37 



Operating costs were somewhat higher for the burley associations. The 

 variation was due mainly to differences in cost of salaries and wages. 

 In some cases, higher wage or salary rates prevailed in certain burley 

 markets in which associations operated auction warehouses. In others , 

 burley associations maintained larger warehouse work forces to handle 

 comparable volumes of tobacco. 



Most associations maintained sizable lines of credit during the 

 marketing season, primarily to pay patrons promptly for tobacco sold 

 on the auction floor but, in certain instances, to cover major operating 

 expenses as well. 



Table 18 summarizes the sources from which such funds were obtained. 



Annual operating returns of the cooperatives marketing flue-cured and 

 dark air-cured tobacco averaged over 125 percent of their operating 

 costs. Returns averaged over 110 percent of costs for the burley 

 associations, but less than this figure for the association handling 

 dark fire-cured tobacco. 



An average of over 90 percent of operating returns was derived from 

 commissions on the sale of tobacco for associations marketing dark and 

 burley types. Remaining returns were obtained mainly from rents on 

 facilities and equipment and from the sale of other agricultural prod- 

 ucts. The average proportion of returns derived from sale commissions 

 dropped slightly below 90 percent for the flue-cured associations. In 

 the case of these organizations, proportionately larger amounts of total 

 returns were obtained from the warehouse leaf account and from the 

 rental of warehouse facilities for storage or other purposes. 



Table 18. --Source of operating funds required during the marketing 



season by tobacco auction warehouse cooperatives in Kentucky, 

 North Carolina, Tennessee, and Virginia 



Source of 

 operating funds 



Number of asso- 

 ciations reporting 



Loan from: 



Bank for cooperatives 6 



Other banks 5 

 Bank for cooperatives 



and other banks 1 

 Bank for cooperatives 



and association savings 1 

 Other banks and subsidiary 



organization I 



Total 14 



