COOPEKATIVE CITRUS-FRUIT MARKETING AGENCIES. 27 
Since the local units of the exchange operate over 200 packing 
houses, even a fractional part of the savings indicated would be an 
important item. A further study and analysis of labor costs and 
operations by the proper agency would seem to be justified. 
Low labor costs may be secured at the expense of real efficiency 
as it is reflected in the net returns received by the members of the 
association. At the same time, there is every indication that low 
labor costs are secured, as a general rule, by efficient management 
and only exceptionally at the expense of careful handling, grading, 
and packing of the fruit. 
Although labor and material make up, on the average, 78 per cent 
of the total packing-house expense, there are instances in which 
indirect expense raises the total above the average, or savings in this 
item materially reduce the total expense. Indirect expense, which 
is subdivided in Tables 3 and 4 into " administrative salaries," 
" miscellaneous expense," " depreciation," and "interest, " indicates 
inverse correlation with the volume of business handled. 
Administrative salaries, expressed on a per-box basis, are con- 
siderably higher for the smaller than for the larger associations. 
At a point about 30 per cent above the average size of the associ- 
ations studied, as represented by average shipments for the five-year 
period (Table 5) , there appears to be little saved in the per-box cost 
of administrative salaries by an increase in size. Other items of 
indirect expenses are not correlated so closely with the volume of 
business handled. Miscellaneous expense, depreciation, and interest 
may be as large an item per box in an association handling a large 
volume of business as in one whose annual shipments are less than 
one-fourth as great. 
However, in another sense all items of indirect expense are directly 
dependent upon volume of business. If shipments are reduced for 
any reason, as in 1917-18 by heat damage, the effect of the reduced 
output is to increase the overhead expense per box. Tables 3 and 4 
show that indirect expense in 1918 was, in many instances, from two 
to three times as much per box as in 1917 and 1919. This is also 
shown in Table 7 and Figure 6, where it will be seen that reduced 
shipments in 1913 and 1914 more than double indirect expense per box. 
Miscellaneous expense appears to be less affected than other items 
by a temporary reduction in volume of business. 
The lemon, associations represented in Figure 7 show variations in 
indirect expense for the three-year period, 1919-1921, of 14 cents per 
box. In these particular cases the increase is definitely the result of 
high administrative salaries and miscellaneous expense, as will be seen 
by reference to Table 4. Comparing associations No. 1 and No. 12, 
which show low indirect expense, it will be seen, by reference to 
Table 4, that, although the expense per box of the smaller association 
for salaries is greater, it is able to offset this partially by a smaller 
item of miscellaneous expense, and that depreciation and interest are 
also maintained at a low figure. A comparison of the orange associa- 
tions represented in Figure 7 and Table 6 shows differences of over 7 
cents per box in this item. 
Indirect expense may be unduly high during a given year, when a 
large packing plant has been built to care for the fruit of young or- 
chards not yet in bearing. This is a condition that will be corrected 
in time. Keference to Tables 3 and 4, however, will show items of 
