6 BULLETIX 1237, U. S. DEPARTMENT OF AGRICULTURE. 
iness of over Si, 000,000 annually. As will be shown, they have 
solved, or have confronting them, important and difficult problems 
of finance and local management. The local associations, therefore, 
are strongly organized and their success is a matter of local pride. 
Nearly all local associations, individual shippers, and packing com- 
panies are organized into 20 district exchanges. About 20 scattered 
local units, which do not fall into any sectional group, contract 
directly with the central agency and are known as direct-contract 
shippers. Each local member of a particular district exchange elects 
one of its own directors to represent it on the board of the district 
exchange. The directors of the district exchange elect a manager, 
and in addition select a man to represent the district in the meetings 
of the exchange. 
The representatives selected by the various district exchanges elect 
themselves directors of the California Fruit Growers Exchange. The 
board of directors elect their officers and a general manager; and, 
upon the recommendation of the general manager, the heads of the 
various departments. The exchange directors meet weekly, and their 
meetings are open to the members of any of the organizations. 
The exchange system, therefore, is composed of a large number of 
strong independent local units, federated for convenience into dis- 
trict exchanges, through which they govern and which form operat- 
ing links between them and the California Fruit Growers Exchange. 
This central organization is the marketing agency of the federated 
local units, controlled by them and operated to correlate and inter- 
pret their policies and activities. 
Distinct from and independent of their marketing agency, the fed- 
erated associations have created a purchasing organization, known as 
the Fruit Growers Supply Co. Similarly, the Exchange Orange Prod- 
ucts Co. and the Exchange Lemon Products Co. are owned and 
controlled by the associations. These companies are organized for 
the manufacture of by-products from cull oranges and lemons. 
NEED OF ORGANIZATION. 
The first carload of oranges was shipped from California in 1877. (2) 
Within 10 years shipments had increased to 2,200 cars. For the 
season of 18S9-90, shipments of oranges were 3,476 cars. This was 
a startlingly rapid increase in the commercial production of a special 
crop; for during this period oranges were a luxury to the average 
family, and were purchased only at Thanksgiving, or Christmas or 
on other special occasions. Throughout the early eighties, how- 
ever, even this restricted demand was sufficient to consume the entire 
crop at profitable prices. About the time that shipments passed the 
2,000-car mark, supply began to outstrip demand. 
To this natural difficulty of overproduction within the limits of 
the established demand was added 1 he problem of slow transporta- 
tion and poor refrigeration facilities. The development of the refrig- 
erator car for the transportation of perishable products was still in 
its infancy and many improvements in equipment and service were 
needed. The railroads, did not give i he at bention to the rapid move- 
ment of California citrusfruit in through trains that is now an ac- 
cepted pari of their service. Deterioration and decay of the fruit in 
transit resulted. This loss did not appear serious when prices were high, 
