MANN HD 9031 .N56h LIBRARY ANNEX 2 Cornell University Library The original of tinis bool< is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924013913615 STATE 03" -ITfi-iV YOEK nEPASTr/MIT OJ FAHMS MD I4AHICETS HAY t/lARIOilTING IN KEIW YOHK CITY STATE OF NEW YORK DEPARTMENT OF FARMS AND MARKETS BERNE A. PYREE, Commissioner ALBANY HAY MARKETING IN NEW YORK CITY TABLE OF CONTENTS PACE 1. Introductory Note 2 2. Consumption of Hay in New York City 2 3. Kind of Hay Preferred 3 4. Sources of Supply 3 5. Distribution of New York State's Hay Crop 4 6. Hay Receiving Terminals for Rail Shipments 4 7. Water Shipment Terminals 7 8. Methods of Sale 8 9. Grading 9 10. Weighing 11 11. The Permit and Embargo System 11 12. Fire Department Regulations as to Storage 12 13. The New York Hay Exchange Association 13 14. Conclusions and Recommendations 13 Appendix A Stations in New York State from which 200 or more Cars of Hay are Shipped Annually 15 Appendix B Procedure and Forms Used in Selling and Shipping Hay 16 Prepared by HERSCHEL H. JONES, Director New York Office 6-28-22-oOOC (15-5012) HAY MARKETING IN NEW YORK CITY Introductory Note Hay is the largest agricultural crop in New York State and New York City the largest consuming hay market in the country. These two facts alone would make a study of the marketing of hay in New York City worth while. But in addition to these characteristics of size and volume, the New York hay market has characteristics of complexity, inefficiency and malorganiza- tion that challenge the careful consideration of hay producers and every- body connected with the distribution of hay. This report aims to describe the terminal facilities for handling and marketing hay within the limits of Greater New York and to give a clear picture of the way hay consignments are received and sold. It gives the sources of supply and the means of transportation. It deals with the char- acteristics of demand in this market, the amount of consumption and the methods of purchasing and storing. It discusses the permit and embargo system by which control of hay shipments into the city was practically placed in the hands of the city wholesale receivers. It analyzes some of the weaknesses and deficiencies in the methods of marketing hay in New York and attempts to offer a few constructive suggestions for improvement of present conditions. In the preparation of this report the Department of Farms and Markets has had the valuable co-operation of leading men in the wholesale hay trade, of the State College of Agriculture and of several of the co-operative hay marketing associations in New York State. Consumption or Hat in New York City Prom 25,000 to 30,000 carloads of hay are received annually in Greater New York. In addition to the receipts of. hay for feed, a comparatively small amount of poor grade hay and meadow grass finds a market here for piacking purposes. The receipts of straw average from 180 to 200 tons per week, or approximately 10,000 tons per year. A biennial census of stables made by the New York City Health Depaifc- ment shows from March, 1917, to June, 1921, a startling decline in the num- ber of horses. In 1921 the number of horses was 65,126, in 1919 it was 75,740, and in 1917 it was 108,036. From 1917 to 1919 the decrease was 25 per cent, from 1919 to 1921, 14 per cent. The Federal census of 1920 shows only 56,53-9 horses in New York City as compared with 128,224 in 1910. General substitution of motor vehicles for horse-drawn vehicles is the obvious explanation. Then, during the war large numibers of horses were taken from New York to Europe for war use. It is now claimed, however, that the tendency is to go back to horses for short haul work, especially in congested parts of the city. Investigations made by large concerns as to the relative cost of ojwrating motor and horse power trucks are reported to show results quite generally in favor of the latter. A resumption of normal business activity will undoubtedly make a slight increase in the demand for hay, but it can hardly be denied that there is little prospect for much greater future outlet for hay in this market. The following table prepared from, the Sanibaxy Bureau Stable Census taken in March, 1917 and 1919, and in January, 1921, by the New York City Department of Health, gives the distribution of horses by boroughs: SANITARY BUREAU STABLE CENSUS — CITr OF NEW YORK * Stables Occupied Horses 1917 Manhattan 2 , 013 BroM 1 ,085 B ooklyn 4,825 Queens 1 ,934 Richmond 727 New York City 10 , 584 1919 1921 1917 1919 1921 1,577 1,200 55,653 37,825 33,104 851 594 8,198 7,805 4,500 3,772 2,791 34,892 23,680 20,751 1,152 1,062 7,108 4,665 5,146 568 486 2,185 1,765 1,625 7,920 6,133 108,036 75,740 65,126 KiKD OF Hay PsErEKRED The demand is chiefly for timothy hay in the New York market and for tlie best quality. Clover, and clover and timothy mixed, find only a small outlet. Alfalfa receipts are not more than one per cent of the timothy receipts. The alfalfa sold in this market is used almost exclusively for cattle feed and is prefeiTed to clover. Some alfalfa is milled and ground into molasses mixed feeds, and in this form' it is at times fed to horses. Very little hay of any kind is purcha,sed here, however, for dairy or cattle feeding. The market is frequently over-supplied with low grade hay and under- supplied with the best grade of timothy. In fact it is seldom that the receipts of No. 1 timothy come anywhere near meeting the demand. The buyers for large stables feeding their own horses always consider it more economical to pay a good' price for good, clean hay than to buy poor hay at a lower price. Boarding stables, however, generally buy lower grades when there is much difference in price. The presence of a large amount of undergrade hay on the market may consequently bring down the price for No. 1 timothy. The buyers in New York prefer large bales weighing from 160 to 225 pounds, which as a rule bring a dollar a ton more than the smaller bales weighing about 100 pounds. The stable men feed too much of tightly pressed hay and the larger bales are preferred because they are not pressed so tightly. In large stables there is a material saving in using the large bales. Those who buy in quantity assert that a ton of hay in large bales will go as far as one and one-quarter tons of hay in small bales. It is also the general opinion that a ton of hay in large bales is more easily handled than in small bales in city delivery. The common faults that affect the selling price of hay in this market are late cutting, mow burn and presence of weeds and daisies. Sources of Supply No record is kept as to the sections from which hay comes that- is received in the New York market. The New York Hay Exchange estimates the per- centages received from various sections, however, as follows : New York State, 6.5 per cent; New Jersey, 5 per cent; Pennsylvania, 10 per