Evening star., 1924-07-28

1t is not every man nor every class
OF workers that is able to go into
the market and, without investment.
persuade experienced business men to
turn over millions OF dollars to the
management of Inexperience.
The farmers who produce wheat
announce that they have bought the
physical property and good will of
the five largest grain-selling cor
porations in the world at total valu-
alton of s25.ooo.ooo. These are To-
Gated in Chicago and Kansas City.
They have been offered on the same
terms hundreds of other elevators be-
longing to companies of Minneapolis.
which they have not yet acquired.
They do not make any cash payment:
they guarantee nothing. With the
purchase they take over the former
employees and managers. who. with
the five great corporations merged
into one, are to continue the actual
handling of the grain-selling machin-
cry until the net profits, after cover
ing per cent interest (dividend) on
the selling price. will pay in real
money the $25,000,000. 1t is argued
that, due to united management, there
will be great economies. For exam
pie, the cost of leased wires covering
the markets of the world, which each
company now maintains. will be re-
duced to one item instead of five-a
saving OF $500. 900 a year. Other
similar savings in overhead expenses
are considered.
The new corporation is organized
under the Illinois cooperative law,
which requires that not less than
half of the products handled shall
come from member producers To
become a member producer" the
farmer must show that he grows
more or less grain and he must also
own one share Of the common stock
at 81 and one or more shares OF pre-
ferred, class A, at SIS. There Will
be a million shares OF each OF these
stocks. totaling $26,000.000, and also
10000 shares OF class B preferred
at $50. totaling s25,o0O,0Oo. All OF
ers of the five corporations-th
vendors-as debentures for the pay
ment of the purchase price. Both
classes of preferred Will carry an
8 percent preferred dividend. The
common will do all the voting, but
as the managers OF the old COM
panles will hold five-year contracts
to manage the new corporation, II
is argued. the voting will be a some
what empty privilege.
X
All profits. measured by the differ
ence between the market price of
the grain when the farmer sells to
the corporation and the price at
which tho corporation sells il, Will
be credited to the producer. less the
overhead. These profits Will be pay
able only in preferred \ stock and
at certain settlement dates IS per
cent or more OF the outstanding
class A must be exchanged with the
vendors for preferred Il, whereby
preferred A will be retired and the
original holders of Is (thc vendors)
will receive cash. while the farmers
will thus gradually acquire owner
ship of their corporation a tlve-
year time limit is "of the essence OF
the contract" hence within the hve
years the net profits must amount
to some s34,000,0O0. since only 10
per cent is necessarily applied
toward taking up the $4,000, 900
debenture stock of the vendors.
The wisdom of the enterprise of
the farmers in acquiring the prop
erty OF tne nFe great companies Is
not indorsed by all leaders of CO.
operative marketing, but the under
taking is backed by the American
Farm Bureau, of which Mr.. Gray Sill
yer of West Virginia is head, and Mr.
Silver becomes president of the new
corporation.
Questions are raised which have
not yet been answered to the salts
a n lie. rS
as Attorney Sapiro, who has been aC-
tive in organizing the cooperative
marketing of the prune growers of
California, the tobacco raisers of
kentucky and the grain raisers of
certain sections of the Midwest.
What part of the acquired physical
assets is dead property owing to the
shifting Of the field of production, in
late years?'
Are the main terminals economi-
cally near to the milling demands"
What net profits or losses do the