The Season 1927-28 ............................... 3
Exchange Sales and Returns ........................ 1 1
Distribution Policy ........... .... .......... 12
Auction Prices Realized .......................... 3
Export Shipments ............................... 14
Bulk Fruit Shipments ............................ 15
Eastern D division ................................ 5
Cincinnati D division .............................. 1 6
Mid-Western Division ............... ........... 16
Other Divisions ........... ..................... 7
Deciduous Tonnage .................. .......... 18
Field Department Activities .......................... 19
Inspection ................ .......... ........... 20
Fruit M parking ................. .............. 21
Organization A activities ........................... 22
Shipment Q uotas ................................ 22
Seald-Sweet Advertising ............................. 24
Premium Operations ............................. 24
Traffic Department ................................ 26
Car Supply .................................. 27
Rates ........................... .......... 27
Expense of Operation ............................... 28
A. Why The Florida Citrus Exchange Does Not Control
a Larger Volume .......................... 30
B. The Folrida Citrus Merchandising Program ......... 37
C. Citrus Acreage .............................. 38
D. Shipments, Sales and Remittances ................ 40
E. Growers Loan and Guaranty Company ............. 41
F. Exchange Supply Company ..................... 42
G. Canned Grapefruit ........................... 42
.. *,: :.- *..
The 1927-28 season well may be regarded with considerable
optimism by all citrus growers.
Returns as a general rule have been satisfactory and well in line
with the intrinsic worth of the fruit marketed. The short crop shipped
this season has been responsible to a large extent for this condition.
Of more permanent importance, however, is the significant awaken-
ing of public, business and wide-spread grower interest in the general
welfare of the industry. It is readily apparent to any interested ob-
server that a firm realization of the importance of the citrus industry
to all phases of Florida's commerce is rapidly becoming established.
These interests have recognized further, that the citrus industry can
be made a much more valuable asset to the state if its marketing ma-
chinery can be freed from the inefficiencies and handicaps which have
marred its consistent and stable performance. These handicaps were
discussed in detail in the 1926-27 Annual Report and do not need
review here. The solution of these difficulties is generally conceded
to lie in the definite and effective adoption of such basic merchandis-
ing fundamentals as are necessary to the stabilization and profitable
sale of any product, agricultural or otherwise.
These fundamentals have been variously expressed but resolve
themselves into three general classifications:
1. Control of distribution by volume shipments and market allo-
2. Standardization of grade and pack.
3. Commodity advertising.
There are other factors of development which are important but
dovetail into these three to a great extent. Of these lesser points, con-
trol of prices and development of foreign markets are perhaps the most
In its work to bring about those conditions in the Florida citrus
industry which would react in favor of the citrus grower, the Florida
Citrus Exchange has long recognized these fundamentals as the first
steps necessary. It has adopted and continually used them in its own
organization. To be effective, however, such principles of control
must be applied to at least 75% of the total volume rather than to
30% which is controlled by the Exchange.
The adoption of such a merchandising program for that volume
controlled by other operators in the industry has presented an almost
insurmountable task. Many plans having this end in view have been
formulated and variously supported by those both within and without
the industry. Some of these have had their origin in purely selfish
business reasons. Others have been sincerely designed to be of benefit.
The Jardine Plan
Perhaps the first of these plans was what is now known as the
Jardine Clearing House plan. It originated outside of immediate
citrus circles and obtained definite headway when Mr. Mayo, Florida
Commissioner of Agriculture, and Mr. Jardine, United States Com-
missioner of Agriculture, called a meeting of all operators in the in-
dustry in Washington on June 13th, 1927. In this meeting, Mr.
Jardine discussed his ideas of a plan which would solve many of the
difficulties facing the Florida citrus industry. Mr. Tenney, a sub-
ordinate of Mr. Jardine, gave the latter's ideas a definite form, which
he later presented to a meeting of the Fruitman's Club in Florida.
Independent operators could not agree on this plan or any of the
alternatives presented by Mr. Tenney. They themselves planned an-
other organization, omitting to provide for the fundamentals which
were the original purposes of the movement. They then submitted this
plan to the Federal Department of Agriculture for its approval. This
endorsement was not forthcoming.
When independent operators failed to obtain recognition for their
plan, it became necessary for the Exchange to lay the facts before the
public as to just what had happened with regard to the Jardine Clear-
ing House plan. Such action became necessary to counteract propa-
ganda which sought to lay the blame for failure of the Jardine proposal
upon the Florida Citrus Exchange. This was done in a full page
advertisement circulated throughout the citrus belt. It is reproduced on
the opposite page and is self-explanatory.
Thus the first plan to coordinate shipping interests on a common
platform for the good of the industry ended in failure in January. In-
dependent operators refused to join an organization which would reg-
ulate their actions for the common good of the industry and which
provided penalties for non-performance.
While the Jardine plan was still alive awaiting endorsement of
the operators in the industry, the bankers of the state met and dis-
cussed the possibility of the development of some plan whereby the
united action of the banks of the state might bring about those changes
1i the marketing machinery which were necessary. This action met
with considerable approval through the state press and for a time it
was hoped that some accomplishment might be made.
Read These Facts
Citrus Clearing House
THE Florida citrus industry
has suffered the "most regret-
table incident of its history," ac-
cording to independent opera-
tors. The Exchange has refused
to become a party to the organi-
zation planned, sponsored and
named "clearinghouse" by them.
The incident properly may be
viewed with regret-but by inde-
pendent operators only
Who, other than these, possibly
could have cause for regret?
Certainly not citrus growers, who
were denied representation in
an organization presumably de-
signed to solve their problems.
Not the Florida Citrus Exchange,
which already has and uses the
complete market information
that the new organization was to
distribute to independents who
themselves are too small to ob-
tWhat is a Clearing House?
T HE name, "Clearing House,"
JL very evidently may be vari-
ously defined. Secretary of Ag-
riculture Jardine spoke of an or-
ganization by this name. It was
to be grower organized and
grower controlled. It was to be
empowered to act decisively on
those phases of marketing which
at present are faulty or entirely
He enumerated these functions
of a clearing house. They were, H
(1) control of daily volume leav-
ing the state, (2) allocation of
volume to regional markets ac-
cording to capacity,(3) standardization of
grade and pack of the product, (4) regula-
tion of prices to provide maximum return
to grower without affecting consumer, and
(5) commodity advertising.
It is this type of clearing houe-built to
efficiently handle the fundamentals of suc-
cesful perishable goods merchandising-
for which the Exchange co-operated with
all other interests and spent its utmost ef-
forts to create and obtain support. Mar-
keting experts agree that such an organi-
zation, grower-controlled, would go far
toward stabilizing the Florida citrus
And the Exchange today stands ready
to join and support such a clearing house.
A Policy of the
Florida Citrus Exchange
THE Floridn Cito. Exchange bu in the ept and
will continue to work orr snd o-operate in the devel-
opment-of ay progreve atep In the improvement of
citrus mketins conditio sand for the but thteret
of the industry. '
The record of action of the Florida Citrus Exchange
l in line with thi. generalI policy. It i. s record of
which it i. Justly proud.
Co-sider the Growere' and Shi pea League. It
an orgseian Uon of merit handling traff maittein
which ffet the entire industry. It should have the
support of heve hipper In Florida. It doe not, but
receive its moor financial support from the Florida
Citru- Exhange. Itn addition. he s ol u of the
Exchange traffic manager re donated to the League.
The Exchange hu co-opested with the Freuitma
Club in the put In the developmt soand support of
legislation which ha been of marked benefit to the
dutry. The law preventing the ue of
sprdy, that designed to stop the shipment of frozen
fruit and the l eaw rtcting the shipment of nmmatture
fruit e outstanding measures whclh received the ac-
tive support of the Exchange.
The Exchange has takes an active part In the nego-
tiatioUs which resulted in greauy improved terminal
facilities in certain Estern markets.
Three seso" ago the bottom tell out of the tgrape-
fruit market. The tExchange fulshed the services of
it advertising, department and nearly halt the fund.
for an advertising campaign on grapefruit which wa
conducted In major northern mkets. It brought the
price out of red Ink almost immediately.
And there are. other incidents which tell the same
tore of the acive co-operation of the Florida Citril
Exchange in the development of the industry.
This policy applied in another way alo. The Ex-
change wll not be a party to any sew urr the trte
purpose of which If to deceive cittu grower. It
declined to participate In what independent operator
cll a cleaningg house."
An efficient, effective organization
of this kind, however, did not fit into
the independent scheme of business. A
strong organization of growers would take
away the huge profit obtained by unre-
stricted handling of fruit bought on the
trees for a low price. The basic premise
of this clearing house was that the grower
should profit-not the speculative opera-
tor. Such would never do.
The Independent Definition
Independent operators therefore took it
upon themselves to plan an organization
which would be suitable to their interests.
One wrote the charter and by-
laws and the rest voted down
every attempt of the Exchange to
have written into it even one or
two of the fundamentals stressed
by Secretary Jardine.
As a result, the operators of the
industry were asked to join a
trade association, the sole pur-
pose of which was to provide for
a more regular exchange of mar-
ket information than had been
available through the Fruitmans
Club. It completely ignored the
regulatory and progressive meas-
ures which the Jardine plan pro-
-and they called it a clearing
Federal Laws Apply
THE alibying argument used
to explain the omission of the
fundamentals was, "We must
walk before we can run. We ean
work in these other factors after
we get going."
