HISTORY AND DEVELOPMENT OF AGRICULTURAL
COOPERATIVES IN OHIO
DISSERTATION
Presented in Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy in the Graduate School of The Ohio State University
By
WILLIAM TAFT RICHIE, B. S., M. S.
The Ohio State University 1958
Approved by:
Adviser Department of Agricultural Economics and Rural Sociology ACKNOWLEDGMENTS
I am grateful to all the people who have helped to make this manuscript possible. A special word of appre
ciation goes to Dr. George P. Henning, of the Department of Agricultural Economics and Rural Sociology, for his guidance and supervision. I also wish to thank Dr. Ralph
W. Sherman and Dr. Virgil R. Wertz for their suggestions and assistance.
My wife, Sadie, has been a source of inestimable help and encouragement at all times. To her I am indebted for the typing of this manuscript.
ii TABLE OF CONTENTS
CHAPTER PAGE
I. INTRODUCTION...... 1
Purpose and Scope of Study......
Previous Studies...... 6
Source of Data ...... 8
II. ECONOMIC PRINCIPLES AND CONCEPTS OF COOPERATIVES...... 10
III. STATE AND FEDERAL LEGISLATIONS...... lk-
IV. DEVELOPMENT OF FARMER COOPERATIVES IN OHIO.. 21
Ohio Farmers Late in Organizing Cooperatives...... 22
Farm Organizations...... 26
Number, Membership and Volume of Business...... 39
V. DAIRY COOPERATIVES...... 57
Early Developments...... 57
Some Factors Affecting Development and Growth...... 61
Background Information of Some of the Associations Operating in Ohio Milksheds. 67
Ohio Milk Producers Federation...... 82
Statistics and Trends in Dairy Coopera tives...... 82
VI. FRUIT AND VEGETABLE COOPERATIVES...... 89
Development of Fruit Cooperatives in Ohio...... 90
Development of Vegetable Cooperatives.... 92
Statistics and Trends...... 96 iii TABLE OF CONTENTS (Continued)
CHAPTER PAGE
VII. GRAIN AND FARM SUPPLY COOPERATIVES...... 99
Early Elevator Cooperatives...... 100
State Organization Formed...... 109
The National Program...... 113
Central Grain and Purchasing Organizations...... 116
VIII. LIVESTOCK COOPERATIVES...... 133
Early Developments in Ohio...... 133
Local Shipping Associations...... l*+0
County-Wide Shipping Cooperatives l*+9
The Need for a State Organization. l5*+
Cooperative Selling on Terminal Markets...... 159
The Decline in Shipping Associations in Ohio...... 16*+
Direct Marketing...... 167
Consolidation of Cooperative Terminal Sales Agencies and Decentralized Marketing...... V/Q
IX. POULTRY COOPERATIVES...... 190
Early Developments...... 190
Ohio Farm Bureau Federation...... 19^
Auction and Commission Pool Associations...... 195
Sales Federation...... 201
Statistics of Poultry Cooperatives 20U- iv TABLE OF CONTENTS (Continued)
CHAPTER PAGE
X. TOBACCO COOPERATIVES...... 208
Early Efforts...... 208
Organization in the Miami Valley...... 209
XI. WOOL COOPERATIVES...... 220
Early Efforts ...... 220
Ohio Wool Growers Cooperative Association...... 222
XII. FARMERS1 MUTUAL INSURANCE COMPANIES...... 232
XIII. CREDIT COOPERATIVES...... 2*fO
The Federal Land Bank and National Farm Loan Association...... 2^2
The Federal Intermediate Credit Banks.... 2^6
Credit Subsidiaries of Ohio Cooperatives. 2*+8
Producer Credit Associations...... 251
Bank for Cooperatives...... 256
XIV. RURAL ELECTRIC COOPERATIVES...... 260
XV. SUMMARY AND APPRAISAL...... 266
APPENDIX A ...... 278
APPENDIX B ...... 313
BIBLIOGRAPHY...... 350
AUTOBIOGRAPHY...... 358
v LIST OF TABLES
TABLE PAGE
1. Index Numbers of Wholesale Prices in the United States (1860-1900)...... 23
2. Financial Picture of the Ohio Farm Bureau Cooperative Association,, Inc. (1931+-1956)... 37
3. Number listed of Marketing, Farm Supply, and Related Service Cooperatives in Ohio (1913 to 195*+— 55)...... U-0
*f. Number of Marketing, Farm Supply, and Related Service Cooperatives for Each 10,000 Farms in Ohio (1925-1955)...... b2
5. Number and Estimated Membership of the Farmers' Marketing Cooperatives in Ohio, By Specified Commodity Groups (195^-55).... *t3
6. Estimated Business in Specified Commodity Groups of Marketing Cooperatives in Ohio (195^-55)...... *+5
7. Estimated Business of Farm Supply Cooperatives in Ohio (195^-55)...... ^6
8. Estimated Membership of Marketing, Farm Supply, and Related Service Cooperatives in Ohio for Specified Periods (1915 to 195*+-55)...... 50
9. Estimated Business of Marketing, Farm Supply, and Related Services in Ohio for Specified Periods (1913 to 195^-55)...... 52
10. Number, Membership and Dollar Volume of Dairy Cooperatives in Ohio for Specified Periods (1913 to 195j+-55)...... 85
11. Trends in Dairy Cooperatives (1950 to 195^-55).• 87
12. Number, Estimated Membership and Estimated Business of Fruits and Vegetables in Ohio for Specified Periods (1913 to 195^-55)...... 97
vi LIST OF TABLES (Continued)
TABLE PAGE
13. Trends in Fruit and Vegetable Cooperatives (1950-51 to 19 5*4-55)...... 98
I1*-. Data on 217 Farmers' Elevators in Ohio, When and By Whom Formed (190*f-192*0...... 105
15. Number, Estimated Membership, and Estimated Business of Grain Cooperatives in Ohio for Specified Periods (1913 to 195*4-55)..... Ill
16. Trends in Grain Cooperatives (1950-51 to 195*4-55)...... 130
17. Some Financial Aspects of Ohio Farmers' Elevators (1933-3*4 to 1953-5*0...... 132
18. Number, Estimated Membership and Estimated Business of Cooperatives Marketing Livestock in Ohio for Specified Periods (1913 to 195*4-55)...... 165 19. Producers Livestock Association and Its Branch Markets 1957...... 185
20. Value and Volume of Business of the Producers Livestock Association, Columbus, Ohio (1935-1956)...... 187
21. Number, Membership and Dollar Volume of Poultry Cooperatives in Ohio for Specified Periods (1925-26 to 195*4-55)...... 205
22. Trends in Poultry Cooperatives (1950-51 to 195*4-55)...... 206
23. Number, Estimated Membership and Estimated Business of Cooperatives Marketing Wool in Ohio for Specified Periods (1925-26 to 195*4-55)...... 228
2*4. Trends in Wool Cooperatives (1950-51 to 195*4-55)...... 230 25. Periods When 102 Farmers' Mutual Insurance Companies Were Organized in Ohio (1950 to 1956)...... 23*4 vii LIST OF TABLES (Continued)
TABLE PAGE
26. Number of Farmers' Mutual Fire Insurance Companies, Insurance in Force, and Costs in Ohio (1935 to 1955)...... 237
27. Federal Land Bank Loans Made and Outstanding in Ohio (1933-1956)...... 2^5
28. Loan Business of the Producers Livestock Credit Association (1935-1956)...... 252
29. Production Credit Association Loans Made and Outstanding in Ohio (193*+-1956)...... 255
30. Number and Amount of Loans Outstanding Made by the Louisville Bank for Cooperatives to Ohio Cooperatives (1935-1956)..,...... 259
31. Loans Made and Loans Outstanding by Ohio Rural Electric Cooperatives (19*+5-1956)..... 265
APPENDIX TABLES
32. Dairy Marketing Cooperatives in Ohio, 1957...... 31^
33. Fruit and Vegetable Cooperatives in Ohio, 1957... 320
3*+. Location of Farmers' Grain Elevator Companies in Ohio Showing Laws and Code Sections Under Which They are Incorporated and Dates of Incorporation, 1957..... 323
35. List of Poultry Cooperatives in Ohio, 1957...... 33^
36. Farmers' Mutual Insurance Associations in Ohio, 1957...... 335
37. Number and Location of National Farm Loan Associations in Ohio, 1957...... 3^3
38. Number and Location of Production Credit Associations in Ohio, 1957...... 3*+5
39. Rural Electric Cooperatives in Ohio, 1957...... 3^7
viii LIST OF FIGURES
FIGURE PAGE
I. Membership in Farmer Cooperatives and Number of Farms in Ohio, 1925-55...... *+8
II. Net Value of Farm Products Marketed and Farm Supplies Handled by Ohio Cooperatives, 1930-31 to 19 5l+-55...... 5^
III. Location of Dairy Cooperatives in Ohio, 1957... 83
IV. Location of Fruit and Vegetable Cooperatives in Ohio, 1957...... 9^
V. Location of Farmer Elevators in Ohio, 1957..... 110
VI. Location of Egg and Poultry Cooperatives in Ohio, 1957...... 200
VII. Location of Farmers' Mutual Insurance Associations in Ohio, 1957..... 235
ix CHAPTER I
INTRODUCTION
Throughout American history farmers have believed that they were victims of monopoly and were exploited by railroads, bankers, farm machinery companies, grain eleva tors operators, and by others with whom they did business.
This was so, they believed, because they produced and sold competitively, whereas the transportation services they used and the manufactured goods they bought were largely monopolized. This feeling, especially by Midwestern farmers, was in part responsible for the early legislation on government regulation of business — the Interstate
Commerce Act of 1887 regulating railroads, and the Sherman
Antitrust Act of 1890 curbing collusive monopoly and en forcing competition.
Again in the early twenties and thirties farm senti ment was largely responsible for legislation enacted to put the farmer on a basis of bargaining equality with those to whom he sold and from whom he bought.
Bigness or concentration has been a steady, if not a growing, characteristic cf American economic life. Most businesses today are bigger than they used to be. Since the end of World War II there has been a tremendous growth in 2
the size of business corporations. Companies have bought out smaller firms and integrated their operations for greater efficiency. Today four or five large corporations dominate the farm machinery field. There are only four large meat packers in the United States. A few food pro cessing companies dominate the market. Most groceries are now sold by large chain stores. The AFL and CIO have merged into a single organization representing more than
15 million workers. Agriculture, with its ^,500,000 farmers, makes up the largest single group of free enter prise operators left today in the United States.
Census data show that over the years the farm popula tion has been declining. One of the results of this change is that with each election farmers have shown less voting strength. City Congressmen are voting the consumer's viewpoint more emphatically.
Against such a background one can view the nature of the farmer's business and his need for collective action.
The typical farm is a small-scale business unit or firm too small to achieve the advantages of integrated operations alone. As small business units, farmers have little or no influence on the prices of the commodities they sell or the prices of the supplies they buy -- they play such a small part In the total agricultural industry. And yet., the market for agricultural products (despite government programs) 3
remains the nearest approach to the theoretical ideal of
perfect competition.
But the very atomistic nature of agricultural markets
tends to place the farmer in a disadvantageous position
with other groups. At the same time it has been a fertile
seed bed for the growth of the cooperative type of business
enabling it to serve as a free-enterprise yardstick in markets characterized by large-scale firms, imperfect com petition, monopoly control, and occasional unfair trade practices.
Farmers' cooperative associations have been particu larly effective in improving marketing methods and in providing farmers with dependable markets. Improved services and better quality of supplies at reasonable prices are also among the important contributions of cooperatives.
As pacesetters in promoting efficiency, they benefit non members as well as members, and in the long run a part of the savings they achiex^e are passed on to consumers in the form of lower prices.
Cooperatives also contribute significantly to farmers' economic welfare by raising standards of quality and improv ing the distribution of supplies between geographical areas and over time.
Two out of three of the nation's farmers belong to one or more cooperatives. These cooperatives market about k
25 per cent of all farm crops and buy about 20 per cent of
all farm supplies, yet they do no more than two or three
per cent of the nation’s business.
Ohio farmers found out a long time ago that they had
many problems which could not be solved individually.
They were at a disadvantage in selling their products, in
buying fertilizer, feed, machinery, and the like., So they
banded together in cooperative associations. They have
sought the same benefits other businesses have, of buying
at wholesale and selling at retail prices. Ohio coopera
tives set the pace in many fields and provide effective
competition with other businesses. Such competition has
brought down farm production costs and has increased marketing returns for all Ohio farmers.
Farmers’ cooperatives are subject to the same economic laws as any other business, and will probably solve their problems no better or no worse than other business institu tions .
Purpose and Scope of Study
Cooperatives play an important role in the economic aspects of Ohio agriculture. Marketing, buying of supplies, financing, and many other essential farm business services, long employed by industrial businesses, now command the attention of many Ohio farmers. 5
Information about certain aspects of Ohio cooperatives
is scattered here and there in state and federal publica
tions. But no recent publication covers in detail the
whole cooperative efforts of Ohio farmers.
The general aim of this study is to assemble data and
facts, trace the historical growth of Ohio farmers' coopera
tive enterprises, and provide a comprehensive review of the many ways farmers in Ohio use the self-help method to help meet their economic problems.
The study presents an analysis of the (l)economic conditions causing Ohio farmers to join together in cooperative associations; (2)farm organizations which have promoted cooperatives; (3)historical development of coopera tive commodity marketing; (*+) extent of cooperative buying of farm supplies; (5)service and credit cooperatives; and
(6)appraisal of Ohio cooperatives.
Even within the scope of this study many questions still will remain unanswered. Cooperation is a broad study covering many points of view — legal, financial, organi zational, and operational. It is hoped that future studies will give attention to these aspects of the problem so that one will be able to get a better picture and make a better economic appraisal of Ohio cooperatives. 6
Previous Studies
Students have made many studies about cooperatives of
various Ohio agricultural enterprises: livestock cooperatives,
milk cooperatives, and poultry cooperatives. These studies
have made an important contribution to cooperative litera
ture and have been used in this study as indicated in the
footnotes.
Other studies more comprehensive in scope, yet more
limited in their alms than the present study, were as
follows:
1. (1913) C. F. Taeusch of the Ohio Agricultural Ex
periment Station made the first recorded survey of farmers'
cooperatives in Ohio.’*’ Taeusch made this study as a part
of a general survey of agricultural conditions of Ohio.
Even at that time it was noted that "in all lines of busi ness, and industry, excepting agriculture only, there is a steady tendency towards unification." Taeusch's survey aimed to determine the extent Ohio farmers were cooperating in the purchase of supplies and in the sale of products, and to learn what factors were contributing to the success or failure of such efforts.
C. F. Taeusch, Rural Cooperation and Cooperative Marketing in Ohio. 1913 (Wooster: Ohio Agricultural Experi ment Station, Circular No. l*fl, December, 1913) • 7
2. (1920) Seven years after Taeusch1s survey, H. E.
Erdman found that many changes had taken place in organiza
tions among Ohio farmers. Erdman made a study to find out
the extent and nature of organization among farmers in Ohio
for business and farm improvement purposes.2
3 . (1936) The Farm Credit Administration, in coopera
tion with the Louisville Bank for Cooperatives, made a survey
of Ohio cooperatives for 1936-37.^ This survey was one of
many others in other states made by the Farm Credit Admin
istration. It gave a brief history and discription of
marketing, purchasing, and other associations in the state.
*+. (1937) The Ohio Agricultural Extension Service
of the Ohio State University published a bulletin giving a 1+ summary picture of Ohio cooperatives as they were in 1937.
These four surveys did not give a complete history of farmer cooperatives, but presented a few highlights of the beginnings, plans, size and scope of cooperative activity in Ohio at the particular time.
2H. E. Erdman, Organization Among Ohio Farmers (Wooster: Ohio Agricultural Experiment Station, Bulletin 3^2 , June, 1920).
3r. c. Dorsey, Farmer Co-ops in Ohio (Louisville, Kentucky: Louisville Bank for Cooperatives, March, 1939).
^Ohlo Cooperatives: Their Business Activities (Columbus: Ohio State University, Rural Economics Department, Ohio Agri cultural Extension Service, Bulletin 191? November, 1937). 8
Source of Data
Both primary and secondary data were used in making
this study. In 1950 the Ohio Council of Farmer Cooperatives,
Inc. compiled a directory of all cooperatives and other
farmer-owned business corporations operating in Ohio.
Since then it has maintained an up-to-date record of the
status of these organizations. The directory lists the
names, location, dates of incorporation, corporation law,
and classification of these associations.
The Farmer Cooperative Service (successor to the
Cooperative Research and Service Division of the Farm Credit
Administration) publishes annually, national and state
figures on farmer cooperatives in the United States. Most of the data used in this study are from this source.
The data from these two sources are not comparable with respect to number and classification of cooperatives.
The reasons for such differences are:
1. The Farmer Cooperative Service includes associa tions in the annual survey only if they meet all of the requirements of the Capper-Volstead Act.
2. Each association is classified on the basis of the commodity which consistently represents the largest percentage of dollar volume of business regardless of the classification the association had when organized. 9
3. Frequently the Farmer Cooperative Service fails to obtain information on every organized association.
Beginning with the 1950-51 survey, the Farmer Coopera tive Service developed new statistical methods to provide more accurate and realistic information on individual cr commodities and states. For example, before 1950-51 an association's dollar volume of business was credited to the product that the association was originally organized to handle, even though the association was also handling other products. Now the value of sales is reported separately for each product handled.
Membership is now credited to the state in which the patron is located rather than to the state in which the association has its headquarters. For these reasons the data from 1950-51 to 195^-55 are not directly comparable with data in previous years.
As already mentioned, other studies have been made of various cooperative enterprises in Ohio. These are cited from time to time in footnote references. Also some data were obtained by personal interviews and by correspondence.
A detailed discussion of the revisions initiated in statistical methods in 1950-51 is given in Statistics of Farmers * Marketing. Purchasing and Service Cooperatives. 1950-51 (Washington, D.C.: Farm Credit Administration, Miscellaneous Report 169), Pp. 1-3. CHAPTER II
ECONOMIC PRINCIPLES AND CONCEPTS OP COOPERATIVES
The Rochdale pioneers organized in 18M+ and operated
their first retail store on the basis of a set of rules
which have, with some changes, become standard for coopera
tive organizations. These rules are underlying principles
that distinguish cooperatives from other types of business
organizations. The three important principles are (1) one man, one vote, or control by members, (2 ) limited interest
on capital, and (3) service at cost. Savings are distribut ed or allocated in direct proportion to the patronage of each member.
Cooperatives incorporated under Ohio law are subject to the following limitations (See Appendix A) —
1. If stock shares are used to indicate the ownership of the cooperative, no one person may own more than one twentieth of the total number of shares issued.
2. Each member has one and only one vote. In stock cooperatives, voting may be by shares; but the one twentieth rule prevents any one shareholder from controlling voting.
3 . Not more than eight per cent interest per year may be paid on stock.
10 11
*+. After interest on shares and reserves have
been taken out of the net receipts, all savings must be
distributed back to members as patronage in proportion to
the business each member has done with the cooperative.
5. Marketing cooperatives may require members to
sign contracts to deliver all or a part of their products to the cooperative for sale. The marketing cooperative may not do more than one-half of its business each year with members.
Farmers organize a cooperative with these purposes in mind —
1. To obtain services for themselves at cost — not to make a profit from rendering services to others.
2. To get the greatest possible financial bene fit to themselves as members — not to make profits as owners.
3. To distribute the money remaining after the payment of the cost of doing business among those who are served by the cooperative in proportion to their use of its services — not in proportion to their investment in the enterprise. 12
if. To have an organization controlled by its
patron-members, each of whom is allowed a single vote — not
by the owners in proportion to capital contributed.1’
More specifically, farmers organize cooperatives to
(1) Overcome some of the disadvantages of the typical production unit, which may be of optimum scale for the performance of certain functions but far short of optimum for the per formance of many others;
(2) Overcome the disadvantages of the typical farm unit in its market contacts; and
(3) Improve the functioning of the markets in which the farmer transacts his business.
The theory of the cooperative holds that the cooperative
organization is only an extension of the individual farm
firms of the members, and that to offer a satisfactory and
economic explanation of the distinctive features which
characterize the cooperative association it is necessary to
view the cooperative as
1. A federation of autonomous economic units
(farms).
•^Advisory Council Guide (Columbus: Ohio Farm Bureau Federation, Inc., Vol. XIV, No. 5, May, 1957). p See general discussion by Frank Robotka, "Fifty Years of Agricultural Cooperation," Journal of Farm Economics (Menasha, Wisconsin: The American Farm Economic Association, Vol. XXXII, No. if, Part 2, November, 1950), p. 1063, 13
2. An economic entity owned and controlled by
its meraber-patrons for their mutual benefits.
3. The enterpreneural unit with delegated
authority to make decisions and assume risks.^
Fundamentally, however, cooperative business goals are not any different from the aims of ordinary business firms.
Both try to maximize net profit. But the difference is that a cooperative seeks to maximize the net profit of the members' businesses rather than the total net profit, as in the case of a non-cooperative firm. The general proposition upon which the non-profit theory of the cooperative is based is stated in 883f-2 of the Bingham Cooperative Act, enacted by the Kentucky Legislature in 1922, which provides:
Associations organized hereunder shall be deemed "non-profit" inasmuch as they are not organized to make profit for themselves, as such, or for their members,, as such, but only for their members as producers.
