4 DEPARTMENT CIRCULAR 413, U. S. DEPT. OF AGEICULTUilE 



When a comparison is made of the number of cases on which price 

 reductions were caused by allowances with the number where the 

 reductions were caused by resale after rejection, it was found that 

 the three-year average figure for the former was 6.2 per cent of the 

 f. o. b. sales, against 3.8 for the latter. Of the cars on which price 

 reductions were sustained in 1922-23, 58 per cent were on allowances; 

 in 1923-24, 60 per cent were on allowances; and in 1924-25, 75 per 

 cent were on allowances. This seems to indicate an increasing 

 tendency on the part of shippers to adjust differences with original 

 buyers rather than to dispose of rejected cars through other channels. 



The average price reduction per car on cars which were rejected and 

 resold at less than the original price, or on which allowances were 

 made, averaged $192.59 for the three-year period, and ranged from 

 $221.58 for 1922-23 to $177.26 in 1923-24. When these figures were 

 considered along with the total number of f . o. b. sales it was found 

 that the reduction per car sold f. o. b. averaged $20.13 for the three- 

 year period and when spread over the entire tonnage shipped, averaged 

 $16.54 per car for the period. The reductions averaged 19.6 per cent 



PER CENT 

 40 50 60 



l922-'23 



1 923- '24 



1 924- '25 



3-YEAR AV. 



Price Reductions 



[H^^ Original fob. Price 



Fig. 2.— Relation of price reductions, due to rejections, to original f. o. b. price of rejected cars, 

 Washington State boxed apples, 1922-1925. Price reductions caused by rejections, expressed in 

 percentage of original f. o. b. price of rejected cars, declined steadily during the three-year period, 

 1922-1925, and averaged almost one-fifth of original price on rejected cars 



of the original f. o. b. price of rejected cars and declined from 26.4 

 per cent in 1922-23 to 13.1 per cent in 1924-25. (Fig. 2.) 



It is interesting to find the total amount granted as allowances or 

 forfeited on resale of rejected cars by Washington apple shippers. 

 Assuming the records studied were representative for the State, this 

 amount was approximately $812,000 in 1922-23, $435,000 in 1923-24, 

 and $235,000 in 1924-25. 



COMPARISON OF PRICE REDUCTIONS ON ALLOWANCES AND 



RESALES 



Each year the amount of the reduction in price per car in cases 

 where allowances were made to the original buyers was less than on 

 cars which were rejected and resold to other buyers at less than the 