Such was manifestly impossi-
ble. The charter and by-laws
drafted by independents pro-
vided for an organization limited
exclusively to shippers. Any at-
tempt made by shippers to com-
bine in the regulation or restric-
tion of the sale of a commodity
to affect its price violates the
Sherman Anti-Trust Act.
The only exceptions to this law
are provided in the Capper-Vol-
stead Act, the provisions of which
allow growers to combine in the
marketing of a common product,
even going so far as to regulate prices.
Growers were very carefully eliminated
from the plan as proposed by independent
interests. It was not possible for growers
to obtain equitable representation even
through their own shipping organization,
the Florida Citrus Exchange.
Not by the wildest flight of the imagina-
tion could such an organization operate
under the Capper-Volstead Act. For it to
adopt and put into execution at any time
the marketing essentials as described By
Secretary Jardine would be illegal and
make its members liable to Federal prose-
They called it a "Clearing House." It
was a magnificent piece of camouflage.
The bisto0ry of the clerin house oveent tfro t1 lnctptlon e year eo to d s ltere i story shoeil n thr reli. tewt
refusilotf ndpnde..topr.to- to coper te n ithe tor,,tinod n o rrg an.. til.o whlch hod .som polbIlUes orwttoitpslihme=t. N
We hvo complex it In chrono.locll order &nd will end It to ay intMeresed irower. It I. to volu.io s. to hndleeio vn
bdrefly in an adve emen Sndforyourcopy. GEN MGR
FLORIDA CITRUS EXCHANGE
It was finally decided by them, however, that such progress was
being made on the Jardine plan by those actively engaged in the indus-
try that any work on the part of the bankers was unnecessary and
unwarranted. The bankers, as a group, thus made no progress with
Following the failure of the Jardine plan and the refusal of the
Florida Citrus Exchange to endorse the dummy clearing house, the
committee of the Florida Citrus Exchange continued its negotiations
with the Fruitman's Club with instructions either to work with inde-
pendent operators to form a true clearing house along lines originally
proposed and endorsed by the United States Government, or to form
a trade association which would function as such. The latter was
finally accomplished and the Florida Citrus Trade Association, Inc.,
was formed. This organization was to be purely informative and had
no powers whatever other than advisory. Although not functioning,
it is at this time in existence.
About the middle of January the Florida State Chamber of Com-
merce appointed a committee to investigate the citrus situation in detail.
It was to formulate a plan offering a solution to the difficulties they
found and to submit this plan for approval and adoption to growers
and operators in the state. This committee was composed of Walter
F. Coachman, Sr., of Lake Placid and Jacksonville, chairman; Dr.
Burdette G. Lewis, of Penney Farms; Edward W. Lane, Jackson-
ville, and J. A. Griffin, bankers; Joe H. Gill, Miami, vice-president
of the Florida Power and Light Company, and Dr. H. Harold Hume,
of Glen St. Mary, a horticultural expert.
Meetings were held by this committee in Orlando, Tampa, Jack-
sonville, Palm Beach and other cities in the state at which the views
of all leaders in the industry were heard. After gathering this infor-
mation over a period of four to six weeks, the committee then announced
that it would make its report at an early date.
Committee of Fifty Formed
Before this report was made, several growers in Polk County con-
ceived the idea of taking the burden of obtaining support for the original
merchandising fundamentals provided for in the Jardine plan into their
own hands. They formed at Winter Haven on February 14th what
has been called the Committee of Fifty. Judge Allen E. Walker was
elected temporary president with a board of directors also temporarily
in office to assist him in the organization plans. After considerable
discussion, this committee decided that a clearing house set up for the
same purposes provided for in the original Jardine plan along practi-
cally the same lines of organization was desirable and practical. The
charter, by-laws, growers' and shippers' contracts of the organization
were prepared by attorneys of the Federal Department of Agriculture
before the Committee started out to get the necessary grower and
The Committee obtained the services of Mr. Merton L. Corey and
started an intensive organization campaign which at this date is still
The Florida Citrus Exchange was asked to endorse this plan. After
carefully considering the charter, by-laws and contracts of the Clearing
House organization proposed by the Committee of Fifty, the Executive
Committee on April 24th committed the Florida Citrus Exchange as
a body to the support of this Clearing House on condition that 30%
of the fruit of the state other than that controlled by the Florida Citrus
Exchange would be signed with the organization by July 10th, 1928.
Exchange Signs Shippers' Contract
It was later deemed advisable for the Committee to sign Exchange
growers individually rather than have them brought into the Clearing
House organization as a unit. In order that this work of the Com-
mittee might progress smoothly and without interruption, the various
legal and technical difficulties inherent in this plan were swept away
by the Executive Committee in its meeting on Wednesday, May 9th.
At this meeting the Exchange Committee decided to sign a ship-
per's contract with the Committee of Fifty Clearing House organiza-
tion. This action would permit the Exchange to handle not only the
fruit of its growers who were signed individually, but also those who
did not sign. Thus, in either event, our growers would be protected.
This matter was placed in a sub-committee's hands for execution
and the shippers' contract was formally signed May 12th.
The Exchange thus announced its position. It was entirely con-
sistent with its constant endeavor to bring into action a plan whereby
the merchandising fundamentals originally outlined might function for
the benefit of all citrus growers.
Favorable Situation Created
The situation created is one which is favorable to growers of the
Florida Citrus Exchange. The one live, meritorious proposal before
the growers and operators is that of the Committee of Fifty. And the
Exchange has committed itself to this movement.
If the required grower support for this clearing house is obtained,
it will undoubtedly become necessary for independent operators to join.
This will then provide for the industry some possibility of effective
operation along proper merchandising lines.
In this event, the Florida Citrus Exchange is in an ideal position,
as other operators will find it necessary to raise their charges to a point
where they are not in line with comparable Exchange charges, or to
pay for the added costs out of their packing or handling profits.
As an instance, the Exchange already maintains its own inspection
service for standardization purposes at a cost of approximately $1.50
per car. The Government inspection required by the clearing house
in order that all shipments may be standardized will cost each operator
about $3.50 per car. The increase to the Exchange will be $2.00,
while that to the independents will be $3.50.
Again, there will be an advantage in the advertising situation. At
the present time, independents have no advertising assessment. The
preliminary figure of 3c for commodity advertising to be charged by
the Committee of Fifty will increase the independent operators' charges
just that much. The Exchange, on the other hand, already has an
advertising charge of 5c and can readily absorb this assessment with-
out raising its retain.
Exchange growers will also have a distinct merchandising advan-
tage. The Exchange will be relieved of the commodity advertising
campaign which it has carried for so many years and will be able to
spend the balance of its advertising funds entirely for direct merchan-
dising work on the brand. It will be the only organization able to
function in this manner. As a result, it can divert the results of the
commodity campaign placed by the Committee of Fifty to its own
immediate benefit by working trade channels and specific markets in-
tensively on the Scald-Sweet brand.
If, on the other hand, the Committee of Fifty is not able to obtain
the required support of either growers or operators by July 10th, the
Florida Citrus Exchange will be the only organization remaining which
offers the certain accomplishments which were possible through proper
support of the clearing house.
As explained in the advertisement on the opposite page, which was
circulated through the entire citrus belt, the Florida Citrus Exchange
is a clearing house practically identical in plan with the original Jardine
proposal. It has been in successful operation for the past twenty years
and has required for complete and successful application of the funda-
mentals provided in all other plans, the 60 to 75% control which was
one of the conditions of operation of such.
If all other plans fail, there still is the Florida Citrus Exchange
ready and in a position to be expanded into the effectively operating
clearing house which has been the objective of all sincere action on the
situation to date.
The question has often been raised, and properly so, as to why
the Florida Citrus Exchange does not have a greater control of the
total state volume if it is the efficient and effective merchandising or-
ganization it has claimed to be. These reasons are worth considering
and for that purpose are presented in Appendix A in this report. They
are not made in the nature of an alibi, but merely in explanation and
answer to the inevitable question stated above.
Handicaps Still Exist
The basic facts of the situation still remain, however, much as they
were a year ago.
Frozen fruit again was shipped from the state after the unexpected
freezes of the season. It is true that these freezes were not as dis-
The Florida Citrus Industry
alreadyy Has Its Clearing House
Requires The 75% Control Acknowledged
Necessary For Completely Effective Operation
1iOlass miaLJnmatalsumaoM usSEPIAN
r CLEARING HOUSE
GROWE RS OROWERS
The Florida Citrus Exchange is a clearing house identical in plan
to that recommended by Secretary Jardtin. In the Exchange.
growers have available the same opportunities of legal merchan-
dising control offered by the Jardine Clearing House.
In addition, they have these facilities already established and
functioning-tihe Grower's Loan and Guaranty Company, an or.
ganization formed to advance money to growers, and the Ex-
change Supply Company, making quantity purchase of packing
Organization Charts Prove Identity
This singleness of plan and purpose of the two organizations is
.evident from a glance at the charts of organization shown above.
In each the grower is the basis. In the Jardine plan, the groweTs
who are not members of the Exchange were to be formed into an
organization through which they could hold the independent opt
erator handling their fruit to the faithful performance of and
strict adherence to the clearing house regulations. The Exchange
has a comparable growers' unit in its 84 associations.
The operators of the Jardine plan correspond to the existing sub-
exchanges of the Florida Citrus Exchange. And their functions
would not be dissimilar.
The sales and merchandising functions in the Jardine plan were to
be accomplished by a central, director-controlled body named
"Clearing House.' Directly comparable is the grower-director-
A SS 0 C NATION S
0 ROW E .RS
controlled body, "the Florida Citrus Exchange," which to~ay
sells 1-3 of the entire crop of the state.