^Frank Robotka, "A Theory of Cooperation," Journal of Farm Economics (Menasha, Wisconsin: The American Farm Economic Association, Vol. XXIX, February, 19^7)* P» 113*
Ll House Committee on Small Business, The Committee of Cooperatives with other Forms of Business Enterprise. House Report No. 1888, 79th Congress, 2nd Session (Washington, D.C.: U. S. Government Printing Office, 19^+6). CHAPTER III
STATE AND FEDERAL LEGISLATIONS1
The principles and most of the practices of farmer
cooperative business organizations came before state and
federal laws were passed. The aim of cooperative legis
lation has been to protect the true nature of cooperatives
--to recognize them as distinct types of business organi
zations.
In 1852, the Ohio General Assembly passed a general
corporation law "to provide for the creation and regula
tion of incorporated companies.11 Cooperative associations
were not mentioned. No legislation was enacted in Ohio to
provide for cooperative trade associations until after the
Civil War.
Public policy toward agricultural cooperatives has
developed during two periods. In the first period, follow
ing the Civil War, efforts were made to write cooperative principles into corporation law. In the second period,
following World War I, the aim was to reshape the legal framework of cooperative associations, and of equal im
p o s t of the information in this chapter is based upon H. R. Moore, Development of Legislation in Ohio that Relates to Agriculture fColumbus: Ohio State University, Department of Rural Economics, Mimeographed Bulletin 112, September, 1938). l^f 15
portance, to set forth the legal differences between farmers'
cooperatives and other forms of business organization.
Between 1867 and 188*+, the Ohio corporation law of
1852 was amended to provide for purchasing associations;
elevator companies; horticultural, nursery, and fruit
companies; and wool growers associations. But these amend
ments did not limit the associations to farmers, nor did
they specify the use of purely cooperative principles in
the conduct of the businesses.
In 188^ the general corporation law was again amended.
This time the law permitted a corporation to provide in its
charter a provision for one vote for each shareholder, but
corporations adopting this provision had to limit the amount of capital stock each member could own to $1,000. And
such corporations could adopt by-laws governing the distribu tion of profits among its workers, patrons, and shareholders.
The law of 188^ permitted a corporation to function more nearly on cooperative principles, but it too failed to limit the membership of corporations to farmers only.
Following the initial development after the Civil War, a generation passed before legislation relating to coopera tive trade associations was enacted. But in the meantime some farmers' associations were organized under the laws already enacted, while others, like the elevator companies, 16
were organized as stock companies under the general corpora
tion law of 1852. Cooperative leaders did not again become
interested in cooperative legislation until after World War I.
The Sherman Antitrust Act passed in 1890, had a lot to
do with the interest created after World War I for coopera
tive legislation. Although the original Sherman Antitrust
Act did not contain any reference to cooperative associa- p tions, decisions of the courst held cooperatives to be
combinations in restraint of trade. State antitrust laws applied the same legal interpretation. For example, during
the period 1890 to 1910 directors and officers were indict
ed in five states under state antitrust laws, and in
Louisiana under the Sherman Act.^ In Ohio, officers of several small fruit and vegetable cooperatives, and milk producers bargaining associations were jailed under the
Valentine Antitrust Act of 1898. It was the experience of these bargaining groups, particularly the milk cooperatives,
P Raymond J. Mischler, "Agricultural Cooperatives Have Legal Foundations,” Farmer Cooperatives in the United States (Washington, D.C.: Farmer Cooperative Service, Bulletin 1, 1955), p. 25.
^J. D. Miller, "The Philosophical and Legal Background of the Cooperative Movement in the United States,” American Corporation (Washington, D.C.: The American Institute of Cooperation, 1935), p. 12. 17
which led to the passage of the Capper-Volstead Act of 1922.^
The Clayton Act of 191^ represented a legislative attempt
to clarify federal antitrust or monopoly policy. It assured
agricultural associations of the right to exist without
violating antitrust laws. But it referred only to non-stock
associations and was generally not considered a guarantee
to farmers of the right to form cooperative marketing associa
tions.
Congress passed the Capper-Volstead Act (1922) to make
it clear that the elimination of competition between
individual agricultural producers, which occurs when they
act together through a cooperative association with or with
out capital stock, would not in and of itself constitute an
antitrust violation. The Act provided that associations must operate on a mutual basis for the benefit of its members
thereof as producer, and conform to one or both of the following requirements —
1. That no member of the association is allowed more than one vote, or,
2. That the association does not pay dividends on stock or membership capital in excess of eight per cent per year.
^H. E. Erdman, ‘'Trends in Cooperative Expansion, 1900- 1950," Journal of Farm Economics (Menasha, Wisconsin: The American Farm Economic Association, Vol. XXXII, No. , Part 2, November, 1950), p. 1022. 18
The following requirement must in all cases be met —
3. That the association shall not deal in the products of non-members to an amount greater in value than that handled for members.
Now back to cooperative legislation in Ohio. The Ohio
Legislature passed the Griswold kct in 1920 to provide for the incorporation of agricultural cooperatives. But the
Act was found to be inadequate because it placed the status of financial responsibility of members on a rather un satisfactory basis as compared with that of stockholders in an ordinary business corporation. The Act provided that each member of the association would be held liable for a per capita share of all debts, however, members could limit the total debt which the association might incur. The trustees of the association would be financially liable for any additional debt.
The Brand Act, passed in 1921, was an addition to the
Griswold law. It provided that farmers could organize cooperative marketing associations with or without capital stock. But the Act did not enable the cooperative associa tion to take title to the products it handled and to borrow money on them.
Besides, the Act specified that the cooperative associa tion was a public interest and as such it required some kind 19
of state control. The public utility commission was given
the authority to supervise and regulate its activities.
The fact that the Brand Act virtually classed coopera tive marketing associations as public utilities, and sub
jected them to an annual fee of $100.00, might well have retarded their development.
In 1923 the Ohio Legislature enacted the Green-Farns- worth Bill patterned after the Bingham Cooperative Act of
Kentucky of 1922. This bill repealed the Griswold and Brand
Acts. It granted cooperatives protection from the Valentine antitrust law in intrastate commerce, just as the Capper-
Volstead Act did in respect to interstate commerce. The Act enabled the cooperative association to make long time agree ments, take title to products, borrow money, and in short, undertake all of the activities necessary for the successful conduct of a cooperative association.
Both the state and federal legislations put Ohio coopera tives in a safer legal position. These laws have permitted
Ohio farmers to organize and operate cooperatives on a basis not permitted under the general corporation law. Now farmer cooperatives can take their place along with other types of business in Ohio.
The list of federal statutes in which cooperatives are mentioned is a long one. The Clayton and Capper-Volstead Acts 20 represented only the beginning of a favorable public policy toward the development of cooperative marketing associations.
Many other supplementary and complementary laws have been passed to strengthen and improve the operations of coopera tive associations. CHAPTER IV
DEVELOPMENT OF FARMER COOPERATIVES IN OHIO
Informal cooperation was characteristic of Ohio pioneer
farmers just as it was with other simple primary group
societies. Ohio farmers banded together in threshing rings,
cheese rings, log rolling, and many other similar activities.
They formed groups to drive livestock to eastern markets,
and organized societies to import purebred cattle.
Isolated cases have been found where Ohio pioneers join
ed in rudimentary business cooperative activities. About
1820 a group of farmers near Granville, in Licking County,
organized what is usually recorded as the first livestock
cooperative in the United States. A cooperative livestock
auction was organized in 1836. Cooperative cheese and butter
factories also got started in the l830's. These cooperative
efforts are discussed in more detail in following chapters.
Ohio farmers later organized clubs or educational organi
zations to promote agriculture. For example, in 1859 sheep
growers organized the Ohio Sheep and Wool Growers Association
for the exchange of information about sheep raising and wool production.
These early cooperative efforts were experimental, simple and rudimentary; yet they gave farmers some experience
In organized methods and techniques that could help in solving their economic problems. 22
Ohio Farmers Late in Organizing Cooperatives
Before the Civil War American agriculture was self-
sufficient; farmers for the most part were not dependent
upon the outside market. But after the war, commercial
agriculture assumed major proportions, farmers became
dependent upon the sale of their products.
Following the Civil War, a combination of circumstances
brought a long period of hard times to American farmers.
Monetary adjustments contributed to a declining general
price level1 (See Table 1). Besides, agricultural production
had expanded as a result of the settlement of western land
and the opening of new farming territories by railroad
development. Post-Civil War adjustments in the South added 2 to these difficulties. These conditions stirred up resent ment especially among middle western farmers, and caused
them to join what has become widely known as "Farmer Move ments" or the "Agrarian Crusade." The Grange spearheaded
this movement.
1F. L. Thomsen, Agricultural Marketing (New York: McGraw-Hill Book Company, Inc., 195l)» p. ^33. p It was the conditions in the South that caused Issac Newton, Commissioner of Agriculture, to send 0. H. Kelley there on January 13, 1866 to obtain information on the status of agriculture. The idea of the Grange stemmed from this trip. 23
TABLE 1
INDEX NUMBERS OF WHOLESALE PRICES IN THE UNITED STATES, 1860-1900 (1910-1^ = 100)
Year Farm Products Prices All Commodities
1860 77 93
1865 l*f8 185
1870 112 135
1875 99 118 1880 80 100
1885 72 85
1890 71 82
1895 62 71
1900 71 82
SOURCE: George F. Warren and Frank A. Pearson, Prices (New York: John Wiley and Sons, Inc., 1933)? P* 26. 2k
Bakken and Schaars list five developments that they
believed caused farmers to organize after the Civil War:
1 . Extensive expansion of agriculture west of the Alleghenies.
2. Production of surplus agricultural commodi ties.
3. Low prices of farm products.
k. Resentment against high freight rates and wide marketing margins.
5. Organization activities of general farm organizations.3
The center of farmer unrest was in the great prairie states of the upper Missippi Valley. Farmers in Ohio and northeastern states were not affected by the general economic h. unrest as were states farther west.
The period of Ohio's pioneering days extend from its settlement in 1788 to about the time its canal systems were completed in 1832. Canals connecting the Ohio River with the
Great Lakes by the way of Cincinnati to Toledo, and Ports mouth to Cleveland opened Ohio's interior to outside markets.
Later the railroads further widened and extended these markets.
^Henry H. Bakken and Marvin A. Schaars, The Economics of Cooperative Marketing (New York: McGraw-Hill Book Company, Inc., 19137, Pp. *+7-4-8 .
^Solon J. Buck, The Granger Movement (Cambridge: Harvard University Press, 191377 P F T ^ . — 25
The period from 1850 to i860 marked a decade of pros-
perity for Ohio farmers. Nor did the Civil War check to
any great extent this situation. From 1885 to 1900 Ohio z farm product prices were low. But by this time the most
enthusiastic wave for cooperative organization had slackened.
Other factors and advantages also made Ohio farmers
vulnerable to adverse farm problems which were plaguing
their farm neighbors west of them. Ohio is located between
the industrial east and the agricultural midwest. The
western half of the state lies in the Corn Belt, the eastern
half and the Ohio River area in the general farming area of
the Appalachian plateau. Thus, Ohio’s diversified farming
and its nearness to eastern markets gave Ohio farmers com
petitive advantages and lessened their need for cooperative associations.
These advantages according to Perry L. Green accounted for an attitude of economic and political conservatism among 7 Ohio farmers and of the people generally.
^W. A. Lloyd, J. I. Falconer, and C. E. Thorne, The Agri culture of Ohio (Wooster: Ohio Agricultural Experiment Station, Bulletin 32^7^918), p. 202.
z Ibid.. p. 211.
^Perry L. Green, History of the Ohio Farm Bureau Federa tion (Columbus: Ohio Farm Bureau Federation, unpublished manuscript, 1955), p. 5*+. 26
While in 1916 Minnesota had 200 cooperative livestock
shipping associations, and there were some 300 in Wisconsin,
Nebraska, Iowa, and neighboring states, Ohio had only one
at that time.® In 190*+ Ohio farmers organized their first
grain elevator, but at that time Illinois farmers had 15, 9 Iowa farmers 7, and Minnesota farmers had 30. The story was somewhat the same for the other commodity enterprises in Ohio.
Only isolated and scattered cooperatives were organiz ed in Ohio during the Grange period (I87O-I89O). It was not until during and after World War I that Ohio farmers began to organize marketing and purchasing associations.
Farm Organizations
The part played by farm organizations, state extension services, and state agricultural colleges in promoting and assisting cooperatives would make a story in itself. But besides being interested in cooperatives, farm organizations provide a great aggregate of organized interest. Farm
®B. A. Wallace, Cooperative Livestock Marketing in Ohio (Wooster: Ohio Agricultural Experiment Station, Bulletin 375, 192*0, p. 3*t.
^Joseph B. Kenkel, The Cooperative Elevator Movement: A Study in Grain Marketing at County Points in the North Central States (Washington. D. C.: Catholic University of America, Ph.D. dissertation, Table 1), p. 30» 27
blocs have demonstrated themselves to be highly effective
pressure organizations during the past 25 years when
agriculture was becoming a less important part of the
economy. They have actively sponsored state and national
legislation for the benefit of the farmer.
Grange.10 The Grange, organized by 0. H„ Kelley in
1867 , rose to its greatest popularity during the farm de
pression beginning in 1873. Mention has already been made
that it spearheaded the first wave of cooperation which re
sulted in establishing many cooperatives or pseudo-coopera
tive enterprises.11
At the outset the Grange did not start as a coopera tive organization, but as a national secret order of farmers resembling the Masonic order. But because of the economic disadvantages farmers faced, it became to a certain extent a cooperative agency.
The Grange had its greatest influence from 1873 to
1875. It was dormant until about I89O but since then it has 12 become a stable and useful general farm organization.
^Unless noted otherwise the factual material in this section is from the pamphlet, Diamond Jubilee History. Ohio State Granget 1872-19^7 (Columbus: Ohio State Grange, 19^+7).
^Buck, o£. cit., p. 239 1 p Thomsen, op. cit.. p. 1+3l+. 28
The first Grange in Ohio was organized in East Cleveland
on March 2, 1870, and on April 9, 1875 the Ohio State Grange
was organized at Lebanon.
The Ohio State Grange made remarkable growth. Member
ship had increased to about 50,000 by 1880, but declined to
about 20,000 by 1890. With its growth came the demand for
cooperative purchasing. In the spring of 187^ the Grange
established a cooperative department and appointed a business
agent. Wholesale buying connections and various cooperative
ventures were undertaken. Some of the ventures were success
ful, while others failed.
In 19^6 the Grange cooperative department was incorporat
ed and organized into Grange Services, Inc. This is a pur
chasing cooperative for the service of its members. It
handles limited numbers of articles and farm supplies.
As early as 1875 the Ohio State Grange organized Grange
Mutual Fire Insurance Companies. Later it took the lead in
organizing the Farmers and Traders Life Insurance Company as a National Grange life insurance company. Then in 1935 it
organized the Grange Mutual Casualty Company for its members.
At the time of this study there are 902 subordinate or local Granges in Ohio with a membership of almost 185,000.^3
^information furnished by Byron Frederick, Master of the Ohio State Grange, 1957* 29
There are 87 pomona or county organization Granges, and about
^50 juvenile Granges with a membership of more than 12,000
children between the ages of five and fourteen years.
Today, Grange activities are largely social and legis
lative, but the organization has made important contribu
tions to the cooperative movement in the State.
Farmers' Educational and Cooperative Union. The Farmers'
Union was organized in Texas in 1902. It placed its major
emphasis on obtaining better prices and improving the market
ing methods for grain, cotton, livestock, and other products.
The Union established the first cooperative livestock com- i U- mission firm on the Omaha market in 1917.
Erdman reported that in the early part of 1919 there were 25 local Farmers' Unions located in the southwestern counties of Ohio.^^ The first one was organized in 1910 at
Hanover in Butler County. By 1917 there were 52 in the
State. These locals did cooperative buying for their members; also cooperative marketing to a much lesser extent.
Equity Union. C. 0. Drayton, who had been a member of the American Society of Equity, organized the Equity Union
^Bakken and Schaars, op. cit., p. 50.
■^Erdman, op. cit., p. 13*+. 30
in Greenville, Illinois in 1910. The two organizations were
never affiliated with each other.^
Drayton organized the Equity Union as a business organi
zation for farmers to eliminate a large share of the middle
mens' profit.
The Association came into Ohio during World War I and
by 1923 had organized 57 farmers' elevators in the Lima-Van 17 Wert and Galion-Ashland areas. ' It also organized the
Equity Union Creamery Company at Lima in 1922.
The Equity Union that was operating in Ohio, failed in
the mid-twenties and was reorganized in 1926 as the Ohio
Equity Exchange Company with headquarters at Lima, Ohio.
According to Green,
...the Equity Union was probably the most thorough and painstaking promoter of cooperatives that existed during this period. They followed the soundest of business and organization pro cedures. .. .1 “
R. H. Blosser, A History of the Major Agricultural Movements in the United States (Columbus: Ohio State Univer sity, unpublished Master's thesis, 1937).
^ L . G. Foster, Economics Aspects of Ohio Farmers' Ele vators (Wooster: Ohio Agricultural Experiment Station, Bulletin ^16, Table 1, 1927), p. b.
l8 Green, op. cit., p. Mf. 31
Ohio Farm Bureau. The general aims of the Ohio Farm
Bureau Federation since its beginning have been to increase
income and improve rural standards of living. Another one
of its aims was to organize affiliates, when necessary, to
carry out its stated principles. There is hardly a single
phase in Ohio agriculture that has not reaped some benefits
from the work of the Ohio Farm Bureau. The list is a long
one, and beyond the scope of this study.
The Ohio Farm Bureau is an outgrowth of county improve
ment associations. These associations were county groups
organized to get agricultural extension agents in their
respective counties to demonstrate better methods of farm
ing -- to carry the results of agricultural research to
farm people.^9
The Portage County Improvement Association was organized
in 1912 and was the first county membership organization
organized in Ohio to employ a county agent. The next year
similar associations were organized in Geauga and Greene
counties.
"^Congress passed the Morrill Act in 1862 which estab lished land-grant or agricultural colleges, and the Hatch Act in 1887 establishing agricultural experiment stations. Ohio established a college of agriculture in I87O and an experiment station in 1882.
These institutions kept in contact with farmers by conducting farmers' institutes, and by publishing and send ing farmers pamphlets and bulletins on better farming practices. 32
The method of teaching farmers by demonstration educa- 20 tion began in Texas in 1903. By 191l+ this idea had become widely known and generously accepted. Congress then passed
the Smith-Lever Act establishing the Agricultural Extension
Service. The Extension Service began strengthening the
existing demonstration programs. It adopted the name "farm bureau" which the Broome County Association in New York was then using.
The Ohio Extension Service which had begun with the organization of county improvement associations now went forward organizing county farm bureaus. Nine counties ob tained agents in 191^. By the end of 1917 there were agents 21 in 29 counties.
The number of county agents and county Farm Bureaus in creased during World War I. Congress allocated federal funds to states to hire more county agents as a means of helping farmers increase production. In 1918, 23 additional
Ohio counties were using county agents, and 16 more had secured them by the end of 1919. Seventy-eight of Ohio's
PO In 1903 the Commissioner of Agriculture sent Seaman A. Knapp to Texas to teach cotton farmers how to fight the boll- weevil. Knapp used the demonstration method of teaching.
21T. B. Manning and R. C. Smith, The Ohio Farm Bureau From the Farmers' Viewpoint (Washington, D.C.: U. S. Bureau of Agricultural Economics, 1931)? P» 33
22 88 counties had county agents by the end of 1920.
The programs of these early county Farm Bureaus were
largely educational but in some cases county agents undertook
cooperative purchasing of lime, fertilizer, and seeds. It is
reported that others assisted farmers in carrying on collec
tive milk bargaining between farmers and dealers.
On February 28, 1919, farmer representatives from the
county Farm Bureaus organized the Ohio Farm Bureau Federa
tion. They organized the Federation because they believed
that many problems were statewide in scope and could best be
handled by the membership of all the county Farm Bureaus working together. The aims of the Federation were —
1. To increase farm income and improve rural standards of living.
2. To develop and maintain an organization that will be the Voice of Agriculture.
3. To provide for maximum membership partici pants in policy development and execution.
*+. To develop an organizational program to meet the needs of all members of the farm family.
5. To organize such affiliates as are necessary to carry out the stated principles of this organiza tion.
6 . To coordinate county, state and national Farm Bureau efforts to achieve maximum results.
22 Ibid. 3b
7. To cooperate with all farm organizations, government agencies, cooperatives, public officials, business, labor, church, and other groups in ad vancing the agricultural and general w e l f a r e . ’
Growth was rapid. By the end of 1920 there were 60,000
members. Six months later there were nearly 100,000. But
in the depression years of the 1930's membership declined to
around 10,000. At the time of this study (1957) the Federa
tion has more than 52,000 family memberships.^
At the outset, the Ohio Farm Bureau Federation emphasiz
ed educational and legislative measures and gave support to
the Extension Service. But gradually the Federation develop
ed a program including cooperative purchasing of supplies
and equipment for farmers and cooperative marketing of farm
supplies. It began working on problems confronting farmers
in marketing their products and in buying farm supplies. It
also started organizing or strengthening cooperatives for marketing livestock, dairy products, fruits and vegetables,
wool, poultry and eggs, and grain, and arranged for farmers
to pool orders for fertilizer.
