Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1923-03-06
COOPERATION HELD
HOPE Of FARMERS
To BUY FERTILIZER

by few large companies, with the
Iretail price fixed through virtually
uniform contracts placing retailers in
the position of agencies, ives report
ed to the senate dtoyaby t. federal
trade commission.
The report, which was submitted
in compliance with a resolution by
Senator Norris, Republican, Ne
braska, also said control of three
essential materials entering into the
manufacture of commercial fertiliZ-
ers was highly OBSERVATION-DISCLOSURES
of soda by Chilean interests, potash
by German and French interests
and sulphate of ammonia by the
American Coal Products company.
The commission described the CO.
Operative buying of fertilizer as the
most important factor in lower
ing the price, with the bulk of
sales in the New England and mid
idle western sections being made
Through farmers purchasing organ
Iizations. The larger companies have
been forced to recognize co-opera-
ltiYe buying, the report declared,
while some have inaugurated direct
selling to farm organizations despite
deposition from dealers, whose bus
mess has decreased as a result. The
president of one of the largest fer
tilizer companies was quoted as es-
Itimating that in 1921 cooperative
Ibuying in middle western sections
saved farmers $5,00O,O0O and the
commission added that the scheme
must now be regarded as per
manent factor" in the fertilizer in
dustry.
Although census bureau figures
flor 1921 showed 5S8 establishments
engaged in the manufacture of fer
tilizer in the United States, the re-
port declared, the American Agri-
cultural Chemical company dom
mates the industry in the north and
the Virginia-Carolina Chemical COM
pany in the south. Their combined
output was placed at approximately
a third of the nations production,
and the commission added that they,
with the International Agricultural
corporation, F. S. Royster Guano
company, Armour Fertilizer Works,
panies, and their subsidiaries, pro-
4
| of the fertilizer used in the United
States in 1921, as compared with
| So per cent in 1916.
Small Farmers Suffer
| The large companies, the report
continued, dispose of the bulk of
their product through retailers by
means of the consignment form of
contract. The seven companies in
| 1921 produced and sold 3,373,304 of
the 100000 tons Of mixed fertilizer
manufactured in that year, and,
emitting the Swift business, which,
the commission said, appeared to be
| only a division of Swift & Co., pack
ers, their combined capitalization
was more than $200,00O,0OO, with
| 1877 subsidiaries under their control.
The report emphasized that the
| tenant farmer of the south. where
more fertilizer is used than in any
other section and the majority of
farms are operated by tenants with
| tenancy increasing, needs legisla-
| ton to extend his credit facilities
| for the purchase of fertilizers. y
| The commission went eXhaustiVely
| into the credit situation as an inn
portant factor in the industry dur
| ing the period it investigated.
| The collapse in the price of farm
products in, the fall of 1920 made it
necessary for the fertilizer manufac-
| turers to carry over many of their
credit customers until the next year,
land this, with general financial con-
ditions, curtailed the usual extension
of credit facilities to the fertilizer
user in both 1921 and 1922. In 1922
| it is estimated that 60 per cent of
the business done in the south was
| on a cash basis as compared with
1 less than 25 per cent under normal
conditions. The farmer being unable
| to buy on a credit basis, as usual,
was forced to do without fertilizers,
consuming only 5,25O,O00 tons in
| 1921 as compared with about $780,
900 in 1920.
Prices Found Excessive
The commissions report went into
detail on price competition and
credit conditions, revealing that 1920
was the banner year for the ferti-
lizer industry, but that the eager
ness of manufacturers for cash bust
ness in the two subsequent years
was an important factor in
forcing prices downward. At the
| opening of the season of 1921. it
said, the manufacturers with large
| quantities. of raw materials on hand
submitted individual price lists to
the department of agriculture as
required by existing wartime legis-
lation. These prices, in the opinion
of the government, were excessive
and a reduction was suggested. The
| companies refused to heed this ssug-
gestion and in March, 1921, the leg
| islation was repealed and the high
price lists remained in effect.
| The purchasing power of the farm
| err, however, had been reduced by a
little less than one-half because of
reduction in the price Of farm prod
ucts, and sales of fertilizer did not
meet the manufacturers expecta-
| tons, so. to move their products,
| price reductions were effected
through the spring and fall of 1921.
Opening price lists of the large COM
panies for the spring season of 1922
| showed that the manufacturers had
reverted to their 1921 base prices,
but, as in 1921, with no material
| changes in market conditions, they
were again forced to reduce their
| list prices ito move their product.
A larger price cut, the report added,
was necessary in 1922 than in 1921,
reduction in many cases being as
high as 33 13 per cent, and even
greater for cash business.
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