, 1924-07-09

~ " nv SIdQlnE VI lODdCCO.
They seldom knew the grade of their
own stuff. The new plan which Aaron
Sapiro brought to Kentucky was en-
tirely different. 1t proposed doing
away with the old auction system. 1t
was a plan to get the hurley growers
to sign a contract to turn their tobacco
crop, every leaf of it, over to the CO
operative association for six years.
When 10 per cent of the growers had
signed the contract would become eff
fective.
drive for members. In a little over a
month 5000 tobacco growers, pro-
ducers of 76 per cent of the 1920 crop,
had signed a-contract.
A board of directors was elected and
James c. Stone Of Lexington was
made president and general manager.
Then the tobacco board got busy. Ken
lucky had no cooperative marketing
law. To save time they Incorporated
under the cooperative marketing law
of North Carolina. But they didn't
have any trouble getting a marketing
law passed in Kentucky, once the leg
idiu llct.
Providing Warehouses.
The warehousing question wasn't so
simple. There had to b. warehouses
to- receive the tobacco, but there was
no money or time with which to build
them before the crop would be ready
TO move. Aaron SapirO had thought
about that. He had provided a plan
which allowed for a subsidiary corpo-
ration to be formed for the purpose
of buying warehouses to be paid for
over IA period of six years, the pay
ments being deducted from the pro-
ceeds of the growers tobacco. AT the
end of six years the warehouses would
belong to the cooperative growers.
Each grower would own a share based
on the amount of his deliveries. This
plan was proposed to III warehouse
e Immediately the association
took possession of more than Sc, 900
worth of property without paying a
cent in cash.
Where to get the money for the
first advance payment-that was the
biggest problem. After the first pay
e had been met it would be easy.
The cost of doing business would be
deducted from the proceeds of the
growers. 1t was at this particular
time that the banks offered their as
sistance. Louisville and Cincinnati
bankers offered to loan S1,S00,0O0 in
spite of the fact that n of the lead
ing banks Of the South gave out the
opinion that the whole cooperative
movement was Illegal. Judge Bing-
ham offered a million dollars of his
personal fortune. The country bank
ers, too, hundreds of them, loaned
their limit. Altogether they sub
scribed $5,4OO. 600.
A group Of expert buyers worked
out a system of grading. The system
hit upon is declared to be the best one
eve devised. The tobacco was grad
ed at the local warehouse where the
grower received a receipt which stated
what he had delivered together with a
draft upon the association of so many
cents per pound for the grade. The
local banker paid full value for this
draft
After the tobacco was re-dried and
stored. in the Lexington warehouse
L ltSiuthl StOht WlICu ali Lie Du.tIS
to come and give their orders. And
he sent them samples of all the 50
grades. For the first time in history
the buyer asked-"What are the
prices?"
Within 40 days all the loans for the
first advance payment had been paid
off and a second payment had een
made to growers based on sales. The
average price received was 211k cents
per pound net after all overhead
charges had been deducted. The aver
age price received by growers outside
of the association was almost two
cents less. The average operating
cost during 1921 and 1922 was three
fourths of "a cent per pound.
Many New Members.
Since the first sign-up more than
81 900 W have Joined their neigh
bors for cooperative marketing in the
hurley district alone. The association
functioned in full blast with the 1921
crop, handling 12O,0O0.O00 pounds of a
175,000, 000-pound crop. Other tobacco
farmers in other tobacco states have
taken up the work. Their membership
adds thr%ee-quarters of a million more
to the cooperative ranks. In the
Virginias and the Carolinas $4,000
bright-tobacco growers have organ-
lied the tobacco Growers Co-opera-
tive association, handling $685. per
cent of the total crop. The 10000
members of the Dark Tobacco Grow
ers' Cooperative association control rs
per cent Of the total crop. In the
eastern states is the Connecticut VAL,
ley Tobacco association. which has
over $500 members producing "a per
cent of the cigar wrapper tobacco
grown in Connecticut and Massachu-
sets. In Wisconsin rs per cent of the