or more in number, either buying independently 

 (often for later resale) or as representatives of the large companies 

 or manufacturers, move along the rows of tobacco baskets and piles, 

 quickly looking at and possibly feeling or smelling of each pile in 

 which they may be interested. They bid on it or pass it by. The 

 piles are sold rapidly — at times a minimum of 240 or more sales an 

 hour is made by the auctioneer. Needless to say, with only a rela- 

 tively few buyers, with no grading system or market information 

 service, and with the rapid method of selling, gross inequalities in 

 prices occur, and the system is open to grave and serious abuses. It 

 is variously estimated that the six large tobacco companies 5 purchase 

 directly from 80 to 90 per cent of the total volume of tobacco offered 

 for sale (IS, p. 51-52). 



Attention has been drawn to«the fact that the auction-floor markets 

 are in operation for only a few months. In this short period farmers 

 have to sell their tobacco; or, if dissatisfied with prices, they can 

 hold it over to the following season (which for many reasons is sel- 

 dom done) or send it later to markets in later marketing areas. The 

 heavy costs of transportation practically preclude the latter alterna- 

 tive. 



The economic condition of the tobacco farmers of the South is 

 such that the majority of them are forced to sell their tobacco as soon 

 as it is ready for marketing, regardless of the price. Most of them 

 have mortgaged an appreciable percentage of their cash crops, and 

 loans become due as soon as the crop is sold. "Time merchants," 

 bankers, and landlords are naturally anxious to receive payment as 

 soon as possible, and frequently bring pressure to bear on the debtor 

 io sell his crop at the earliest possible elate. 



Tobacco in the green state is liable to rapid deterioration unless 

 redried or frequently " turned." Most growers can not afford to have 

 their tobacco redried, and in any case the redrying of small parcels 

 is much more expensive than the redrying of large orders. These 

 conditions obviously make it still less possible for farmers acting 

 individually to withhold their tobacco from the market if dissatisfied 

 with prevailing prices. Only when they act collectively can they 

 hope to supply themselves with the equipment and facilities neces- 

 sary for the successful carrying of tobacco over from seasons of 

 surplus to seasons of deficiency. 



It is the possession of redrying equipment, storage facilities, and 

 large reserves of capital which enables the large companies to pur- 

 chase heavily in years of surplus production when prices are low and 

 thus provide against years of lean crops and high prices. The man- 

 ufacturers do not have immediate need for the crop just harvested, 

 except for conditioning, as the bulk of it is neither required nor 

 ready for manufacturing for a year or more after it is grown. 



On the whole, the farmers are practically forced to sell their 

 tobacco at whatever price may prevail when their tobacco is ready 

 to market. The inability of the majority of the farmers to withhold 

 their tobacco from the market and the ability of the large companies 



5 The six large tobacco companies are the American Tobacco Co., P. Lorillard Co., the 

 Liggetts & Myers Tobacco Co., the R. J. Reynolds Tobacco Co., comprising the big four ; 

 the Imperial Tobacco Co. (Ltd.), and the Rritish American Tobacco Co. (Ltd.). 