Unit for unit, the present Florida Citrus Exchange is identical with
the proposed clearing house as planned by Secretary Jardine.
75% Control Necessary
The primary condition to effective operation of the clearing
house was that it represent at least 757. of the fruit of the state.
That percentage of control was essential to maintain proper vol-
ume of shipments, perfect distribution, standardize the grade and
pack, intensively develop European markets and provide an ade-
quate advertising campaign.
Without that 75% minimum control, supporters, opponents and
critics of the plan all agreed that the organization could not be
completely effective. That condition applies just as emphatically
to the industry existing clearing house, the Florida Citrus Ex-
True, the Florida Citrus Exchange has standardized its grade and
pack, does advertise to the best of its financial ability is develop-
mng European markets, and does control and properly distribute
its own volume.
The full effect of its work, however, is lost because the balance of
the crop 67% is not correspondingly controlled and
Stabilisation of citrus investment and enhanced returns on ose investments are
rnestly deJired by every Person in the sl-ae, except fruit 'oAfelators.
Citrus growers alone have in Ah;,r osower to gain these ends by placing 75% control mi
a elearig house organisation efficiently of rated tonrolled by growers in .omesi
dance with Federal legislation on t6e subject.
The Florida Citrus Exchang is juse such an organsat1on. In satorting the Florida
Cirus Exchange, growers -w7 avoid the loeess of tme and money wAhic always a.com-
=anies the development of a new orgasat;io anad the costly mtis ess wh.ish are always
ade before thsat organisation is faueotma orfecetly.
FLORIDA CITRUS EXCHANGE
astrous as the season before because of climatic conditions prior to
their occurence. Nevertheless, a greater antipathy to Florida fruit on
the part of the trade and consumer than ever before will be faced next
season as a result of these unwise operations.
Florida fruit still competes with itself in prices, in grading and in
volume. Shipments remain uncontrolled.
There is no certainty of advertising other than that which the Ex-
change will provide from its retain on 30 to 35% of the crop.
Competitive conditions remain the same. The non-bearing acreage
of Texas, Arizona and Porto Rico has increased and become one
season nearer to the addition of its volume to American markets. Non-
citrus continues with increased strength of organization to bid for a
still larger share of the nation's fruit dollar.
To meet these difficulties, the Florida Citrus Exchange continues
to emphasize the necessity for the adoption of common sense merchan-
dising methods in the industry (see Appendix B). Whether such
methods are applied through a separate organization, such as a clear-
ing house, or by means of a full support of the Florida Citrus Ex-
change is not a major factor.
In view of the organization activities of the past season, the sole
purpose of which was to gain for the citrus industry greater prosperity
and stabilization, it is more apparent than ever that grower cooperation
alone is the only basis through which permanent and satisfactory re-
sults can possibly be obtained. It remains with the citrus growers
themselves by their action in support of some organization capable of
producing these results to say whether or n6t they desire permanent
prosperity in the industry.
EXCHANGE SALES AND RETURNS
Shipments from the state during the season 1927-28 to May 1st
total 34,315 cars, or a shortage this season over the same period of
last of 14.5%. This total is divided as follows as reported by the
Oranges and mixed ............ 1 7,205 cars
Grapefruit ................ 15,994 cars
Tangerines ................. I, 1 16 cars
During the same period the Florida Citrus Exchange shipped 3,-
886 cars of oranges, 3,973 cars of grapefruit, 1,642 cars of mixed
and 312 cars of tangerines, or a total of 9,813 cars. This total ship-
ment by the Exchange represents a loss over last season's volume ap-
proximately in proportion to the shortage in the total state movement.
Judging from returns, the past season has been without a doubt
one of the best that the Florida Citrus Exchange has ever seen. In
spite of the decreased volume, the Exchange has returned to its sub-
exchanges for the season up to May 10th a total of $12,118,673.67,
which is an increase of nearly $3,000,000 above the total for the same
period of last year. This figure will be proportionately increased by
the addition of final returns up to the close of the fiscal year.
The movement of fruit from the state during the season was main-
tained at a fairly satisfactory and uniform rate. The demand at all
times equalled or exceeded the supply. This situation maintained on
all varieties of fruit with the exception of late bloom grapefruit.
Late Bloom Speculation
The latter fruit was the cause of the only flaw in the shipment of
this season's crop. Shortly after the first of the year, certain Florida
speculators believed that they saw an opportunity of making a quick
turnover and long profits by shipping late bloom grapefruit while it
was still immature and unsuitable for consumption. Not only was the
fruit unfit for shipment at this time, but it also ran heavily to low grade.
As a result, heavy losses were incurred and the demand for' late bloom
choice grapefruit, because of its early lack of eating quality, is at the
present time practically dead, although the fruit now is of an edible,
This doubtful experiment on the part of the speculative element
within the state has caused a heavy loss to Florida growers.
The season opened somewhat earlier than usual with the demand
on both oranges and grapefruit creating a most encouraging situation.
When the regulatory measures of the green fruit law expired December
1st, it was feared that shipments might be rushed, causing excess sup-
plies and a serious drop in prices.
Early in December, however, it was clearly shown that such would
not be the case. Fruit was not maturing as fast as was expected. The
colder weather made it necessary to take a longer time in coloring.
Supplies were so limited that the slight price drop, which occurred dur-
ing the first part of December, particularly on oranges, was speedily
overcome by a lack of supplies. In general, prices were maintained
at a satisfactory level throughout December.
Following the freeze of January 1st, an excess of shipments in an
attempt to salvage frozen fruit was again feared. While there was
some break in the market during this period, it did not at any time
reach alarming proportions. Climatic conditions in California short-
ened the usual heavy shipments from that state during this time so that
the supplies available in American markets were not excessively heavy.
As a result, prices soon overcame the loss following the freeze and have
continued to improve.
The Valencia season opened with good prices and at no time to
date has the supply of that variety been excessive. Climatic conditions
in California were also of material assistance to the satisfactory move-
ment of the Valencia crop. Demand has exceeded supply with a con-
sequent steady improvement in prices until, at this date, Valencia sales
are being made for best stock in private sale markets as high as $8.00
per box f.o.b., while small size Valencias are being sold at auction
at an average as high as $1 1.00.
Grapefruit prices during the Valencia period were also satisfac-
The policy of so distributing the fruit volume in the smaller in-
terior markets so as not to increase or to assist in creating a surplus of
Florida fruit in the large centers has been continued. During former
seasons it has been customary to look for a surplus of supplies in the
larger centers once or twice each season. Fortunately, however, be-
cause of the short crop this season, there has been no occurence of
Of the 9,813 cars shipped by the Exchange, 5,735 cars, or 58.2%,
were sold at private sale, 4,01 1 cars, or 40.8%, were sold at auction,
105 cars, or 1.0%, were unsold as of May 1st.
Of the 4,011 cars sold at auction, 2,024 cars, or more than
50%, were shipped direct to these destinations by associations. Private
sales were made in 378 towns, of which 57 were not entered last year,
to 920 customers in 44 states and seven Canadian provinces.
Exchange Beats Competition
While good returns were experienced by all citrus growers, it will
be of interest to Exchange growers to know that their average returns
have exceeded those received by growers shipping through independents
in an appreciable degree.
A basis for such a comparison is found by a study of auction
prices. Such a comparison is meritorious because at auctions fruit is
displayed for inspection and bought on the merits of the samples. The
prices obtained directly reflect the confidence of the trade and the
buying public in the lines offered.
In the following table prices on the six largest auctions have been
averaged for all Exchange shipments as compared to all competitive
shipments from the state. These averages are for brights, golden and
russets, including all varieties and all sizes of fruit.
AUCTION PRICES REALIZED
Exchange Compared to Competitive Shippers
Of the 18 different averages furnishing points of com-
parison, the Exchange has exceeded its competitors in 16.
This is adequate proof that buyers in the barometer mar-
kets of the country are showing an increasing confidence
in the higher uniform standard of grade and pack main-
tained by the Exchange. This data is taken from all Auc-
tion Sales from the beginning of the season to date.
Exchange Averages . 6.51
Competitors' Averages ... ...... .5.90
Exchange beats competitors ... .. .61
Competitors beat Exchange ......
Exchange Averages ...........
Competitors' Averages .........
Exchange beats competitors .....
Exchange Averages .......
Competitors' Averages .....
Exchange beats competitors .
Exchange Averages ......
Competitors' Averages ...
Exchange beats competitors .
Exchange Averages ......
Competitors' Averages .
Exchange beats competitors .
. .. 4.93
. .. 5.54
. .... .22
Exchange Averages ........... 5.53
Competitors' Averages ....... 5.42
Exchange beats competitors ..... .11
Competitors beat Exchange ......
Brights Goldens Russets
Average prices for Exchange sales on all fruit from the beginning
of the season to date, f.o.b. Tampa, are as follows:
Auction ................... $4.32
Private Sales ............... 3.97
General Average ............ $4.1 6
A auction ................... 3.37
Private Sales ............... 3.23
General Average . .... 3.28
A auction ................... 5.25
Private Sales ............... 5.40
General Average ..... 5.28
Bulk Oranges, Average ............ 1.53
Bulk Grapefruit, Average .......... 1.20
Bulk Tangerines, Average .......... 2.32
Cannery Grapefruit, Average ....... .79
Development of foreign markets for Seald-Sweet grapefruit has
been continued by the Florida Citrus Exchange through its broker, the
S. B. Moomaw Company, and by maintaining a salaried contact with
Seald-Sweet quality constantly has been making headway in Eu-
ropean markets over other citrus. Applications are constantly being
received from dealers asking for the privilege of buying and handling
Seald-Sweet during the season.