cent; Ohio, Michigan, Indiana and other states 15 per cent; Canada, 5 per cent. An occasional car is received from Vermont, Delaware and Maryland but not enough to change the above percentages. Of the hay received from New York State about 25 per cent, according to the New York Hay Exchange, is produced in Jefferson and adjoining counties, 25 per cent in Cayuga county and vicinity, 10 per cent in the western counties, and 40 per ' cent in the Mohawk valley and southern or Hudson river eounties.f A considerable proportion of the best grade hay comes from Ohio. Alfalfa is received from New York State, Michigan and Ohio, and some from Cali- forniia, Dakota, Missouri, Texas and other western states. * These figures do not include receipts of hay at New Jersey terminals. No figures are available as to the number of horses in the New Jersey metropolitan area except for Newark, where the Board of Health reported in 1921 approximately 620 stables and 1,818 horses. t The receipts from New York State in the 1921-22 season were about 20 per cent less than the average, the shortage being made up from Ohio and Michigan. The Secretary of the New York Hay Exchange Association states that the average mileage distance of a shipment to the New York market is about 350 miles, the period in transit 15 days, the average tonnage per car 11 tons . DiSTEIBUTION OF NeW YoEK StATE's Hay CfiOP Th€ yearbook of the U. S. Departftnent of Agriculture for 1920 gives tlie total acreage in hay in New York as 4,3&6,000, the production as 5,482,000 tons and the farm value as $129,37'5,000. New York is the largest hay pro- ducing State in the Union in acreage, in tonnage and in value of crop. Pennsylvania, the next largest in hay production among the eastern states, produces 3,&51,0O0 tons with a value of $92,848,000. New Jersey produced only 544,000 "tons. The production of hay in New York State was 7 per cent of the total production of the country. A shipping point survey made by the Bureau of Markets and Storage of the New York Department of Farms and Mkrkets in 1919 and 1920 shows the following total annual car lot hay shipments by counties, of which only a part were destined for New York city:* Gars Albany county 858 Broome county 285 Cattaraugus county 699 CajTiga county 4,477 Chautauqua county 320 Chemung 132 Chenango county 714 Clinton county 1 , 013 Cortland county 740 Delaware county 182 Essex county 535 Erie county 503 Franklin county 206 Fulton county 134 Genesee county 320 Herkimer county 682 Jefferson county 3 ,793 Lewis county 247 Livingston county 1 , 753 Madison county 2 , 347 Monroe county 138 Montgomery county 3 , 556 Niagara county 623 Cais Onondaga county 3,679 Oneida county 1 , 040 Ontario county 1 ,950 Orange county 49 Orleans county 372 Oswego county 287 Oj;sego county 1 , 193 Rensselaer county 187 Saratoga county 416 Schuyler county 885 Seneca county 3 , 440 Schenectady county 1 . 100 Schoharie county 1 , 151 Steuben county 2 , 463 St. Lawrence county 897 Sullivan county 7 Tioga county 466 Tompkins county 2,090 Ulster county 165 Washington county 590 Wayne county 243 Weattehester county 2 Wyoming county Yates county 2,028 No complete data as to the destinations of carlot shipments of hay from points in New York State is available for an. annual period*. A study of distribution of New York hay was made by the State College of Agriculture at Ithaca, however, for a four months' period in 1919 from which the fol- lowing table is taken: Shipments of Neic York Hay, January to April Inclusive, 19il9 Per To New England Points. . South New J,ersey New York City New York State Pennsylvania Maryland Delaware District of Columbia. cent 31.4 31.2 16.1 11.4 4.6 3.7 1.2 100.0 Hay Eeceiving Terminals for Rail Shipments There are 13 principal hay receiving terminals in Greater New York for rail shipments of hay to commission merchants and regular wholesale dealers. Three of these are general terminals used by all railroads, the others being the delivery points of individual roads. * See Appendix A for complete list of shipping points from which 200 or more cars of hay were chipped in 1920. The following is a list of these terminals in each borough with approxi- mate annual receipts at each:* MANHATTAN New York Central R. R.; Cars West 33d St. Hay Sheds 5,500 130th St. and Hudson River 600 Lehigh Valley R. R.: Pier 66, 28th St 2,000 Pennsylvania R. R.: West 36th St. to 37th St. Pier 1 ,000 Erie R. R.: West 28th St. Pier 1 , 500 BROOKLYN Brooklyn Eastern District Terminal: North 10th St. and Kent Ave 5,000 Baltic Terminal 200 Long Island R. R.: East New York Terminal 600 to 700 Bushwick Junction 3 ,700 Flatbush Ave. Terminal 800 to 1,000 BRONX New York Central R. R.: Melrose Junction 1 , 500 Lehigh Valley: 149th St. and Harlem River 1,500 N. Y., N. H. andH. R. R.: 133d St. and Willis Ave. Tracks 100 Only four of these receiving points have sheds or storage facilities of any- kind, namely, the New Yorl< Central sheds at 33rd street, Manhattan, the Brooklyn Eastern District Terminal, the Lehigh Valley yards, 149th street and Harlem river and Pier 66, N^orth river. The most important of these hay receiving points including three of these just mentioned are here de- scribed briefly: NeiD York Central Sheds, Z3rd Street The largest hay receiving point in the city is the 33rd street shed of the New York Central which is directly connected with the Hudson River Division freight tracks and which receives cars floated across the river from the West Shore E. E,. and the New York, Ontario and Western E.. R. All the receipts of hay consigned to 33rd street station via the New York Central or to 36th street via West Shore R. E. or New York, Ontario and Western E. E., are unloaded from the cars into this building called "the hay sheds " to be sold and subsequently delivered out of the other side of the building to wagons and trucks. The building, which was built in 1883, has capacity for 200 cars of hay, is three stories high, approximately 600 feet long, 50 feet wide and is of brick construction. The first floor is about 15 feet high and the second and third about 10 feet each. The bales are hoisted up to and let down from the two upper stories by means of electrio hoists which carry one bale at a time. The building is equipped with an automatic sprinkler system for fire protection. The east end of the build- ing is occupied with offices of hay dealers and of the Hay Exchange. Free storage of 48 hours is allowed. After that tihe charges are $1.50 per day per car for the first eight days, then $3 per day per car for the next five days and after that $4 per day per car. This is an active market every business day of the year. The day's arrivals are mostly unloaded during the morning and sales may go on all day. Buy- ers walk through the shed and examine the hay. The dealers have their cards * Newark, which ina sense may be considered as a part of the New York market, receives