70 



CIBCULAR 10 0, IT. S. DEPARTMENT OF AGRICULTURE 



the future of the association did not justify the number of proper- 

 ties bought or the prices paid for them. The association's idea of 

 causing as little loss as possible to owners of warehouses did not 

 justify such wholesale, and as it subsequently developed, unwise 

 purchase of property. It is possible that more of the warehouses 

 could have been leased instead of purchased. The unfortunate pur- 

 chase of warehouses and the subsequent warehousing policies con- 

 tributed to a large extent to the dissatisfaction of members who be- 

 came increasingly suspicious of the conduct of the association affairs. 



The prices paid in many if not most of the purchases of ware- 

 house property seem, now at least, to be exorbitant. There were at 

 least two causes for the high prices. One was the raising of prices 

 of warehouse property when it was learned that the association in- 

 tended to take over all warehouse property offered for sale or lease. 

 The second reason was that the prices asked for the warehouses were 

 higher than the cash valuation of such property because the associa- 

 tion was able to make only very small cash payments when the ware- 

 houses were purchased and had to use long-term credit for the re- 

 mainder of the cost. 



Table 30 shows the purchase price of property held by the dif- 

 ferent warehousing corporations and the auction bid on such prop- 

 erty made to the receivers up to 1928. The offers were only 36.5 

 per cent of the original purchase prices; the biggest loss was in- 

 curred in the sale of the property of the Eastern Carolina Ware- 

 housing Corporation, as" would be expected because of the overval- 

 uation at the time of purchase by the association. However, prop- 

 erty sold under a receivership is usually sold under conditions un- 

 favorable to the seller. Furthermore, the warehouses were sold at 

 a time when the general value of property was at a lower level than 

 it was in 1922, when they were purchased. In some markets only 

 one buyer was willing to take the property and the receivers were 

 forced to accept any reasonable bid made by such louver. 



Table 30. — Purchase prices to the association of warehouse property and auction 



bids made to receivers 





Purchase price 



Auction bids made to 

 receivers 



Warehousing corporation 



Total amount 



Percent- 

 age of 



purchase 

 price 



Dark-leaf. 



Dollars Dollars 

 333,923.20 : 134,248.00 



40.2 



Bright-leaf 



491,407.10 ' 193,818.00 



413,741.45 251,130.00 



1, 173. 462. 83 ! 303, 327. 50 



543,538.59 I 197,420.00 



39.4 



Central Carolina _ 



60.7 





25.8 



South Carolina 



36.3 



Total 





2, 956, 073. 17 



1, 079, 943. 50 



36.5 



Receivers' Report, 1928. 



GRADING 



When the association was formed there was no standardized, or 

 generally recognized, grading s^rstem and a wide variation in prices 