23 What is Farm Bureau? The Story of the Ohio Farm Bureau (Columbus: Ohio Farm Bureau Federation, Booklet).
2b Records of the Association. 35
As already noted the Extension Service was instrumental
in organizing the county Farm Bureaus as an educational
adjunct to its work. But with the organization of the Ohio
Farm Bureau Federation there came a change in the existing program. The Federation's stated aims made this clear. It began stressing the economic aspects of the farmers problems, and after a few years the business program over-shadowed the educational program. And because extension agents were for bidden to take part in these business programs, in time the
Extension Service and the Farm Bureau declared their inde pendence and began operating separately.
As already mentioned, from the very beginning the Ohio
Farm Bureau Federation's goal was to increase farm income and improve rural standards of living. As the farmers' needs changed, the Federation changed its structure, tried new ideas, went into other fields. For instance in 1926 it went into the insurance business, then in 193^ it broadened its services to farmers by organizing the Farm Bureau
Cooperative Association. Now the insurance companies and the Farm Bureau Cooperative are separate and incorporated business organizations. But the Federation, as the parent organization, still maintains close relationship with them.
The Ohio Farm Bureau Federation, as a general farm organization, continues to serve its county Farm Bureau 36 members. It represents them on state and national legis
lative matters, disseminates information through publications
and radio, conducts research, and provides other services and programs.
The Ohio Farm Bureau Cooperative Association was established as a federated cooperative, taking over the pre vious farm supply activities of the Ohio Farm Bureau Service
Company which was organized in 1923.
As a federated organization, the Farm Bureau Coopera tive Association is owned by county Farm Bureau cooperatives in 83 counties. Each county Farm Bureau cooperative is con trolled by an elected board of farmers. This board employs a manager and determines local policies.
The Ohio Farm Bureau Cooperative Association assists the county Farm Bureau cooperatives in marketing their grain and providing terminal storage space, and distributes farm supplies to them.
Table 2 shows the financial growth of the Association.
It had built up a business which amounted to more than 67 million dollars in 19%; and since it was started it has had savings of over 18 million dollars. Its assets at the end of 1 9 % stood at $29.9 million.
The Associations' purchasing and marketing activities are discussed in more detail in the chapter dealing with grain marketing and farm supplies. TABLE 2
FINANCIAL PICTURE OF THE OHIO FARM BUREAU COOPERATIVE ASSOCIATION, INC., 1931+-1956
(In thousands of dollars)
Dollar Net Dividends Patronage Current Equity Total Net Year Volume Savings On Stock Refunds Ratio Ratio Assets Worth
193^* $ 731 $ 7 $ 0 $ 7 1 .1+0 89% $ 1*96 $ 1*1*3
1935 ^,023 91 27 6b 2.71 72 1*99 358 1936 6,57*+ 185 18 166 1.95 59 67I* 396 1937 8,322 193 18 175 1.86 57 8l*t 1+65 1938 6,777 lib 18 96 2.81 71 7l*0 522 1939 7,057 20 7 18 190 1.76 58 1,098 631+
19*+0 7,3d* 7*+ 18 56 1 .1*8 1+5 1,51** 61+8 19*+1 9,980 235 12 223 1.1+8 1+1 2,097 68** 19*+2 12,952 360 16 3*+5 2.03 51* 2,1+85 1,339 19^3 19,892 1+90 32 i*58 2.17 56 If, 101 2,313 19**1* 21,561 5^8 66 i*82 1.98 58 **,978 2,891
19^5 2^,623 510 82 1+29 1.37 1+5 7,529 3,361 19*+6 35,**01 1,502 121 1,381 1.61 50 11,896 5,986 19*+7 1+5 ,71+0 1,855 19b 1,661 1.71 50 15,691 7,81+5 19**8 55,555 l > 3 259 1,18** 2.53 63 15,278 9,689 19*+9 5^,116 963 315 6**7 2.21 62 16,328 10,066 TABLE 2 (Continued)
Dollar Net Dividends Patronage Current Equity Total Net Year Volume Savines On Stock Refunds Ratio Ratio Assets Worth
1950 $ 52,^32 $1,066 $331 $ 731* 1.81 52% $20,719 $10,7*+5 1951 59,291 1,332 3£*2 923 2.06 52 21,95** 11,**59 1952 6 7 ,M+i 1,205 269 856 1.97 52 21,535 11,297 1953 6^,810 1,297 185 882 2.**9 56 21,261 11,886 195^ 62,158 l\k2b 191 971 2.10 53 23,608 12,*+8l
1955 69,196 1,629 212 1,120 3.12 53 26,36*4- 13,905 1956 67,1^9 1,597 256 1,07** 3.03 51 29,982 15,175
*Includes first four months
SOURCE: Annual Report of the Ohio Farm Bureau Cooperative Association, Inc., 1956.
CO CO 39 Number. Membership, and Business Volume
The first report giving a national picture of farmer co
operatives in the United States was issued by the Office of
Markets and Rural Organization of the Department of Agri
culture in 1913. The report showed that in Ohio there were
60 marketing cooperatives and 1 purchasing cooperative
which did a volume of business of 3.3 million dollars and
$155,000 respectively.
Number of cooperatives. Since the first national survey,
Ohio farmers have organized many cooperatives (Table 3). The
peak was in the period between 1925-30. In 1925-26, 395 co
operatives were listed, 322 were listed in 1935-36, 293 in
19^5—^6, and 29b in 195*+-55. Over a 30-year period the number
has declined about 25 per cent. But the ratio between number
of cooperatives and number of farms in Ohio has remained fair
ly constant (Table h). And at the same time that the total
number of cooperatives was decreasing, the number of purchas
ing cooperatives was increasing. From 33 in 1925-26, the
number steadily increased so that by 195^-55 there were 103 .
Table 5 gives the number of marketing cooperatives and memberships by commodity groups. Grain cooperatives
accounted for about 63 per cent of the total number of marketing associations and 21 per cent of the total market
ing memberships. Dairy cooperatives were next with 18 per
cent of the associations and 15 per cent of the membership. TABLE 3
NUMBER LISTED OF MARKETING, FARM SUPPLY, AND RELATED SERVICE COOPERATIVES IN OHIO, 1913 to 195*+-55
Marketing Farm Supply Service* Total Year Number Percent Number Percent Number Percent Number Percent
1913 60 98. If 1 1.6 61 100.0 1921 2i+8 92.2 20 7.8 268 100.0 1925-26 362 92.9 33 7.2 395 100.0 1927-28 355 9^.7 20 5.3 375 100.0 1929-30 3^2 88.6 ¥f 1 1 A 386 100.0
1930-31 312 86 A |+9 13.6 361 100.0 1931-32 309 87.3 12.7 35*+ 100.0 1932-33 301 88.0 hi 12.0 3^2 100.0 1933-3^ 333 193^-35 280 83.6 55 16 A 335 100.0 1935-36 261 81.1 61 18.9 322 100.0 1936-37 236 71.7 93 28.3 329 100.0 1937-38 23^ 68.0 110 32.0 3 A 100.0 1938-39 223 67 A 108 32.6 331 100.0 1939-ifO 219 66.6 110 33 A 329 100.0
19*+0-*H 219 66.8 109 33.2 328 100.0 19*+l-*+2 209 65.3 111 3^.7 320 100.0 19l+2-l+3 200 6*+. 7 109 35.3 309 100.0 191+3-1+1+ 195 6*+.0 110 36.0 305 100.0 191+14.-^5 187 63 A 108 36.6 295 100.0 ■r o TABLE 3 (Continued)
Marketing Farm Supply Service* Total Year Number Percent Number Percent Number Percent Number Percent
19^5-^6 191 65.2 102 3^.8 293 100.0 1914-6-1+7 20k 65.^ 108 3^.6 312 100.0 19lf7-l+8 201 65.5 106 3*+. 5 307 100.0 19^8-1+9 197 65.0 108 35.0 305 100.0 19^9-50 19b 63.6 111 36 .M- 305 100.0
1950-51 180 59 A 112 37.0 11 3.6 303 100.0 1951-52 189 60.8 110 3 5 A 12 3.8 311 100.0 1952-53 185 60.7 109 35.7 11 3.6 305 100.0 1953-5^ 186 6l A 107 35.3 10 3.6 3°3 100.0 195^-55 181 61.6 103 35.0 10 3 A 29^ 100.0
♦The 1950-51 marketing season was the first time the "service*1 classification was used. Before this time service cooperatives were included with the marketing cooperatives.
SOURCE: Farmer Cooperative Service and other USDA publications. k2
TABLE b
NUMBER OF MARKETING, FARM SUPPLY AND RELATED SERVICE COOPERATIVES FOR EACH 10,000 FARMS IN OHIO, 1925-1955
Number of Number of Ratio Between No. of Year Farms Cooneratives Co-oos & No. of Farms
1925 2M+,703 395 16
1930 219,296 386 18
1935 255,1^6 335 13
19^0 233,786 329 lb
19^5 220,575 295 13
1950 199,359 305 15
1955 170,000 29k 17
SOURCE: United States Census of Agriculture and Table 3. TABLE 5
NUMBER AND ESTIMATED MEMBERSHIP OF FARMERS' MARKETING COOPERATIVES IN OHIO, BY SPECIFIED COMMODITY GROUPS, 195*<~55
Associations Listed Estimated Memberships. Commodity Group* Number Percent Number Percent
Dairy Products 33 18.2 *<-1,570 15.0
Fruits and Vegetables 13 7.2 2,930 1.1
Grain 11** 62.9 56,980 20.6
Livestock and Livestock Products 7 3.9 126,900 **5.9
Poultry Products 9 **.9 2*+, 360 8.8 Sugar Products 2 1.1 600 0.2
Tobacco 1 0.6 16,350 5.9
Wool 1 0.6 6,810 2.5
Miscellaneous 1 0.6 10 1-
Total Marketing l8l 100.0 276,510 100.0
Classified according to major product handled.
SOURCE: Anne L. Gessner, Statistics of Farmer Cooperatives. 195**-55 (Washington, D.C.: Farmer Cooperative Service, USDA, General Report 31? Table 2, June, 1957)? Pp. **-6. Mf
Livestock cooperatives accounted for only seven per cent of the associations but had *+6 per cent of the memberships.
Although in 195^-55 there were 181 farmer cooperatives in Ohio whose primary business was marketing farm products, the extent of cooperative marketing was greater than this figure indicates. An estimated total of 252 cooperatives marketed Ohio farm products in 195^-55 (Table 6). This represented about 86 per cent of the 29^ cooperatives listed for the State. Thus, 71 cooperatives, other than marketing cooperatives, marketed some farm products in 195^-55*
Another thing to note is the extent of cooperative purchasing. In 195^-55, 103 specialized farm supply coopera tives provided Ohio farmers with necessary production items.
But again this does not give a complete picture of coopera tive purchasing -- for 2*+l or about 82 per cent of the 29*+ cooperatives handled farm supplies during that period
(Table 7). Table 7 also shows the variety of supplies handled by these cooperatives.
Beginning with the 1950-51 season, the Farmer Coopera tive Service began a new classification of cooperatives,
"Service’1 cooperatives. These are cooperatives engaged in providing services related to marketing and purchasing. In
195^-55 Ohio had 10 of these specialized service cooperatives, but 218 or 7*+ per cent of the total number of cooperatives, were performing some kind of services. TABLE 6
ESTIMATED BUSINESS IN SPECIFIED COMMODITY GROUPS OF MARKETING COOPERATIVES IN OHIO, 195*1-55
Cooperatives Handling Gross Business Net Business Commodity Group Number Percent of Amount Percent Amount Percent Total Coops+ ($1000) ($1000) Products Marketed for Patrons: Dairy Products 35 11.9 118, i*87 22.8 116,992 2*+. 5 Fruits and Vegetables 1*+ *+.8 10,57*+ 2.0 10,57*+ 2.2 Grain 182 61.9 170,776 32.9 136,*+28 28.5 Livestock & Livestock Products: 9 3.0 183, Mf 7 35.3 183,1M+5 38.*+ Poultry Products 13 if.1* 25,805 5.0 20,775 *+•3 Sugar Products 2 0.7 511* 0.1 5l*+ 0.1 Tobacco 1 0.3 7,6*+2 1.5 7,6*+2 1.6 Wool 2 0.7 l,5*+6 0.3 l,5*+6 0.3 Miscellaneous 5 1.7 311 .06 311 .07 Total Farm Products 252** 85.7 519,102 100.0 if78,227 100.0
♦Computed as a percentage of the total number of 29*+ cooperatives listed.
♦♦Because many cooperatives do more than one type of business, these totals are less than the number that would be obtained by adding the number of cooperatives handling individual items or performing individual services.
SOURCE: Anne L. Gessner, Statistics of Farmer Cooperatives. 1951+-55 (Washington, D.C.: Farmer Cooperative Service, USDA, General Report 31, Table 38, June, 1957)? Pp. 51— 55* ■r V J l TABLE 7
ESTIMATED BUSINESS OF FARM SUPPLY COOPERATIVES IN OHIO, 195*+-55
Cooperatives Handling Gross Business Net Business Item Number Percent of Amount Percent Amount Percent Total Coops^ ($1000) ($1000) Supplies Purchased for Patrons: Building Materials 115 ^7.7 1 1 ,03*+ 7.0 M-,870 *+.8 Containers & Packaging Supplies 19 7.9 663 0.*+ 663 0.7 Farm Machinery & Equipment 116 U-8.1 13,015 8.2 8,*+95 8.3 Feed 201 83 A 51,263 32.5 35,770 35.1 Fertilizer 200 83.0 21,691 13.7 13,812 13.6 Meats & Groceries 16 6.6 505 0.3 505 0.5 Petroleum Products 112 k6.k 30,*+92 19.3 17,885 17.6 Seed 189 7S.k 9,327 6.0 5,65*+ 5.6 Sprays & Dusts(Farm Chemicals) 73 30.2 1,579 1.0 555 0.5 Miscellaneous Supplies 195 80.9 18,355 11.6 13,579 13,3 Total Supplies 2kl** 81.9 157,92*+ 100.0 101,788 100.0 ♦Computed as a percentage of the total number of 29*+ cooperatives listed. ♦♦Because many cooperatives do more than one type of business, these totals are less than the number that would be obtained by adding the number of cooperatives handling individual items or performing individual services.
SOURCE: Anne L. Gessner, Statistics of Farmer Cooperatives. 195**-55 (Washington, D.C.: Farmer Cooperative Service, USDA, General Report 31, Table 38, June, 1957)? Pp. 55-59. Number of memberships. Estimated memberships in market
ing, farm supply, and related service cooperatives in Ohio
were about 385*000 in 195*+-55. As farmers are often members
of more than one cooperative in the marketing, farm supply,
and related services fields, the number of individual farmer-
members is less than the membership indicated.
Henning and Mann, in a study made in 19L*-3, found that
in five representative Ohio counties about 82 per cent of
the members belonged to only one cooperative, about 1*+ per
cent to two cooperatives, about three per cent to three, and
less than one per cent to four or more cooperatives. J
Ohio agriculture is quite diversified. If each farmer
belongs to two or three cooperatives, then the 385,000
memberships would represent between 130,000 and 190,000
individual farm members.
While the total number of cooperatives in Ohio has been
declining over the years, memberships have been increasing.
Not only this, but there has been a marked changed in the
ratio of cooperative memberships to number of Ohio farms
(Figure I). Figure I also indicates that the greatest in
crease in membership has occurred since 19^0.
25 George F. Henning and L. B. Mann, Relationships Between Cooperative Organizations Serving Farmers In Five Ohio Counties (Wooster: Ohio Agricultural Experiment Station, Bulletin 660, 19^6), p. 20. Figure I MEMBERSHIP IN FARMER COOPERATIVES AND NUMBER OF FARMS IN OHIO, 1925-55 Thousand s
*+00 -
300 Number of Farms
-V
200 / Total memberships in cooperatives
100 - Memberships in marketing and service cooperatives
Memberships in farm supply cooperatives 0 1925 1930 1935 l9l+n 19^5 1950 1955 -r SOURCE: Tables h and 8 CO *+9
Memberships in farm supply cooperatives in Ohio rose from
5,360 (M-.6 per cent) in 1925-26 to more than 106,000
(27.6 per cent) in 195*+-55 (Table 8). The accelerated rate
of growth was made in the five-year period, 19^5-1950.
Business. mLumfi. Table 9 shows the amount of business
done by Ohio cooperatives from 1913 to 195^-55. Data before
1950-51 are not entirely comparable with the net volumes
shown for 1950-51 and subsequent years because earlier data
were not strictly net value. But these figures do illustrate
the continuous rise in business volume over the years.
The net value of business done by Ohio marketing and
purchasing cooperatives amounted to more than 107 million dollars in 1925-26, but by 195*+-55 it had increased to more
than 587 million dollars. This was an increase of about
*+50 per cent. Between these periods the general price level increased about 65 per cent. But even after adjusting for price changes, the volume of business increased about 235 per cent.
Figure II indicates the net value of farm products marketed and farm supplies handled by Ohio cooperatives for the years since 1930. From 82.7 million dollars in 1930-31, the net value of farm products marketed rose to V 78 million dollars in 195*+-55. Farm supply cooperatives on a percentage TABLE 8
ESTIMATED MEMBERSHIP OF MARKETING, FARM SUPPLY, AND RELATED SERVICE COOPERATIVES IN OHIO FOR SPECIFIED PERIODS 1915 to 195^-55
Marketing Farm Supply Service* Total Period Number Percent Number Percent Number Percent Number Percent
1915 ** ** ** ** 1^,370 1925-26 109 ,9^0 95.^ 5,360 ^.6 115,300 100.0 1927-28 155,800 91.5 1^,500 8.5 170,300 100.0 1929-30 ** ** ** ** 1 7 2 , ^ 0
1930-31 122,890 88.2 16,500 11.8 139,390 100.0 1931-32 13^,070 89.9 15,000 10.1 1^9,070 100.0 1932-33 130,270 88.8 1 6 , *+00 11.2 1^6,670 100.0 1933-3^ ** ** ** ** 1^0,290 193^-35 135,600 80.9 32,000 19.1 167,600 100.0
1935-36 155,8^0 75.7 50,000 2k.3 205,8^+0 100.0 1936-37 ** ** ** ** 138,772 1937-38 129,160 77.1 38,000 22.9 167,600 100.0 1938-39 122,500 76.8 37,000 23.2 159,500 100.0 1939-^0 127,500 78.5 35,000 21.5 162,500 100.0 19^0-1+1 133,900 80.2 33,000 19.8 166,900 100.0 19lH -!+2 120,310 78.0 3^,000 22.0 15^,310 100.0 19^2-^3 133,800 79.3 35,000 20.7 168,800 100.0 19I+3-M+ 1^6,300 78.1 1,000 21.9 187,300 100.0 19Mf-*+5 156,350 78.0 Mf,000 22.0 200,350 100.0 TABLE 8 (Continued)
Marketing Farm Supply Service* Total Period . Number Percent Number Percent Number Percent Number Percent
19^-5-^+6 162,350 76.3 50,500 23.7 212,850 100.0 191+6-lf7 176,360 7*+.0 62,100 26.0 238,*4-60 100.0 191+7-14-8 200,820 73.9 71,000 26.1 271,820 100.0 191+3.149 211,600 71.2 85,500 28.8 297,100 100.0 19149.50 227,600 71.2 92,000 28.8 319,600 100.0
1950-51 229,767 68.7 101,963 30.5 2,61+5 0.8 33*+,375 100.0 1951-52 252,7*+l 69.0 111, 11*+ 30.3 2,^70 0.7 366,325 100.0 1952-53 265,097 71.1 105,282 28.3 2,290 0.6 372,669 100.0 1953-5*+ 272,100 71.6 106,139 27.9 2,053 0.5 380,292 100.0 19 5*+-55 276,500 71.8 106,190 27.6 2,190 0.6 38^,890 100.0
*The 1950-51 marketing season was the first time the "service” classification was used. Before this time service cooperatives were included with the marketing cooperatives.
**Data not available.
SOURCE: Farmer Cooperative Service and other USDA publications. TABLE 9
ESTIMATED BUSINESS OF MARKETING, FARM SUPPLY, AND RELATED SERVICES IN OHIO FOR SPECIFIED PERIODS, 1913 to 195^-55 (In thousands of dollars)
Marketing Farm Supply service* — .. Totar"" - Period Amount Percent Amount Percent Amount Percent Amount Percent
1913 3,822 96.1 155 3.9 3,977 100.0 1921 38 >1 8 97.9 830 2.1 39, 2*+8 100.0 1925-26 101,080 9*+.l 6,260 5.9 W ^ O 100.0 1927-28 86,250 9^.3 5,170 6.7 91,4-20 100.0 1930-31 82,730 91.8 7,300 8.2 90,030 100.0
1931-32 66,725 91.8 5,970 8.2 72,695 100.0 1932-33 50,530 91.8 ^,500 8.2 55,030 100.0 1933-3^ ♦♦ ** ** 51,910 193^-35 56 > 3 0 88.2 7,550 11.8 63,980 100.0 1935-36 7^,350 87.9 10,200 12.1 8^,550 100.0
1936-37 95,069 81.8 21,199 18.2 116,268 100.0 1937-38 9^,1^0 80.1+ 23,000 19.7 117 ,l*+0 100.0 1938-39 80,520 79.2 21,200 20.8 101,720 100.0 1939 - 1+0 82,270 77.7 23,600 22.3 105,870 100.0 19*+0-*+l 90,2i+5 80.0 22,500 20.0 112,7>+5 100.0
19kl-k2 107,355 82.8 22,300 17.2 129,655 100.0 19lf2-l+3 1^1 ,7^0 78.9 38,000 21.1 179,7^0 100.0 19k-3-kb 170,6^0 77.7 *+9,000 22.3 219,6*+0 100.0 19i+i+.J+5 189,8^0 76.0 60,000 2*+.0 2*+9, 8*+0 100.0 19^5-^6 203, *+70 76.7 61,900 23.3 265,370 100.0 ro TABLE 9 (Continued)
Marketing Farm Supply Service* Total Period Amount Percent Amount Percent Amount Percent . Amount Percent
194-6-4-7 239,940 73.1 87,900 26.9 327,14-0 100.0 191+7.1*8 357,900 75.5 116,000 24-. 5 473,900 100.0 191+8-1+9 368,600 7 2.9 136,700 27.1 505,300 100.0 191+9-50 426,44-0 75.7 137,100 24-.3 563,54-0 100.0 1950-51 336,4-96 89.8 3^,383 9.1 4-, 24-3 1.1 375,122 100.0
1951-52 385,976 78.5 100,579 20.5 >+,856 1.0 4-91,4-11 100.0 1952-53 433,829 79.2 108,677 19.8 5,387 1.0 547,893 100.0 1953-54 4-4-4-, 6 28 79.8 105,591 18.9 6,64-5 1.3 556 , 864- 100.0 1954-55 4-78,227 81.5 101,788 17.3 7,058 1.2 587,073 100.0
*Tne 1950-51 marketing season was the first time the ’’service" classification was used. Before this time service cooperatives were included with the marketing cooperatives.
