The Organization and Development of the Eastern Shore of Virginia Produce Exchange

The history of the Eastern Shore of Virginia is linked inseparably with the adventures and exploits of daring men and their followers. This narrow strip of land with its bay and its indenting creeks and rivers, is filled with romance of the birth of America. It is an old country, rich in tradition and old time memories of American history. It dates back to Captain John Smith, the Indians and the Jamestown Colony.

This promising land, once the rendezvous of buccaneers, is now a happy playground for those who love recreation and outdoor sports.

In fancy we can see on the far horizon the pirate ship which roamed the seven seas with cannon roaring, seeking plunder. Today the deck of the new ship swarms with business men of a different caliber, transformed for the time into blood thirty pirates in colorful costumes, and they too sail on the winged ship's way.

"Beyond the gates of morning

And down the broad blue bay;

Yes, down the broad dominion

Of the Chesapeake, and o'er

That grand tide to the beauty

Of the lovely Eastern Shore!"

And view a land of promise and plenty. Thus another ship was launched, "A Ship of State." The Eastern Shore of Virginia Produce Exchange came into existence and became part of the commercial life of the Eastern Shore on January 26, 1900.

During the latter part of the year 1899, a small number of farmers and others interested in the success of farm operations held several meetings ,at one of which a committee composed of A. J. McMath, chairman, Benjamin T. Gunter, G. Walter Mapp and other prominent Accomackians, were chosen to formulate a plan of action. As a result of the work of this committee, a charter was procured on January 26, 1900, for a cooperating marketing organization, to be called the Eastern Shore of Virginia Produce Exchange.

The general principles laid down by the committee have been adhered to throughout, but such minor changes have been made from time to time as changed conditions have necessitated.

This organization was established almost without precedent, and its early days were fraught with difficulties. No kindly hand was offered, no money at the hand of the promoters was tendered, no warning of the many pit-falls that would beset their path was given, and no financial assistance from the government was solicited. They were pioneers, but they had faith in their organization and persevered, largely blazing their own trail, and they were destined to revolutionize the marketing of farm products.

This organization found the farmers struggling along with sometimes unmarketable produce, and receiving hardly enough to pay expenses. This was due to several reasons, namely, the consigning of most of the produce to circumscribed areas which were particularly Baltimore, Philadelphia and New York cities, with the resultant glut of their markets, and second, the lack of reliable standard goods. Also, the competition among buyers who were merely representatives of produce dealers in various cities, and who were paid a fixed sum per barrel for buying at the dealers' local shipping point. This one thing held the farmers of the Eastern Shore back for many years before a system of distribution was developed. The charter provided for a minimum capital of $5,000.00 divided into shares of $5.00 each, par value; the purpose being to draw into the organization just as many growers as possible.

To further this aim, subscriptions were taken upon a cash payment of twenty-five cents per share, six months being allowed such subscribers to pay the balance. Original stock was purchased not only by the farmers, of whom there were about three hundred stock holders the first year, but also by business and professional men.

Six or seven years passed before a majority of the produce of the Eastern Shore was being handled by the Exchange, yet the results obtained were so much better than could be secured through any other method of marketing, that there was each year from its inception a steady and substantial growth.

Naturally the fundamental thought was economic, but the ideal involved the idea that successful marketing would do more than increase the farmer's income. It was believed and hoped that its success would enrich the rural life of the community with improved farming methods, greater educational facilities, better churches and happier homes. Furthermore, the building of new roads, the development of more prosperous banks and the material advantages which a good income insures the high type of American citizen must necessarily follow.

The tract of land comprising the Eastern Shore consists of about seventy-seven miles, and is divided into two counties, known as Accomack and Northampton Counties.

The soil is a rich, sandy loam, very favorable for trucking and a climate that favors a long growing season. The climate is tempered by the mild sea breezes which are warmed by the waters of the Gulf Stream, and cooled by the Labrador current sweeping off the Atlantic Coast.

The Eastern Shore is entirely an agricultural section, with white potatoes taking the lead over all other crops, and sweet potatoes second. Strawberries and cabbage are also increasing in production and popularity. Some other staple crops are onions, peas, turnip greens, butter beans and snaps.

The geographical position aids the Shore materially in shipping produce.

The planting of twelve thousand to fifteen thousand acres of white potatoes formed the basic livelihood of the Eastern Shore in 1900. Such was the ground work for the building of an Exchange.

The Exchange soon discovered a vital and important fact; it learned that supply and demand was a dominant factor, rather than sentiment, prejudice or wishes. Then, too, competition had to be encountered, as well as many other obstacles. The Exchange has experienced lean years, successful years, adverse criticism, and has endured and achieved results.

