Evening star., 1924-08-01
FARMERS DIVIDED
OVER GRAIN FIRM
Taking Stock in SIG, 900, 900
Marketing Company Stirs
Wide Discussion.
BY J. C. ROYLE.

NEW YORK, August 1-Farmer ers
the progress OF the new Grain
Mark citing Co. OF Chicago, which
has been formed around the prop
critics of the Armour Grain Co.,
the Rosenbaum Grain Corporation,
Rosenbaum Bros. and J. G.. Shaner
& Co. Of Chicago and the Davis
Noland-Merrill Grain Co. of Kansas
City, the price to be paid for which
will be determined later. AS
might be expected, farmers are
divided as to the advisabiIfty OF pur-
chasing stock in the concern, ac-
cording to reliable reports from the
Middle West.
The company has been organized
under the Illinois cooperative
marketing act, with capitalization
of $26,000,000. This capital is di-
vided into 100000 shares OF COM
mon stock at 81 a share. 100000
at $25 a share and 100000 shares
of class B preferred stock at
$50 a share. The company has start
ed with a paid-in working capital or
$4,000,000, supplied through the COM
panies whose properties are to form
the nucleus Of the concern.
Stock To BE Limited.
AS explained by statement by the
Farm Bureau Federation, lit is un-
derstood that the class b stock will
be sold for immediate financing pur-
poses. 1t is understood that rs per
cent of the earnings of the new com
pany over and above operating and
| II, n
the class A stock will be used in re-
firing class b stock. This means
that with the sale of every two
shares of class A preferred stock one
share of class b stock Will be re-
tired. This prevents the capital
$26, 900. This plan OF financing
has been worked out to facilitate the
movement of the business from the
present owners to the farmers.
Purchasers of stock must be pro-
ducers of grain and must pay for at
least one share of common at ~,
and one share of class A preferred,
which bears per cent interest, al
$25. The organization, however, can
handle one-half of it's grain from
nonstockholders or members.
Claims to Help Growers.
The company says it provides a
complete marketing system for
farmer producers of grain, local CO.
operative elevators and other organl-
cations doing cooperative gram
mark eting business.
Advocates of the plan declare thai
it's machinery puts the grower IN IN
innate touch with practically all DO.
mestic and foreign markets, and
proyides a trained staff and machin-
cry for promoting profitable sales
which hitherto has been lacking to
cooperative grain growers aSsocia-
tions of different sections. and which
will eventually be owned by the
growers themselves.
They point to the success or the
Federated Fruit and Vegetable Grow
ers. Inc, the first company of the
sort to come into existence, and tC
that of the Live Stock Producers, each
of which took over growing con-
Germs under plans oSmewhat similar
to that of the grain marketing com
pany.
Cooperation Questioned.
Some opponents of the scheme say
that the business Of the five compa-
nies involved has not been particu-
liarly prosperous and that they have
suffered as a result of the Capper-
over possible extension of Govern
ment regulation. Therefore, the op-
ponents continue, they are willing to
turn over their properties to a com
pany with control centering largely
in their own hands and with a farm
plan is based less on corporation
than on stockholder participation
such as is being worked out by the
American Telephone & Telegraph
Co. and other public utility cor
portions.
Other interested observers explain
that grain elevator cooperative own
ership is extending from Canada
where it has gained a firm foothold
to this country. At the same time the
dealing in wheat is increasing. The
grain companies involved. these ex-
perts say, decided the cooperative
idea was expanding and, seeing the
handwriting on the wall. decided to
get out, in expectation that with
farmers interested there would be
less cry for Government regulation.
Merger Long Desired.
Still other opponents of the plan
state the grain companies for some
tim( have wanted to merge and thus
cut overhead. To merge they feared
test from farmers, and since the lat
ter had been crying for regulation
and cooperative management, they
are willing to let them try 1t.
These commentators declare that In
offering their properties for CO.
operative IldudS SIuChI thO SoiiiPdAACs
retain control through ownership OF
the class preferred stock, which is
to be held by them until retired
through purchase by farmers of the
$26 100000 worth of common an6
class A stock. Until such time as thai
took place, the companies would be
merged and doing business as one
concern.
Grain growers of some Of the
Northwestern States meeting at the
call of the Grain Growers Advisory
Council, which former Gov. Lowder
of Illinois represents, decided to urge
farmers against buying stock ant
to oppose marketing of grain will
the proposed company. The stant
was taken that the company is mere.
ly a combination of trade interests.
Advocates of the plan are said t