about 50 cars of hay a week, mostly from states west. It is sold on track. on the bales consigned to them and if they do not happen to be on hand as the buyer sees a shipment in which he is interested, the buyer goes to their oiflces to negotiate a purchase. In 1920, the receipts at the 33rd street shed were, by months, as follows: Cart Jan. Feb. Mar. April May June July Aug. Sept. Oct. Xov. Deo. 455 265 629 171 529 446 419 363 524 446 454 472 Brooklyn Eastern District Terminal The hay shed of the Brooklyn Eastern Bistriot Terminal, North 10th street and Kent avenue, Brooklyn, is the principal wholesale hay market in that borough. It is a three story building of the same type as the Xew York Central shed at 3Srd street with capacity for storing 150 oars of hay. Eope cables with tongs attached are suspended about each door through which hay is brought in or out and power for hoisting is supplied from a central re- volving overhead shaft on each of the upper floors. The Brooklyn Eastern District Terminal is owned and operated by a pri- vate corporation which, under contract with the respective railroad com- panies, acts as their agent in the delivery of hay and other commodities, consigned to that station. Cars are floated over to it from the New Jersey terminals of practically all lines. A switching engine takes the car; from the flats and distributes them to various tracks in the terminal. Hay cars are all billed for delivery into the warehouse except possibly a car shipped directly to a person who will unload the entire car at once. This terminal is well patronized by dealers at all times because of its good facilities and prices average about the same as at 33rd street with a ten- dency to run not over $1 more per ton. The receipts average about 15 cars a day. Free storage of 4S hours is allowed and after that the charges are the same as at 33rd street sheds. Some dealers who receive hay at this terminal and several brokers who are practically sales agents for th* commission receivers have ofiices a short distance from the hay warehouse but not in the building itself. Bushioick Station The third largest hay receiving and marketing point in Greater New York is the Bushwick Junction terminal of the Long Island railroad. Hay may be consigned to this point of delivery via any and all the trunk lines. Here the hay is sold directly from, the cars on track with inspection at car doors. A small shed capable of holding about 20 carlots of hay was formerly used for hay storage but not since li910. The railroad claims that it cannot afford to operate this shed as hay warehouses, although the receipts of hay here averiige from 250 to 300 carloads monthly. Prices here vary but are usually on a par with prices at 33rd street. Only three or four dealers have oflBces across the street from the Bushwick yards, the others doing business entirely at the car door. Lehigh Valley Railroad Delivery Points Hay from the Lehigh Valley railroad is brought in the cars by floats from the Jersey City terminal to the railroad pier, Pier 66, North river (28th street) or to the freight yards of the Lehigh Valley on the Bronx side of the Harlem, river at 149th street. About 2,000 cars a year are de- livered at the former and 1,500 at the latter point. All deliveries at Pier 66 are made through the pier warehouse. At 149th street and Harlem river the Lehigh Valley has a hay shed with a capacity of 45 cars. The building is equipped with an electrically con- trolled hay stacker which can be used to stack the hay to any height and to unstack it. About 66 cars per month are received here on an average, over 90 per cent of which comes from New York State farmers. All shipments are delivered into the warehouse, where inspections are made and where the hay can be conveniently shown to prospective buyers. Free storage of 4 hours, exclusive of the day of unloading, is allowed at Pier 66 and at 149th street, and after that the charge is $1.50 per car for the first day and $3 per ear for each day thereafter that the hay remains in storage. Other Railroad Terminals Of the other railroad terminals at wliich hay is marketed the most im- portant are the Erie R. R. yards at 28tli street, and the Pennsylvania Pier at West 37th street, to which cars are brought on floats from tlie New Jersey shore. Tlie Melrose Junction of the New York Central R. R. in the Bronx re- ceived about 1,500 cars per year. All deliveries there are made on the tracks. The hay may be sold there or trucked to the receivers' warehouse for sale. There are no sheds here. Market prices here are generally $1 to $2 per ton less than at the yards in Manhattan, depending upon the supply. Deliveries of about 500 cars per year are made to the tracks of the New York Central at 130th street and Hudson river, nearly all of this hay going to several wholesale dealers with their own private track sidings. Other consignees are given the usual 48 hours' time for removal, followed by the regular demurrage charge plus a track storage charge of $1 per day for the first two days and $2 per day thereafter. Market prices are about the same as at 33rd street.* The N. Y., N. H. and H. R. R. makes deliveries of 100 or more cars of hay at its tracks in the Bronx at 133rd street and Willis avenue. Shipments to this point are mostly consigned directly to wholesale dealers who have their regular customers. Cars are subejct to usual demurrage and track storage charges if not unloaded in 48' hours. In Brooklyn hay is also delivered by the Long Island R. R., to its east New York terminal and its Flatbush avenue terminal yards. Shipments to these points are mostly direct to wholesale dealers and must be removed from cars by receiver as any other freight. At the Baltic terminal and the Atlantic terminal sliipments are mostly to one or two wholesale dealers. Water Shipment Terminals Hay reaches Xev^ York by water shipment during the season of river navi- gation. April to December, from the Hudson river valley and points along the Barge canal as far up as Canada. In 10'20 three barges with a carrying capacity of approximately 200 tona or about 2,000 large bales, owned by different firms, made about fifteen trips each with hay and straw from. Hudson river points to New York. The same vear the Catskill Evening Line brought to its dock at the foot of West 3Stii street, 26.658 bales, or 267 carloads. In 1919 the Catskill Evening Line liay shipments were still larger, 35,000 hales. During the fruit season, hay is stored at Catskill terminal without charge until it can be carried to New York Inspections and sales are made on the dock here just as in the hay sheds. The Barge canal hay shipments in 1920 amounted to 8,630 tons, the origins of which were as follows : Tons Canada 6.847 West of Troy: Amsterdam 715 Fonda ' 32,5 Fort Plain 65 Rome 40 Sprakers ,69 Utica 120 North of Troy: Cooville ^^^ Schuylerville 197 Williams Basin 170 1,334 449 