Big Dividends for Farmers: How Agriculturists of the Eastern Shore Combined for Self-Protection and How Their Combination Works.
[Special Dispatch to the Baltimore Sun.]
ONANCOCK, VA., Dec. 6.
A short time ago THE SUN published a special dispatch from Onancock, Va., stating that the Eastern Shore of Virginia Produce Exchange had just declared a dividend of 70 per cent. The fact that a concern away from a large city could do a thing like that caused widespread attention, and has led to an investigation of the business methods of the exchange and of the men who run it. These men, like the goods they handle, are products of the Eastern Shore, and are proud of it. The men whom they represent are their friends and neighbors, farmers of Accomac and Northampton counties, and their exchange is one of the best possible examples of a farmers' organization. It grew out of a disastrous condition of affairs. It reversed these conditions and brought prosperity in the place of depression, and showed that in spite of all the statements to the contrary, farmers could organize for the protection of their interests, stick together in spite of discouragements and maintain their organization.
Field Of The Exchange.
The territory which the exchange claims for its own are the two Virginia counties the end of the Maryland Delaware peninsula -- Accomac and Northampton. The population according to the last census was 46,340 -- that of Accomac being 32,770 and of Northampton 13,570. It is 75 miles long, an average of 12 wide, and contains 900 square miles. Its population is almost entirely American, and until about 20 years ago the two counties were without railroad communication with the outside world. It has great resources and natural advantages in its thousands of acres of oyster and fishing grounds, on both the sea and the bay side, and in its fertile lands. Many inlets and creeks make in from the Atlantic and Chesapeake down both coast lines. In these hundreds of thousands of bushels of oysters have been planted, from which millions of fish are caught annually. These industries of themselves support a large part of the population.
The exchange is a combination of about 1,500 of the most successful farmers of Accomac and Northampton counties. By special provision of its by-laws, which permit tenants of stockholders to market their products through the exchange, it has the patronage of about 2,500 growers.
How It Was Organized.
Its organization was brought about by the ruinous prices at which the staple crop of the peninsula -- Irish and sweet potatoes -- had sold for several years prior to the organization of the exchange.
The thoughtful realized that something had to be done to better the condition of the truck growers, whose success or failure so vitally touched the interests of all business men of the lower peninsula. The condition of the farmer was deplorable. His potatoes were selling at 25 cents a barrel, and he was in a quandary as to how he was to pay his rent, his fertilizer bills and to clothe and feed his family. A discussion of these matters resulted in the holding of a mass meeting held at Onley, Va., in August, 1899, at which a committee of 12 influential citizens were appointed to recommend some plan of marketing the products of the farms.
This committee, after several meetings, drafted a working plan for an exchange to be run on Mr. Morgan's "community of interests" plan.
This report was unanimously adopted by a convention of farmers and business men which met at Onley in October of the same year. Its chief officers were elected and a solicitor put in the field to secure subscriptions to stock and to organize the farmers into separate local divisions. Thus was put into motion the force which has practically revolutionized affairs of the farmers on the Eastern Shore and has accomplished results that the most sanguine never dreamed of.
A charter was secured from the Virginia Legislature in January of 1900, and by the 20th of June in that year, when the crop of Irish potatoes was ready to be marketed, 14 local organizations had been completed and were in working shape.
Outline Of Its System.
A general outline of the plan is as follows: The farmers and those interested in the movement at one or more shipping points are grouped together under what is known as local organizations. These respective organizations elect their local board of directors, a local agent and a local inspector, and at the same time one of their directors is designated as a member of the general board of directors. The general board of directors is thus composed of as many directors as there are local organizations, which now number 28. They cover 40 shipping points, These being nearly all the railroad stations and bayside steamboat wharves.
The Eastern Shore is now well supplied with transportation facilities. The New York, Philadelphia and Norfolk railroad runs directly through the center of the peninsula and provides transportation for produce from the seaside and immediate center and northern part of Accomac, which now has no steamboat line. Produce shipped by this road usually goes directly to the Eastern markets -- Boston, New York, Providence and Philadelphia. The Baltimore, Chesapeake and Atlantic Railroad Company runs a line of steamers from all the leading shipping points on the bayside to Baltimore every day of the week. The produce for the Western markets -- Chicago, Cincinnati, Cleveland and St. Louis -- is usually shipped by this route, about 24 hours being gained thereby. All products shipped by this route are consigned to the order of the general manager and are shipped out from Baltimore the next morning. The general manager, Mr. William A. Burton, is the executive of the exchange, and he keeps in close touch with all shipments, seeing that no market is overstocked. As a result of this policy the prices to farmers have steadily increased, and they are now able to sell their goods at a profit instead of at a loss.
The general exchange is located at Onley, which is a central point between Cape Charles, on the south, the terminus of the New York, Philadelphia and Norfolk railroad, and New Church, on the line between Virginia and Maryland at the north. The general office is connected by a special private telephone system with all the local offices and shipping points, so that the large business can be moved with system and proper dispatch.
