ANALYSIS OF TOBACCO GROWERS' ASSOCIATION 89 



recapitulate briefly the conditions under which the association was 

 operating, for these conditions largely determined the policies that 

 the directors saw fit to adopt. The organizers of the association 

 hoped that ultimately the cooperative system of marketing tobacco 

 would displace the existing auction-floor system. It was the inten- 

 tion of the board to deal directly with the large domestic tobacco 

 companies as far as possible and eventually to establish direct con- 

 nections with foreign companies and Government monopolies. Be- 

 cause tobacco is subject to rapid deterioration, members were forced 

 to deliver their tobacco to the association within a period of a few 

 weeks whereas the association had to attempt to dispose of this 

 tobacco to the large companies at such times and places as would 

 best suit large companies. These companies bought only a part of 

 the crop in the green state. Therefore, since to avoid dumping of 

 the tobacco of its members upon the market during the course of a 

 few weeks was one of the purposes of the association, it Avas neces- 

 sary to make arrangements for the immediate redrying, financing, 

 and storing of the remainder until such times as the tobacco com- 

 panies were prepared to purchase it. 



bankers' valuation committees 



It has already been shown that in the establishment and operation 

 of its grading S3 7 stem the association succeeded in materially cor- 

 recting one of the chief complaints against the auction-floor system 

 of marketing, namely, the discrimination and inequalities in prices 

 paid to different growers for the same quality of tobacco. But 

 the main problem confronting the association was to obtain for 

 its members an average price for their tobacco justified by condi- 

 tions of demand and supply. It had previously been maintained 

 by some agricultural leaders and farmers that the large tobacco 

 companies, owing to their dominant position in the market, were 

 able to force farmers to accept a price below what market conditions 

 would justify. The board of directors, then, was obliged to devise 

 some means of ascertaining what was an equitable price or what 

 average price would be justified by conditions of demand and supply. 

 So many immeasurable forces affect the ultimate price of tobacco 

 that at best even an estimate of a reasonable average price for the 

 crop as a whole was a matter of guesswork. 



Few reliable figures were available on the factors affecting the 

 prices of tobacco generally, or the prices of tobacco by types or 

 quality. Practically no research work in tobacco prices had been 

 done by either Federal or State agencies which might aid the board, 

 the bankers' valuation committee, or the sales committee, in arriving 

 at fair and warranted prices. But to arrive at an average price for 

 the crop as a whole was only part of the task. 



Before receiving the members' tobacco, one of the first acts of the 

 association each season was to determine the price which each grade 

 of tobacco could be expected to bring in order to give the grower 

 as advance payment upon delivery a certain percentage of an esti- 

 mated value. 



To pay members according to quality, it was necessary to have 

 not only an average price for each crop as a whole, but also a range 

 of prices for several hundred grades of tobacco. These prices had 