**Data not available.
SOURCE: Farmer Cooperative Service and other USDA publications.
vn Figure II NET VALUE OF FARM PRODUCTS MARKETED AND FARM SUPPLIES HANDLED By OHIO COOPERATIVES, 1930-31 to 195^-55 Million Dollars | ------f |
500 *- Farm products marketed Farm supplies handled M-00 1
300
200
100 ^ '1
- --iwHi 1930-31 1935-36 19^0-1+1 19^5-1+6 1950-51 1951-52 1952-53 1953-5V l95*+-55 SOURCE: Table 9 55 basis, made by far the greatest gain. Their dollar volume rose from 7.3 million dollars to 101.7 million dollars during that period.
Again referring to Table 6ylivestock cooperatives accounted for 38 per cent of the total dollar volume of the marketing cooperatives, grain 29 per cent, and dairy coopera tives 25 per cent. These three cooperative groups did about
91 per cent of the business volume of the marketing coopera tives.
The net business volume of the farm supply cooperatives amounted to about 102 million dollars, or about 17 per cent of the total cooperative business. Table 7 shows the number and per cent of total cooperatives handling various farm supplies and the per cent each item represents of the total net business volume. Feed, fertilizer, miscellaneous supplies, and seed are the supply items handled by the majority of cooperatives. As a per cent of total net busi ness -- feed represented 35 per cent, petroleum products 18 per cent, fertilizer 1*+ per cent, and miscellaneous supplies
13 per cent. Other items with less than 10 per cent of the total are also shown in Table 7. 56
Ohio leads all other states in the net value of farm
machinery and equipment, and miscellaneous supplies handled
by farmer cooperatives.
The statistics cited in this chapter, in respect to the number of cooperatives handling specific commodities, show
the diversification of Ohio's marketing, purchasing, and
service cooperatives. Perhaps this has been done to reduce overhead costs and increase membership satisfactions. It also may be an expression of farmers' desire and approval of one-stop cooperatives where they can do most of their farm business.
Gessner, op. cit., Pp. k-2 and 50. CHAPTER V
DAIRY COOPERATIVES
Early Developments
Dairy farmers were perhaps the first group in the
United States to apply cooperative principles in marketing
farm products. Farmers in Goshen, Connecticut are reported
to have cooperated in making cheese and butter as early as
1810. Later, farmers in some of the other New England
States, and in Ohio, Wisconsin, and New York began and
developed cooperative cheese factories and creameries.
These were mainly local producer-owned manufacturing estab
lishments .
Ohio farmers began cooperative dairying as far back
as 1 8 3 0 . In that year, small groups of producers pooled
their milk, made it into cheese, and sold it through small
cooperative cheese factories. Over the years these cheese
factories became important and successful institutions in
the dairy industry, and probably increased, in numbers with each decade. For instance, by 1873? 15 such factories had been established in Geauga county alone. Other factories were located in Columbiana, Holmes, Portage, Stark,
^T'rank C. Dean, The Farm Bureau in Ohio (Columbus: Ohio Farm Bureau Federation, 192*+), p. 21.
57 58
Tuscarawas, and Wayne counties. At one time Ohio was noted as the state of cooperative cheese factories, and it shipped a large part of its output into other states.
Another feature of the pioneer cooperative activities among Ohio dairymen was the organization of cooperative creameries. A noted writer on cooperation considered them to be
...the only noteworthy example of productive cooperation in Ohio...the only example of success, and the only branch of business in which Ohio farmers have tried to apply cooperative principles in which the results have not been disasterious.
Around 1900 there were 3*+2 local cooperative creameries ■3 in Ohio, most of them handled a small volume, yet made a high quality of butter. With the coming of improved roads and motor truck, and the rise of centralizer creameries, these community creameries disappeared from the dairy market ing picture.
Beginning in the early twenties, the Ohio Farm Bureau promoted and established several cooperative cream stations where producers could bring their cream so that it could be
2 Amos G. Warner, History of Cooperation in the United States (Baltimore: John Hopkins University. Studies in His torical and Political Science, Vo^. VI, l88o), Pp. 379 and 381.
^Dean, 0£. cit.. p. 21. 59
sold to dealers. Many of these stations were affiliated with fluid milk cooperatives and later became part of such
organizations, ^uring 1922 and 1923 about 75 cream stations Ll had been established in areas where they seemed justified.
It is reported that they brought about astonishing improve ments in cream prices in the state.
As time passed, many of the cream stations were gradu ally eliminated and various milk marketing cooperatives established cream routes and brought the cream direct from the farm to the cooperative.
So it was that for many years the local cooperative cheese factories and creameries were the only types of organization in the dairy industry.
Next in the early development of cooperation among Ohio dairy farmers was the beginning of farmer-owned stock com panies operating plants which were later recognized as city milk concerns. The Milk Producers Union was the first of this type in Ohio. In 1887 dairy farmers in the area around Cleveland organized this cooperative to better market conditions.^ Ten years later (1897) dairymen, again around
Cleveland, organized the Northern Ohio Milk Producers'
la. Ibid... p. 26.
^H. E. Erdman, Marketing Whole Milk (New York: The MacMillan Company, 1921), p. l5o. 60
Association to fight for better prices.^* This association
grew very rapidly and in 1919 was reorganized and ineor- 7 porated as the Ohio Farmers Cooperative Milk Company.
So before 190CV cooperative efforts to market dairy
products in Ohio were confined as mentioned to cheese
factories and creameries, and producers made a small begin
ning in fluid milk marketing. This was the general picture
not only in Ohio, but nation-wide.
In the decade following 1900, Ohio dairymen made other
cooperative efforts at organizing and developing their own
collective milk marketing system. For example, in 1906
and 1910 producers supplying tne Cincinnati market organized,
and Canton and Dayton producers formed associations in 1912.
All these ventures were short-lived. In 1936 the Farm Credit
Administration listed only three cooperative fluid milk
associations operating that had been organized in Ohio
before 1915.8
6Ibid.
7Ibid. O William C. Welden and T. A. Stitts, Milk Cooperatives in Four Ohio Markets (Washington, D.C.: Farm Credit Admin istration, Bulletin 16, 1937), Table 1, p. 9. 61
Some Factors Affecting Development and Growth
Since 1916, and especially from about 1922 or 1923, Ohio
dairy farmers have organized and developed many successful
fluid milk marketing associations around the larger cities
of the state. Some others have been organized in the
smaller cities too. But besides the dairymen tnemselves,
there have been particular conditions and institutional
arrangements which have contributed to the growth and
business success of these associations. Briefly some of
the factors have been: (1) growth in urban population,
(2) changes in legal status of cooperatives, and (3) state and federal milk marketing controls.
The growth in Ohio's early urban population especially in the decade 1910 to 1920 increased the demand for fluid milk, which in turn called for an adjustment of a constant milk supply to the needs of the rapid growing urban popu lation. Milk marketing cooperatives played an important part in determining marketing policies that would adjust supply to demand, and thus they have become fully recognized in the dairy industry as being an integral link in the system.
The war-time period from 191*+-1919 was a period in which a sharp increase in prices occurred. With rising prices of feeds and costs of labor, dairymen found it ex tremely difficult to get prices of milk up to profitable 62 levels. They therefore began to organize cooperative bar gaining associations to improve their economic lot. But because of Ohio’s Valentine antitrust law of 1898, some of the bargaining associations' activities were considered in violation of both the state and federal antitrust laws. For example, associations were not permitted to take control of members' milk, contracts could not be binding between the Q members and the association, neither could the boycott be used as a bargaining tool. In 1919 seven directors of the
Ohio Farmers Cooperative Company in Cleveland were indict ed on charges of violating the state antitrust law.
As earlier noted, perhaps it was the experience of milk bargaining cooperatives in Ohio, and in otner states with similar experience, which led to the passage of state and federal legislation permitting farmers to organize collectively and clarifying their activities under the anti trust laws.
9 It has been customary for bargaining cooperatives to require their members to sigh marketing agreements to deliver their entire production. In turn, the association agrees to assume the responsibility for marketing this output. Most fluid milk marketing organizations, producers of canning crops, and sugar beets producers in Ohio use this type of contract. 63
The Griswold and Brand laws of 1919 and 1921, and the
Green-Farnsworth law in 1923 opened the way for rapid growth
of collective bargaining associations in Ohio.
In the decade 1915-192^, Ohio dairy farmers organized
21 milk bargaining associations.^ Many of these associa
tions are still doing business.
Milk prices were at a low level in 1933. In many
Ohio milk markets, price cutting tactics and other unfair
trade practices had further contributed to the unstable 11 condition. In spite of cooperative bargaining techniques,
they could do nothing. 12 The Ohio Legislature in June 1933 passed the Burk Act.
This Act was important in the history of milk marketing in
Ohio and particularly as it pertained to the role of milk
cooperatives. Its aims were to raise incomes of milk
producers to a satisfactory level and to protect the public
interest. The Act emphasized the need for safe guarding
the consuming public and the industry itself against the
■^Welden and Stitts, op. cit.
"^Paul A. Young, Dairy Marketing Information on Ohio M arkets (Columbus: Ohio State University, Department of Rural Economics, Agricultural Extension Service, Bulletin 6 3 , September, 1933)? P* *+•
^ S e e C. G. McBride, State and Federal Milk Marketing Orders in Cincinnati and Toledo "(Wooster: Ohio Agricultural Experiment Station, Research Bulletin 6 7 8 , October, 19^-8). 6k
"evils of unfair, unjust, destructive, and demoralizing trade practices...which constitute a menace to the health and welfare of the state."
The Act set up the Ohio Milk Marketing Commission to function as a referee in bargaining procedures between producers and dealers. Each milk dealer had to apply for a license to do business. The Commission set up 6^ market ing areas in the state and authorized producers and dealers to agree on prices and market procedures.
Producers’ cooperatives were given an important role under the Burk Act. For the Act provided that there could be no regulation of prices and market conditions in an area where producers were not represented by a cooperative.
In the larger markets, milk bargaining cooperatives were already functioning. They therefore took a leading hand in representing their members under the procedures of the
Burk Act. Such was not the case in many of the smaller markets. But producers in these markets thought they too should have something to say about prices and marketing practices in their area. The net result was that producers, encouraged by the Burk Act, organized many cooperatives in the smaller markets. Also during this period a number of producers because of dissatisfaction with low prices split off from the associations already operating and formed new 65
associations. The Burk Act was in force from July 1, 1933
to June 30, 1935. In that two-year period producers
organized 25 milk marketing cooperatives."^
Another development in the milk industry and one which
began about the same time as Ohio's Milk Marketing control
law, and under similar conditions, was the federal legis
lation providing for marketing agreements or orders. The
primary aim of these agreements on fluid milk was to
establish a minimum price to producers. These agreements
or orders were made possible by the provisions of the
Agricultural Marketing Agreements Act of 1937. Federal milk
orders now operate in nine areas in Ohio.
The federal order requires that all dealers in the marketing area must pay the minimum prices to producers
according to the provisions of the order as established
through local public hearings. A stable minimum price is
one of the purposes of the federal order, but there is no objection to dealers paying farmers above the minimum prices
set by an order.
•^Welden and Stitts, o£. cit.
■^These areas are Akron-Canton; Cincinnati; Cleveland: Columbus; Dayton-Springfield; Toledo; Wheeling, W. Va., and Steubenville, Ohio; North Central Ohio which includes Findlay, Lima, Mansfield, and Marion; and the Tri-State area which includes Athens, Marietta, Ashland, Ky., and Parkersburg and Huntington, W. Va. 66
Dairy farmers, milk distributors, and the con suming public across the nation have been the bene ficiaries of the federal milk order program because it has resulted in greater market stability in the dairy industry
stated J. P. Mason, economist of the National Milk Producers
Federation, at the annual meeting of the American Dairy
Science Association at Stillwater, Oklahoma on June 29,
1957.15 Leland Spencer has expressed the same sentiment in appraising federal marketing orders.
...market-wide equalization and cooperative payments made possible by public control have helped to overcome one of the major handicaps of many associations — that is, their inability to return to their members prices as high as those paid by independent buyers. Had there been no public control of market prices, it is probable that the low prices of 1933 would have continued for a longer time, with the result that more radical leaders might have obtained control of the milk producers' organizations. Possibly these organizations would now be stronger in some respects, but it may be doubtful whether they would function more effectively in the , interests of producers or the general public. °
15 Reported in the Dairymen1s Price Reporter (Pittsburgh: The Dairymen's Cooperative Sales Association, July, 1957), p . 10.
Leland Spencer, "Impact of Marketing Agreements and Orders on the Marketing of Milk," Journal of Farm Economics (Menasha, Wisconsin: The American Farm Economic Association, Vol. XXXII, No. Part 2, November, 1950), p. 100*+. 67
C. G. McBride pointed out the good and bad effects of
the federal milk control program on cooperatives, but then
concluded "that the net result had been a gain for the 17 cooperative."
Background Information of Some of the Associations Operating in Ohio Milksheds ~
Ohio dairymen are now represented by some large and
successful fluid milk marketing cooperatives operating in
Akron, Canton, Cincinnati, Cleveland, Columbus, Dayton,
Toledo, and Youngstown. Historically, fluid milk coopera
tives have developed and have made their most rapid gains
around large cities. Certainly this has been the case in
Ohio. Thirteen of tne 16 associations set up before 1920
operated and served producers in the milksheds of the cities
mentioned above.
Practically all of the milk marketing associations
now in business were organized as bargaining associations.
A few of these now maintain supply equalization plants to
take care of surplus milk, they also do some manufacturing
C. G. McBride, "The Effect of Milk Control Program on Cooperatives," Journal of Farm Economics (Menasha, Wisconsin: The American Farm Economic Association, Vol. XXIV, No. 1, February, 19*+2), p. 325.
l8 Welden and Stitts, og. cit. 68 and processing. The Cincinnati market provides an example of a successful cooperative distributing milk at retail.
In all Ohio markets the primary aims of milk producers in organizing, apparently, were to correct unsatisfactory market practices, and to work toward higher prices.
A brief history of producers' associations operating in the principal cities of the state how follows.
Akron-Canton market. The area around the Akron-Canton market has for many years been prominent in cooperative marketing of dairy products. It includes dairy farmers in
Carroll, Columbiana, Holmes, Medina, Portage, Stark,
Summit, Tuscarawas, Wayne, and a few other adjacent counties.
It was in these counties that some of the early cooperative cheese factories and creameries flourished in the period
1875-1900.
In the Akron market, now operates one of the oldest milk marketing cooperatives in the state -- the Akron Milk
Producers, Inc. Until the name was changed in 19^6 this association was better known as the Cooperative Milk
Producers' Association of Summit County and Vicinity. It was organized in 1917 and reorganized in 1933.
Shortly after 1917, dairymen on the western edge of the Akron area organized the Wayne-Medina Milk Producers'
Association. In 1919 this association became an auxilliary 69 of the Milk Producers* Association of Summit County and vicinity, and in 1933 consolidated with it.
In 1932 the Independent Milk Producers Association was formed due to dissatisfaction with low prices which accom- 19 panied the depression. y It was not in business long.
Over the years the Akron Milk Producers, Inc., has lost membership to associations in surrounding markets — especially to the Cleveland market. In 19*+0 the association had 2113 members. At present it has about lH60 members.
The cooperative marketing of fluid milk in Canton had its beginning in 1921 when 103 of the producers selling to the Sanitary Milk Company met and formed the Stark County Of) Milk Producers Association. Later in the spring of 1913? forty-three other dairy farmers joined. These l*+6 members were about the total number of shippers to the Canton market at that date.
%l. W. Sherman, A Study of Cooperative Milk Marketing Associations in Pour Ohio Markets (Wooster: Ohio Agricul tural Experiment Station, Bulletin 57^, 1936). In addition to the larger associations operating in the principal markets, the author also gave a brief history of some of the smaller associations organized in the 1930's.
20 C. G. McBride and R. W. Sherman, Farm Sales of Ohio Milk Through Different Outlets (Columbus: Ohio State University, Department of Rural Economics, Mimeographed Bulletin 131, Part 2, May, 19*+1), p. 31* 70
Like the association in the Akron market, the Stark
County Milk Producers Association has lost members to other
associations in the area. In 19*+0 it had approximately 1100
members. Today it has about 1000.
The association makes cheese, ice cream, and butter at
its plant at Brewster. This provides an outlet for excess
milk coming into the market not required by buyers in their
daily operation.
In May 1936, local milk producers and distributors
organized the Stark County Milk Marketing Board to supervise
the operation of the Stark County Milk Market Pool. Since
then, a market-wide type of pool has been in operation which provides that all producers be paid a uniform or average price based on the classification-price plan.
Cincinnati market?-*- Dairy farmers supplying milk to the Cincinnati market first organized in 1906 when about
600 of them formed the Tri-State Milk Company. This organi zation was in business for only a short time. Dairymen made another effort in 1910 by organizing the Hamilton
County Milk Producers1 Association, but it also failed.
For an early account of producers' associations in this market, see McBride, op. cit. 71
In 1915 dairy farmers organized the Queen City Milk
Association as a bargaining association. This time they were successful. The association has operated in the
Cincinnati market (under a change in name) throughout the period of more than *+0 years.
In 1921 the Queen City Milk Association was reorganized as the Tri-State Cooperative Association, but its name was later changed to the Cooperative Pure Milk Association so as to avoid being confused with another organization in
Cincinnati with an almost identical name. The Association has been one of the few successful cooperatives in large cities in the United States to follow through with its own distribution system by taking farmers' milk and other dairy products all the way to the consumer.
Before the Cooperative Pure Milk Association began operating in the Cincinnati market, distribution of milk was virtually controlled by the French Brothers Bauer
Company, the largest distributing firm in that market, and also a manufacturer of butter and ice cream. This firm was bitterly opposed to farmer cooperatives, and like other
Cincinnati milk distributors not only refused to recognize the association but also refused to buy milk from farmers who became members. To provide an outlet for its members' milk the association started retail distribution from a 72
plant In Covington, Kentucky on January 1, 1923. Before the
end of the year many distributors began buying from the
association, and in November 1923 the French Brothers Bauer
Company sold out to the association, but was kept intact
and operated as a subsidiary of the Cooperative Pure Milk
Association under the name of French Bauer Inc.
The Cooperative Pure Milk Association owns facilities
to market the milk of its members direct to wholesale and retail customers in the Cincinnati, Hamilton, Middletown, and northern Kentucky urban areas, and other towns and villages within an approximate radius of *f0 miles from
Cincinnati.22 It markets the milk for about 1,750 milk producers in 2k counties in southwestern Ohio, southeastern
Indiana and northern Kentucky within a 75 mile radius of
Cincinnati. About 1,500 of the stockholding members are actively engaged in shipping milk direct to the Associa tion's plants or to the plants of the milk handlers under the direction and supervision of the Association.
In 1956 the Association did more than 13.5 million dollars in business and returned to its patrons more than
7 million dollars for the products marketed.
22 Paul J. Betscher, General Manager of the Association, furnished the writer with the current information in a letter dated July 17 > 1957. 73
Within a year after the Cooperative Pure Milk Associa tion went into retail distribution, another group of milk producers in Kentucky, Indiana and Ohio selling to members of the Cincinnati Milk Exchange, organized the K.I.O. Milk
Producers Association. Then in 1933? in the midst of low prices and surplus milk supply the Milk Producers Union was organized. The two bargaining associations organized the
Cincinnati Sales Association in 1935 to facilitate the hand ling of their records. This producer group now represents some 2,700 milk producers.
Cleveland market. As has already been noted, the earliest attempt at collective action among Ohio fluid milk producers goes back to the organization around the Cleveland market before 1900. One of these earlier associations, the
Northern Ohio Milk Producers' Association (1897), was re organized in 1919 and incorporated as the Ohio Farmers
Cooperative Milk Company. An organization with an almost identical name, the Ohio Farmers Cooperative Milk Association, was organized in 1923. It is believed that these two associa tions were one and the same, although available records do not make this clear. The Ohio Farmers Cooperative operated in the Cleveland
market for about 15 years.^3 It grew very rapidly and at
one time controlled about 90 per cent of the milk in the
market, paid producers, controlled hauling, and did all the
testing and allocating of milk. The association finally
decided to go into retail distribution with the result that
distributors discontinued buying from it. Soon afterward,
the association went out of business.