Ten countries in Western Europe were entered by Seald-Sweet
grapefruit this season. This is an increase of one country over last
season. The larger markets of these countries, namely, England, Scot-
land, Germany, Belgium, Sweden, Norway, Holland, Denmark, France
and Finland, have been worked intensively and have taken the greater
proportion of the export volume.
The European demand for Seald-Sweet grapefruit this season was
such that a greater volume than last season was sold. Much was
shipped by the Exchange direct from Jacksonville at a considerable
saving in freight. More was shipped from New York. Still addi-
tional tonnage was sent to Europe by New York speculators who
purchased their supplies of Seald-Sweet at auction.
Because of the character of domestic markets this season, the
Florida Citrus Exchange exported no more fruit than was necessary
to maintain recognition for its brand with European trade. A greater
volume could have been shipped had supplies been available. European
demand continues good for desirable sizes and good quality.
Seald-Sweet fruit led all other grapefruit this season in prices ob-
tained in European markets.
Bulk Fruit Shipments
The experiment of marketing a very low grade of fruit under a
special arrangement has been continued during the past season with
very satisfactory results. This was especially effective during the
period following the freeze when a special effort had to be made to
maintain the standard of our Seald-Sweet and choice grades.
In general, however, the volume shipped by this method and in
bulk was small because of the generally satisfactory prices which
prevailed throughout the season.
Seald-Sweet fruit went into most markets in the Eastern Division
in about the same proportion as last season. Distribution exceeded
quotas because the large markets presented a buying power which
could afford the high prices which maintained far more readily than
the smaller interior markets.
Competition, especially in private sale markets, has been not only
keen but difficult because of the tactics employed by some of our
competitors. In spite of the fact that it has been a sellers' market
and the volume considerably short of the supply, many of our com-
petitors continued their old practice of selling below sales quotations
and wire, as usual, "If Exchange sells for $ .... offer our fruit 25c
It is unfortunate that our competitors do not have the complete
sales contact such as is available daily to the Exchange. Their ig-
norance of the actual worth of their fruit and the consequent under-
quoting of Exchange prices reacts to break the market. It was the
short volume alone which saved the situation this season.
Averages of the division for fruit from all sections of Florida, ex-
clusive of Indian River shipping points, were as follows:
Oranges ............... .$5.26 $5.12
Grapefruit .............. 4.44 4.21
Valencias .............. 6.49 5.95
Tangerines ............ 7.04 6.56
It is evident from these averages that an outstanding merchandis-
ing job is being done by the Florida Citrus Exchange. In New York,
for instance, all Exchange brights outsold those of competitors by 55c
per box. Exchange golden averaged 25c per box more than com-
In Pittsburgh, where dealer sales crews were operated prior to the
freeze and subsequent curtailment of this work, the balance in favor
of the Exchange is even more noticeable.
This is particularly significant when it is realized that only 4%
of the fruit sold in Pittsburgh consisted of brights. Of the remaining
96%, the Exchange outsold competitors 28c per box on golden and
72c per box on russets.
Indian River fruit has been largely controlled by our competitors.
Nevertheless the record made in New York by the Exchange on fruit
from that district has been noteworthy. It is one of which we are
These accomplishments have been made in spite of the heavy re-
ceipts of our competitors, and their practice of selling the lower grades
of Indian River fruit in markets other than New York so that the
average in that market might be kept as high as possible for purposes
On every variety of fruit-oranges, grapefruit, tangerines and
Valencias-the Exchange has beaten competitors on average returns
of Indian River fruit in New York from the beginning of the season
Much of this advantage may be traced to the advertising and
specialty work done on this class of fruit in New York City.
The markets of this division, upon examination of their records,
present the same story of good distribution and superior Seald-Sweet
returns as was obtained in the New York division. Here again sales
volume exceeded quotas because of the higher prices available in the
In the table below, Cincinnati auction averages for brights, gold-
ens and russets, all grades, Exchange as compared to competitors,
Brights Goldens Russets
Exchange ................... 5.04 4.90 4.55
Competitors ................ 4.99 4.64 4.22
Exchange prices over Competitors. .05 .26 .33
Exchange ................... 4.35 4.19 3.28
Competitors .................. 4.21 4.11 3.51
Exchange prices over Competitors. .14 .08
TANGERINES, /2 Boxes-
Exchange ................... 4.06 2.97 2.41
Competitors ................ 3.30 2.95 2.09
Exchange prices over Competitors. .76 .02 .32
Definite preference for Seald-Sweet quality and pack is evidenced.
Here again there is available definite proof of the superiority of
Exchange sales methods measured in greater returns from the sale of
fruit. Considering averages of the offerings on the Chicago auction,
Exchange fruit to April 12th brought 23c per box more than that of
The new auction terminal which was opened for business at the
beginning of the season has materially improved the auction situation
at Chicago. Both auction companies now sell under the same roof
in the Sante Fe terminal.
It is considered one of the best auction terminals in the United
States. Its excellent facilities for properly unloading cars, displaying
them, caring for the fruit, etc., are of material assistance in holding
the trade and maintaining satisfactory prices. These facilities have
enabled the auction companies to effect many economies and save
much lost motion on the part of the shippers as well as the trade.
Perhaps the greatest advantage in the new terminal is the fact
that a better understanding on the part of the trade has been ac-
complished. This has to a large extent removed the antagonistic feel-
ing that formerly existed. The buyers now purchase their require-
ments from the offerings of both auction companies and are in a
position to personally inspect every car that is on sale in the city of
The business-like manner under which these auctions are now
conducted and the cooperative spirit which has been brought into be-
ing has had a considerable stabilizing influence on the market in
general. This condition, plus a concentration of buying power under
one roof, has reacted materially to the shippers' benefit. By working
closely with the trade in both auctions, the Exchange has been able
to overcome a great deal of antagonism that before existed and now
receives the support of every jobber in Chicago, regardless of his
Direct comparisons in divisions consisting almost entirely of pri-
vate sale markets are not available, since records of sales are public
only in auction markets.
In New England, terminal facilities have been increased and im-
proved. Two new produce terminals have been opened at Boston,
which greatly facilitate the sale and handling of Florida fruit. The
New York, New Haven and Hartford Railroad rebuilt two of its
existing sheds and has installed up-to-date facilities for loading and
unloading fruit. The Boston gnd Maine Railroad has built a new
and modern steel and concrete terminal for the same purpose.
Auction sales are held at different hours in the two terminals, so
that the trade has time to attend both. Shippers are thus given the
largest buying power possible in the market.
As an outgrowth of the terminal development in Boston, the
Boston and Maine Railroad has operated a new service schedule of
delivery from the Potomac Yards to the Boston auctions. Fruit is
now available for sale the second morning after leaving Potomac
The Exchange has worked with the principals behind these im-
provements and is to a large measure responsible for the results
Terminal facilities in St. Louis have also been improved during
the past season. In this market there is also available a fund of data
indicating the superiority of Exchange sales returns.
The Florida Citrus Exchange has followed the policy common
in other cooperative organizations of handling non-competitive pro-
ducts through its existing sales organization. The advantages to the
Exchange in such operations are two-fold. In the first place, all re-
turns from such work accrue directly to the Florida Citrus Exchange
and operate to reduce the gross maintenance cost of the organization.
Second, the sale of this deciduous volume reaches its peak at a time
when Florida citrus is off the market. It thus conflicts in no way
with the handling of the Florida crop. On the contrary, it serves to
keep our representatives on their toes actively in contact with the
trade at a time when they would otherwise be idle. Greater effi-
ciency and higher morale are the inevitable results.
All business of this kind is handled through a subsidiary organ-
ization, the Exchange Sales Company, authorized and operated on
the authority of the Board of Directors.
Through this company we have succeeded in securing one of the
largest individual accounts in the California deciduous field-the Pa-
cific Fruit Exchange. This account is handled by our organization
This contract provides the sales organization of the Exchange
with a larg' deciduous tonnage. It is now estimated that the volume
will run considerably higher than originally planned, due to the suc-
cessful organization efforts of the Pacific Fruit Exchange. It has
recently closed several large blocks of business which will increase its
volume this year between three and four thousand cars.
As an example, the Pacific Fruit Exchange has succeeded in se-
curing the business of the French American Corporation, which is the
holding and handling company of the properties of that organization,
together with the Bank of Italy and the United Security Bank and
Trust Company, whose combined tonnage approximates 1200 cars.
Such business is of a stable nature. The Pacific Fruit Exchange
is one of the largest and probably most amply financed shippers of de-
ciduous fruit in California. The fact that it is obtaining accounts
like that of the French American Corporation is indicative of a steady
growth which will react materially to our advantage.
The contract with the Pacific Fruit Exchange was placed with
the Florida Citrus Exchange only after its President, Mr. Scott
Ennis, and his Sales Manager had personally investigated all organ-
izations available for the work. That it was placed with the Florida
Citrus Exchange is a compliment of the highest type to the efficiency
and business-like conduct of our organization.
FIELD DEPARTMENT ACTIVITIES
During the season 1927-28 the Florida Citrus Exchange was
composed of eleven active sub-exchanges. In these sub-exchanges
were 80 associations and eight special shippers, operating 74 packing
In Every Section
The chart to the right
illustrates the state dis-
tribution of Exchange
packing facilities, which
would permit the Ex-
change to handle 75%
of the state crop with-
out impairing efficiency.
