23 



Cost of warehouse and office equipment can also be viewed in relation 



to the square foot measure , the amount of warehouse space operated by an 



association usually indicating the relative volume of tobacco handled. 



The amount invested in warehouse equipment by the associations reporting 

 ranged from 6 to 21 cents a square foot of warehouse space operated, with 

 the average cost amounting to 12 cents a square foot. Cost of office 

 equipment ranged from 2 to 12 cents a square foot of warehouse space and 

 averaged 4 cents a square foot. 



Cost of warehouse and office equipment together ranged from 4 to 24 

 percent of the investment in auction warehouse facilities, averaging 

 almost 12 percent. That is, for every dollar invested in auction ware- 

 houses and the land on which they were situated, associations spent from 

 4 to 24 cents for office and warehouse equipment, with the average cost 

 amounting to approximately 12 cents. 



Insurance 



Most of the associations carried insurance on warehouse facilities and 

 equipment. Several were also covered for fire damage occuring to tobacco 

 displayed on the auction floor. 



Insurance coverage on warehouses and equipment was generally separable 

 into three groups, based on the amount of insurance kept in force. Some 

 associations carried coverage approximately equivalent to original cost, 

 or if price levels had risen substantially since acquisition, to replace- 

 ment cost. Other associations reduced coverage as the assets depreciated 

 in value. The third group carried an amount of insurance which approxi- 

 mated average life-time value of facilities and equipment. 



Insurance for tobacco displayed on warehouse floors was usually calculated 

 to cover partial or entire amounts of loss which might be incurred by 

 fire. 



Information on premium rates paid for insurance coverage was limited. 

 That which was available indicated annual premiums for insurance on ware- 

 houses and equipment ranged from about $15 to $25 per $1,000 of coverage. 

 For tobacco in the auction warehouse, che premium ranged from $1 to $1.27 

 for $1,000 coverage. 



The wide disparity between the rates charged for facilities and equipment 

 and those for displayed tobacco was due to the time period involved. 

 Facilities and equipment had to be covered during the entire year, while 

 sale tobacco had to be insured only during the relatively short marketing 

 season, or that portion of the season during which the association was 

 operating. 



Capital Improvements 



Eight associations incurred additional indebtedness to improve existing 

 facilities or to diversify services offered to patrons. The capital addi- 

 tions acquired are presented in table 9. The cost to the associations 

 for these additions ranged from $10,000 to $340,000 and averaged $98,000. 