Total 8,630 * All track deliveries are subject to a combined car demurrage and track storage charge. All but 40 tons of this hay was delivered to Pier No. 6, East river, New York City. Such shipment may be moved from the barges at the discretion of the receiver, there being only a nominal charge of 50 cents per day for storage on a barge less than 100 feet in length and $1 per day for a barge of over lOO feet in length. There is no established market for hay at the pier and if small sales are made from the barges themselves it has not come to the notice of the pier officials. The hay barges delivered at Pier No. 6 are frequently taken by the receivers to Brooklyn points for unloading. Methods of Sale and Market Orgamization About 95 per cent of the hay shipped to 'New York City is consigned to be sold on comm.ission. It is shipped chiefly by country dealers or buyers and not by farmers themselves. The country dealer or buyer may be a local grain and feed dealer who ships hay as a side line of his business. He may be a man who gives his whole time to buying hay during the season and consigning it to be sold on commission in different markets when he can not make outright sales, or he may be a transient buyer operating on what is called a " joint account " basis. This last method involves a division of the net profits of the sale of the hay between shipper and city dealer. The country shipper is, generally speaking, a speculative buyer. That is, he buys on his own responsibility at prices that he thinks will enable him to make a profit and uses his judgment as to when to ship, providing he is able to secure a railroad permit. Tlie farmer is easily induced to sell his hay to a local buyer by the fact that he gets cash immediately and has to take no risks on adverse market conditions or unsatisfactory liandling at a distant market. Few farmers, furthermore, are able to ship solid carloads of their own hay of uniform quality, whereas the country buyer is able to sort out carload lots of fairly uniform quality from what he buys. So far co-operative hay marketing associations have been organized in only a few counties in New York State, but several such associations have very suc- cessfully supplanted the speculative buyer by sorting, shipping and selling hay for members at cost. The commission merchant receiver of hay in New York must file a bond with and secure a license from the State Departmient of Farms and ilarkets, as is required of all commission receivers of farm products. The bond to the amount of $3,000 is for the protection of tliie shipper. The Department of Farms and Markets has power to examine all records of commission trans- actions and to compel full return of the sales price to the shipper, except for deductions for commission, freight, demurrage and such charges. Any per- son who ships hay to be sold on commission by a dealer who is not licensed and bonded fails to avail himself of the protection of the licensing law. Under the commission merchant law the receiver is required to make full returns with an account of sales within 48 hours after the goods are sold. He must keep all records of commission transactions separate from records of other business. If the hay is not sold the day it arrives, the receiver should notify the shipper of its receipt immediately without waiting till sale is completed. The commission charge in the New York market is a flat charge per ton, not a percentage of the selling price. The customary charge of $1.50 per ton was raised to $2 per ton during the war. but has recently been reduced to .$1.50 again by a large proportion at the dealers. This flat rate of com- mission per ton i^athout relation to the price obtained gives the commission merchant no financial interest in securing the best possible price for the shipper, beyond his desire to satisfy the shipper and in consequence to get more shipments. Tliat is, as long as there is a. plausible correlation be- tween the sales price and the quotationsi o^ the day he is satisfied. It is a common practice for the commission merchant to advance about 50 per cent of the value of the car to the shipper in order to help the shipper to pav cash for the hav he buys. He charges no interest for this advance. Notwithstanding all sales are made by the commission merchant on a 30-day credit basis, he is obligated to render promptly after the sales transaction is completed, an account sales of the shipment in a manner similar to the following : Account Sales, New York, June 1, 1922. Sold for John Doe, By Charles Jones, . . ,, , Offices, 76-78 New York Hay Ejohange, Oonunission Merchant and Exporter 601 West 33d Street, New York. 126 bales of hay 23,815 lbs at $1 90 S490 47 Freight 48 72 Loading 4 . 50 _ , Storage 4 00 Car No. 36048 Commission 2381 Advance 100 00 183 03 Check to balance $307 44 Between the commission receiver or wliolesale dealer, and the retail hay dealer, there is often another middleman, called a " broker," who acts prac- tically as a sales agent for the commission man. He does not take any of the risk or take possession of the hay, but merely gets a fee of $3 per car for finding a buyer and making the sale. When the broker acts as agent of the farmer he usually charges $5 per car. Some dealers licensed to sell hay on commission actually dispose of their hay chiefly through these brokers. In spite of the decrease in volume of hay business in this market, the total number of dealers seems not to have decreased in the last ten years. As a result competition for shipments is very keen and costs of marketing are higher than they would be with a closer concentration of the business. The highly competitive condition of the market is a handicap to any real im- provement of conditions. It not infrequently happens that there are more salesmen on the floor, at the 33rd Street sheds, for example, than there are buyers. Very few of the old established firms are able under this competitive condition to use their organizations to anywhere near the maximum capacity for efficient service. Between the wholesale oommiission receiver, or the broker acting as agent, and the ultimate consumer there are both jobbers and retailers each of whom expects to make a living by dividing up earlots and supplying the particular needs of their clientele. The jobber buys at the terminal market and sells to the retailer or to large stables. Thic retailer keeps stocks on hand to sell by the bale or in larger quantities. Sometimes the two types of business are merged. There are a few firms who receive in earlots on commission who also sell at retail. In making a survey of buyers of hay in Greater New York the New York State Department of Farms and Markets in 1921 found over two hundred firms who buy one-half a carload or more of hay per month. Only a few of these ever buy any hay direct from the country.