The chart shows three
n e w associations and
three new special ship-
pers. In addition, three
special shippers discon-
tinued their packing
houses to pack through
Exchange houses, and
receive the advantages
of low Exchange oper-
During the year two small associations were eliminated as in-
active. Six special shippers have either gone out of business or are
shipping through associations; three packing houses have combined
their output in one; three controlled by the Exchange are not now in
use; one has recently been burned but will be rebuilt. Three addi-
tional packing houses belonging to special shippers have come into
We are now working on the establishment of two new packing
houses which we believe will add materially to our tonnage. Further,
we are reorganizing several weak associations which, under the new
arrangement, should have a good volume next season.
It is estimated that there are about 400,000 boxes of fruit re-
maining in the state to be shipped during the balance of this season.
Of these, the Florida Citrus Exchange controls approximately 50%.
The total estimated movement of the state this season, including
that which remains to be shipped, will be 13,980,200 boxes as against
15,757,120 boxes last season.
This reduction has been due to the effect of the January 1927
freeze, the period of extreme drought of last fall and winter and
the freeze of January 1928. These abnormal conditions, together
with the large quantity of late bloom fruit, have made this an exceed-
ingly difficult operating year from the standpoint of the Field De-
partment. The cordial cooperation of sub-exchange and association
managers all along the line has assisted materially in efficiently hand-
ling the situation. The reputation of our brands has been sustained
and best possible returns have been made possible through our Sales
Inspection Force Continued
Due to the very short crop-the smallest since the season of
1921-22-it has been necessary to keep our inspection force at a
minimum, although as many packing houses as before had to be cov-
ered. Six regular inspectors, or two less than heretofore, have been
used. The balance of the territory, six sub-exchanges, were handled
by the sub-exchange managers directly.
The short tonnage and difficult classes of fruit handled have
made it difficult for association managers to keep costs down. Our
auditors' reports however indicate that in most instances good work
has been done along this line. Improved labor conditions have been
of material benefit.
Three men have handled the work of association audits this year,
as in the past. While the large territory to be covered renders this
difficult, the accomplishment has been in the main very satisfactory.
Due to the peculiar weather conditions maintaining this season,
we have probably been more free from decay troubles than any
previous season on record.
Precooling plants are in operation in eighteen of our houses.
Twelve houses have used Zeltrocide and one Bicarbonate of Soda.
In consequence of the court decision in the case of Brogdex Distri-
butors against the American Fruit Growers, Inc., rendered in favor of
the Brogdex Company, it has been thought best not to continue the
use of borax solution.
Several more of our houses contemplate installing precooling
plants before the opening of next season.
Fruit Marking Necessary
The necessity for marking all of our Seald-Sweet fruit is increas-
ingly apparent. Many of our independent competitors are now
marking. The California Citrus Exchange is endeavoring to mark
all of their Sunkist, although they seem to be experiencing some of
the difficulties we have encountered, judging from the following ex-
cerpt on the situation, as quoted from the May Citrograph:
"It Costs Money to Omit Sunkist Trademarking.
"If there is anyone who doubts the value of Sunkist
trademarking, he should see the complaints received from
the trade on occasional lots of Sunkist oranges which have
been allowed to go to market without being so identified.
It is not trademarking that is an expense, but rather the
omission of it that costs the grower money.
"The retailer finds unmarked fruit hard to sell the
housewife who reads Sunkist advertising and understands
that oranges are not of the dependable Sunkist quality unless
they bear the name upon the skin. The retailer goes back
to his wholesaler for a rebate and the demand for an al-
lowance is passed back to the shipper.
"It is important that the fruit be trademarked as ad-
vertised. If you don't agree ask some association manager
who has had to make an allowance of 25c or more per box
on a car of unmarked fruit."
At the beginning of this season our contract with the Sevigne Ma-
chine Company for the Hale marking machines was cancelled by
mutual agreement. This cancellation left the Sevigne Company free
to deal with individual houses for the use of machines already installed.
At the same time the Electric Fruit Marking Machine Company
finally submitted a definite offer on its machines. During the season
their machines have been installed in nine houses with generally satis-
Recently the Electric Fruit Marking Machine Company notified
us that it would make any house continuing the use of the Hale
machine party to an infringement suit started by it against the
Sevigne Machine Company. We have, therefore, advised against a
further use of these machines. Meanwhile, the Sevigne Machine
Company has brought out a new machine which does not use heat.
Only one of these machines has been installed but it appears to be
It has not been our policy to mark any fruit which might be late
bloom or frost damaged. Due to the large quantity of this class of
fruit shipped this season, together with the high percentage of choice
fruit, we have to date marked only 271,796 boxes. Every house,
however, should be prepared to mark all Seald-Sweet next season.
The Exchange has had one man, Mr. J. Reed Curry, working
exclusively on organization matters. Through him much has been
accomplished by giving many growers and business men of many
communities a thorough knowledge of the operation of the Florida
Citrus Exchange. His principal medium through which this infor-
mation was presented was by means of talks to civic organizations and
growers' meetings. The Florida Citrus Exchange is still far behind
the California Exchange in the number of men used on organization
work, even though they already have 75% of the fruit of the state
in their organization.
Contact has been maintained with the Federal and State Agri-
cultural authorities. Many matters affecting the interests of our
growers have been handled with them. Our Production Manager at-
tended the conference in Washington last Summer on the Mexican
Orange Maggot situation in Texas. With the cooperation of the
California interests, a handling of the situation was secured which to
date has worked well and, we believe, has afforded us a large meas-
ure of protection against this very grave danger.
At present the Florida Citrus Exchange is doing its utmost to
assist in securing an extension of the weather bureau service which
will give the state something comparable with the service furnished in
California. A start undoubtedly will be made during this coming
winter. However, action by Congress and the Florida Legislature
will be necessary to obtain the complete service. The Exchange is
working toward this end.
The Seald-Sweet Chronicle has been of material advantage in
building and maintaining grower morale at a high standard. Through
this medium we have been able to authoritatively inform our growers
of current questions and operations throughout the season.
The circulation of this paper is at present well above 10,000.
It is circulated to both members and non-members of the Florida
Under conditions existing this season, there has been no necessity
for an allotment of quotas to be shipped during given periods. With
the prospects of a large crop next season, this is liable to be an im-
portant matter for the Sales and Production Departments to work
in coordination. As such allotments must be based on the estimates
of fruit in the Exchange as compared to the total in the state, the
importance of having accurate estimates is readily apparent. A
large amount of data for use in checking and verifying these estimates
has been prepared by the Production Department. With additional
care on the part of all sub-exchange and association managers, it is
believed that most accurate information on the crop next season will
The outlook for next year's crop is extremely favorable. A very
heavy bloom developed in all sections. Rains have occurred at op-
portune times to cause the fruit to set well. Oranges are heavier in
proportion than grapefruit, but there should be an ample supply of
It is still too early, however, to make an estimate of the probable
crop. On April 12th the Government report showed the condition
of the crop for this year as compared with last as follows-grapefruit
84 per cent, as against 76 per cent; oranges 87 per cent, as against
82 per cent; and tangerines 83 per cent, as against 78 per cent. It
is believed that the orange percentage is too low.
The effective advertising campaign which was planned and
created by our Advertising Department and Erwin, Wasey & Com-
pany, our advertising agency, was cancelled immediately following
the freeze in January. As a result, considerably less than 50 per
cent of the operations of this department as planned were put into
The advertising activities of the Exchange for the coming season
will continue toward the three primary objectives-to increase con-
sumption and demand for all citrus, to create preference for Florida
citrus and to stimulate a recognition on the part of the trade and con-
sumer for Seald-Sweet as Florida's Finest Fruit.
One of the most important phases of next season's work will be
the activities of the dealer sales crews. The nucleus of these crews
has been kept in operation in Chicago, Cincinnati and New York.
From these experienced men as a beginning, adequate, result-produc-
ing crews can be trained and put into effective operation on Seald-
Sweet as the coming season advances.
Dealer sales work in Europe was continued as in the past. About
fifteen European markets were entered and thoroughly worked by our
An appreciable volume of dealer display material remains for
next season because of the cessation of activities following the freeze
this past season.
Advertising on Florida citrus fruits is one of the three primary
essentials to the intelligent merchandising of Florida citrus. More
advertising than the Exchange can possibly afford with its retains
on one-third of the crop must be done.
This increase to support a more comprehensive campaign may be-
come a fact through the citrus clearing house now before the operators
and growers in the industry. It may be made a certainty, however,
by placing a dominant percentage of Florida fruit in the Exchange
so that all fruit may bear its share of the burden and an adequate fund
for this purpose created.
The Seald-Sweet Juice Extractor adopted as a Seald-Sweet pre-
mium and designed to increase the use of citrus juice continues to
receive an increasing demand. Exchange offices during the past
season distributed approximately 9,000 juice extractors, principally
through premium offers contained in our advertising and on the fruit
wrappers. In addition to this volume the manufacturer sold through
his retail hardware sales force about 6,000 machines. These latter
sold for the full retail price of $3.00 a machine.