How The Grading Is Done.
The growers hand their products to the depots and wharves and, after they are properly inspected by the local inspectors and branded according to their merits, they are then turned over to the local agent, who makes a record of each shipper's goods and then makes his report to the general office by manifest sheets giving shipper's name and quantity of goods and the car's number in which they are loaded. The agent then ships them on consignment or on orders from consumers or jobbers, as he is directed by the general office.
On the inspection system and proper grading of goods handled by the exchange has largely hinged the success of the movement. This has been appreciated by the trade as a great improvement over the old slipshod method of packing.
Agents In The Great Markets.
The exchange has one or more selling agents in the great distributing markets, such as Baltimore, New York, Boston, Philadelphia and Providence, who look after the goods consigned to these markets, and when sales are made report the prices received for each shipper's products to the general office and make returns for these consigned goods direct to the growers. The great idea, however, of the movement is to the sell the goods on an "f.o.b." basis: that is, on orders sent direct to the exchange, the goods being sold when delivered to railroad or steamer, and by judicious distribution prevent any market from becoming oversupplied and thus break prices. By this system of packing and the wide advertisement of its brand, the consignment of potatoes on a commission basis is almost a thing of the past. Fully 95 per cent. of the entire output this year was sold free on board at shipping point.
Big Dividends On Small Capital.
The growth of the exchange has been steady from its organization. The number of members is increasing and more produce is put in its hands to sell. The first year of its organization was a trial year, and the profits and the cost of management and the other expenses were about equal. But in 1901 the people had gained confidence in the management and saw the benefits resulting from the proper distribution of products, and a business amounting to about $750,000 was done on a capital of a little over $6,000, each member being compelled to own one share before he is allowed to ship through the exchange. That year a dividend of 150 per cent. was declared, 50 per cent. cash and 100 per cent. in stock. The year 1902 has been the most successful in its history, the business having increased over 25 per cent. over the preceding year, amounting to about $1,000,000. A dividend of 70 per cent. was declared by the directors this year -- 20 per cent. cash and 50 per cent. in stock -- on a capital of over $16,000.
The entire business of $1,000,000 a year is managed by three officers -- William A. Burton, general manager; Edward F. Miles, assistant general manager, and Alfred J. McMath, secretary and treasurer -- and two bookkeepers and stenographers. All bills and correspondence go out and money is received for the sold goods through the general office. All telegrams are also sent from and received there, and thus it is in close touch with the conditions of markets all over the country. In this way only can judicious distribution of its goods be made on the various markets and better results obtained than could possibly be done by leaving the movement of their goods in the hands of individual growers.
Goods Widely Distributed.
A special telegraph office is maintained in the exchange, and nearly $6,000 was paid to the companies for telegraph tolls this year. Eastern Shore potatoes are sold as far North as Portland, Me., in the United States, and many are shipped to Quebec, Montreal and Toronto, Canada; as far West as Lincoln and Omaha, Neb., and as far South as Anniston and Birmingham, Ala. The total number of cars of sweet potatoes, 190 barrels to an average car, handled this year by the exchange was 1,900, and of Irish potatoes, 675.
Potatoes are not the only crops handled by the exchange, as thousands of quarts of berries and baskets of peas are shipped through it.
In The European Field.
The exchange's officers are ever on the alert in widening influence, and are now reaching out after new business. Next year the exchange will be a strong competitor of New Jersey for the business of "double-headed sweets," that is, sweet potatoes packed in double-headed barrels. Already platforms and packing sheds have been erected for this method of packing, and it is expected that a large export trade will be worked up. Even now the United States Government buys from the exchange weekly and ships to London, England, a small lot of "double-headed" Eastern Shore sweets. These potatoes are selected and packed with the greatest care and have given general satisfaction. Exchange officials think of sending a representative to Europe to introduce these potatoes on a more extensive scale. General Manager Burton this year has many times stopped the farmers from digging their sweet potatoes and paid demurrage on cars to allow the market to clear up, but a shipment of 500 barrels weekly on the large liners to Europe would greatly help in the distribution.
The advantage of packing sweet potatoes in double-headed barrels was discovered by a traveling man of the exchange. He was in a large commission house in Chicago and noticed some nice sweet potatoes marked "Jersey," and asked the merchant where he got them. He afterward found out that they were Virginia sweets, and that the merchant was repacking them and shipping them to Minnesota as Jersey sweets in double-headed barrels. The exchange man took the next train for Minnesota and the people of St. Paul, Minneapolis and Duluth told him they would be glad to have the "double-headed sweets" from the Eastern Shore next year.
The Eastern Shore is also finding a ready market for its second crop seed Irish potatoes, which, it is claimed, have been demonstrated to be superior to Northern and Western-grown seed. The exchange is helping its growers largely along this line in finding purchasers for these seed and has sold some 10,000 barrels within the last month.