* Grading One of the most difficult problems in the marketing of hay is the estab- lishment of uniform practical grades as a basis for buying and selling. Although elaborate hay ^ades have long been established by the Xew York Hay Exchange and also by the National Hay Association, there is little ap- plication of these grades in actual practice in the New York market. Buyers examine the hay, judge for themselves as to its quality and make their pur- chases without mentioning grade. In case of any dispute between shipper and receiver as to quality, however, an inspection may be made by an official in- spector of the Hay Exchange to determine grade according to their standards, or such an inspection may be requested and paid for by the buyer to insure the quality of his purchase. * For a fuller desoriotion of the procedure ani cD-n-nunioations usei in selling and shipping hay, see Appendix B Malpractices in handling hay shipments are discussed in some detail in Bulletin No 979 of the U. S Dept. of Agriculture on " Marketing Hay Through Terminal Markets." 10 When seller and buyer come directly together where the hay can be per- sonally examined, grades are unimportant. But when hay is shipped to a dis- tant market and handled by a commission merchant or broker, whose returns to the shipper can only be checked by the market quotations for hay of a given quality, the method and standards of grading becomj© of great im^ portance. The widest variation in grade terms may be applied to the same lot of hay in the course of its joiirney from farm to city market and point of consumption. There is usually a tendency on the part of the shipper to claim higher quality than the hay actually is and on the part of receiver to grade it at least low enough to make the range of prices quoted for that grade easily cover the price for which he sold the hay. In general, how- ever, it may be said that hay in the N"ew York market falls short of literal standards of the grades used in quotations. In other words', grading as applied in this market is somewhat of an indefinite arrangement for making up market quotations. This, it may be added, is understood to be in line with similar practice at most if not all lai'ge city markets. The New York City Hay Exchange Association grades are as follows: Prime Timothy Hay shall be pure timothy of medium growth, bright color, sweet, sound and well-baled. No. 1 Hay shall be timothy, not more than one-eighth (J) mixed with other tame grasses, exclu- sive of clover, bright color, sweet, sound, and well-baled. No. S Hay shall include all timothy not good enough for No. 1, fair in color, not more than one- eighth (i) other tame grasses, sound and well-baled. No. 3 Hap shall include all hay not good enough for other grades, not over one-third (i) clover free from wild or bog, and be sound and well-baled. Shipping Hay shall consist of hay not good enough for No. 3, sound and well-baled. No Grade Hay shall include all hay badly cured, stained, threshed, or in any way unsound. No. 1 Packing Hay shall consist of all fine grasses of good color, free from flag or thistles, sound and well-baled. Fancy Light Clover Mixed Hay shall be bright, green, sweet clover and timothy of medium growth containing not over one-fourth (J) clover, sound and well-baled. No. 1 Clover Mixed Hay shall be clover and timLothy, medium growth, with at least one-half (J) clover, bright color, sweet, sound and well-baled. No. 2 Clover Mixed Hay shall be clover and timothy, with at least one-half (i) clover, fair color, sound and well-baled. No. 1 Clover Hay shall be bright, medium growth, sweet, sound and well-baled. No. S Clover Hay shall be clover of fair color, sound and well-baled. These grades differ in many respects from the National Hay Association grades which are used in practically all -of the other large cities. As revised August 24, 1^21, the National Association grades have only three classes of timothy hay as follows: No. 1 Timothy Hay shall be timothy containing not more than one-eighth (i) clover or other tame grasses, bright color, sweet, sound and well-baled. No. 2 Timothy Hay shall include all timothy not good enough for No. 1, fair color, not more than one-eighth (i) clover or one-fifth (J) other tame grasses, may also contain two per cent foreign matter, sound and well-baled. No. 3 Timothy Hay shall include all hay not good enough for other grades, not over one-fifth (I) clover or one-third (J) other tame grasses, including 15 per cent foreign matter, sound and reasonably well-baled. There is one grade of " mixed hay " and five grades of " clover mixed hay " in the National Association grades as follows: No. 1 Light Clover Mixed Hay shall be timothy mixed with clover, the clover mixture not over one-third (|) properly cured, sound, good color and well-baled. No. 8 Light Clover Mixed Hay shall be timothy and clover mixed, with clover mixture not over one-third (|), properly cured, fair color, sound and well-baled. No. 1 Mixed Hay, the same to contain at least 50 per cent timothy, the balance other tame grasses, not to exceed 20 per cent clover, properly cured, bright natural color, sound and well-baled. No. 1 Clover Mixed Hay shall be clover mixed with not less than one-fourth (i) timothy, may be slightly over-ripe, weedy or seedy, of fair color, sound and well-baled. No. 1 Heavy Clover Mixed Hay shall be clover containing 20 per cent to 40 per cent timothy, or 10 per cent to 20 per cent tame grasses. Bright, natural color, sound and well-baled. In addition to the differences in names of several grades, the essential distinction between the two is the quantity of clover allowed to appear in the different grades. Prime Timothy and Timothy No. 1 Hay of the New York rules may not contain any clover, but No. 1 Timothy of the national rules may contain one-eighth clover. No. 2 Timothy in New York City should be compared in clover content at least with No. I in other cities. Two factors 11 are slowly changing hay grading in New York City irrespective of what the rules provide. First, there is very little real " prime timothy hay " or " No. 1 Timothy " that does not contain clover. Since the Western farmers are using stable manure, clover will grow without any seeding just as it does in the " sweet " soil in New York. Secondly, the buyers in New York City are beginning to realize that a little clover not only does no harm to their horses, but is really desirable. The solution of the grading problem can only be worked out by years of research and investigation such as is being carried on by the Federal Bureau of Markets and Crop Estimates and the eventual establishments of Federal grades with Federal inspection in the largest markets. Determination of Weight The weight of a carlot of hay is usually determined by a test made by an official weigher of the New York Hay Exchange. This test consists of weighing 10 bales of a car containing large bales and 15 bales of a car con- taining small bales. The