Total distribution on the Seald-Sweet Juice Extractor is close to
50,000 machines, including the original model used in the early
premium operations of the Exchange. From the correspondence re-
ceived from purchasers, it is safe to say that all but a small propor-
tion of the Seald-Sweet extractors which have been sold are still
The original stock of extractors has been sold and it has been
necessary to meet current demands with additional orders during the
A new premium offer which affords a closer tie-up with the re-
tailer and offers the Exchange a distinct trade advantage was tested
this season. Instead of selling the juice extractor for $1.50 and 36
wrappers as heretofore, the offer was changed to $2.00, one wrapper
and the dealer's name and address. The increase of 50c in the price
was such that it had no effect on the sales volume, yet it made pos-
sible a rebate to each retailer whose name and address was given of
a 50c piece for each extractor sold.
This plan in effect reduces the cost of a box of Seald-Sweet fruit
to the retailer 50c for each extractor purchased by one of his cus-
tomers. It is an advantage available only on Seald-Sweet fruit and
has gained considerable attention during its first year of operation.
New Premiums Added
Two new additions have been made to the premiums offered by
the Exchange during the past season. Both of these have been so
recent as to have received little or no distribution to date.
The first is a smaller hand extractor which, while operating with-
out gears, is still mechanical. This machine is much more suitable
for the modern apartment. It can be set anywhere, is less cumber-
some and has the advantage of a strainer and a bowl which holds the
juice until ready to serve. It has a further advantage in the fact
that it retails for $1.00 as compared with the $3.00 price of the
The second premium addition is the Seald-Sweet Grapefruit
Corer, the patents of which are owned by the Florida Citrus Ex-
change. The new corer is much more simple in construction and op-
eration and retails for $1.00, as compared with the $2.00 corer
All premium articles bear the stamp "Seald-Sweet," including
those distributed directly by the manufacturer. This is a material
advantage in advertising the trade name of the Exchange.
From October Ist, 1927, to May Ist, 1928, the Traffic De-
partment filed claims totalling $27,709.76. The amount collected
on claims during the above period was $27,577.72.
Since the Exchange was organized, up to May 1, 1928, the
Traffic Department has filed 57,788 claims amounting to a total of
$1,432,226.82. Of these, 'it has collected 55,537 claims amount-
ing to $1,073,781.98, leaving on hand and unpaid as of May 1st,
329 claims amounting to $35,918.59.
The fact that the past season has been one practically free from
decay, coupled with the fast and dependable transportation service,
has tended to reduce the usual number of claims filed for loss through
decay in transit. A better class of equipment and more careful
manipulation of ventilation devices has also eliminated losses traceable
to freezing in transit. We have no record of a single complaint of
fruit having arrived at destination frozen this season.
The improvement in the handling of perishables by the carriers
can doubtless be attributed to the vigorous prevention campaign which
they inaugurated two or three years ago. While very satisfactory
results have been obtained so far, there is still room for activity along
that line. The tonnage of fresh fruits, vegetables and melons is about
2 per cent of the freight transported by carriers, while the amount of
claims paid by them annually on that traffic is about 22 per cent.
In an effort to solicit the cooperation of shippers, an appeal was
made to the American Fruit & Vegetable Shippers Association, whose
membership controls the movement of practically three-fourths, or
750,000 of the million car loads of fresh fruits, vegetables and melons
transported annually. The appeal resulted in the organization of
Joint Claim Conferences, at which all of the principal railroads are
represented by their freight claim agents and shippers and receivers
are represented by 26 members. Our Traffic Manager has served
since the organization of that body as Chairman of the Rules of Pro-
cedure Committee. He also has recently been appointed, for the third
consecutive year, Chairman of the Claims Committee of the Amer-
ican Fruit & Vegetable Shippers Association.
There are several very important subjects now before the Claims
Committee which are being handled with the Freight Claim Division
of the American Railway Association in an effort to bring about uni-
formity in the handling and adjustment of claims throughout the
It is felt that much good already has resulted from the claim con-
ference, and much is still possible of accomplishment by cooperation
of the railroads and shippers in this work.
Routing and Reconsignment
The Traffic Department has direct supervision over the routing
and reconsigning of all shipments. In the handling of perishables it
is highly important that routes be selected that will insure the arrival
at destination in the quickest possible time. Consequently, the matter
of routing is given very careful and close attention by the Traffic De-
partment at all times.
It is the duty of the Traffic Department to select reconsigning
points so situated geographically as to permit of reconsigning to the
largest possible number of markets under the protection of the through
Perhaps one of the most important things confronting an associa-
tion is the securing of an adequate car supply to enable it to promptly
load out fruit as it is packed. It is the duty of the Traffic Depart-
ment to keep in close touch with the carriers and to keep them posted
as to what our probable car requirements will be over certain periods.
The car supply is under the supervision of the Car Service Division
of the American Railway Association. They keep in touch with
the situation through reports rendered at the Regional Advisory Board
meetings held quarterly throughout the country.
In addition to the quarterly meetings of the Southeast Regional
Advisory Board, our Traffic Manager requested and was granted the
privilege of organizing a Florida Perishable Sub-Committee of the
Southeast Advisory Board. That committee is composed of local
representatives of the operating departments of the railroads in Flor-
ida, and representatives of the various shipping organizations. Meet-
ings are subject to call at a moment's notice and in that way any
trouble arising during a shipping season can be promptly handled and
the trouble corrected without delay.
Another important duty of the Traffic Department is to assist in
securing an equitable adjustment of freight rates. While the Growers
& Shippers League of Florida was organized for the purpose of hand-
ling all rate matters, that organization is entitled to, and is justified in
expecting, the assistance and cooperation of the traffic departments of
the various shippers whom they represent. Our Traffic Department,
therefore, has kept closely in touch with the activities of the League
and has rendered every assistance possible in the attempt to secure a
proper readjustment of the present Florida rate structure. Our
President serves the League as its First Vice President, and our
Traffic Manager is a member of the Executive Committee and Chair-
man of the Traffic Committee. Aside from the Exchange assisting
the League materially in this work in a monetary way, therefore, its
officers are aiding in the work to the fullest extent.
The so-called Line Haul Rate Case, in which every grower and
shipper of fruits and vegetables from Florida is so vitally interested,
has been in the hands of the Interstate Commerce Commission since
last August. We feel that a very good case was made, and material
reductions will be ordered in the rates on fruits and vegetables. While
we are momentarily expecting the decision of the Commission, just
when it will be rendered is problematical. Nevertheless, we are hope-
ful that next season will be opened with an entirely new and equitable
line of citrus fruit and vegetable rates.
The prospect of the rapid development in European markets nec-
essitates an inquiry into freight rates on grapefruit between European
ports and interior markets. The Traffic Department is now handling
the matter with the American Freight Traffic Manager of the London
Midland and Scottish Railway, with a view to securing the most
favorable freight rates possible throughout Great Britain.
EXPENSE OF OPERATION
Although the Florida Citrus Exchange operating statement shows
that the cost of operations this season was $15,275.12 less than last
season the operating costs per box have increased from $.074 to $.086.
This is due to the fact that nearly one million boxes less were shipped
by the Exchange this season as compared with last.
Operations have been maintained on a basis of the most strict
economy possible consistent with efficiency in every department.
Details of the comparative costs of operation this season and last
are shown in the tabulation below.
Comparative Operating Statement
Season 1926-27 and 1927-28
To May 10th
Agents Expense $ 31,657.94
Agents Salaries less
Brokerage Rec'd. 43,493.16
Post. & Telephone 25,722.95
Int. paid less Int. rec'd.. 3,887.01
Office Supplies 9,352.57
Rent Paid 4,585.00
Florida Salaries and
Traveling Expense 124,117.45
Telegraph Expense 87,918.15
Per Box Amount Per Box
.007 $ 29,652.08 .007
In order to provide a basis of analysis of costs of sales in each
division and to make available some method by which these can be
kept to a minimum, the costs of acceptance by divisions for the pres-
ent season to May 10th are pertinent. This data is presented in the
COST OF ACCEPTANCE BY DIVISIONS
To May 10, 1928
New England .$ 9,098.00
Northwestern & Canada
Waycross Diversions 2,964.00
Total Costs .$87,858.60
Total Acceptances ...
Boxes Per Box
Some Answers to the Question, "Why Does Not the Florida
Citrus Exchange Control a Larger Volume of Fruit?"
To examine into these reasons it will be necessary for us to recog-
nize the fact that the Florida Citrus Exchange is the only exponent
of cooperative citrus marketing in Florida. Fundamentally then, we
must find out why a greater volume of fruit in Florida is not coopera-
tively marketed. Upon what factors does cooperative marketing
Some light is thrown on this question by an examination into the
history of cooperative development, both in this country and abroad.
In every case it is apparent that economic necessity alone has forced
A study of the growth of cooperative endeavor in Europe, prin-
cipally in Denmark and Sweden, emphasizes this fact that necessity
is its cause. There we found a gradual break down of the landed
estates on which the peasants were little other than slaves. With a
change of governmental policies, much of this land was turned over
to a class of people who were in no way ready for ownership in any-
thing other than ability to grow the product. Severe and often disas-
trous struggles on the part of these new farm owners with the market-
ing problem finally forced the birth of the cooperative marketing idea.
Over a period of several generations, this idea has been developed
to its present national status in those European countries which are
dependent almost entirely upon their agricultural resources for exist-
It is in Europe that extreme necessity forced the original coopera-
tive endeavor. And it is in Europe today that we find the most suc-
cessful activities along this line because their governments have been
dependent upon that success for their existence.
In America necessity has been just as great a motivating factor.
