, 1924-07-02
FARM
COOPERATIVE
By GLENN C. HAYES
Capital Rallies to Support of
the Farmers

LIE WAS a former son of Italy, a
Abright-eyed, blue-overalled little
farmer with five acres of prunes to sell.
"How's business this year, Tony?'
a Santa Clara banker asked, surveying
the prune orchard from his car.
"Beesness?" with his thumbs back
of his suspenders and blowing out a
pair Of sunkist lungs Tony replied.
1--WE gotta one beeg $3.50 o boss
worka for me to sella them p~runes."
Tony had gone into business. He
was keeping step with American agri-
culture. He is only one of a million
American farmers who are hiring high
priced experts to market their crops.
Ten years ago the farmers business
was handled by brokers, by specula-
tors, by financiers-city men, who
owned not an acre of land nor a
single team of horses. 1t was the
Spectator that sold the farmers wheat
n corn. that glutted the markets
with his pears and apples, that juggled
the prices OF the live stock exchanges.
The farmer stood by and watched his
share of the dollar shrink to some
where around 81 cents. The farmer
didn't say a word. But he was doing
a lot of thinking as he watched his
tobacco and his cotton and his wheat
and his live stock sell at a profit to
everyone except himself. Then his
years of steady thinking crystallized
into group action.
Farmers Go Into Business.
Farmers got together and decided
to go into business for themselves.
They would do what all great industry
has done, join forces for collective
selling. They would set up their own
sales department and merchandise
farm products in an orderly way rather
than dumping them on glutted on
Stunning centers within four months
after harvest. They would hire the
best business brains in America to
manage the selling of their products
n to represent them in the central
markets. on the grain exchanges and
on the stock exchanges.
n that's what they did. Out of
the cotton fields the fruit orchards.
the dairy barns and the feed lots are
rising up great agricultural enter
prises producer-owned and producer
Observation-Disclosures which during
the past year marketed more than a
billion dollars worth of farm prod
ucts nj the actual cost Of handling.
The farmers own sales department
produced a business half as large as
hat of the hundreds Of automobile
factories and five times greater than
the total output of American-made
machinery.
In five years the farmer has learned
the art of big business. An effective
outlet has been provided for perish
able products. The non-perishable are
stored to be sold as the buyers will
absorb them at a fair price. Organi-
cations have been built up capable of
handling the nations food supply.
These farmer co-operatives, as they
are called, are not outlaw organiza-
tons unrecognized in the business
world. They have been legalized by
an act of congress to function not only
as selling agencies but to a the
full-fiedged rights of corporate entities
In financial operations. This put them
on a legal footing with the worlds
greatest corporations. Once the farmer
made his appearance in the business
world he was accepted in good faith.
Even Wall Street has sounded its ap-
proval and offered its assistance.
To go into business on a billion
dollar scale requires money! lot of
money, and around 1919-1920 the
farmer didn't have a dollar in spare
change. How was he going to finance
his new undertakings?
The Loan Plan.
The cotton farmers were in the
midst of the worst depression hat
their industry had suffered in years.
They were trying to organize CO.
operative marketing associations to
handle their crop, but they couldn't
raise the money. Then the War FL
nance corporation developed a plan to
lend money to the cotton farmers Oh
a big scale. The corporation made its
first loan to the association in Missis-
sippi in the summer of 1921. The cot
ton was classified by the association
according to grade and staple and
placed in bonded warehouses licensed
under the United States warehouse act.
1t wasn't a week until other loans
were made on n similar basis to cotton
c~o-operatives in Oklahoma and Texas.
Before a e loans to cooperative
marketing associations was made a
special feature of the work of the
War Finance corporation. During 1922
the corporation approved advances to
80 cooperative marketing associations
of 20 states totaling $172, 1927 900.
After the War Finance corporation
made its first loans to the cotton CO.
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