weights on the shipper's tags of the 10 or 15 bales are then tabulated and the test-weights deducted to determine the amount and the percentage of shrinkage. This percentage is then deducted from the total tag-weight of the entire carload and returns made on that basis except for 1 per cent, deduction for shrinkage which is borne by the buyer. In other words, the idea is to select at random, about one ton, or one- tenth of a carlot, and whatever shrinkage is found to exist in that portion, is applied to the other nine tons or nine-tenths of the carlot. For instance, let us suppose that you shipped, a carlot of hay consisting of 150 bales, the total weight of which, based on the aggregate of the bale- tags, was 22,000 pounds. Aifter arrival of car, 15 of the bales are weighed and found to weigh two pounds per bale less than the tags called for and applying this ratio to the 150 bales or entire contents, the shrinkage would be 300 pounds. Returns to you would be based upon tlxe total tag-weight of 22,000 as mentioned above, less the 300 pounds shrinkage, plus 1 per cent, of the total tag-weight or 220 pounds, and equivalent to 21,920 pounds or a shrinkage loss to a shipper of only 80 pounds. This method has been devised after considerable thought and is considered by the trade to be the most practical and economical. Much difficulty is experienced in carrying out this mtethod of weight deter- mination owing to the large amount of hay, chiefly from other states, that is improperly and illegibly tagged. The New York state law contains the following requirement as to tagging of weight: Every presser of hay or straw for market shall mark each bale of any of such commodities pressed by him with his name and business address and the correct weight of thebale. These markings shall be made upon a tag, of not less than one and one-half inches in width and three inches in length, securely fastened to the bale. , , , , , , , „ , , The gross weight shall be plainly marked on each bale of hay or straw sold or offered for sale in this state; and no baled hay or straw shall be bo sold or offered for sale which weighs less than such gross weight after deducting five pounds from such bale for shrinkage. And no baled hay or Straw shall be sold or offered for sale with more than twenty pounds or upward, or more than ten pounds of wooa for bales weighing less than two hundred pounds. No person shall put or conceal in any such bundle of hay any wet or damaged hay, or other materials, or hay of any inferior quality to that which plainly appears upon the outside of such bundle. The requirement as to marking of weight applies to any hay sold or offered for sale within the state, even though it may be shippied from another state. The Permit and Embargo System The natural flow of hay to the market as seasonal conditions permit or as demand induces supply was until recently placed under artificial restric- tions by two arbitrary diecks imposed by the railroads at their discretion. One of these was the requirement of " permits " for shipment and the other, the embargo. 12 During the war the Railroad Administration for the purpose of prevent- ing congestion at terminals and keeping rolling stock free for preferential freight established the rule that hay would be received for New York City points only when a permit was presented for the shipment, these permits being issued by the railroad terminals to the regular established dealers receiving hay here. As a result of efforts of a few leading men in the hay trade and of this department, the railroads temporarily discontinued the permit system in May 1920 (some of them previous to May), 'but the possibility of ids reinstatement at any time warrants a discussion here of both methods of control. Under the permit system, before the farmer or the country shipper could ship hay to New York he had to secure a permit from a commission man or other receiver. The railroads arbitrarily alloted so many permits each month to each dealer with apparently little reference to actual con- {.nestion of traflSc or shortage of rolling stock. Theoreticailly the nuimber of permits issued for a given terminal in a given month was supposed to be just enough to admit the amount of hay that could be handled there. In addition to the permit system in force at all times, embargoes were placed by various roads on shipments of hay to New York City from time to time, presumably for the purpose of further relieving congestion at the terminals or switching tracks. The fact that hay is relatively undesirable freight due to its bulk and the lower rates under which it is shipped, no doubt had had a great deal to do with the administration of both the embargo and the permit system. In describing the effect of the embargo in an address before the New York Hay Associaition of Syracuse, August 1920, JUr. E. A. Dillenbeck, one of the largest commission receivers of hay in the New York market, stated: " Prospective shipmentsi thus shut out are invariably consigned to some other city station, until one station after another becomes burdened and embargoed, the market greatly over-supplied with cars scattered over the entire greater city and offerings made from possibly fifty different railroad stations. As was said before, hay cannot move any faster than fire laws and consumption permit, irrespective of how low values may drop, and neither will increased detention charges hurry that movement." Mr. Dillenbeck also expressed the following opinion, which may be con- sidered as representative of that of the hay dealers and shippers generally in regard to the pennit system: " Many shipments, as a result of the ' permit ' rule, were lost to the New York market for one reason or another, namely, carriers refused to grant permits, or long delay in the issuance of such authority, shippers' inability to get ears after receipt of permits, bad conditions of country roads or the diversion of consignment elsewhere. As a result the many permits issued for hay transportation fail to create a corresponding supply, of trafiic. The number of permits issued by the carriers does not indicate that an equal number of carlots will accordingly move. It is possible that such permits may not be over 10 per cent, productive. Fire Department Rerjitla.tions as to Storage As has been suggested above, the fire regulations in reference to storage of hay within the limits of Greater New York prevent the accumulation of more than a few days supply at a time within the city. Hay and straw are included in the list of " combustible fibres " more than one ton of which may be stored or kept on hand in any premises only by permit from the fire commissioner. No permit may be issuied for storage of such material in any building or premises : (a) Situated within 50 feet of the nearest wall of a building occupied as a school, hospital, theatre or other place of public amusement or