Take, as an instance, the situation in California. Many years
of strenuous effort were of little avail until economic necessity forced
the present strength of the cooperative movement in that state. The
California Fruit Growers Exchange operated with a small volume of
fruit for many years. Conditions finally reached a point where pro-
duction was unprofitable.
The various marketing interests in evidence at that time, directly
comparable to those we have in Florida today, organized what was
called a citrus union. This citrus union was similar in nature to our
proposed clearing house. According to the advice I have on the situa-
tion, practically all of California's citrus was marketed through this
union. It lasted just fourteen months, but a study of the history of
that period might be of considerable value to those interested in pres-
ent-day Florida citrus problems.
After the failure of the citrus union in California, bankers, bus-
iness men and growers were forced by economic conditions to the
decision that one organization must have sufficient volume to create
stability by increasing consumer demand, stabilizing the product and
controlling distribution. Then, and not until then, the California
Fruit Growers Exchange acquired control of the percentage of the
fruit volume which they have marketed ever since.
In considering the growth of the cooperative movement in Amer-
ica, many instances of unqualified success in the agricultural field
might be cited. The cooperative marketing idea has brought from
bankruptcy to comparable economic independence the growers of
potatoes, pears, apples and other standard farm products.
It is not necessary, however, to stay in the agricultural field to
illustrate the fact that necessity forces cooperation. A study of the
history of the United States Steel Corporation proves that there is
strength in unity and that when producers pool their common interests,
satisfactory conditions can be created. Without going into too much
detail, you will remember that at the time of the merger of the United
States Steel Corporation, which was made possible by the affiliation
of a large number of small competitive companies, that the uses of
steel were limited, price cutting rampant and conditions in general
were deplorable. Such were the factors which forced, again through
economic necessity, the formation of perhaps the most outstanding
business success in the world.
Now let us consider the situation in Florida. Here again we find
the factor of necessity paramount in the formation and development
of cooperative marketing. We find here, just as elsewhere, that co-
operative marketing has improved practically all conditions in the
industry to which it has been applied.
Prior to the organization of the Florida Citrus Exchange, fruit
had been shipped in various ways, some in barrels, some in bulk, much
of it packed. There was no standard of grade and pack. As one
operator expressed it, the package consisted of "an orange, a piece
of paper and sometimes not together." The boxes were fastened
with birch hoops. Packing operations were slow and would be ex-
ceedingly expensive today.
Compare just these few details with those of today and you will
agree with me that the organization of the Florida Citrus Exchange
has advanced citrus marketing very, very materially. Better standard-
ization, better pack, better loading, better handling, better carrier fa-
cilities and contracts and better terminal facilities are primarily the
result of this cooperative effort. Competition and increased produc-
tion made these improvements necessary. Cooperative marketing made
them possible and profitable for the producer.
I have gone into this detail to emphasize to you in the strongest
method at my command the fact that economic necessity has been and
continues to be the fundamental reason for the existence, growth or
success of cooperative marketing.
With this as a background, let us now consider why the Florida
Citrus Exchange does not have the percentage of Florida's citrus vol-
ume necessary for successful control. The fluctuations of cooperative
control in Florida citrus directly parallel economic exigencies. When
'markets were good, prices satisfactory and volume not too heavy,
there was no necessity for cooperation. During the few times that
these conditions were reversed, cooperation made great strides.
Florida is indeed fortunate that to date the periods of poor re-
turns have been somewhat infrequent and of short duration. This is
undoubtedly due to the greatly superior quality of fruit which has in
itself served to create to a great extent its own market. Our less for-
tunate neighbors, not possessed of a comparable quality of product,
were forced more quickly into complete cooperative endeavor.
The time is not far distant, however, when the increasing pro-
duction of Florida groves and the growing keenness of competition
which Florida fruit is meeting will inevitably bring about and main-
tain conditions bordering upon disaster until cooperation is forced to
a successful dominant plane in Florida.
It was one of these periods of depression which forced the organ-
ization of the Florida Citrus Exchange. A large percentage of fruit
was signed with it this first year. The succeeding season, however,
conditions were changed. The crop was not so large, buyers were
again in evidence, growers withdrew from the organization and many
have never come back. Others were forced in two or three times in the
past two decades by a recurrence of the original conditions.
I can point out to you a more recent illustration of this rise of
cooperation during a period of depression. In 1922-23, when prices
were low, growers were forced to consider some steps which would
remedy the situation. As a result, about 55 per cent of the fruit was
signed up to the Florida Citrus Exchange during the Lake Wales
drive. The organization was expanded in the best possible manner
to handle the increased volume. The reason was necessity.
As you know, in 1923-24, the season immediately following this
drive, we had a very good crop and California had a big crop until
December 21 st. On this date a disastrous freeze passed over Cal-
ifornia and the day following buyers began to come into Florida. In-
stead of the Exchange handling 55 per cent of the fruit, they handled
35 per cent, losing 20 per cent of the state volume to buyers. Co-
operation was retarded because the necessity for it had passed.
I have thus illustrated to you the first reason why the Florida Cit-
rus Exchange does not have a greater percentage of the Florida crop.
In a few words, it is because the life blood of cooperative marketing-
economic necessity-so far has been intermittent and casual in the in-
dustry. The necessity has not been sufficiently imperative to inculcate
into growers a stable cooperative inclination. And history proves that
this state of mind can be gained only by economic pressure.
The second reason I have in mind is one of business fact. No
organization can be built into a pinnacle of efficiency over night.
When the Florida Citrus Exchange was organized, there was a
lack of competent association and sub-exchange managers. Some
grower's brother, uncle or cousin who had absolutely no training in
this line was employed as manager. Many mistakes have been made
by the Florida Citrus Exchange during its growth. I am convinced
however, that the biggest mistake ever made and one that is largely
responsible for much of our lack of volume has been the result of in-
efficient management of the local associations and sub-exchanges.
These results were far-reaching and did much to prejudice growers
who were the victims of mistakes made because of inexperience during
the early days.
The weakness was not short-lived. An analysis of the operations
of the Florida Citrus Exchange three years ago by efficiency men of
national reputation definitely pointed out the inefficient management
of local associations as being the weakest link in the entire organiza-
tion. They recommended a closer tie-up to the Tampa office. As
the result, local association managers today must be satisfactory to
Better results and greater efficiency have been brought into the
work of the local association managers in other ways. Three years
ago an inspection service was set up to make certain that grading and
packing specifications of the Florida Citrus Exchange were adhered
to and that the operations were efficient. In addition, a complete
auditing service was given the associations every month, which has
provided a closer check on current costs with a corresponding increase
in efficiency and lower operating cost. These services have proven
The operation of the Tampa office, in my opinion, has been fair-
ly satisfactory. Examination of the records shows that where fruit
was properly graded, packed and handled by the associations, the
prices realized through the Florida Citrus Exchange were as much or
more than through competitive agencies. This condition has been
made possible by the very capable men who have headed the Florida
Citrus Exchange in the past. I refer to Mr. M. E. Gillett, Mr. W.
C. Temple, Dr. Ross and others. Their efforts, however, were par-
tially nullified because of inefficiency in associations.
My aim has been to build efficient units wherever the Florida Cit-
rus Exchange may operate, rather than to press a lot of people into
the organization and then have them get out because of local dissatis-
faction. While I believe I have made some considerable and satis-
factory progress along this line, these corrections have not been of
sufficiently long standing to overcome the deeply rooted prejudices
fostered by earlier mistakes.
Since the organization of the Florida Citrus Exchange, competi-
tion has been exceedingly difficult. Here I point to a third answer
to the question. I do not refer to competition in itself, as it has no
doubt helped to improve conditions. Quite on the contrary, I refer
to the many absolutely unfair and underhanded practices which have
been resorted to by opposing operators.
There are many instances of this kind which I might cite. For
example, it has been stated that independent shippers have at times
increased their volume considerably by working closely with care-tak-
ers. We have many good, honest care-takers in Florida. Unfortun-
ately, however, we have some who are not, but who are on the look-
out for whatever graft they can get. No one knows this fact better
than the independent operator. During my time as association man-
ager in Polk County, I had proof of three distinct and separate cases'
of this practice in my territory, which prevented considerable fruit
from coming into the organization. Since I managed a house in a
strong Exchange territory, the condition must have been much worse
in other sections. I have since found that this is true.
Another example of dirty competition might be cited in false
propaganda put out by independent operators against the Florida
Citrus Exchange. This has to do with high salaries, revenue, cost of
operations and many other things which are twisted or thoroughly un-
true about the organization. In spreading this propaganda, it is not
unusual for independents to employ growers who are somewhat prom-
inent in their communities and pay them so much per box, or some other
guarantee, in return for their influence in keeping fruit away from the
Exchange and bringing it to their organization.
Another practice used by independents in spreading propaganda
is the employment of solicitors and buyers. With a large number of
these solicitors in the field, equipped with tricky and false information,
a large volume of fruit is certain to go to independent operators.
The employment of these men is made possible by the profits
private operators make on the growers' fruit they handle. One year,
when I was manager of the Polk County Citrus Sub-Exchange, I
checked up on the organization expense of one operator in Polk
County. It cost him over 8c per box in addition to his ordinary over-
head to bring fruit into his house.
A more recent example of this false propaganda sponsored by in-
dependent interests is the attack upon the integrity of Exchange offi-
cials made through the columns of the Tri-City Times published in
Winter Haven over the name of Mr. C. W. McCoy. He bases his
insinuations upon the operations of the Capitol Fruit Company. He
perhaps was unwilling to inform himself that this company is an auth-
orized subsidiary of the Florida Citrus Exchange and that the execu-
tives he named were appointed by the Board of Directors of the
Florida Citrus Exchange to handle the company.