The Dairymen's Cooperative Sales Association (See p. 80).
also organized producers in the Cleveland territory and for
a time operated a branch office there. Then in 1932 pro ducers who were not members of the Dairymen's Cooperative
Sales Association in the Cleveland territory organized the
Northern Ohio Milk Association.
In 1937 the Milk Producers Federation of Cleveland organized and began serving producers in 1938. This associa tion is a federation of the Dairymen's Cooperative Sales
Association and the Northern Ohio Milk Association just mentioned.
•^J. W, Hartsock, Manager of the Milk Producers Federa tion of Cleveland, supplied the writer with the data on the Ohio Farmers Cooperative and the data on the present associa tion in the Cleveland market (letter dated August 2, 1957)o 75
The Milk Producers federation of Cleveland is the
association now serving producers in the Cleveland milkshed.
At the present time there are about 3?000 members. Of that
number all but 250 are in Ohio, the balance are in Indiana.
This association's milkshed covers 30 counties in northern
and eastern Ohio. It has four, country pool plants in
Indiana .
In 1956 the association sold about 19*5 million dollars
worth of milk for its members. This represented a total
volume of 986 million pounds.
Columbus market. Dairymen in the Columbus milkshed
were among the first to organize during World War I. In
1916 they organized the Central Ohio Milk Producers
Association. Later this association bought a distribution
plant in East Columbus, but due to poor management and in
sufficient finance the plant was disposed of in 1921. Soon
afterward, the association went out of business.
In 1918 a group of producers formed the Home Producers
Milk Company for the purpose of going into retail distribu
tion. The plant was later taken over by a private concern and is still in business in Columbus.
It was not until 1922 that dairymen in the Columbus market organized an association that became a success. With the promotion of the Ohio farm Bureau they organized the 76
Scioto Valley Milk Producers' Association and began business
in 1923. The associations in the market just mentioned had
no relation to this new association, however, many members
of these old associations became members of the Scioto Valley plf Milk Producers' Association.
The Association grew rapidly. At one time it marketed
two-thirds of the milk going into Columbus. During the
early thirties, in the midst of low prices, many members
of the Association became dissatisfied. Asa result the
Dairy Farmers Distributing Company was started in 1932 as
a distribution cooperative. It operated until early 1936
when it was taken over by a private concern already dis
tributing milk in the Columbus market.
In 1933 the Columbus Milk Producers Association was
organized as a bargaining association. It operated until
1939 then consolidated its membership with the Scioto Valley
Milk Producers' Association to form the Central Ohio Coopera
tive Milk Producers Inc. This is the association that is now serving some 1,500 milk producers in 17 central Ohio
counties. In 1956 the Association sold over 220 million pounds of milk for its members.
Sherman, op. pit., p. 17 77
Dayton-Springfield market. ' In 1912 or 1913 a small '
group of dairy farmers in the Miami Valley organized to
market their products cooperatively. But the little group
lacked the support of milk producers and could not with
stand the opposition pressure of organized dealers. After
a few years the organization passed out of existence.
Around 1919, A. F. Hedges, then county agricultural
extension agent in Montgomery County, started promoting
the idea of a cooperative milk marketing association for
the Valley's dairy farmers. The Ohio Farm Bureau joined
Mr. Hedges by giving its support to the idea. It encouraged
its membership to enroll as members, and sent special workers
into eight selected counties surrounding Dayton to help
in the organization work. By late summer of 1921 enough
dairy farmers had enrolled as members to enable the leaders
to file for incorporation. In July 1922, the Miami Valley
Milk Producers Association was incorporated.
Immediately after the organization of the Association,
numerous cream stations were organized throughout the area.
In fact, the association planned its activity around these
'The information on this market was taken from a pamphlet of the Miami Valley Cooperative Milk Producers Association entitled, Let * s Look At Ourselves after Twenty- Five Years. 19*+6. 78
cream stations. It undertook to represent cream producers
by bargaining with dealers. Many of the dealers in an
attempt to bring about the failure of the association re
fused to recognize it as the bargaining agent for its members. To meet the dealers opposition, dairymen in the early part of 1923 built a creamery to process their milk and cream, established cream routes, and brought the cream to the creamery plant in Dayton where it was made into butter.
Later in 1923, the position of the association became strong enough that the dealers finally recognized it.
Since that time the association has continued to represent the member producers in the Miami Valley in bargaining for fair prices, and in marketing their milk and other dairy products.
The Greenville plant, later known as the Farmer's
Cooperative Dairy, was started in 1927. It retails fluid milk and other dairy products to nearby areas. At Troy another plant was also set up for retail distribution, but this plant was sold in 19^5. No milk is distributed in retail sales by the Association in Dayton or Springfield.
The Association now markets milk and cream for pro ducers in a 28 county area in western Ohio and eastern
Indiana. In 1956 it sold over 15 million dollars worth of milk for these producers. 79
Toledo market. Dairymen around Wauseon in Fulton County became interested in cooperative marketing of their milk in 26 1919. For most of them, condensery plants were their only outlet. Through the years they had become dissatisfied with prices, wieghts, and butterfat tests. Dairymen in surround ing counties in the state and some in southern Michigan where much the same conditions prevailed, also became interested. The plan for organization was to include the entire Toledo milkshed — for about 65 per cent of the
Toledo fluid milk supply was coming from nearby Michigan counties.
In 1919 dairymen organized the Nortnwestern Coopera tive Sales Company at Wauseon. During its early years the organization faced a great deal of opposition from dealers who were reluctant to recognize it as a bargaining agent 27 for its members.
In 1932 the organization was reorganized as the North western Cooperative Sales Association and moved its head quarters to Toledo.
The Association now serves four southeastern counties in Michigan, three northeastern counties in Indiana, and
2^Dean, up. cit.. p. 32.
2^For a more detailed discussion of some of the Associa tion's early difficulties, see McBride, op. cit., p. 3. 80
21 counties in northeastern Ohio. It has about 2,^00 members and in 1956 sold about 17.5 million dollars worth of milk
for them.
Youngstown market. The Youngstown market is located in an area where milk producers have had a long history in cooperation. Even before 1900, northeastern Ohio producers had supplied milk to the Pittsburgh market. The urban population growth came earlier in the industrial east than in the agricultural midwest.
Beginning in 1906 a group of farmers near Austinburg,
Ashtabula County, Ohio took the initiative and formed a voluntary organization called the Ohio Milk Producers 28 Association. After about a year this association ceased to operate, but in 1916 it began business again under the name of the Northeastern Ohio Milk Producers' Association.^^
In the summer of 1918 it joined with an association south of Pittsburgh called the Tri-State Dairymen's Sales Com pany and was incorporated as the Dairymen's Cooperative
Sales Company under the general corporation laws of Ohio
pO Dean, op. cit.. p. 28.
29 Erdman, 0£. cit.. p. 150. 81
•30 with headquarters at Youngstown. Soon dairymen in the
counties located in the Panhandle area of West Virginia
joined the association.
On September 19, 1930 the Dairymen's Cooperative
Sales Association was incorporated under the Pennsylvania
Cooperative Act of 1929 as the successor to the Dairymen's
Cooperative Sales Company.
The association made rapid growth. By June 1957 it represented 7,000 active members in western Pennsylvania,
West Virginia, and eastern Ohio.And it marketed more than 865 million pounds of milk for a gross sales value of more than b2 million dollars. In Ohio its membership numbered 2,235, extending from Ashtabula county down to
Gallia county. In the Youngstown district the association handled almost 1^9 million pounds of milk for a gross sales value of over seven million dollars.
The Association serves five districts — Pittsburgh,
Youngstown, Greater Wheeling, Clarksburg and Charleston,
West Virginia.
80 Dean, op. cit.
^ T h e 1956 data obtained from the Association's 1956 Annual Report. 82
Ohio Milk Producers Federation
In 1935 the Ohio Milk Producers Federation, Inc., was set up as a state-wide organization composed of cooperative dairy marketing associations whose members were milk pro ducers.
The Federation represents Ohio dairymen on a state level in matters of legislative interest and importance. It also functions as an educational association providing its members with useful information about market conditions, and economic and other factors affecting their operations.
Some cooperative milk marketing associations in Ohio are also members of the National Milk Producers' Federation.
This is a national organization which represents its members at the national level in matters relating to federal legislation which dairy cooperatives have direct interest.
Statistics and Trends in Dairy Cooperatives
A.s shown in Figure III dairy cooperatives are located in some 30 Ohio counties. But this does not tell the whole story of the extent of the territory covered by these associations. These associations operate quite a few branches -- but more important is the fact that in Ohio's large urban population a number of milk marketing coopera tives as described before, now operate in these urban markets. S3
Figure 1 l J
Location of Dairy Cooperatives in Ohio, 1957
A 3 H T A 0 U L A
WILLIAMS LUCA:
HENRY T R U M 0 U L L D C F l A N C C LORAIN
SUMMIT
PUTNAM HANCOCK MAHONING
W A Y N t
COLUMBIANA
HAROIN
MARION AUGLAIZ C
LO O A N COSHOCTON
CHAMPAIGN
HAMILTON
P lK [
Onto Council of Farmer Cooperatives 81+
As the urban population has grown, and with improved
transportation and communication, these milk marketing
associations have found it necessary and possible to widen
their market procurement area. This has resulted in the
overlapping and duplication of membership territory and
raises the question of the economic justification of some
of the associations operating in the smaller cities. As explained already, the associations operating in Ohio’s eight larger markets, practically cover the state.
Table 10 shows the changes in number of associations, membership and dollar volume of dairy cooperatives over a number of years. There has been very little change in. number of associations in recent years, but significant changes in membership and business volume is noticeable.
In the 1951+-55 marketing season, dairy products marketed accounted for almost one-fourth of the net value of all farm products marketed by Ohio cooperatives. For the same period, Ohio ranked 9th in the total number of all dairy associations, 6th in membership, and 6th in value of net sales.
Looking at Ohio dairy cooperatives on a regional basis
Indicates that over a five year period the number of associa tions remained the same, membership increased by 19 per cent, while volume of business increased 67 per cent (See Table 11). 85
TABLE 10
NUMBER,* MEMBERSHIP AND DOLLAR VOLUME OF DAIRY COOPERATIVES IN OHIO FOR SPECIFIED PERIODS 1913 to 195*+-55
Associations Estimated Estimated Value of Period Listed Members Net Sales** ______(1.1000) ____
1913 23 812 1921 21 * * * 2,317 1925-26 39 * +* 28,000 1932-33 29 ** * 15,800
193^-35 31 k o ,000 15,*+50 1935-36 27 33,500 i7,5io 1937-38 M+ 30,000 22,000 1938-39 39 26,000 21,500 1939-ifO 36 26,000 20,600
19*+0->+l 36 26,000 23,000 19*+l-*+2 36 25,800 26,500 19*+2->+3 37 25,600 27,700 19I+3-M+ 3*+ 27,200 39,600 19i+if-)+5 32 27,800 *+3,000
19*+ 5-*+6 3*+ 28,300 >+6,700 19*+6-*f7 35 28,900 57,500 191+7-1+8 3*+ 32,000 67,600 191+8-1+9 36 3^,200 76,500 191+9-50 37 36,700 80,000
1950-51 33 3*+, 91*+ 70,0*0 1951-52 36 *4-0,000 9*+, 67*+ 1952-53 3*+ 38,077 115,819 1953-5*+ 33 38,813 12*+, 15*+ 1951+-55 33 *+1,570 116,992
^Classified according to major product handled.
**Represents the value of dairy products marketed by specialized dairy cooperatives and other cooperatives which handled dairy products as a sideline. ***Data not available. SOURCE: Farmer Cooperative Service and other USDA publications. 86
For the East North Central States the number of
associations decreased about 9 per cent between 1950 and
1955, membership decreased ko per cent, while the volume
of business increased 27 per cent.
Although the number of dairy marketing cooperatives in
Ohio have not increased significantly in recent years,
diarymen have set up dairy service cooperatives to improve
the efficiency of their dairy herd. Before 19li0 Ohio dairy men had not tried this type of cooperative -- now they have organized about 59 of these service associations.
By cooperative efforts milk producers have solved many of their marketing problems. And they have made considerable progress. Today many of Ohio's larger dairy cooperatives provide their members with some or all of the following services.
1. Guaranteed payment for milk.
2. A guaranteed year-round market.
3. Representation in federal milk order hearings.
k. Service on production problems.
5. Sampling and testing of all milk and cream.
6. Verification of weights.
7. Promote the demand for dairy products through
participation in educational and advertising programs. 87
TABLE 11
TRENDS IN DAIRY COOPERATIVES* 1950-51 to 195I+-55
Percent Item and Area 195*4-55 1950-51 Change
Number of Associations:
Ohio 33 33 0
East North Central States 552 606 -8.9
Membership:
Ohio *+1,570 3*+,91*4 /19.0
East North Central States 235,8*+o 263,280 -10.*+
Dollar Volume of Net Sales** (Thousands)
Ohio 116,992 70,0*+3 /67.0
East North Central States 77*+, 290 608,9*+! /27.2
♦Classified according to major product handled.
♦♦Represents the value of dairy products marketed by specialized dairy cooperatives and other cooperatives which handle dairy products as a sideline.
SOURCE: Gessner, ojd. cit. 88
8. Representation in State and National legislation
through the Ohio Milk Producers Federation and the
National Milk Producers Federation.
9. Transportation of milk.
10. Dairy supplies.
11. Plants and facilities for handling surplus milk.
According to Herbert C. Johnson, Jr., Executive Secretary of the Ohio Milk Producers Federation, Ohio dairy cooperatives handle about 60 per cent of the fluid milk in the state in cluding that used for manufacturing. CHAPTER VI
FRUIT AND VEGETABLE COOPERATIVES
In 1867, the Fruit Growers’ Union and Cooperative Society
was organized at Hammonton, New Jersey to market apples and
other fruits and vegetables. The Association continued in
business for 30 years.
Other local associations followed as production and
leadership developed. Available records show that before
1900 cooperative fruit associations, rather than vegetable
associations, were the ones generally organized. Fruit
growers in California, Delaware, Florida, Massachusetts,
Michigan, New York, Ohio, and a few other states had
organized cooperatives before 1900. But perhaps the organi
zational activities of the citrus growers of southern Cali
fornia during the l890's prompted fruit growers in other areas to organize.
The development of cooperative associations among truck crop producers has been difficult because of such factors as wide fluctuations in production, short marketing seasons, and perishability of the produce.
Potato growers in some of the more specialized areas have set up cooperatives for marketing their crops. The
Eastern Shore of Virginia Produce Exchange at Onley, Virginia was the first cooperative in the United States to market
potatoes. It was organized In 1899 and incorporated in 1900. 89 90,
Development of Fruit Cooperatives In Ohio
Some Ohio fruit growers in counties bordering Lake Erie
began marketing their fruits cooperatively about a decade or
so after the Hammonton, New Jersey association was organized.
In 1878 peach growers in Ottawa county, Port Clinton, Ohio
built and operated a dock cooperatively to aid them in ship
ping their fruit by water to Cleveland, Sandusky, Toledo and Detroit."^ Although more recent information about this association is not available, records do show that it was 2 operating in 1928.
Between 1910 and 1916 the peach crops in Ottawa county were very large. To handle these large crops, fruit growers organized five cooperative associations which in cluded practically every grower in the county.^ Up to 1916 these cooperatives sold their fruit independently either at auction or at private sale. In 1916 they organized a central exchange to do their selling. This plan was successful but the crop failures in 1917 and 1918 did not warrant the further use of the exchange.
■^■Chastina Gardner, Beginnings of Cooperative Fruit and Vegetable Marketing (Washington, D. C.: USDA, Preliminary Report. Mimeographed, 1928), p. *+.
2Ibid.
^H. E. Erdman, Organization Among Ohio Farmers (Wooster: Ohio Agricultural Experiment Station, Bulletin 3^2, June, 1920), p. 123. 91
Ohio apple growers are also known to have marketed
their fruit cooperatively. The Island and Gypsum Fruit
Company of Gypsum, Ohio was organized in 1889. According
to available records it is the oldest apple cooperative in if the country now operating.
Through the efforts of the Ohio Farm Bureau about a
half a dozen local apple associations were organized in
Columbiana, Gallia, Lawrence, Meigs, and Washington
counties in the early 1920's.
The Ohio Farm Bureau also took the initiative in or
ganizing the Ohio Fruit Growers' Cooperatives in 1922 as a federation of the local fruit and vegetable associations.
This association was loosely organized and was never an
effective sales agency.^
Grape growers in counties bordering Lake Erie were active in organizing associations before 1900. For instance, the Lorain County Grape Growers Shipping Association was organized at Avon Lake, Ohio in 1889. Two other associations
— the Northern Ohio Grape Company at Euclid, Ohio and the
Dover Grape Growers Cooperative began operating in the early
1890's.
^lohn H. Heckman and George H. Goldsborough, Cooperative Marketing of Apples in the United States (Washington, D.C.: Farm Credit Administration, Bulletin 55?> November, 19^8), Pp. 1-2.
'Green, op. cit., p. 132. 92
Most of the early fruit associations were organized to
improve quality and to assemble a large volume of fruit to
supply buyers. This was necessary if Ohio's fruits were to
meet outside competition — for fruits from other states,
especially from the Pacific Coast, had been selling at
better prices than Ohio grown fruit on the same market.
Development of Vegetable Cooperatives
Vegetable marketing cooperatives were much later in
developing in Ohio than fruit marketing cooperatives. No
record is found of the existence of a vegetable marketing
cooperative in Ohio before 1900. The oldest producer
cooperative in Ohio is the Marietta Truck Growers Association,
Inc., Marietta, Ohio organized in 1907. This association
was set up to market mainly tomatoes and cabbage. It is
still operating.
In Cleveland, Akron, and Toledo, truck growers made an
early start to market their own products through coopera
tive commission houses. The Cleveland Growers Market, a
cooperatively operated wholesale produce store, was set
up in Cleveland about 1911.^ The company did only a whole-
George H. Goldsborough, Cooperative Marketing of Potatoes in the United States ("Washington, D.C.: Farm Credit Administration, USDA, Bulletin 62, May, 195D? P* ^0. 93 sale and jobbing business and practically all its sales were made to Cleveland retailers. The company was only in business
for a few years, but in 1921 some ^OO market gardeners and
fruit growers working through their county Farm Bureaus re vived the association and reorganized it as the Cleveland 7 Growers Marketing Company. This association is still in busi ness. Growers around Akron and Toledo also organized associa tions during the early 1920's similar to the Cleveland Grow ers Marketing Company. Lettuce growers around Ashtabula, sugar beet growers in northwestern Ohio, and celery growers at Hartville, Stark county, were also active in the cooperative marketing of their produce before 1920. In 1927, hothouse cooperatives were started in Lucas and Cuyahoga counties handling mostly toma toes. These cooperatives are still important today in market ing this line of produce, and they have been successful in packing and selling a uniform quality product in large volumes to buyers in distant markets. Most of the fruit and vegetable cooperatives doing business today have been organized since
1930 (Appendix Table 33) in the areas around Akron, Cleveland,
Cincinnati, Columbus, Geneva and Toledo (Figure IV). Most of these associations are wholesale markets carrying a full line of produce.
Mention has already been made of the fact that much of
Ohio's fruits and vegetables have had to compete with produce
?Ibid. Figure J V Location of Fruit and Vegetable Cooperatives In Onto, 1957
ASHTABULA
TRUMBULL
ANLKjt C^AV, f-QWD
Ic o l u u b i a n a w c n l « MARION A u G L A l* ! C
COSHOCTON
MUSKIfSOUM
fr A iR ric ,. o | PCWR'
Pic k aw , _LJV. L W A 5 H . N G T O N
SOURCE: Ohio Council of Farmer Cooperatives, Inc
9V 95 shipped in from other producing areas. And this had been
especially true with potatoes. Some years ago potatoes from
other states began to crowd the local grown potatoes out of
the market. The out-of-state potatoes were better graded and
more attractively packaged. In 1933 and 193^ northeastern
Ohio farmers produced large surpluses of potatoes and were will- o ing to sell at almost any price.
To help growers, the Ohio Farm Bureau mapped out a grad
ing program in 193*+ for county cooperatives in the potato
areas. For six years the Ohio Farm Bureau marketed potatoes
cooperatively. During those years much progress was made in
standardization of grading and packaging.9
The work of the Ohio Farm Bureau led to the organization of the Ohio Potato Growers Association in 19L*-1+ - This is a statewide organization and may be described as a centralized marketing-bargaining association. It handles no potatoes.
All storing, grading, and packing is done by the grower.
Growers also transport or arrange for transportation. The association makes sales to food chains, independent grocers, and other large buyers.
8 Dorsey, on. cit., p. 1^.
9C. W. Hauck and A. W, McKay, Marketing Potatoes Through the Ohio Farm Bureau Cooperative Association (Washington, D. C.s Farm Credit Administration, USDA, Bulletin *+2, March, 19^1), P. Mf. The Ohio Potato Growers Association represents about 300
growers with some 10,000 acres. It handles 60 to 70 per cent 10 of the production in the state.
Statistics and Trends
Tables 12 and 13 show data on the number, membership,
and volume of business of organizations marketing fruits and
vegetables cooperatively.