assembly. (b) Occupied as a tenement house, or hotel. (c) Of wooden construction, except in sparsely populated districts, where it shall be in the discretion of the commissioner. (d) Which is not equipped with a fire extinguishing system approved by the fire commissioner, (e^ Where paints, varnishes or lacquers are manufactured, stored or Vept for sale. (f) Where dry goods, ot other highfly inflammable materials are manufactured, stored or kept for sale. Cg) Where matches, rosin, turpentine or any explosives are stored or kept. 13 The regulations also include the following: "Weight limit. No person shall store upon any floor of a building any combustible tibie ex- oeeoing in weight one-thira of the safe bearing capacity of such floor, as certibed to by the i^ureau 01 JJuildjings having jurisdiction; or covering, when taled, more than two-thirds of the floor space ol such floor, and no such material shall be piled to a greater height than two-thirds of the ais- tance from the floor to the ceiling," 'The New York Hay Exchange Association The New York Hay Exchange .A-ssociation whose offices are in the 3;jrd Street Hay Shed building was organized in December, 1904. The name " Hay Exchange Association " does not correctly convey its functions as the members of this association do not conduct their business on an " exchange " but sell their consignments direct from freight cars, or from the hay sheds of carriers. The association was organised in 1904, according to Mr. Kichard J. O'Brien, Secretary, " for the purpose of improving the conditions of the hay and straw trade in general, for the benefit of the receiver, dealer and shipper." The association is alert to the possibility of adverse legislation and adverse decisions and rulings of the railroads and of various governmental bureaus and commissions. The association also maintains a credit system and endeavors to protect its members against those buyers who may be inclined to exceed the 30 day cTedit period in their payments to members. The names of such credit delinquents are circulated among the members on complaint of a member. The secretary of the association also circulates in a like manner the names of those shippers who have overdrawn their drafts on a member and fail to make proper refund. An Arbitration Board, composed of association members, settles disputes between buyers and members on the initiative of the memiber involved. Failure of a buyer to comply with a decision of the Arbitration Board in- volves the penalty of credit suspension until the decision is complied with. A set of hay grades were adopted by the association soon after it was organized. These were temporarily abandoned in 1910 for the grades of the National Hay Association but the latter were found unsatisfactory to the trade here after a short trial. The old grades were restored and are still in use. The association has six official inspectors who inspect and grade hay. They are paid a fee based on number of cars inspected. One of the inspectors is the secretary of the association, and the other five are employees of hay concerns. Requests for inspections are made very seldom. The local associ- ■ation has no direct connection with the National Hay Association and does not issue certificates of grade for the National Association. The association employs two weighers on salary, one at the 33rd Street hay sheds, one at the Brooklyn Eastern Distriot Terminal. The weigher at the 66th Street piers is paid on a car fee basis. Those three men work on full time. In addition, the association has four men who are qualified as weighers and who are called upon as they are needed. They are also paid on a car fee basis. A weekly printed circular is prepared by the association on the condition and prices of hay in the New York market and is sent without cost to shippers. The memhership of association includes about two-thirds of the total num- ber of commission receivers of hay in this market. It is managed by a board of directors of six and five officers. Conclusions and Recommendations The crux of the problem of hay marketing in New York City is cheap storage space at receiving terminals. The necessary fire protection regu- lations do not permit the storage of more than a week's supply at a time at points of consumption. The absence of hay receiving buildings at any except four terminals in Greater New York, of which only one is a general terminal 14 for all lines, of course, augments the difficulty. In a congested city like New York hay should all be unloaded from the car into a building as soon as it arrives and thie car and track space saved. The procedure of selling from the track is uneconomical and inefficient in such a market as this. The establishment of a large hay receiving terminal in New Jersey connected with all the important railroads with terminals on the Jersey shore would be the most constructive solution of the problem. Such a receiving ter- minal should have not only adequate space for storing all normal receipts of hay pending sale, but for storing surplus supplies for buyers for longer periods. If this terminal could at "the same time be located on water so as to receive barge canal shipments its utility would be increased. The need for a union hay receiving terminal market on the New Jersey shore has been discussed among hay merchants and traffic men on several occasions. One of the principal carriers suggested several years ago the erection of such a building on the tracks of the Hoboken Shore Road which could be reached by all lines, but the plan collapsed because the carriers couldn't agree upon a switching and service rate. Individual railroads may offer concessions for the constmction of such a market and storage place at a location that assures special revenue to that road, but obviously the project for a, union hay market can not be successful without being equally accessible to all lines. For the control of hay traffic under present conditions, there may be some arguments in favor of the permit system but the evidence is prepon- derantly against as impracticable and discriminatory. It does extend an equal opportunity to all shippers. In the last year, at least, of their issuance the permits were used chiefly as a means of soliciting shipments by the New York dealers. The small percentage of actual traffic compared with the number of permits issued, indicates that the permit system serves no real need when there is not serious congfestion. It is strongly recom- mended that this system be not reinstated without a conference of railroad officials, representatives of the dealers and producers and government market- ing officials. The proposition that all consignments of hay intended for sale after arrival be refused by the carriers unless consigned to one of five principal receiving terminals in the metropolitan district has been made by Mr. Fred Williams, President of the New York Hay