Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1924-02-14


Sapiro brought to Kentucky was en-
tirely different. 1t, proposed doing
away with the old auction system. It
was plan to get the hurley growers
to sign contract to turn their tobacco
crop, every leaf Of it, over to the CO.
operative association for six years
When Is per cent of the growers had
signed the contract would become eff
fective.
Later the South staged the first big
drive for members. In little over a
month $500 tobacco growers, pro-
ducers Of 76 per cent of the 1920 crop,
had signed contract.
A board of directors was elected and
James G. 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 marketing
law passed in Kentucky, once the leg
islature met.
Providing Warehouses.
The Warehousing question wasn't so
simple. There had to be 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 a 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 share based
on the amount of his deliveries. This
plan was proposed to III warehouse
men. Immediately the association
took possession of more than $6.OOO,OO0
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
ment had been met it would be easy.
The cost of doing business would be
deducted from the proceeds of the
growers. It was at this particular
time that the banks offered their as
sistance. Louisville and Cincinnati
bankers offered to loan $1,800,000, in
spite of the fact that one 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,OOO.
A group of expert buyers worked
out a system of grading. The system
hit upon is declared to be the best one
ever devised. The tobacco was grad
ed at the local warehouse where the
grower received receipt which stated
what he had delivered together with
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
President Stone wired all the buyers
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 been
made to growers based on sales. The
average price received was 211s 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
q, 900 growers have joined their neigh
bors for cooperative marketing in the
hurley district alone The association
functioned in full blast with the 1921
crop, handling 120,OO0,000 pounds of
OOO,OOO-pound crop. Other tobacco
farmers in other tobacco states have
taken up the work. Their membership
adds three-quarters Of a million more
to the cooperative ranks. In the
Virginias and the Carolinas $1,000
bright-tobacco growers have organ
lied the Tobacco Growers Co-opera-
tive association, handling 66.66 per
cent of the total crop. The 10000
members of the Dark Tobacco Grow
ers' Cooperative association control 70
per cent Of the total crop. In the
eastern states is the Connecticut VSl-
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 78 per cent of the
states crop is controlled by the mem
bers of the cooperative tobacco pool.
Jeff Clay, whose average income for
ten years had been somewhere around
$500, doubled it in 1871. For the first
time in Ave years jeff bought new
shoes for his little family. If you
were to happen down in Bourbon coun-
tv today you would find jeff Clay living
in a new four-room bungalow with
lowered wall paper in the parlor and
a brussels rug on the floor. JEFF
doesn't owe the country grocer a cent,