38 
may be referred to the arbitration committee in Atlanta but are 
usually sent to the nearest Federal inspector for decision as to grade. 
No. 1 shelled Spanish peanuts shipped by members of the South- 
eastern Peanut Association not coming up to contract quality are still 
considered of good delivery and not reject able if containing not over 
double the percentages of splits, shrivels, foreign material, damaged, 
moldy, and unshelled nuts and other varieties allowed in the grades. 
But it is agreed that the contract price shall be reduced for each 1 per 
cent, and proportionately for each fraction of 1 per cent in excess of 
the grades stipulated as follows : One-half per cent for each excess 1 per 
cent in splits; 14 per cent for each excess 1 per cent in foreign mate- 
rial; Yz per cent for each excess 1 per cent in other varieties; % per 
cent for each excess 1 per cent in shrivels. Unshelled, damaged, and 
moldy nuts between % percent and 1 per cent are subject to a deduc- 
tion in price at the rate of 3 per cent of the contract terms for each 1 
per cent in excess. For any moldy, damaged, or unshelled nuts above 
1 per cent, however, the contract price is reduced at the rate of 7 per 
cent for each 1 per cent excess. Good delivery of noticeably dis- 
colored peanuts is given as 2 per cent, of which J^ per cent may be 
badly discolored. Noticeably discolored peanuts above 1 34 per cent, 
however, are penalized at the rate of 1 per cent of the contract price 
for each 1 per cent in excess. Any excess badly discolored peanuts are 
subject to a reduction of 2 per cent of the contract price for each 1 per 
cent of excess. The association rules also provide penalties for ship- 
ments of No. 2 Spanish and shelled Runners which do not come up to 
grade specifications. 
Should the whole or any portion of a shipment of shelled peanuts 
not equal in quality the contract grade within the variations aUowed, 
it may be rejected by the buyer within 48 hours after delivery. The 
seller may replace a rejected shipment within the contract period, or 
if that has expired, within five working days after telegraphic notice 
of rejection. If the seller fails to declare his intention to replace the 
rejected shipment within 48 hours, the buyer may cancel the contract, 
or buy, for the account of the original sheller, stock equivalent to the 
rejected quantity through a broker member of the association between 
24 and 48 hours after the seller has been wired of this intention. 17 
Not unnaturally, the shipper often formerly felt that when city 
brokers or receivers served on the arbitration boards of the association 
it was difficult to have an entirely impartial committee; and unpleas- 
antness has at times arisen on this score. The availability of an 
impartial inspection by Government representatives, when disputes 
arise over the grades of shelled Spanish peanuts arriving in the mar- 
ket, has already had a wholesome effect on the peanut industry. 
METHODS OF DISPOSING OF SHELLED AND CLEANED PEANUTS 
Peanuts are usually sold by southern cleaners and shellers in one of 
three ways: (1) Direct to the purchaser, usually by wire; (2) through 
a broker at the shipping point or at the city market, both often being 
employed in one sale; or, more rarely, (3) by a traveling representative 
of the shipper. Occasionally large city brokers make trips through the 
peanut belts of the South, and place orders in person for their clients. 
17 Paraphrased from Southeastern Peanut Association. Rules Southeastern peanut association [effective 
September 1, 1925]. Atlanta, Ga. 1925. 