Over the years there has been little change in the num
ber of fruit and vegetable cooperatives, but the number of
members has tended to fluctuate while the dollar volume of
business has increased.
Over a five year period (1950-51 to 195*+~55) the number
of associations and the dollar volume of business have declin
ed for cooperatives in Ohio and in the East North Central
states (Table 13). But during 1950-55 the average dollar
volume in Ohio was $10,*+30,000 compared with $10,57^,000 in
195^-55. Cooperatives have provided a means of assembling a
sufficient volume of fruits and vegetables to attract large
buyers. Since the trend is more and more in the direction
of consumer packages, perhaps fruit and vegetable cooperatives
will have to give more attention to this merchandising develop ment .
■^Information furnished by W. W. Hollis, Manager of the Ohio Potato Growers Association. TABLE 12
NUMBER,♦ ESTIMATED MEMBERSHIP AND ESTIMATED BUSINESS OF FRUITS AND VEGETABLES IN OHIO FOR SPECIFIED PERIODS 1913 to 195*)--55
Number of Estimated Estimated Value’"of"" Period Associations Membership Net Sales^* ($1000) 1913 9 *** 910 1921 7 *** 1,935 1925-26 21 1 ,1+00 *+,000 1927-28 20 *** 3,530 1930-31 1*+ 1,800 5,060 1931-32 15 1,930 5,170 1932-33 13 900 *+,000 193*+-35 1*+ 1,200 2,800 1935-36 1*+ 3,000 2,830 1937-38 17 2 ,2*+0 5,500 1938-39 18 2,100 k, 51+0 1939.1+0 17 1,800 l+, 300 191+0-i+l 16 1,550 *+,100 19*H-*+2 15 1,300 5,500 19lf2-'+3 16 2,100 6,000 191+3.1+1+ 16 2,100 7,000 19i+i+-i+5 17 2,100 8,500 191+5-1+6 16 2,000 9,200 191+6-1+7 17 2,300 9,300 191+7-1+8 18 2 ,*+00 9,800 191+8-1+9 19 2,600 11,900 191+9-50 16 2,100 10,100 1950-51 17 2,197 10,70*+ 1951-52 16 3,*+5*+ 10,160 1952-53 ll+ 3,221 9 ,8*+6 1953-5*+ 13 2,890 10,866 1951+-55 13 2,930 10,57*+ ♦Classified according to major product handled. ♦♦Represents the value of fruits and vegetables marketed by specialized fruits and vegetables cooperatives and other cooperatives which handled fruits and vegetables as a sideline. ♦♦♦Data not available SOURCE: Farmer Cooperative Service and other U3DA publications.
97 98
TABLE 13
TRENDS IN FRUIT AND VEGETABLE COOPERATIVES* 1950-51 to 195*+-55
Percent Item and Area ... 195*4-55 _ 1950-51 Change
Number of Associations:
Ohio 13 17 -23.5
East North Central States 53 66 -19.7
Membership:
Ohio 2,930 2,19*+ /33.5
East North Central States 17,100 21,177 /23.8
Dollar Volume of Net Sales** (Thousands)
Ohio 10,57*+ 10,70*4 -1.2
East North Central States 31,*4-5*+ 39,63*+ -20.6
♦Classified according to major product handled.
♦♦Represents the value of fruits and vegetables marketed by specified fruit and vegetable cooperatives and other cooperatives which handled fruits and vegetables as a sideline.
SOURCE: Gessner, 0£. cit. CHAPTER VII
GRAIN AND FARM SUPPLY COOPERATIVES IN OHIO
Ohio farmers received over 136 million from the sale of grain marketed through 182 cooperatives in the 1951+-55 market ing season.^ Only livestock and dairy cooperatives did a greater net dollar volume of business. Of the 182 coopera tives handling grain, 11*+ are listed as specialized grain cooperatives, that is, cooperatives whose main function was grain marketing. The other 68 associations were mostly purchasing or farm supply cooperatives marketing grain as a sideline business.
During the same period as mentioned above, the net value of grain which Ohio farmers marketed cooperatively and the number of grain cooperatives ranked fourth and eighth respec tively among the states.
The writer will relate in this section the organization and growth of both the grain and purchasing of farm supply cooperatives. The two grew up together in Ohio. Ohio farmers organized their grain cooperatives as farmers' ele vator companies. They were the most important group of farmer organizations organized in the state during the period
Anne L. Gessner, Statistics of Farmer Cooperatives. 1953-5^ (Washington, D.C.: Farmer Cooperative Service, General Report 31? Table 38, June, 1957)? p. 52.
99 100
p 1918 to 1920 operating from established business centers.
Along with the local Grange they provided purchasing services
for their members.
In trying to develop a coordinated purchasing program at the beginning of the twenties, Ohio leaders sought to work out a plan whereby all farm supply purchases could be combined with grain elevator business, or with other estab lished cooperative agencies. Although this plan did not work out as intended, Ohio cooperative elevator associations have continued to provide their members with farm supply services. Today, there are a number of associations originally organized as farmer elevators, but now selling more farm supplies than grain, and therefore classified as farm supply cooperatives.
Early Elevator Cooperatives
The beginning of the movement^ Grain associations were among the oldest cooperatives to be organized in any consider able extent. Farmers in Madison, Dane County, Wisconsin,
2 Erdman, jop. cit.. p. 119.
^Unless indicated otherwise, this part of the discussion is based upon, Thomas E. Hall and Edward B. Ballow, "Grain Growers Practice Cooperation," Farm Cooperatives in the United States (Washington, D.C.: Farmer Cooperative Service, Bulletin 1, December, 1955), Pp. 75-76. 101
organized the first cooperative elevator in 1857. They were
dissatisfied with the excessive freignt rates charged them 1+ in shipping their grain from Madison to Milwaukee.
Within the next two decades following the Wisconsin
efforts, farmers in other grain states built a number of
cooperative elevators. For example, in Iowa, farmers built
three elevators; one each in 1867, 1869, and 1871. Also
the Grange took an active part in organizing elevators in
Illinois, Minnesota, and other northwestern states.
With the downfall of the Grange beginning in 1876, and
an improved general price level from 1879 to 1883, farmers’
interest in grain cooperatives slackened.
But beginning in 1886 farmers manifested a new interest
in grain cooperatives. This is the general movement which
Ohio farmers later became a part of. The great expansion
in this movement came in the period from 1900 to 1920 and
reached a peak in 1919 and 1920. From 1920 to 19*+5 coopera
tive elevator companies decreased in number. But by this time
farmers had formed elevator associations in all the princi
pal grain shipping areas. The motor trucks made long farm-
to-market hauls practical and decreased the need for an elevator at every small shipping point. From 19^5 to the
Ll . r, Bakken and Schaars, ojo. cit., p. 55. 102
present time (1957) relatively little change has occurred in
the number of associations.
It is estimated that M-,000 farmers' elevator associations
were operating in 1920. Only about half of that number is
operating today.
What caused the movement to grow so rapidly up until
1920? Roy F. Hendrickson, Executive Secretary of the
National Federation of Grain Cooperatives, believes that
besides prices, there were other factors responsible for the
growth. "Farmers wanted dependable storage facilities.
They wanted reliable weights and grades, and they wanted to limit the unconscionable margins which were taken at the primary markets."'
The movement in Ohio. The general elevator movement which began about 1886 in some parts of the Grain Belt finally hit Ohio. In 190*+, Ottawa County farmers at Rocky Ridge organized Ohio's first farmer-owned local elevator. This association is still doing business under the name of the
Ottawa County Cooperative Company with headquarters at Oak
Harbor.
5 Roy F. Hendrickson, "Grain Cooperatives — The First Century," Cooperative Digest. Vol. XVIII, No. 1, January, 1957, p. 8. At the time that Ohio farmers organized their first
elevator, farmers in Illinois had 15 elevators, Iowa 7? and
Minnesota farmers had 30.^
Why were Ohio grain farmers late in organizing farmer- owned grain associations? The western half of the state lies in the Corn Belt. Did Ohio farmers have any problems market ing their grain? Grain elevators were not new to Ohio farmers. As early as 1885 one of the major railways built an elevator at Siam, Ohio.'7 Wallace in analyzing the reasons for the late beginning of the farmer-owned grain associations in Ohio considered the following factors to be significant:
1. Ohio farmers had readily available nearby markets.
2. A large part of the grain was fed to livestock on farms where it was produced.
3. In the states farther west, line elevators were much stronger and had workihg relations with the railroads.
*f. Grain was more of a major source of income to some of the other states.
Kenkel, _op. cit., Table 1, p. 30.
^Thomas E. Hall, "Times and Grain Elevators Have Changed News for Farmer Cooperatives (Washington, D.C.: Farmer Cooperative Service, Vol. XXIII, No. if, July, 1956), p. 16. 10lf
5. Until 1910 there was little promotional o activity in Ohio.
These factors gave distinct advantages to Ohio farmers
and lessened materially the need for protection from un
favorable prices and unfair marketing practices.
Even though Ottawa County farmers made a beginning
toward cooperative marketing, the movement in Ohio was slow at first. It actually did not get started in a big way until Henry County farmers organized an elevator company at Grelton in 1910. Tne success of this company caused other farmers in the state to do likewise.
By 1912 the movement to organize elevator companies was well underway. A study made by Foster in 1925 showed that
Ohio farmers organized 20 elevator companies in the ten- year period 190*+-1913? 7*+ in the five-year period 1911+-19l8^ and 106 in 1919-1920.10 By 192>+, 217 farmers' elevator companies had been organized (Table l1*).
O B. A. Wallace, Development of Farmer Elevator Move ment in the State of Ohio TUnnumbered mimeographed Bulletin, October, 19^8), p. 1.
^Wallace and Falconer estimated that farmers organized at least 50 or possibly 75 other elevator companies in the period 1915-1920. Records on these were not available. See B. A. Wallace and J. I. Falconer, Farmers' Elevators of Ohio — Fifteen Years. 1928-19^3 (Wooster: Ohio Agricultural Experiment Station, Bulletin 650, 19*+*+)> p. 3*
10L. G. Foster, o£. clt.. p. *+. TABLE lb
DATA ON 21? FARMERS1 ELEVATORS IN OHIO, WHEN AND BY WHOM FORMED 1901+-192l+
Equity Farmers' Grain Farm Year Total Locally Union Dealers Ass'n. Bureau Grange Gleaners
190*4- 1 1
1905 --
1906 - -
1907 1 1
1908 - -
1909 3 3 1910 1 1
1911 - -
1912 9 8 - 1
1913 5 k - 1
191*4- 15 11 3 1
1915 10 5 5 - TABLE I1* (Continued)
Equity Farmers’ Grain Farm Year Total Locally Union Dealers Ass’n. Bureau Grange Gleaners
1916 15 6 5 3 -- 1 1917 l*f 6 7 - 1 - -
1918 20 10 5 5 ---
1919 k7 16 17 11 3 - -
1920 59 15 12 23 8 1 -
1921 11 9 1 - - 1 - 1922 2 1 1 - - - -
1923 3 2 - - 1 - - 192k- 1 ------
Total 217 99 _ sz_ *+5 ...... 1 3 ... 2 1 SOURCE: Foster, _op. cit., Table 1, p. *+. 107
What were the reasons back of the rapid growth? Who promoted it? Farmers generally felt that private and line elevators took too wide a margin on both grain and farm
supplies. They also felt that some dealers were not too accurate on their weights and took unwarranted discounts 11 for moisture, dockage, and other quality factors. The prosperity of the farmer during World War I years due to a rising price level and his ability to invest part of his earning was also important. 12
Farmer organizations especially after 1910 promoted and assisted farmers in organizing elevators. Referring again to Table 1*+, *+6 per cent of the elevators organized by 192k were by local efforts; the Equity Union organized
26 per cent of them; the Ohio Farmer Graih Dealer Associa tion 21 per cent; and almost 6 per cent was accounted for by the Ohio Farm Bureau.
The price crash of 1920-21 forced many cooperative elevators out of business and left most of the others with heavy debts. From 1923 on, management began paying off debts, reducing or wiping out deficits, and improvement plants.
■^Wallace, op. cit., Pp. 2-3.
12 Foster, op. cit.. p. *+. 1 0 8
At the time most of the farmer-owned elevators were organized, Ohio had no special laws providing for incor poration of cooperatives. Incorporation was as a rule under the general corporation law of the state. Farmer- owned elevator groups had to wait until the passage of cooperative marketing laws. Many elevators reorganized under these laws, some did not.
Even today not all farmers' elevators are true cooperatives. Some are regular corporations no different from other non-cooperative elevators except they are owned by farmers. For example, of the l*+7 farmers' ele vators listed by the Ohio Council of Farmer Cooperatives, 102 or 70 per cent are operating under the cooperative marketing act. The others are organized (for profit) under section 8623 of the general corporation act (Appendix Table
A).
Wallace and Falconer found in their study of some 150 elevators that the 15-year period 1928-19^3 was one of marked progress not only in financial soundness, but in widening the range of services offered and commodities handled, membership growth, and growth in cooperative practices.1^
13 Wallace and Falconer, op. ci^.. p. 109
Sixty-three per cent of the elevator companies operat
ing today were organized in the period 1915-1920. And about
15 per cent of them were organized before that period
(Appendix Table 3*0.
Ohio farmers' elevators are located almost entirely in
the area north and west of a line from Cincinnati to
Chillicothe to Newark to Cleveland (Figure V ). This geo
graphical location corresponds almost with the Corn Belt
area of the state.
The trend in the number of cooperative grain market
ing associations has been downward since the peak period
1927-1928 (Table 15). Perhaps this has been due to the
failure of these associations to meet the qualifications
of true cooperatives under the state and federal cooperative
laws. But while the number of associations has declined, the membership has shown a steady increase, especially since
19^2-19^3. The dollar volume of business too has increased
steadily since the early 19^0's. From 19M+-i+5 to 195^-55 it increased about 81 million dollars or 1^6 per cent.
State Organization Formed By 1916 Ohio farmers were operating nearly 50 local
grain elevators. These elevators operated as separate units. Grain cooperatives in many states had formed state- 1X0
Figure 1/
Location of Farmer Elevators in Ohio, 1957
A 5 M T A 0 U L A
.A K f
WOOD TPUMBULL HENRY
Jp U R C M
PUTNAM HANCOCK
HAROIN X x
AUGLAJZC MORROW
LOO A N COSHOCTON
C h a m p a i g n MUSKINGUM
rAlRFiC(.D P fP O v 'O N P O t PlC * AW AV
WASHINGTON C L ' N T ON
HAMILTON
* ' * C * \ tT ^ -
SOURCE: Onlo Council of Farmer Cooperatives, Inc Ill
TABLE 15 NUMBER,* ESTIMATED MEMBERSHIP, AND ESTIMATED BUSINESS OF GRAIN COOPERATIVES IN OHIO FOR SPECIFIED PERIODS, 1913 to 195^-55
Number of Estimated Estimated Value of Period Associations Membership Net Sales** ($1000) 1913 l6 *•** 1,830 1921 159 *** 25,667 1925-26 205 31,800 1+0,000 1927-28 210 70,000 38,750 1930-31 19*+ 53,200 29,850 1931-32 193 55,380 26,000 1932-33 183 1+7,000 17,000 193^-35 175 *+3,000 21,000 1935-36 172 1+8,000 29,000 1936-37 150 *** *** 1937-38 ll+5 28,300 35,ooo 1938-39 139 25,000 27,000 1939-^0 139 26,500 28,000 191+0-1+1 138 26,950 27,100 19l+l-)+2 128 2*+,500 33,200 I9I+2J+3 118 2*+, 700 1+0,000 19i+3_i+i+ 115 25,700 1+6,500 19I+1+J+5 113 26,1+00 55, 5oo 191+5-'+6 113 29,000 67,600 191+6-1+7 116 32,500 77,800 l 9i+7_i+8 113 36,800 89,000 19L+8-I+9 110 39,700 93,ooo 191+9-50 110 1+5,000 105,600 1950-51 110 1+7,311 80,911 1951-52 11b 1+9,998 89,589 1952-53 11b 51,368 98, 99*+ 1953-51+ 117 55, 9^1 103,150 195^-55 llM- 56,980 136,1+28 ♦Classified according to major product handled. ^♦Represents the value of grain marketed by specialized grain cooperatives and other cooperatives which handled grain as a sideline. ♦**Data not available SOURCE: Farmer Cooperative Service and other USDA publications. 112
wide associations and Ohio leaders began thinking about form
ing a state association too. They had already formed a
loose and informal association known as the Northwestern
Ohio Association which for years had held meetings each
month from April to November to discuss farmer-elevator
problems.
On March 13, 1916 the same group of leaders formed the
Ohio Farmers Grain Dealers Association at Toledo to discuss
and study common elevator problems and unite their efforts. As has already been noted, this association promoted
and assisted local farmers in organizing elevator companies.
It also represented local elevators in legislative matters,
and provided additional services in their interest.
Sometime in 1920 the Ohio Farmers Grain Dealers Asso
ciation became a member of the Farmers National Grain
Dealers Association, a national association, whose objectives
were to support cooperative principles and to improve grain marketing practices. In a working arrangement with other farm organizations,
the Ohio Farmers Grain Dealers Association made attempts to
form central organizations to market grain and buy farm
supplies. These efforts will be discussed in a later section.
Wallace, op. cit.. p. 11. 113
According to Wallace, the Ohio Farmers Grain Dealers
Association finally lost most of its value as a builder of
cooperative enterprises. It was never a marketing organi
zation itself, merely a trade association.
But it should not be overlooked that in the years 1915 to 19^0. no one contributed more toward the upbuilding of the farmer elevator in terests of Ohio thanjlharles Latchaw, secretary of the association.1?
Th£ Nakioaal PrQgrflS It seems appropriate at this point in the discussion to
relate briefly the proposed programs cooperative leaders
and others outlined to establish national sales agencies for
grain cooperatives. There were two major movements in this direction. The American Farm Bureau Federation sponsored
the first movement at the beginning of the twenties. A decade later the Federal Farm Board set up an agency to
provide a marketing service for grain cooperatives. Ohio farmers through their representatives were directly associ ated with both movements.
Grain was the major source of income for farmers of the west and midwest. They were in dire distress when the bottom fell out of commodity prices in 1920. A number of
15M m p . 12. lib grain cooperatives blamed the farmers' distress upon the operator of the Grange Exchanges which they alleged speculat ed in grain at the farmers' expense.These cooperatives had sought membership in the Exchanges but the Exchanges refused to admit them. While great dissension existed between the cooperative groups, they were willing to join together to fight the Exchanges. They turned to the American
Farm Bureau for help.
In the summer of 1920, grain marketing problems appear ed so large that J. R. Howard, president of the American
Farm Bureau Federation set July 23 and 2*+ 9 1920 as the dates for a conference in Chicago of all farmers' cooperative associations interested in marketing grain. Out of this meeting came the agreement to appoint the Committee of
Seventeen. L. J. Taber, of Barnesville, Ohio, and Master of Ohio State Grange was a member of this Committee. The
Committee recommended that the American Farm Bureau Federa tion form a national organization to handle and sell grain.
The American Farm Bureau organized such an organization — the U. S. Grain Growers, Inc. in 1921. The plans called for this organization to be made up of state and regional grain growers groups who would band together to control
^Green, op. cit.. Pp. 133-13^. 115 markets and prices, and eliminate speculation. But the
organization never got under way successfully.. Dissension and jealousy, opposition from the grain trade, and mount ing debts forced the organization out of business. And it 17 never was admitted to the Chicago Board of Trade.
The Federal Farm Board made an effort in 1929 and 1930 to develop a national grain program. It set up the Farmers
National Grain Corporation as a 20 million dollar grain 1 Q sales corporation with headquarters at Chicago. The purpose was to try to bring together under one control all the small local cooperative grain elevators as well as some of the larger cooperative grain handling groups. The
Farm Board was to furnish the funds for organizing as well as to provide any money needed to store and hold grain for a better market.
To use the services of the Farmers National Grain
Cooperative a farmer had to become a member of a local ele vator association which was affiliated with a regional member of the Farmers National. In Ohio, the Ohio Farmers
Grain and Supply Association was set up in 1929 so that local elevators could take part in the national grain program.
17 M. Kile, The Farm Bureau Through Three Decades (Baltimore: The Waverly Press, 19^+8), Pp. 87-88 and 119.
l8Ibid.. p. I6*f. 116
The move made toward centralized marketing did not hold the support of enough local associations.1^ The Farmers
National Grain Corporation soon lqst a lot of money, and failed in 1938. The Farm Board was dissolved and its re maining assets were turned over to the Bank for Cooperatives.
However, most of the owned facilities were acquired by the reorganized regional terminal sales agencies.
Central Grain and Purchasing Organizations
Early efforts toward a coordinated program. For the purpose of this discussion the period covering the early efforts towards cooperative integration and correlation of grain marketing and purchasing needs of farmers will be limited to the period from 1920 to 1923.
This period is a significant one because it was when the Ohio State Grange farmers' elevators, and the Ohio Farm
Bureau Federation tried to coordinate their efforts in eliminating duplications in providing services to farmers.
They aimed to provide a central selling and buying organi zation. The period is significant also because it was con temporary with the efforts made on a national scale — especially the grain marketing program.
19 Hall and Ballow, j2£. cit.. p. 81. 117'
It has already been noted how the American Farm Bureau
Federation and the Federal Farm Board tried to establish
central grain selling organizations. A program equally as
comprehensive was planned for Ohio farmers' elevators. It
called for a tightly organized cooperative central grain
agency that would handle grain from the farmer to the pro
cessor. Besides, processing would also be done.
