WHOLESALE DISTRIBUTION OF FRUITS AND VEGETABLES. 15 
AUCTION CHARGES. 
Auction service charges are from 2 to 15 per cent (usually 3 per 
cent) on gross selling price. Where the selling charge is under 5 
per cent a " terminal charge " to cover costs of unloading and han- 
dling is sometimes added. This terminal charge is paid by the buy- 
ers and is simply a means for securing increased revenue, since busi- 
ness reasons make it necessary for certain auctions to handle goods 
on a very low selling charge, and some additional income is needed 
to offset the costs of doing business. Since the auction itself oper- 
ates strictly on a nonspeculative basis its costs are fixed, in a measure, 
and as a rule consist of such charges as rental, interest on invest- 
ment, and employment of help. 
AUCTION ABUSES. 
One weakness of auctions lies in the possibility of manipulating 
the sales so that goods sold on certain days will not move at true 
market prices. In some cases members of the distributing trade in 
certain cities may be interested financially in the local auction. In 
such cases it is possible that the business will be conducted so as 
to favor those who are supporting the auction. Thus, those who are 
interested financially may secure more or less extended credit, while 
all others must deal on a strictly cash basis. This, of course, would 
give an immense advantage to those especially favored and tend to 
create dissatisfaction among the greater number of buyers. 
Another weakness lies in the possibility of tampering with sample 
boxes in particular lines. However, in justice to the many reputable 
auctions operating in different parts of the country, it should be said 
that there is little evidence that any of the abuses mentioned affects 
the great volume of business handled daily by them. 
ADVANTAGES OF THE AUCTION. 
Auctions offer quick outlets for fruits which must be kept moving 
in a more or less steady stream from producer to consumer. Large 
quantities of citrus fruits are sold at auction on several of our large 
markets. When this fruit starts toward market there^ arises the 
necessity for keeping a steady stream flowing to the consuming 
public, and the auction provides one means whereby distributing 
channels are continuously supplied. Auctions offer an outlet for sur- 
plus holdings on well-stocked markets, and, by attracting buyers, 
tend to expand the market to a certain extent. They afford a good 
index of market conditions, and when the auction company sells 
the major part of the supply of certain commodities or is patronized 
by most of the buyers, it tends to be a more or less accurate deter- 
miner of basic wholesale prices. 
