New-York tribune., 1918-01-31
Cooperative Societies
How They Eliminate Middlcmen and
Help Consumers

10 the Editor Of The Tribune
sir: a recent article in one OF tho Sunday
papers, entitled The Mddlcman Presenting
His Own Case, as related among: other
things to cooperative societies as Il substi-
tute, suggests reflections which may be OF
general interest.
"Middlcman's" contention is that "cvcrv
eubstituto contains him in DISGUISE" 7. may
be resdily admitted that under present com
rctitivc syatcms the mdd!eman is q necessity
though it may vvel bc argued that he is very
cftcu unnecessarily multiplied. That, bow
c-er, Vii coutinuc to no incl itable under
present conditions aud customs Of trade"
Regarding cooperative societies rs sub
e.ituto. quote his statement that "thc locsl
cooperative cociety is performing tho crtirs
distribution ecrvico ct no cost to the pro
ducer for that service. This Involves hidden
costs which do not appear in the selling price
That Is net business"
Now, right here I claim that Mr. Middle
man bcgs the question or does not state the
'ituation fairly.
| In tho fret place. how. where, why and to
~hat extent does or should the producer pav
the cost OF distribution? lie generally sells
f. .. b. factory or elsewhere. II lie does paw
tor distribution TO any extent it is Of his ow,
volition, possibly as q bid for business end
then by the big wholesaler to some smaller
dealer, and he to another and SO on down
through half dozen links in the chain OF
distribution, each adding to same.
The cooperative society q am speaking
only OF large combinations Of consumers not
OF the small retailers, who are, however
but local branches Of the samc) may itself be
The producer or 1T may buy directly from the
producer. 1T IS then itself certainly sub
stltutc tor tho mldd!cman and does its own
distribution to its retail branches, thus saw
ing all the added costs Of several middcmen
Who thus become unnecessary.
! But this does not "involvc eny hidden costs
not appearing in the selling price" The cost
o. this one distribution is determined exactly
as in any line OF business, and the selling
price based upon the same. Why is this mot
business?
Again he says. "Coopcrative societies which
have succeeded have done so because one OF
the members managed the venture success
fully. Unless the manager Of such an organ
izstion is an amateur. which generally i'm
plies incompetence, he is, sooner or later. at-
tracted by an offer Of position as businc,,
manager because Of the capability shown. and
the association has to fall back on a subati
tute "ho wrecks the venture BY his incom
pctcnce."
Now, on what facts does he base such m
assertion? large cooperative society is
managed like any other business, by it's board
of directors, general and local managers. ETC.
II is IN no Nsy dependent upon any one nao.
Managers arc changeab!e just as clsewher.
and no one incumbent is essential TO ,ucce.s
"lncompetcnce" is soon dispensed With as in
aN other lnca.
big Wholesale und retail cooperative ,,.
soclation can command the highest ,nauarin
talent like other concerns. The local mar..
gers OF branch retail stores or Chain. @,
/ stores" have only. local duties and rc.norsi