Richmond daily register. (Richmond, Madison County, Ky.) 1917-1978, 1921-06-14

is no excuse for the warehouse as
an auction center. There is need
for the warehouse as a storage
center.
There is another problem. Sup
pose the manufacturer won't deal
with you. 1 have known that prob
lem to be advanced at times. I am
going to answer that. The manu-
facturer is a pretty smart fellow. He
has proven that by being on the man.
ufacturing end of the game instead
Of the growing end Of the game. He
is on the end Of the game where you
make dividends. whether the price is
high or low. You are on the end of
the game where you make profits
when the price is high, which you
lose when it lis low. He has shown
his wisdom by being in on the best
end OF the game under the present
system. Your manufacturers are
square, intelligent fellows. You will
lind they will deal with you when
you are fact, established as an
organization. During the process of
organization they may be negative,
but when you are established they
recognize you as a fact. But if, by
any chance, you should run into a
condition where some of the manu-
tacturers won't deal with you, there
Is nothing to prevent you men from
going into lines Of work into which
the manufacturer forces you.
The prune growers didn't own a
single packing plant the first year.
They made contracts with the pack
ers, until they started to take adj
vantage of the growers. You can
blend some 30-40s into 2O-30s and get
profit. We were entitled to that
They forgot to give it to US. Begin
ming with the second year we began
to acquire packing plants. We have
now twenty-five. Beginning with
next year we will have no need for
any outside packer. OF the prunes
grown by California prune growers,
over eighty per cent will be packed
In our own plants. Likewise we have
our own shook mills: and likewise
we are beginning to acquire our own
forests for our kind Of timber.
In fact, you can integrate the in.
dustry If they make you do it. We
didn't start out to do it, but we were
wise enough to give ourselves the
right. When they aroused us we
started to put up plants. Mr.. Coy
kendall. manager of the prune grow
ers, evolved a system by which, by
the use OF preferred stock in a sub
sIdlary company, you get the money
for your plant. You get the money
on the guaranteed preferred stock
right when you need it and pay It
off out of the money received rom
the crop. 1t is ideal for financing the
physical needs of a cooperative en-
terprise, building warehouses or fac
tories If you have to have them. l
don't advocate going into the other
fellows business; there is a place for
the WarehOuSeman as we'll as a place
for the factory. / don't believe in
playing the other fellows game until
he Compels you to do it. But if he
compels you to do it don't be bashful
But you will find that nine times out
of ten the factories and warehouses
are distinctly intelligent and broad
gagged factors. If they are not
broad-gauged at least they are SEN
Nsible enough to recognize a fact when
they face it. They do business with
that fact.
The Financing Problem.
Co-operatives couldn't exist unless
they could find some method for MAX
ing advance payments, payments on
account when they get the product
We have gone through that process
time after time in California. We
use different methods. In some cases
the association gets direct credit on
the basis of its storing the product.
Take, for example, the prune grow
ers. In 1919 the prune growers had
written arrangement with a group
Of bankers; they considered the
problem locally with the local bank
ers and, then they invited their city
correspondents and they got the So
no InFN
pool. They formed a great pool under
which, by written agreement, we
could borrow up to $40 ,000, 900 at Az
per cent for our needs during the
year. We didn't even have to give
up the warehouse receipts. We gave
a statement of the quantities Of fruit
coming into the warehouses. We got
all the funds needed for the advance
payment and paid the growers 4 to
8 cents, depending on the size and
quality. That to cents advance
payment we paid them was a good
deal more than the average that they
used to receive for the entire crop
over a period of six years, and al
most twice as much as they received
for the average of the entire crop
over Il period of twelve years. Then,
in addition to that, they got the bal
dliOC VI lllC pay AllClIlot lIlS DIV Gl dSG
bringing them up to more than II
cents a pound for the entire year.
They got that balance from time to
time-1 cent in October, l cent in
December and so on-until the prunes
OF the season were sold. That is one
system.
The Grain Financing.
A still better system was evolved
by the Washington Wheat Grow
ers' Association this last year, this
panic year. 1t is the most interest
ing thing worked out by a coop
erative enterprise in the United
States. 1t was worked out chiefly
through the skill of Mr.. Jewett, gen.
eral manager. They arranged with
a lot of local bankers throughout
Washington and Idaho territory
what the fair loan value on the crop
would be. They were business men.
They were not wild spectators.
They did not go to the bankers and
say: Give us 80 or eighty per cent"
They went in and they fixed the
amount and the banks said: You
fellows are certainly sound" We
arranged for an amount of 81 to
s1.25 a bushel for wheat. depending
on the grade. Let us illustrate with
No. Walla Walla wheat at S1.25.
Here was the process; The grower
delivered his wheat to any public
warehouse or any public elevator.
If he delivered it at an elevator he
got a so-called grain or wheat ticket
showing he delivered there 10000
bushels of No. 1 red Walla Walla.
If he delivered it to the public ware
house he got warehouse receipt.
He took the receipt over to the
association manager or mailed it in.
That was delivery of his crop. The
association mailed a regular form
chat would be a three or a six
months draft, because those drafts
are agricultural paper) for $4,000
to be signed by the grower, and, of
course, it was sent to him signed