The Breckenridge news. (Cloverport, Ky.) 1876-1955, 1921-05-11

Likewise we have our own shook
mills; and likewise we are beginning
to acquire our own forests for our
kind of timber.
In tact you can integrate the indus
try il 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. Coykendall, mana
ger of the prune growers, evolved
system by which, by the use of pre-
ferred stock in subsidiary company,
you get the money for your plant. You
get the money on the guaranteed pre-
ferred stock right when you need it
and pay it off out of the money re-
ceived from the crop. 1t is ideal for
financing the physical needs of CO.
operative enterprise, building ware
houses or factories if you have to have
them. don't advocate going into the
other fellows business; there is a
place for the warehouseman as well
as place for the factory. | don't be-
lieve 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 broadgauged factors. If they are
not broad-gauged at least, they are
sensible 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 prob
lem locally with the local bankers
and then they invited their city cor
respondents and they got the socalled
New York bankers into the pool.
They formed a great pool under which
by written agreement. we could Dor
row up to $1O,OOO,OOO at 4 "a per
cent for our needs during the year
We didn't even have to give up the
warehouse receipts. We gave state
ment of the quantities of fruit coming
into the warehouse. We got all the
funds needed for the advance pay
ment and paid the growers 4 to s
cents, depending on the size and
quality That to 8 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 almost
twice as much as they received for
the average of the entire crop over
period of twelve years. Then, in addi-
ton to that, they got the balance of
the payments, the average 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, 1 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 Growers
Association this last year, this panic
year. 1t is the most interesting thing
worked out by cooperative enter
prise in the United States. 1t was
worked out chiefly through the skill
of Mr.. Jewett, general manager They
arranged with a lot of local bankers
Washington and Idaho
territory what the fair loan value on
the crop would be. They were bust
ness men. They were not wild specul-
ators. They did not go to the bankers
and say: Give us 30 or eighty per
cent" They went in and they fixed
the amount and the banks said: you |
fellows are certainly sound" We ar
ranged for an amount of 81 to $1.25 !
a bushe for wheat, depending on the
grade. Let us illustrate with No l !
Walla Walla wheat at $1.25.
Here was the process: The grower |
delivered his wheat to any public >
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. red Walla Walla. If |
he delivered it to the public ware |
house he got warehouse receipt.
He took the receipt over to the as
oOSidtiOn llldildSSl VI lldllCu IL III 1
That was delivery of his crop The |
association mailed a regular form /
(that would be three or a six
months draft, because those drafts
ire agricultural paper) for $12, 500 to
be signed by the grower and, of
course, it was sent to him signed al
-eady by the association. If the grow
er needed money or wanted money
think they always wanted money
ne took the draft to the approving
ocal bank. With the draft went I
list of bankers that approved the plan
We insist on the growers dealing
With the local banks wherever they
will deal with us. The local bank dis
counts the draft at the current rate
or 61-2 or per cent? If the draft
S a three-months draft, as most of
hem were, the bank deducted its
hree months at 9 or 6 1-2 or per
,ent and handed him $12.5OO less the
discount. The bank then had that
lraft- which was an inland trade
ill, technically, signed by the grow
n and accepted by the association.
At the end OF the day we sent over