Malicious work of this type is constant and effective. It ,is an-
other very good reason why growers maintain false opinions about the
Florida Citrus Exchange and withhold their fruit from cooperation.
A fourth factor in preventing the growth of the Florida Citrus
Exchange is the matter of finances. I am convinced that it is impos-
sible for any organization to secure the volume of fruit necessary to
create stability without strong financial connections. Private operators
make growers advances during the summer as they need the money in
return for handling their fruit. Until two or three years ago, the
Florida Citrus Exchange was not in a position to do much along this
When I assumed my present position, I set about to enlarge the
financial subsidiary of the Florida Citrus Exchange, the Growers Loan
and Guaranty Company. We have been very successful with this
organization and have been able to assist our members materially dur-
ing the past two years' depression. We do not have sufficient funds,
however, to take care of new tonnage, as the last two years have been
largely a proposition of financing our present members.
Independent operators will finance growers at their own risk.
Many in the past two or three years have used their money in this
manner unwisely, and I am convinced that some of them have lost
considerably. On the other hand, some played safe, made whatever
advances the fruit justified, took a mortgage on the grove and now
own some valuable grove property as the result.
Here we come to a fifth answer to our question. By shrewd fi-
nancial operations and manipulations and by the profits made by
handling growers' fruit, independent operators have been able to
obtain financial control of a large number of groves. This volume of
fruit is owned outright by independent operators and is placed on
preferred orders. These operators then solicit tonnage to take care
of and to keep down the cost of operation of their own fruit and to
increase the profits on the entire deal.
Here we have a factor with which California never had to con-
tend. From the best information I can get, about 15 to 20 per cent
of the state crop is owned by operators outright or controlled by
mortgages on the property. This fruit is, of course, closed to Ex-
I believe the Florida Citrus Exchange, by increasing its financial
strength, by working strictly along efficient lines and by conducting
the best possible educational campaign to counteract the propaganda
above referred to, will be able to increase its tonnage gradually until
conditions reach a point where fruit production is unprofitable. At
that time, I believe growers will be forced to place at least 75 per cent
of the fruit in the state in some one organization which is capable of
bringing about relief.
A survey made by disinterested parties recently at my request
showed that out of 100 inquiries as to past marketing affiliations, 68
per cent of the growers replied that they had at one time or another
been in the Exchange and 32 per cent had never been affiliated with
this organization. Various reasons were given for withdrawals-sale
of property, forced to accept financial assistance from independent
operators, poor returns from fruit, etc. In each instance where the
reason of poor returns was cited, our investigation showed that these
returns were several years ago and through associations that were not
properly managed. Others withdrew because the Exchange would
not move their fruit at the time they wanted it moved. Still others
withdrew because they had an opportunity to sell their fruit, or be-
cause they did not like to pool, or they did not like the association
manager, or the general manager, or the sales manager.
In my opinion, any organization set up in Florida on any basis
with only 33 per cent of the fruit could not produce better results than
the Florida Citrus Exchange. It would merely buy a lot of experi-
ence for its money.
I have gone into considerable detail in this letter to clearly present
the thought I had on the situation. I believe that by doing so, I have
given you my opinion of the reasons why the Florida Citrus Exchange
does not control a larger volume of fruit. I have discussed these
under five main heads and I believe I have fairly well covered the
-(From a letter to Dr. H. Harold Hume from C. C. Comman-
der, March 15, 1928).
THE FLORIDA CITRUS MERCHANDISING PROGRAM
Sponsored by the Florida Citrus Exchange
It is the belief of the Florida Citrus Exchange that any program
looking to the stabilization of the Florida citrus industry and the pro-
tection of grower investments in that industry must recognize as essen-
tials these basic activities and functions:
1. STANDARDIZATION OF GRADE AND PACK. This
is the first essential to the success of any merchandising
program. Without a standardized product, controlled sales
are impossible. The manufacturer must first perfect his
product before he can hope to gain and hold trade and con-
sumers on that product.
2. ADVERTISING. With a perfected product in
hand, consumers must be developed, new markets must be
entered and wider distribution must be obtained. These
facts are particularly true and apply in this case where there
is no control of the production volume to conform with the
consumer demand and immediately available distribution.
The impending and sizable increase of the citrus volume
from Florida is by no means a secret and must be con-
3. PRICE FIXING. The manufacturer of a perfected
product, having developed markets, must fix a price on
that product or his previous work is to no avail. The ob-
jection raised by certain operators that the wide variance of
qualities of fruit makes price fixing impossible can be taken
care of by a committee acting on these details, probably by
districting the citrus belt and providing prices according to
these districted classifications of fruit. The objection of
inability to hold these fixed prices is not sound, inasmuch as
the committee in charge would have full cognizance of the
fruit volumes rolling or in prospect and would adjust their
price immediately and in accordance with that information.
This matter of price fixing is absolutely essential to eliminate
the playing of one distributor against another by the trade
and to do away with the cutting of prices below the inherent
worth of the fruit, which has been a dominating factor in the
breaking of markets in the past.
4. REGULATION OF DISTRIBUTED VOLUME FROM
FLORIDA. With the above factors taken care of, i.e.,
standardized product, developed markets and uniform price,
the manufacturer then faces the problem of distribution of
that product at the price decided upon to the markets in
such volumes as coincide with the stimulated demand.
The following tables are the latest available data on the citrus
acreage by varieties and whether non-bearing or bearing for those
countries the products of which feed American markets.
Florida Citrus Acreage and Trees
Reported by State Marketing Bureau, October, 1926
California Citrus Acreage
Reported by California Cooperative Crop Reporting Service
Oranges .. ..... 185,543
Lemons ............ 43,179
Grapefruit . 6,223
Totals . 234,945
Texas Citrus Acreage
Reported by J. M. Delcurto, Chief, Seed Division,
April 10, 1928
Oranges .......... 2,300
Grapefruit ......... 6,200
Totals ........... 8,500
Reported by T. S. Bis
Oranges .. .
Grapefruit . .
rizona Citrus Acreage
hop, Chairman Commission,
April 10, 1928.
Totals ........... 2,200
Alabama Citrus Acreage
Reported by J. W. Pace, Chief Citrus Inspector,
April 10, 1928
Satsuma Oranges .... 4,030
Isle of Pines Citrus
. . 1,000
Porto Rico Citrus Acreage
Reported May, 1927
Grapefruit .......... 3,145
SHIPMENTS, SALES AND REMITTANCES
Remittances to Date
F. O. B..
Remitted 1,685,052 1,563,983 197,460 16,397
A accepted, not remitted ........................
Shipped, not accepted ........................
Distribution of Acceptances
M isc. .
Totals .1,737,142 1,648,580
Shipments Compared With Last Season
1927-28 Increase Decrease
May 1 1
Orange. .. .... 815,029
St. Johns. 171,135
Decrease 1927-28. 905,140
GROWERS LOAN AND GUARANTY COMPANY
This company, a subsidiary of the Florida Citrus Exchange, op-
erates as a financial organization lending money to Exchange growers
During the past year it has strengthened its position materially.
It now maintains credit relations and does business with over ten large
Northern banks. Its loans this season were over a million and a half
dollars, with additional funds available but not required by growers.
THE EXCHANGE SUPPLY COMPANY
The Exchange Supply Company, stock of which is owned by the
members and associations affiliated with the Florida Citrus Exchange,
has had a very satisfactory season, having done about the same amount
of gross business during the season just closed as it did the season
before, although with a smaller volume of fruit having been handled
by the associations.
The Exchange Supply Company handles practically everything
connected with the operations of a packing house, except crate ma-
terial, and while it has operated on a close margin of profit, giving
to the association liberal discounts, it has by purchasing in large quan-
tities made a small net profit.
The Supply Company is continuing to liquidate its fixed holdings
that it acquired in connection with its manufacturing departments that
were discontinued several years ago and has retired nearly all of the
bonds that were outstanding and will probably retire the remaining
bonds within the course of the next year.
Due to the unsatisfactory supply and quality of grapefruit for
canning purposes, several of the largest canning plants have done very
little during the past season. For the same reason, the development
of new plants has not been as great as was expected. There is no
question, however, that there will be ample plant capacity to care for
a normal crop next season.
Accurate data as to the output during this present season is not
The development of this work is vital to the fresh fruit industry.
The consumption of low grade, off-size fruit, both oranges and grape-
fruit, in this manner relieves the box lot market and tends to increase
the general averages received on fresh fruit.
All sales of fruit for canning purposes have been continued this
year under the special contract that was made about a year ago. The
value of this special arrangement has been demonstrated to the full
satisfaction of every association able to take care of the requirements
of the canneries in the state.
The canners in the state have formed an association, the objectives
of which are to deal with problems common to the industry and event-
ually to put into effect an advertising program to stimulate the demand
for the canned product. Practically all canners are members of the
The larger canners of the state now in operation include:
The Polk Company ............... ..... Haines City, Florida
Florida Fruit Products Company ........... Eagle Lake, Florida
Hills Bros. Co. of Florida ................ Clearwater, Florida
West Coast Fruit Co .................. Clearwater, Florida
Shaver Brothers Co. ................... Jacksonville, Florida
DeSoto Canning Co ...................... Arcadia, Florida
Highlands City Canning Co. ........... Highlands City, Florida
Florida Fruit Canners Co ................ Frostproof, Florida