Another idea of the organization may be expressed in the words, "United we stand, divided we fall." This maxim, illustrating the value of union in dealing with unscrupulous buyers, has been and is of immense value to the community. A natural and inevitable result has been the saving of money to all parties through the exclusion of useless middlemen, and the shipping of produce F. O. B. rather than on consignment.

Keeping in active touch with the markets through telegraphic communication and the elimination of extra cost through a heavy volume of business are worth while ideas when intelligently employed, and the results are proof of their value.

The Exchange now handles approximately two-thirds of the produce raised on the Shore with annual value ranging from $10,000,000 to $15,000,000.

The white potato acreage has grown from twelve thousand to fifteen thousand acres in 1900 until a maximum of ninety thousand acres has been reached. A proportionate growth has been noted in the field of sweet potatoes, strawberries, onions and cabbage.

During the twenty-eight years of operation, the Exchange has increased its field of activity and widened its scope of distribution from five or six cities to a maximum of six hundred and sixteen cities in the United States, Canada and Havanna, Cuba. The selling price has increased from $1.00 to $3.50 and $4.00 per barrel. The value of real estate has increased five or six fold; improvement in every phase of rural life has kept pace with the time.

Another principle that has proved its value in returns and raised the standard of produce to a higher place has been accomplished by assembling produce, standardizing it under internationally known registered brands, and intelligently distributing same among all the available markets.

The Exchange continues its services to the Eastern Shore through its newly organized subsidiary "The Eastern Shore Farmers Supply Co., Inc."

This subsidiary was organized in the fall of 1929 and was in operation during 1930-1931.

We note that through cooperation the Supply Co. purchases supplies for its patrons and offers its services to every farmer on the Shore, with no shipping restrictions to those who pay cash, purchase on an open account, or give a negotiable note, with the exception of a lien credit on crop. In addition these farmers are free to ship through any other agency if they so desire.

The Farmers Supply Co. is owned and controlled by farmers. The Federal Farm Board has heartily endorsed their plan, and every well thinking farmer supports it.

Records are kept of all purchases and of their distribution and the profits are returned to the farmers who are members.

The Produce Exchange operates under the unified activities of several departments.

The selling of potatoes is in charge of a Sales Department which has charge of all quotations, sales and pooling . This department receives reports from local offices of all cars loaded for sales and regulates the activities of local agents. The local agents are appointed each year by the Exchange.

The Adjusting Department takes care of complications which arise and makes settlements according to the facts in the case, always maintaining their high standard of fair play.

The Accounting Department collects the proceeds from sale of produce, deducts the commission and forwards the money to local shipping points for distribution to shippers. Complete records are kept of all transactions, the local agents submitting their books to this department at the close of the year and an expert accountant making a final check.

The Adjusting and the Accounting Departments are under the very capable management of the secretary and treasurer, W. Hardy Taylor.

The Traffic Department takes care of the transportation problems. Here they make an effort to have produce reach its destination in the best of order. Refrigeration is used when necessary.

The Standard Department prepares grade specifications, supervises the grading, packing, inspection and storing of goods for shipment. The work of this department is especially difficult, and has to be handled in a very diplomatic manner. It is no easy matter to tell a farmer his goods are not up to standard, or a package not properly filled, and cannot be accepted until the required standard is attained, and still retain his good will. This department sends out trained, reliable men who by diplomacy are raising the standard of produce shipped from the Shore, until the Eastern Shore is conceded to be the richest section in the State, and among the two richest counties in the United States.

The Exchange has placed on the market three brands of produce. Their "Red Star Brand" of the Eastern Shore is the oldest and perhaps the best known potato brand in the world. It is the brand upon which they built their reputation. This brand meets all the requirements of the United States No. 1 grade.

The Bell Brand is their second brand and meets all the requirements of the United States No. 1 grade except in size. The "Gear Wheel Brand" meets all the requirements of the United States No. 2 grade.

The regular loading points have inspectors and the Exchange has reserve inspectors as needed during the heavy loading.

An effort is made to prevent the potatoes from long exposure to the sun, which results in blistering the potatoes and an inferior grade.

Aside from its services in marketing the Exchange purchases for its members seed potatoes, barrel covers and berry crates, for which it pays cash and puts out on credit, collecting after the grower has marketed his crop.

There are approximately forty some Cooperative Marketing Organizations in the United States and according to statistics the Eastern Shore Produce Exchange handles about one-fifth of all the cars loaded by Cooperative Organizations.

Therefore, it is obvious that only the stabilizing influence of a strong Cooperative Organization, wisely and economically managed can maintain the selling price of produce that supply and demand justify.

The Eastern Shore Produce Exchange has survived the proposed stage and is with us in the visible proportions of solid construction and successful operation, and with such a personnel as Messrs. Gunter, Burton and Taylor, we exclaim with the author of the poem:

"Sail on! O Union strong and great!

May the Eastern Shore of Virginia Produce Exchange continue to prosper under the careful guidance of its faithful leaders.