BULLETIN 861, U. S. DEPAKT^IENT OF AGRICULTURE. 
" F. o. b." is an abbreviation of the phrase " free on board," which 
means loaded in the car, ready for shipment, with no attachments to 
the stock. From the definition it will be seen that a car may as, well 
be f. o. b. Kansas City, Mo., as f. o. b. Lawton, Mich., and so, while 
this phrase is used almost without exception in this industry as re- 
ferring to shipping points, the exact station where cars are loaded 
should be specified in all cases. 
Sales made on an f. o. b. basis imply contracts, either written or 
understood, between the shipper and the buyer, which cover a wide 
variety of clauses and conditions, but which have been standardized 
into three general types: Carloads f. o. b. usual terms; carloads 
f. o. b. cash track; and joint or open account sales. The volume of 
less than carload shipments of grapes is so small that carloads are 
regarded as the unit. 
CARLOADS F. O. B. USUAL TERMS. 
The great majority of the Michigan crop is sold on the basis of 
" f . o. b. usual terms," and this type of trade has reached a high stage 
of development in Berrien and Van Buren Counties. 
The shippers in this section, who are for the most part brokers 
and cooperative associations, keep in close touch with all possible 
market outlets, sending out daily quotations by wire to any available 
consuming center where they think they can place a car. Whenever 
one of these bids is accepted by a city buyer, assuming of course that 
his reputation for business integrity and financial soundness is satis- 
factory, they telegraph acceptance of his order, usually giving the 
number and initials of the car used to fill it, as well as the number 
and varieties of the baskets included. The buyer, with his order, 
has furnished shipping directions, according to which the car is 
billed out and turned over to the transportation company. The 
shipper then takes the bill of lading, received from the railroad, 
to his banker, and instructs him to draw a sight draft on the buyer. 
The banks in this section are usually willing to finance these dealers 
and advance them cash for 75 per cent of the face value of this draft, 
accepting the bill of lading as security. The bill of lading, with the 
sight draft attached, is then mailed to the correspondent bank 
through which the buyer deals, if possible in the city to which the 
cars are destined. The arrival of the sight draft attached to the bill 
of lading is usually approximately coincident with the arrival of 
the car, and the buyer is informed in each case. He then inspects the 
car, which is permitted in the standard form of contract and bill of 
lading. If he believes that the grade and quality are up to the 
standard agreed upon he accepts it. He does this by going to the 
city bank and " taking up " the sight draft. He pays its face value, 
receives the bill of lading, and thereupon accepts title to the shipment. 