Exchange. He suggests that permits might be issued by the carrier for s^hipments on direct sales to other terminals on condition that the car be promptly released. He also suggests that records of cars of hay rolling en route to each of the five selected terminals be forwarded by the carriers to some one central office in New York City and that embargoes on hay be placed only when the number of cars rolling to that terminal would cause serious congestion. The recommendations of the Department for the improvement of hay marketing in New York may be sum.marized as follows : (1) The problem, of providing additional storage for surplus shipments of hay and establishing a central hay market with direct connections to all the principal hay carrying railroads in addition to facilities for receiving hay by boat should be taken up with the Port of New York lauthorlty and a definite plan developed that will fit in with the general plans for reorgani- zation of transportation facilities in the New York port. (2) Hay producers, shippers and dealers should co-operate with the U. S. Department of Agriculture in developing practical and more definite hay grades along the lines being worked in the Federal hay laboratories at Alexandria, Virginia. (3) Federal inspection of hay at New York City under the Federal grades should be made available at the earliest possible date so that any uncer- tainty as to grades on the part of shipper and receiver may be removed. (4) The permit system should not be reinstated without a conference of railroad officials, representatives oif producers and dealers and marketing officials. (5) The hay commission receivers in the New York market should revise their methods so that present costs of handling hay shipments may 15 be lowered and the various charges defined and segregated. Returns to shippers should state clearly just what the commission charge consists at and should be in a position to indicate which services are desired and which are of no value to them. (6) The commission charge should be a percentage of the sales price, not a flat amount per ton. (7) State-vride or regional co-operative hay marketing associations of producers should be developed as rapidly as farmers will support them, on a strictly co-operative plan of operation. (8) The hay trade in New York City should be reorganized so that machinery may be established within the trade itself for meeting construc- tively some of the many problems confronting it. APPENDIX "A'' Stattoxs IX New Yoek State From Which 200 ob More Cars of Hay Ake Shipped Annuailt. fData from Shipping Point Survey made by the Bureau of Markets and Storage, Departmen t ofiParms and Markets, 1920.) Albany County Cars Montgomery County Cars Coeymans 200 So. Amsterdam 502 South Dayton . Moravia . . . Auburn. . . . Aurora . , . . Weedsport . Genoa Oakwood. . . Cayuga. . . . Cattaraugus County Cayuga County Rouses Point. Clinton County Jefferson County Cape Vincent Rosiere Chaumont Clayton Three Mile Bay Lafargeville Evans Mills Chittenango. Canastota — Wampsville. . Madison County Canandaigua. Holcomb Ontario CounJty Jordan Rose Hill . . . Manhus. . . . Skaneateles . Marcellus. . . Apuha Onondaga County 249 791 612 320 316 298 297 216 721 447 406 386 338 369 217 480 460 255 451 327 339 368 278 263 235 210 Montgomery County So. Amsterdam Sprakera Fonda Port Plain Amsterdam Canaioharie So. Ft. Plain Pultonville Schoharie County Central Bridge Sharon Springs Seneca County Seneca Falls Waterloo Lodi Romulus Inter laken Sheldrake Springs McDougall Hyatts Corners Prattsburg. Canisteo. . . Cameron* . . Rathbone. . Steuben County Tompkins County Trumansburg North Lansing Ithaca Groton Savannah. Lyons .... Wayne County ■ Branchport . Dundee Penn Yan. . . Yates County 426 374 330 329 322 233 225 408 257 829 415 328 316 314 248 238 201 471 426 272 231 651 212 210 204 224 216 430 427 286 16 AlPPEN*I)IX «B" PROCEBUEE A3ND FOKMS USED IN SELLING AND SHIPPING HaY The trade rules of the National Hay Association, as revised August 24, 1921j are generally considered the standard guide as to forms and procedure in direct sales of hay. These rules require that the original articles of trade include the following specifications : (1) Number of cars, tons or bales, (2) Size of bales, (3) Grade of hay or straw, (4) Price, (5) Terms of payment, (6) Rate basing point, (7) Time of shipment and (8) Route. Both buyer and seller are required to confirm in writing a sale or purchase on the hay of trade. The seller is liable for any demurrage or additional charges accruing on hay billed to *' shipper's order," when buyer has not been able to get possession of the bill of lading. The following rules* apply to time of shipment: Immediate or Bush Shipment shall mean shipment within three (3) calendar days from the day directions are received by seller, Sunday and holidays excluded. Quick Shipment shall mean shipment within five (5) calendar days from the day directions are received by seller, Sunday and holidays excluded. Prompt Shipment shall mean shipment within ten (10) calendar days from the day directions are received by seller, Sunday and holidays excluded. Where no time is stated prompt time governs. For information of persons interested in the customary forms of com- munications used in making a sale of hay, arranging shipment, confirming sale and other transactions, the following series of sample telegrams, letters and papers is given. These are not recommended as model communications but merely represent the customary existing practices. I. Telegraph Request for Pei-mit from Skipper to Commission Merchant Mr. A. Commission Merchant, Hay Exchange Building, New York City. Have two cars hay to ship. Send Shipping instructions. Sam Brown. II. Answer from Commission Merchant to Shipper Sam Brown, Brownsville, N. Y. Opportune time to ship. Market good. Start car quickly, A. Comroission Merchant, or, " Market oversupplied, advise to hold. Will write." (Followed by a letter describing condition) III. Letter from, Shipper to Commission Merchani Mr. A Commission Merchant, New York City. Dear Sir: I have several cars of timothy, some alfalfa and some rye straw which I would like to send you for sale for my account. Please advise me as to the present market condition and whether you think you can handle this hay and straw advantageouly for me at the present time. The timothy and straw are very nice quality and should grade No. 2 or better. The alfalfa is second cutting and also of a good quality. William Jones. The following is a sample of an incorrect letter offering hay for sale in that it does not specify grade, size of bales or when a shipment will be made: Hay Dealer, New York City. Dear Sir: The hay that we have to offer is good straight timothy. We prefer to sell outright at this time. Will take $18 per ton loaded in cars at Home tab weights. Please advise if you can handle. Yours truly, John Doe.