What the American Farm Bureau Federation, Farm Board, and the Ohio Farm Bureau tried to do was not new. Since the early 1890's the grain trade had made a movement towards integration in buying, selling, handling, and processing grain.20
The first cooperative attempt to provide the kind of organization Ohio cooperative leaders wanted occurred In the early twenties. About that time the Ohio Farmers' Grain
Dealers Association had taken over the Cleveland Union Ele vator Company.21 For a short time it operated this company, but because of mismanagement or inadequate finance, soon found itself in distress. The Ohio State Grange and the
Ohio Farm Bureau contracted to become affiliated in ownership
20John W. Sharp and Cecil E. Fuller, Marketing Grain Through Ohio Terminal Facilities (Woosters Ohio Agricultural Experiment Station, Research Circular 38, 1956), p. 3»
21Wallace, ojg. cit.. p. l*f. 118 of this elevator on condition that they (Ohio Farmers Grain
Dealers, Ohio State Grange, and the Ohio Farm Bureau) raise
$75,000 for capital investment. This amount was not raised and the venture did not materialize.
The idea of the three affiliated organizations was to organize the Cleveland Elevator Company as a grain outlet for local farmer cooperatives. Also, the group had reasoned that since farmers of the east were consumers of the grain products of the west, processed grain might also become a sales product of this central plant.
In May 1920 Forrest G. Ketner was made director of the Ohio Farm Bureau Grain Marketing Department. Later in
1923 the Ohio Farm Bureau set up a Division of Grain Sales under the managing directions of D. M. Cash. This service was to be offered state-wide to all elevators who might wish to use it.
Not until the organization of county Farm Bureau associations did the Ohio Farm Bureau really begin moving in the grain business. But even then it handled grain only as an accomodation to its members.
After the failure of the farm organizations to set up a central grain selling organization, nothing further was done along this line until the organization of the Ohio
Farmers Grain and Supply Association at Fostoria in 1929. 119
Historically, not only have farmers as sellers had to
face marketing problems, but they have also had to face
problems as buyers. It seems that farmers have for a long
time been concerned with the relation between the prices
they receive for their products and the prices they have had
to pay for production supplies. During the depression of
1920-21 farmers everywhere were having a hard time making
enough from the things they sold to pay for the factory-made
things they had to buy. To meet the problem, Ohio farmers demanded action on both their marketing and purchasing problems.
Cooperative interest in Ohio had long recognized that one of the greatest needs of Ohio agriculture was farmer- owned sources of fertilizer, seed, feed, machinery, etc.
Some of the local Granges and farmers* elevators had from their beginning provided purchasing services for their members.
The Ohio State Grange as early as 187^ (one year after it organized) is reported to have saved its members over
$13,000 on machinery and goods purchased.22 As already noted,
Wallace cited the wide margins taken on grain and supplies among the major reasons causing Ohio farmers to form ele-
22 S. H. Ellis, "History of the Grange in Ohio," Ohio Farmer. Vol. 101, January 9, 1902, p. 32. 120 vator companies. The county agents, around whom the County
Improvement Associations and county Farm Bureaus built their programs, placed great emphasis on cooperative pur chasing projects.
So when the Ohio Farm Bureau was organized (1919), the
Ohio State Grange, local elevators, and county Farm Bureaus, had set the stage for cooperative purchasing. But each group operated independently of each other. It was evident that if the buying power of these groups were combined, the effectiveness and savings through cooperative purchasing would be materially increased.
In March 1920, Murray D. Lincoln became the executive secretary of the Ohio Farm Bureau Federation. He at once began to work towards an integrated purchasing program, trying to bring order out of the unorganized conditions which existed. His whole idea was to do away with duplica tion in purchasing services being provided by all farmer- agencies.
The first step in this direction was the bringing of the
Ohio Farm Bureau, Ohio State Grange and elevator companies together in a Joint service organization — the Farmers'
Commercial Service Company which had been previously eontem- plated if not actually set up by the elevators. J The
2^Green, op. cit.. p. 1^2. 121
Farmers’ Commercial Service Company first arranged for farmers to pool their orders for fertilizer. This was a profitable venture despite strong opposition from the ferti lizer industry. It saved the farmer from three to five dollars a ton. Lincoln has reported a drop of 10 per cent in fertilizer prices when Ohio farmers first began pooling their orders. Although successful from a financial stand point, the Farmers' Commercial Service Company failed in carrying out its objective. The Ohio Farm Bureau pooled most of the orders, while the Grange and elevator companies lagged in placing their orders with the purchasing manager of the Service Company.
The failure of the Grange and elevator companies to give their full cooperation to a coordinated purchasing program, and the competition and opposition of the fertilizer industry, resulted in the liquidation of the Farmers' Com mercial Service Company and the organization on January 9,
1923 of the Ohio Farm Bureau Service Company. This company was to be wholly owned by the Ohio Farm Bureau, and was to serve as the central purchasing agent for the local county
Farm Bureau purchasing groups.
Oh. Murray D. Lincoln, "Co-ops: How Big Can They Get?," The Reporter, Vol. XI, No. 10, December 2, 195*S P« 25. 122
Although Ohio farmers through their organizations were
not successful in developing the type of marketing and
purchasing program their cooperative leaders thought
necessary, they did organize and develop effective grain
and purchasing associations which have continued to serve
their marketing and production needs.
What are these organizations? How effective are they?
To obtain an over-all picture of these organizations which
serve the grain marketing and purchasing needs of Ohio
farmers, attention will now be centered on a brief history
of the Ohio Farm Bureau Cooperative Association, the Ohio
Equity Exchange, the Ohio Farmers Grain and Supply Associa
tion, and the Ohio Farmers Grain Corporation.
2«? Ohio Farm Bureau Cooperative Association. J The Ohio
Farm Bureau Federation oh July 31, 1933, organized the Ohio
Farm Bureau Cooperative Association to take over the functions of the Ohio Farm Bureau Service Company. It is one of the largest federated regional farm supply cooperatives in the
United States.
The Association is owned by the county Farm Bureau cooperatives. There are Farm Bureau cooperatives in 83
25 The data in this section were obtained from the records of the Association. 123 counties with 230 branches. More than 125,000 farmer patrons make use of its services each year.
Mention has already been made about the financial growth of the Association (p. 37, Table 2). In 1937 its business amounted to more than 8 million dollars. Six million dollars or 75 per cent of the total represented the value of supplies purchased for patrons. The total volume of business done in
1956 was more than 67 million dollars. Of this amount, about
39 per cent, or 26 million dollars was marketing business
(principally grain), and the balance of 61 per cent, or *4-1 million dollars was purchasing business. Petroleum accounted for 23 per cent of the purchasing business; feed, 15 per cent; seed and fertilizer, 13 per cent; and farm machinery and supplies, 10 per cent.
The volume of grain handled by the Ohio Farm Bureau
Cooperative Association has increased considerably in the last
15 years. In 19^-0 the Association handled one million bushels of grain compared with 20 million bushels in 1956.
The Association has a grain marketing department and a terminal grain elevator through which 155 locally-owned
Farm Bureau elevators in 83 counties market grain for its members. The terminal elevator buys from the local units on a competitive basis with other buyers. 12b
The Ohio Farm Bureau Cooperative operates three feed
mills, six fertilizer plants, two insecticide plants, one
seed plant, and one oil refinery. Besides, it has joined
in national associations to help it in its manufacturing
operations. Along with 17 regionals, it owns jointly the
United Cooperatives, Inc., in Alliance, Ohio. Products
which it handles are paint, barn equipment, and farm supplies
of all kinds. Up until 1953> 13 regionals owned the Nation
al Farm Machinery Cooperative which operated a general farm
implement factory at Bellevue, Ohio.
The Ohio Equity Exchange Company. The Ohio Equity
Exchange Company is another regional grain and farm supply
cooperative serving the needs of Ohio farmers. Previous
to the organization of this association, the Equity Union
of Greensville, Illinois, came into Ohio during World War I
and organized some 5>0 or more elevator companies. It
organized and promoted more elevator companies in Ohio from
191*+ to 1922 than any other farm organization.
In the mid-twenties this organization failed and was reorganized in 1926 as the Ohio Equity Exchange Company.
It has continued to operate as a central agency through which farmer elevators, especially those of Equity origin, could sell their grain and buy their feed, coal, fertilizer, and other farm supplies. 125
Until about 1950, the Ohio Equity Exchange confined its
activities to handling grain and purchasing supplies on a brokerage or commission basis. Now, grain is purchased from
Ohio Equities elevators, other farm cooperatives, and some privately owned grain elevators. Farm supplies are whole
saled to member-elevators, other cooperative elevators, and independent farm supply stores.
In 1939, the Association acted as sales agency and farm supply wholesaler for 39 local elevators.^ At present
(1957) 62 cooperative elevators and 388 independents use its 27 services. '
Business of the Association In 1936 amounted to 2.3 million dollars. Seventy-eight per cent or 1.8 million dollars consisted of sales from grain marketing, and about 28 22 per cent or $ 500,000 represented farm supply sales.
In 1956 the business had grown to a 20 million dollar enter- 29 prise. About 17.8 million dollars or 88 per cent of the total came from the sale of grain and the rest from farm supply sales.
2^Dorsey, op. cit.. p. 6.
^Letter from Hubert B. Calvelage, Treasurer of the Ohio Equity Exchange Company, dated April 27, 1957.
2^Dorsey, op. cit.
^Letter from Hubert B. Calvelage, op. cit. 126
In 1935 the Association had a net savings of $15,622;
in 19*+5, $*+3,762; and In 1955, $312,667. Net savings
amounted to $275,261 at the end of its fiscal year, January
31, 1957. Since the Association was organized, it has
allocated over 1.6 million dollars in patronage refunds.
The financial conditions of the Ohio Equity Exchange
Company as of January 31, 1956 and 1957, is shown In the
following statement:
Assets: 1956 1957
Current Assets $1,151,960 $1,*+75,009
Fixed Assets (Net) 1,222,265 1,513,079 Other Assets 3*+. 612 37.916
Total $2,^-08,837 $3,026,00*+
Liabilities and Net Worth:
Current Liabilities $ 873,172 $1,266,039
Other Liabilities 239,706 358,183
Net Worth(capital & reserves)! ,295,959 1.*+01,782
Total $2,*+08,837 $3,026,00*+
The Ohio Farmers Grain and Supply Association. For
some years before 1929, the Ohio Farmers Grain Dealers Association had made an attempt In cooperation with the Ohio
State Grange and the Ohio Farm Bureau to operate a central buying agency. Reference has already been made to this 127 effort. By 1929 the Ohio Farm Bureau Service Company had made great progress In Its purchasing program. Elevators had continued to make purchasing services available to their members. But the question of centralized buying kept coming up. In 1929 the Board of Directors of the Ohio Farmers Grain
Dealers Association held several meetings to study the problem. They decided to incorporate the Ohio Farmers Supply
Association, with headquarters it Fostoria, as a wholesale source of farm supplies for member associations.
The Federal Farm Board was organizing the Farmers
National Grain Corporation about the same time when the Ohio elevator group was organizing their central farm supply association. To participate in the national grain program, the Ohio elevator group broadened its program and changed the name of its supply association to the Ohio Farmers Grain and Supply Association. It turned over its grain marketing functions to the Farmers National Grain Corporation. This arrangement continued until the Farmers National Grain
Corporation was dissolved in 1938. In the meantime the Ohio Farmers Grain and Supply
Association went about providing its member elevators with feed, fertilizer, seed, fence posts, and petroleum products. The Association is now serving some 230 elevators. 128
In 1956 the Ohio Farmers Grain and Supply Association
did a volume of business of about 3.5 million dollars, and
since it was organized it has allocated over $7^8,000 in
patronage refunds to its m e m b e r s . Information on total
patronage paid to non-members is not available at this writing.
The financial condition of the Ohio Farmers Grain and
Supply Association as of June 30, 1956 is shown in the follow
ing statement:
Assets:
Current Assets $ 788,087.71
Fixed Assets (Wet) >+22,032.27
Other Assets 5V. 3 llf.78
Total *l,26V,lf3lf.76
Liabilities and Net Worth:
Current Liabilities $ 177,036.91 Other Liabilities 1>+1 ,900.00
Net Worth(Capital stock, patrons 9^5,^97.85 equity and surplus)
Total $l,26>+,l4-3l+.76
^Letter from S. E. Salisbury, General Manager of the Ohio Farmers Grain and Supply Association, dated April 29, 1957. 129
The Ohio Farmers Grain Corporation. The Ohio Farmers
Grain Corporation is a regional grain marketing association.
As noted before, the Ohio Farmers Supply Association
in cooperation with the national grain program, broadened its functions to include grain marketing. It then turned
over its marketing functions to the Farmers National Grain
Corporation. But when the corporation went out of business
in 1938, the Ohio Farmers Grain and Supply Association set
up the Ohio Farmers Grain Corporation as a separate
association devoted entirely to grain marketing. Many Ohio
farmers’ elevators who formerly sold grain through the
Farmers National Grain Corporation then began selling their
grain through this new Association.
In 1956 the Ohio Farmers Grain Corporation marketed
grain for 110 elevators located principally in northwestern
Ohio. It did a gross volume of 27 million dollars that y e a r ?
Trends in grain cooperatives. Table 16 shows the trends of grain cooperatives in Ohio and other East North Central
States over a five-year period, 1950-51 to 195l+— 55-
■51 Letter from Nelson J. Cotton Jr., Manager of the Ohio Farmers Grain Corporation, dated April 29, 1957. 130
TABLE 16
TRENDS IN GRAIN COOPERATIVES,♦ 1950-51 to 19 5*+-55
Percent Item and Area . 19.5^-55 1950-51 Change
Number of Associations:
Ohio Ilk 110 /3.6
East North Central States *+32 *+•37 -1.1
Membership:
Ohio 56,980 >+7,311 /20.*+ East North Central States 277,720 238,96*+ /16.2
Dollar Volume of Net Sales*^ (Thousands)
Ohio 136,*+28 79,711 /71.2
East North Central States *+68,629 378,322 /23.9
♦Classified according to major product handled.
♦♦Represents the value of grain marketed by specialized grain cooperatives and other cooperatives which handled grain as a sideline.
SOURCE: Gessner, o j d . cit. 131
For the East North Central States the number of associations showed a slight (1.1 per cent) decrease, but membership increased 16 per cent, and volume of business increased almost 2k per cent.
In Ohio the number of associations increased almost four per cent, membership 20 per cent, and volume of business increased 71 per cent for the same period.
Over the years, studies made by the Department of
Agricultural Economics Extension Service at Ohio State
University show that the financial operations of Ohio coopera tive elevators are good. Table 17 shows some of the financial aspects of these elevators.
Ohio regional grain elevators have provided the grain marketing services needed at terminal markets by local cooperative elevators. They have increased their capacity so that farmers now can store more of their grain rather than flooding the market at harvesting time.
In 19*+9 Ohio farmers had to sell their wheat as much as
35 cents below the government loan price because storage space was not adequate to store it until the market got better.32
32 Columbus DispatchT September 11, 1955> P* 19E. 132
TABLE 17
SOME FINANCIAL ASPECTS OF OHIO FARMERS' ELEVATORS 1933-3L to 1953-5*+
1933-3*+ 19*+3-*+*+ 1953- 5*+
Number of Cooperatives l *+9 138 119
Average Dollar Volume 102,28*+ 1+05,590 672,390
Average Gross Income 12,709 *+o ,733 61,998
Gross Income as a Percentage of Volume 12.*+ 10.0 9.2
Total Expenses as a Percentage of Volume 10.8 6.3 6.9
SOURCE: Financial Operations of Ohio Cooperative Elevators (Columbus: Ohio State University, Agricultural Extension Service, Department of Agricultural Economics, Mimeographed Bulletins 75? 179and 265, dated October, 193*+, 19*3*+ and 195^ respectively). CHAPTER VIII
LIVESTOCK COOPERATIVES
Early Developments In Ohio
The growth of the livestock industy and the associated
growth of livestock cooperatives have provided an interest
ing chapter in the history of farmers' efforts to build
self-help institutions to take care of their livestock
marketing problems. Records show that the livestock in
dustry and cooperation have grown up together in Ohio.
After 1783 there was a new era in American agricultural
history; the most important feature was the agrarian migra
tion and the shifting of the center of livestock raising
to the Ohio Valley.1
From 1815 to 19305 Ohio was the main cattle and hog
raising section of the United States. In fact, cattle
raising was the first specialized type of farming in Ohio.
It began around Chillocothe but was soon over the whole
Scioto Valley. While the Scioto Valley was the heartland
R. A. Clemens, "Cattle Trails as a Factor in the Development of Livestock Marketing," Journal of Farm Economics. Vol. VIII (Menasha, Wisconsin: The American Farm Economic Association, October, 1926), p. ^27.
^Chastina Gardner, Beginning of Cooperative Livestock Marketing (Washington, D. C.j USDA, A Preliminary Report, April, 1929).
133 13^
of the Ohio cattle industry, the Miami Valley was the
region of greatest concentration of swine. Cincinnati and
other river towns became the centers of pork packing. In fact, Ohio's Miami Valley became the chief region of surplus pork production, and Cincinnati was known as Porkopolis.
During this period, probably one of the earliest forms of cooperative effort was that of informal rudimentary cooperative marketing agreements among neighboring farmers in driving livestock to distant markets. To one or two members of the group was entrusted the job of driving the animals to market and selling them. The location of supply at one point and demand at another necessitated this method of marketing at that time. The large consuming centers were the cities of the east, and it was necessary to develop routes for driving livestock to these markets. The routes, or overland trails as they were sometimes called, were not even roadways. They were mere tracks of footprints through the wilderness.
These cattle trails figured very prominently as a factor in the development of livestock marketing in Ohio.
Even before 1800, a group of men in the Scioto Valley develop ed an extensive livestock industry and sent thousands of cattle over the trails to the seaboard cities.3 Although
3Ibid.. p. 2 135
drove marketing in Ohio was begun before 1800, George Renick
is usually given the credit for starting the movement. In
1805 he drove sixty-eight head of fat cattle from the Scioto 1+ Valley to Baltimore, Maryland. He is also credited with
having charge of the first western cattle drove to reach
New York — being driven through from Ohio in 1818.
Another drove was that of Felix Renick of Chillocothe, who
in 1817 drove 100 head of choice fat steers weighing 1,600
pounds or more to Philadelphia where they were sold for
$13^*00 per head.8 In l8*+l, R. R. Seymour, of Ohio drove
8^0 cattle through to Philadelphia.7 In 1810 it was esti
mated that about *+0,000 hogs annually were driven from 8 Ohio to Baltimore, Philadelphia and other eastern markets.
During the 1820's the figure ran as high as 100,000 annually.
It is possible that some of this stock was driven by
farmers themselves under some sort of cooperative plan.
For example, the early "cattle kings" with large heads could
^Charles S. Plumb. Marketing Farm Animals (New York: Ginn and Company, 1927$, p. 13. K A. A. Dowell and K. Bjorka, Livestock Marketing (New York: McGraw-Hill Book Company, Inc., 19*+1)» p. 217*
^Plumb, op. cit.. p. 13.
7Ibid.. p. Ik.
8Ibid., p. 15. 136
drive their cattle across country to market, but small
producers could not do so individually. Undoubtedly, the
problem of getting his cattle to market led the small pro
ducer quite naturally to associate with his neighbor for
this purpose.
In those early days, a popular route from the Scioto
Valley of Ohio was north to Columbus? then east over the
National Pike to below Wheeling, West Virginia; then on
through Connellsville and Bedford, to Carlisle, Harrisburg,
Lancaster, and Philadelphia, Pennsylvania; and New Y o r k . ^
Thus, over the heavily wooded forest-trails and waterways where today the Baltimore and Ohio and Pennsylvania Rail roads make their way down to the seabord cities, Ohio farmers drove thousands of cattle, hogs, and sheep each year from the Scioto Valley and Ross County, from Gallipolis and
Marietta, and the Muskingum River County to eastern markets, thereby playing a prominent part in the history of the new west, and in many cases demonstrating the value of coopera tive efforts among neighbors who had similar problems in getting their livestock to markets.
Among pioneer farmers, there were a few attempts at business organizations. The Miami Exporting Company was
9Ibid., p. Ih. 137
organized in 1803^°— thought not a cooperative organization,
yet it had for its purpose the finding of a market for the
agricultural products of the state, and it actively sought
to enlist the support of the farmers as well as that of merchants. It later developed into the first bank in Ohio.
An organization coming more within the concept of cooperative, as loosely defined, was the Licking Exporting
Company. This company was organized in 1820 by a group of Welsh settlers near Granville, Ohio. This venture is considered as one of the earliest attempts in cooperative livestock selling and is recorded as being the first live stock cooperative in the United States. It was composed of farmers who came together for the purpose of sending their livestock to market. They first marketed hogs. The animals were put into the custody of representatives of the company and driven to Sandusky, Ohio where they were slaughtered and packed for shipment by boat to Montreal.
The company realized only $1.2$ per hundred. This was too unprofitable and the venture was not repeated.
In a bulletin of the Ohio Agricultural Experiment
Station, some statements relative to this organization were:
This attempt at business cooperation is the first in the State of which we have an account, and possessed most of the elements of ideal, modern cooperation: (1) the product was brought
■^Lloyd, Thorne and Falconer, op. cit., p. 83. 138
together at the point of production; (2) it was transported economically; (3) it was uniformly handled and packed; (M-) it was presumably sent to the best market; and (5) a representative of the company was at the point of sale.11
Although the company seemed to have followed sound
business practices, no records are available as to the
exact cause of failure.
