Willmar tribune. [volume] (Willmar, Minn.) 1895-1931, 1917-03-07
JAS. /. HOWARD ON
COOPERATIVE BILL.
COOPERATIVE Accountant Writes
Interesting lettef REGARDING
Mapus Johasoa's DM.

M,gaus Jelasaa's Bill.
Editor Willmar Tribune:
l have just read in the "Tribune"
the article written, or rather signed
w. v. Olson, entitled Relating to
Pending Legislation" and having ref
erence to bill introduced by Repre-
sentative Magnus Johnson at the pres
ent session Of the legislature.
The bill is for an Act to Provide for
the Organization of Cooperative Bus
mess Corporations and to Define the
same.
l concur fully in that portion Of Mr..
Olson's article which reads: EVERY
member of a cooperative company or
association, whether it be store, ele-
vator, creamery or other, is directly
concerned in getting a. cooperative
law enacted in our state that shall be
the best it is possible to obtain"
Every member of a cooperative
company should be concerned about
obtaining the best law, for new COM
panies to incorporate under, not be-
cause new law will have any bearing
on companies that have incorporated
under prior statutes, but because of
their desire to protect and safeguard
the investments of farmers and 9TH
ers that may incorporate in the fut-
ure. 1t is the farmers and others that
have not yet invested in cooperative
enterprises, that, should be the most
concerned about new legislation.
But the bill introduced by Magnus
Johnson is fundamentally wrong and
is not what is needed, and probably
was not intended to be. His bill,
(Which l have before mel is conspicu-
GUS for what it does not contain, and
is nothing more or less than a make
shift, and subterfuge. 1t is "promot-
ers" bill pure and simple and would
permit of the unrestrained exploita-
lions of the farmers and others by un.
scrupulous "organizers," "grafters,"
and promoters"
In the first place, the Johnson bill
does not permit of the allowance of
any patronage refund dividend to non
stockholders. 1t does not provide for
any capital with which to operate;
no limitation of Indebtedness; no linn
itation of organizing cost of getting
started; in fact the bill is farcial il
the interests of the people are consid-
cred.
1t provides that all of the annual
net earnings, except 10 per cent, shall
be distributed. without regard to the
financial condition of company, or
even fixing basis for determining the
earnings. The bill does not permit of
cooperative Live Stock" shipping.
1t permits the investment of all Of
the reserve fund, or Is per cent Of it's
capital In other cooperative enter
prises.
. The Dill II not a constructive meas
ure from any standpoint and will be
welcomed only by exploiters.
No Cooperative Company can sue
coed, If required to distribute all Of
It's earnings, except 10 per cent re-
gardless of it's condition, or If it has
no capital, or If it can invest all Of
Its reserve fund or Is per cent of it's
capital in another enterprise, or if it
costs too large an amount of expense
to get started; or is started under
other handicaps.
Identical with the Bylaws under
which the Right Relationship League
organized and started a great many
cooperative stores in the Northwest,
the greater number Of which failed
and many of which are in
an insolvent condition at this time.
The so-called Right Relationship
League was incorporated several
years ago by E. j. Van Horn, E.. M.
Tousley and w. F. Vedder, under the
laws, without capital and
not for profit. The reason for incor-
porating under the Educational Stat
utes, was to evade liability for DAM
ages.
Needless to say that the officers of
the Right Relationship League were
in the business solely for profit and
for no other purpose, and they "reap-
ed" while the "reaping" was good.
They started so many companies that
have since failed and that are insolv.
ent; earned and deserved such a no.
toriously unfavorable reputation from
their record Of wreckage and ruin.
that, they split up some two wears
ago, each selecting new title with
League" or Bureau" to it, to add at
traction, and the same wolves" in the
new "sheepskins," are now in compe-
tition with each other, in the same
business OF seeking new victims to
exploit.
Companies that are and have been
operating on the genuine constructive
cooperative basis are successful
About every company that lived IN
to the antiquated, impracticable. un.
sound Bylaws recommended bv men
with no practical business experience.
have failed. The companies that have
survived and succeeded, are those
that disregarded the counsel of the
oretical dreamers and fanatics. re.
pCaled or amended the rules under
which they we're required to operate.
and inaugurated policy of common
sense. You will find one of these
sensibly operated companies at VIII.
mar, and the most self-satisf1ed lot Of
farmers In the whole Northwest.
have a list of cooperative store
failures in the Northwest, the total
capital Of which aggregates over
100000 practically all farmers mon.
ey. l can show you another list. OF
companies with total capital of over
$250,OOO that are practically fnsolvent
and likely to collapse at any time
Such record should not be possible.
but it is a fact.
My business is accounting, and dur.
Ing the last ten years l have audited