PROCEEDINGS OF THIRTY-SIXTH FRUIT-GROWERS ' CONVENTION. 103 



marketing agency that our sphere in life has been well defined and 

 established. 



The working of the exchange resolves itself as follows : The local 

 associations gather the fruit of their own locality, supervise to some 

 extent the packing, the distribution of shooks, the loading of cars. etc. 

 These associations turn over to the exchange the loaded car. The bill of 

 lading and papers are forwarded to the Sacramento office ; the exchange 

 finds a market for the product, collects for the same, and returns to the 

 local associations the cheeks for the growers, and the local associations 

 in turn pay their members. The operation is quite simple, and from 

 experience it has been found that it is advisable to follow the above 

 procedure. 



It would seem that returning to the grower all his fruit would bring, 

 the distribution of market information, etc., the exchange would have 

 nothing but a smooth road to travel on, but obstacles were encountered, 

 and some of them seemed almost insurmountable. The first was in 

 regard to the matter of obtaining box shook, packing houses, pay for the 

 help during the season when no shipping was being done, loaning of 

 money to growers during the winter, etc. It was also discovered the 

 growers organized in Placer County to market their own fruit did not 

 have a complete list of assortments, and found from experience that in 

 going before the trade of the country it would be necessary to have a 

 complete assortment to successfully trade in the big markets. There- 

 fore, it was necessary to reach out and do missionary work and teach 

 growers to organize. All of this required money. How was it to be 

 secured ? The banks did not care to loan to the associations because they 

 had no capital stock, and it was necessary for the association directors 

 to put their personal signatures upon the notes to raise sufficient funds 

 to do business. These amounts, as far as the local associations were con- 

 cerned, did not total very much, but in the exchange the aggregate was 

 considerable; in fact, so high that a good many of the larger growers 

 would not serve as directors and take the risk connected with the loss 

 when they had nothing to gain beyond the marketing of their fruit. 



The above was the most serious obstacle ever presented. How could 

 the growers finance such a big undertaking without any capital to start 

 with ? In other words, attempt to build something out of nothing. The 

 outcome was the present organization known as the California Fruit 

 Exchange, a cooperative stock corporation. The by-laws are so arranged 

 that no one individual, partnership, association or corporation can own 

 more than ten shares of stock, thereby eliminating the danger of con- 

 trol by a few persons, and at the same time overcoming the objection 

 of the banks. On February 19. 1907, the old exchange was reorganized, 

 and is now known as the California Fruit Exchange. Stock was sub- 

 scribed for and promptly paid up. as a great many growers willingly 

 purchased a share of capital stock then valued at one hundred dollars 

 ($100). The local associations each purchased a share of capital stock 

 thereby making the connecting link between the associations and the 

 exchange. The results have been very gratifying, the banks have 

 learned that the exchange is thoroughly sound financially, that it does 

 not buy or speculate, thereby insuring a solidity; and the corporate 

 notes have been accepted without requiring a few persons to take the 

 "big risk that formerly attended the financing. 