Another manifestation of an earlier form of cooperative
efforts among livestock men of Ohio was the importation of
cattle. In 1833 the Governor of Ohio and several others
formed a quasi-cooperative known as the Ohio Company for
Importing Cattle. They secured stock subscriptions to the
amount of $9*200 in shares of $100.00 each, and sent three
men to England to buy cattle. These buyers brought back
19 animals of the Shorthorn breed, which were shown at the exhibition of the Ross County Agricultural Society, October
31, 183*+. More animals were brought in from time to time and in 1836 a sale was held, said to be the first public
sale of thoroughbred cattle in the United States. The ven
ture was so successful that when the company closed its affairs on April 1, 1837* each share of stock was worth
$280.00 a total of $25,760.12
11Ibld.. Pp. 83-8^. 1 ? Gardner, op. cit.. Pp. 1-2. 139
Nourse and Knapp make reference to an article appearing
in the Ohio Cultivator on March 1, 1850, in which a descrip
tion is given of an association of cattle drovers and
feeders of the Scioto Valley, organized as "The Association
of Feeders and Drovers of the Scioto Valley." The purpose
of this association was to secure market outlets in the
eastern markets.^3
In the years following the Civil War, cooperative
livestock auctions were operated for a time at several places in Ohio. A few producers near Mt. Vernon, Ohio
sought to establish better markets and to improve their livestock. They formed an association in 1885 called the
Knox County Livestock Exchange. This organization proved very successful for both buyers and sellers. The buyers could obtain more readily and cheaper than by going from farm to farm, and the sellers had the advantage of free advertising and competitive bidding by a large number of 1^ buyers.
Some Wo years ago, C. F. Taeusch of the Ohio Agricul tural Experiment Station at Wooster, made the first record
E. G. Nourse and J. G. Knapp, The Cooperative Marketing of Livestock (Washington, D.C.: The Brookings Institution, 193l)j p. 11.
ill Gardner, op. cit.. p. 5. iWo
ed survey of farmers' cooperatives in Ohio. It is interest
ing to note what he had to say then about cooperative live
stock associations in Ohio. Here is what he saids
Cooperation for the purpose of selling animals for slaughter is not only not practiced but is absolutely untalked of. This may be due to the fact that the grower is very independent in the sale of a product when he can hold back and Increase while waitihg for an improvement of the market. The present marketing condition, in which buyers purchase cattle and ship them, is far from being satisfactory, but the solution worked thus far has been for the individual producer to turn to stock-raising almost exclusively and thenjnarket his own cattle in some large city.1?
Livestock cooperative associations in Ohio have come a long way since Taeusch's survey. There have been many dynamic and phenomenal changes that have taken place both in form and in organization. Today, farmers livestock coopera tives blanket all the heavy livestock producing areas in the State.
Attention now will be directed to what might be called the real beginning of cooperation in livestock marketing.
Local Shipping Associations
Small local cooperative shipping associations were the earliest forms of livestock cooperatives. They may be con-
15 C. F. Taeusch, op. cit., p. 20. 1^1
sidered as being a step in advance of the earlier pioneer
cooperative efforts which have just been cited only in
respect to time and to the mode of transportation which
was used. Certainly, cooperative endeavor seems to be a
part of man's basic nature. Over time it has taken on
many forms.
Most of the locals were strictly local in character,
informal in organization, and were organized about the
local market. Their purpose was to serve only the farmers
surrounding a local loading point. For example, in many
areas of the midwest several farmers in the community would make up a shipment of stock and send it by rail to terminal markets. These joint efforts on the part of farmers soon led to the establishment of thousands of local livestock shipping associations from 1900 to 1930.
Why were the locals formed? ^ In the Eastern Corn
Belt are found many diversified farms producing small numbers of cattle, hogs, and sheep. This was more so at the beginning of this century thah now. The average family farm produced livestock in less than carload lots and the farmer was confronted with a problem of getting his stock to market. Besides, roads were poor and truck
^Nourse and Knapp, op. cit.. Chapter III. Ik2
transportation had not yet come into the picture. Market
information was not adequate to meet the farmers' needs.
Radio and other communication media, in most part, did not
exist. And the coming of the railroads did not reduce the
disparity in marketing opportunities between large and
small producers of livestock. Large producers could ship
direct in carload lots to terminal markets, but the small
producer had to depend on local buyers who assembled small
lots of livestock for shipment.
Consequently, the local buyer came to occupy a promi
nent and conspicious place in the marketing system of
small producers who marketed less than carload lots. This
local buyer either operated independently or acted as
buyer for local slaughterers or distant traders in large
railroad terminals close to packers in big consumer centers.
For several decades the local livestock buyer was the main buyer of the farmers' livestock. His services of buying, grading, assembling in carload lots, and arranging for the transportation and sale of the livestock were essential. He was performing necessary marketing functions.
Essential as these functions were, the farmer came to believe that the local buyer was taking undue advantage of him. He had a suspicion that the operating margin was wider than seemed justifiable. Specifically, the farmer l*+3
became dissatisfied with the service given him by the local
livestock buyer and began thinking in terms of some sort of
cooperative agency that would correct what he believed to
be unfair and often discriminating trade practice in the
market.
With this sentiment growing among farmers, it was not
long before they formed their own agency — the local ship
ping association. The farmers around a shipping point would unite to form a shipping association, have someone
to weigh and mark the stock they had to sell, and ship it
to some terminal market. They took over the functions which the local buyer had been performing, and replaced him wholly or in part in many local markets.
In Ohio there has been a steady decline in the number of local buyers operating at county points. For example, in 1937 the Ohio Department of Agriculture listed 939 local buyers, but In 1 9 % it listed only 122 with 198 agents acting for these buyers.
The general movement. One of the best known of the early livestock associations was the Goodlettsville Lamb and
Wool Club of Goodlettsville, Tennessee which started the practice of selling lambs and wool on a cooperative basis as early as 1877. This association is still operating. I1*1*
The Farmers Shipping Association of Superior, Nebraska
which was organized in 1883 is usually considered to be the 17 first association of the strictly cooperative type. ' After
the organization of this association, more than 20 years
passed before other communities and other states showed an
interest in this type of organization.
The next association began operations in Iowa in 190^; 1 O Wisconsin in 1906; and Minnesota in 1908. During the
next few years a number of associations were started in
the livestock producing sections of the United States.
The normal course of the movement seems to have been
from west to east with Ohio marking practically the eastern boundary.
The peak of the shipping association movement was
reached in 1926 when over 5,000 were operating in the 19 middle western states.
Reasons for the late beginning of the movement in Ohio.
Cooperative livestock shipping as a marketing institution was well established by 1916. While in that year Minnesota
^Bakken and Schaars, o£. cit., p. 53.
l®Dowell and Bjorka, 0£. cit., p. 157. 19 C. G. Randell, "Livestock-Wool Co-ops Blanket Most of Nation," News for Farmer Cooperatives (Washington, D.C.: Farm Credit Administration, Vol. XVII, No. 10, January, 1951), p. 7. ]>5
had 200 livestock shipping cooperative associations, and
there were some 300 in Wisconsin, Nebraska, Iowa, and
neighboring states; Ohio had one, and it was three years 20 before another one was formed. Thus, cooperative live
stock shipping associations first had its beginning in the
Western Corn Belt region, then moved eastward and finally
into Ohio which practically was the eastern boundary of
the movement.
Before going into the organization and development
of the movement, it may be appropriate at this point to
inquire as to why Ohio got a relatively late start in view
of the rapid development of the movement in other areas.
Wallace suggested that the following factors were
perhaps responsible for the late beginning of cooperative
livestock shipping associations in Ohio:
1. Ohio was a region of diversified farming, rather than a specialized livestock area.
2. Prosperity was general in the state thus making cooperatives unnecessary.
3. Keen competition for livestock by interior packers and terminal markets has resulted in paying fair prices at the farm.
20 B. A. Wallace, Cooperative Livestock Marketing in Ohio (Wooster: Ohio Agricultural Experiment Station, Bulletin 375, 192*0, p. 3*f. 1^6
*f. Advantages of relatively cheap trans portation made possible by good roads and nearness to eastern markets.
Perry L. Green, formerly president of the Ohio Farm
Bureau Federation expressed similar views about cooperation
in general in Ohio. The fact that cooperative shipping
did not strike the popular fancy in Ohio until it had
achieved a considerable reputation in other sections, may
also be due to what Green calls, "an attitude of economic
and political conservatism which dominated the thinking and
activities of Ohio farmers as well as the people in
general."22
Other lines of reasoning, and certainly plausible
ones, were those offered by Earl B. Poling. Poling suggest
ed that
...Ohio’s late beginning might well be found on the basis of a lack of promotion before 1919• Another might well be the influence of World War I, in which attention was directed towards production rather than marketing.23
Inasmuch as no one has ever made an analysis of the exact causes for Ohio’s tardiness, it would appear safe to
21Ibid. ?? Green, ojd. cit.. p. 5^.
23Earl B. Poling, The History of Cooperative Livestock Marketing in Ohio (Columbus: Ohio State University, un published Master’s thesis, 1939)» P« 12. 1^7 assume that not any one factor, but rather a combination of the factors cited were responsible for the delay of the shipping association movement in Ohio.
The beginning of the movement in Ohio. Livestock shipping cooperatives in Ohio got their start when a hand ful of New Concord (Muskingum county), Ohio farmers joined in 1916 to sell livestock on a terminal market. Three years later (1919) another association was established at
Hicksville (Defiance county), and thereafter, several more were organized mostly in the northwestern part of the state adjacent to Indiana and Michigan where the cooperative oL. movement was developing more rapidly,
Earl McCall, a farmer, near Cleveland, Ohio organized the New Concord association. It is reported that the
Community felt a need for the association, and since the McCalls had at one time lived near Cleveland and sold livestock through the stockyard there, farmers around that community saw no reason why they could not ship their own stock.25
W a l l a c e , op. cit., p. 35.
^Poling, pp. cit.. p. 7 (Poling’s source of infor mation is from a letter written in 1927 by McCall to Dr. George F. Henning of the Agricultural Economics Department, Ohio State University). 11+8
The association had such steady growth that by 1920
it had over 300 regular shippers.
Farmers* elevator organizations in Ohio gave a great
deal of support to the development of these shipping
associations. The period of rapid growth in the number of farmer’s elevators came before the expansion of live
stock shipping cooperatives by 5 to 10 years, and afforded sound evidence that farmers' business cooperatives were 27 practicable.
Farmer elevators were the first organizations in
Ohio to undertake the cooperative marketing of livestock.
The majority of them began shipping livestock in 1918, nO 1919 and 1920. This was done as a sideline to their main business.
Although farmer elevators spearheaded the movement of cooperative livestock marketing in Ohio, records show that the formation of the shipping cooperatives came mostly from the efforts of farmers in the community and from county agents, but very little from the professional
26Ibid.. p. 8.
^Nourse and Knapp, op. cit., p. 1^-.
2®Edgar Arneson. The Cooperative Marketing of Live- stock the Local Shipping Association and Farmer Elevator (Columbus: Ohio State University, unpublished Master's thesis, 1928), p. 82. 29 promoter. ' By the end of 1923, Ohio farmers had formed
2k local livestock shipping cooperatives. The majority
of them were formed in 1919, 1920 and 1921.^°
County-Wide Shipping Cooperatives
At the turn of the twenties cooperative leaders began
thinking about a change in the organizational structure of
livestock shipping associations. This new approach was
not concerned with organizing more locals on a local level,
but rather a plan whereby there would be a centralization
of several small locals into county organizations. This
system was not entirely new to Ohio cooperative leaders;
for in 1917 F. G. Ketner had set up the first county-
wide association in Delaware county.
Cooperative leaders felt that with about 15 years of experience gained from local shipping cooperatives in Ohio and neighboring states, Ohio was now in a position to choose a type of organization that would provide a more uniform and coordinated system of livestock marketing.
29lbid., p. 20.
3°Ibid.
31R. L. F o x and C. G. Randell, Decentralized Market ing by Producers Livestock Cooperative Association. Columbus O h l o CWashington. D.C.i Farm Credit Administration, Bulletin 65, 1951), p. 3. 150
This the locals had not done. True, they were performing
a necessary function, but not a sufficient one.
Then too, the local associations were confronted with
problems both within and outside their body. Problems of
competition (especially with old line buyers), small
volume, disloyalty of members, and complaints from customers
were some of the troublesome issues which they had to face.^
The Ohio Farm Bureau Federation undertook the cooper
ative marketing of livestock soon after it was organized
in 1919. It formed a department of livestock marketing and
appointed Ketner in charge.
At about the same time, the local shipping associa
tions had organized the Ohio Livestock Shippers Association.
Representatives of this association spent weeks in visiting
cooperative livestock organizations in Illinois, Kansas, 33 Nebraska, Minnesota, Iowa, and Winnipeg, Canada. Upon
completing this trip, local livestock and farm bureau leaders met and made some decisions about the type of cooperative marketing system they wanted in Ohio. As a
32Ibid.. Pp. 75-76.
33Wallace, op. cit., p. 35» 151
result, they agreed that the county p l a n ^ was best suited
for the state. The county-wide system as it came to be
known, had one company for the whole county with one
board of directors.
In a typical county-wide shipping association, live
stock was concentrated at a large assembly-point yard
directly, or at sub-stations, for the county as a whole.
The livestock was then sorted and assembled into carloads.
From this type of organization (centralized type) develop- ed the cooperative concentration yard,-" and the first real attempt towards developing a local sales organization.
The need for physical facilities made capital needs small, so the non-stock form of organization was widely used.
To get the system moving, it was necessary to do a lot of promotional work; so in 1921 Ketner campaigned over the state outlining the advantages of the county-wide plan. He emphasized that the county-wide plan —
oL. J This form of organization originated at Palmyra, Missouri. Officials from Ohio obtained a copy of the constitution and by-laws of this association and patterned after it.
•^Farmer Cooperative Service Bulletin 1, oja. cit. p. 8 3 . 152
1. Provided uniform methods, records, and contract.
2. Gave better attention to claims for damages etc.
3. Provided better service by commission companies.
*+. Operated with lower expenses.
5. Insured at lower rates.
6 . Gave coordination in marketing.
7. Would with a large volume attract higher caliber men.
8 . Provided greater flexibility in shipping by having interchanging membership.
9. Shipped by grade.
10. Would regulate the flow of livestock by having one manager rather than a number of competing local managers.36
It should be remembered that at the same time that emphasis was being placed on county-wide associations, the local associations were having their largest growth. So besides advancing arguments in favor of county-wide associations, Ketner also had to show the advantages which the county-wide associations would have over the locals.
Under the supervision of the Ohio Farm Bureau and the promotional direction of Ketner, rapid strides were made in pushing forward the organization of livestock shipping cooperatives on a county-wide basis.
^Wallace, op. cit., Pp. 72-73 153
By 1925, county associations had been organized in
63 counties in Ohio, and covered the most important live stock areas in the state.
In less than a year after the organization campaign throughout the state had begun, it was reported that
17,908 shippers had used the associations and were operat ing in *f6 counties, furthermore, 3j755 cars of livestock had been shipped to terminal markets; and that after all charges had been taken out, shippers had received ^.8 million dollars. '
Data concerning savings were also given. For example, in conjunction with the above information, it was reported that old line buyers average margins were $1.50 per hundred on hogs; $2.00 on cattle; $2.50 on sheep; and
$5.00 to $6.00 on calves. The association costs had been
$ 1.06 per hundred — a saving of M+ cents — using $1.50 as the per hundred average. This represented a saving of
$1^,00 to each shipper.38
A survey of all shipments made cooperatively in
Portage County, Ohio, in 1920 showed that a saving of over
3^Green, oja. cit. T p. 127.
38Ibld. $50,000, or 5 per cent, was made out of a shipment of approximately 1 million dollars. ^
The livestock marketing program continued at an accelerated rate once the pattern had been established.
Most of the heavy livestock producing counties were organized on a county-wide basis, and the system of live stock marketing in Ohio received wide publicity in other livestock areas.
The Need for a State Organization
At or about the time that efforts were being made in Ohio to organize cooperative livestock marketing on a county-wide basis, another development was about to take place. A state organization to assist locals was being advocated by cooperative livestock interests. This was done because it was felt that in dealing with business organizations like railroads, stockyards, and packers, etc., the small local associations would have little influence, and would not be able to undertake any large- scale marketing program. But a state organization representing a large volume of cooperative shipments could command respect and afford to make efforts necessary to protect cooperative livestock interests.
39The Ohio Farmer T October 1, 1921. 155
Then too, it was felt that a state organization
would provide the means through which the locals could
discuss and study their common problems, and in the mean- 1+0 time unite the efforts of all livestock interests.
As a result of this thinking, the first of a series
of meetings of local association delegates, farm organi
zation leaders, educators, agricultural extension workers, and livestock producers was held at the Southern Hotel,
Columbus, Ohio March 8-9, 1920. The meeting resulted in the formation of a federation of livestock shipping associa tions known as the Ohio Federation of Livestock Shippers — later changed to Ohio Livestock Shippers Association.
The resolution adopted at the first meeting called for the cooperation of all existing farmers' organizations, the adoption of a uniform system of accounts for all live stock associations, and the study of the costs of marketing livestock.
i+o In 1920 there were three distinct agencies coopera tively marketing livestock — farmers' elevators, local shipping associations, and county-wide associations — all operating independently of each other. Poling, op. cit., p. 11. 156
At the first annual meeting in March, 1921 a plan
of affiliation with the Ohio Farm Bureau Federation was Lfl worked out„
The state association maintained and developed a
state wide educational campaign and encouraged the
formation of additional livestock shipping associations
on a county-wide basis. After operating for three years,
it was incorporated December 13, 1923 as the Ohio Live
stock Cooperative Association, and affiliated with the
Ohio Farm Bureau. Ketner was named secretary and placed
in charge of the organization to carry out its adopted
policies.
The Ohio Livestock Cooperative Association worked
closely with the livestock marketing department of the
Ohio Farm Bureau developing shipping associations on a
county-wide plan. In fact, it became the livestock market
ing department of the Ohio Farm Bureau, but kept its
identity in name as a separate organization.
Under the continued management and direction of Ketner,
the Ohio Livestock Cooperative Association according to
Green,
1 + 1 For a detailed discussion of subsequent meetings, plans, and the nature of its affiliations, etc., see Wallace, op. cit.. p. 6 3 . 157
...made the greatest over-all success in correlating its organization and perfecting its service from the farmer to the processor, of any of the marketing cooperatives. It was an exceedingly, well-integrated organization within itself.4-2
In 1930 the Ohio Livestock Cooperative Association
in accordance with the policy of the Federal Farm Board,
severed its relations with the Ohio Farm Bureau, and opened
its membership on a livestock commodity basis to all pro ducer- shippers .
One of the requirements of the Federal Farm Board called for complete separation of membership in local cooperatives from any Ohio Farm Bureau membership affilia tion in order to be eligible for Federal Farm Board loans.
Besides, it had been the early intention and practice of the local livestock and other cooperative units of the
Ohio Farm Bureau family to confine or show preference of service to Farm Bureau members. The requirement of the
Federal Farm Board that there be no legal connection between cooperative association membership and Farm Bureau membership greatly disturbed the relationship between the two organizations.
Mr. Ketner left the Ohio Livestock Cooperative Associa tion in 1929 and became affiliated with the National Order
Buying Company.
5+2 Green, 0£. cit.. p. 181. 158
From 1930 to 193*+ county associations were in a bad
financial condition and in many cases were unable to pay
the one-cent per hundred fee to the state organization
for livestock shipments.
The inability of the county associations to pay the
one-cent fee to support the state association greatly
reduced the effectiveness of the organization. As a
result, cooperative terminal agencies had to do much of the field work for the county associations. In fact, these agencies finally took over all the services and functions formerly performed by the Ohio Livestock Cooperative
Association.
Things went from bad to worse until in 193^ the or ganization which had done so much for cooperative live stock marketing in Ohio dissolved.
Among the reasons given for the failure of the Ohio
Livestock Cooperative Association were:
1. Increasing bad financial conditions in the county
associations which reduced the state organization’s
income.
2. Differences which arose between county-wide
associations and cooperative terminal agencies. 159
3. National decline in economic conditions.
k. Changing methods of livestock marketing.^
Cooperative Selling on Terminal Markets
Dissatisfaction with marketing conditions and
practices and the belief on the part of farmers, represent
atives of livestock cooperatives, and farm organizations
that marketing services could be Improved and costs re
duced, led to the establishment of producer-owned sales
agencies on terminal markets. Although farmers through their farm organizations had made earlier efforts to operate on terminal markets, it was not until 1917 that the Farmers' Union set up the first successful sales agency on the Omaha market. This marked the beginning of the major movements to establish large scale livestock organizations. From 1917 to 1923 the Farmers' Union established sales agencies on 8 terminal markets.
About 1920, another farm organization, the American
Farm Bureau Federation, began to actively sponsor the organization of cooperative livestock marketing associa tions. The movement started by the American Farm Bureau is important in the history of cooperative livestock marketing; for it prompted and gave further stimulus to
^Poling, ,2£. cit.. p. 52. 160 the idea of cooperative sales agencies on public markets.
On October 8, 1920, J. R. Howard, President of the
American Farm Bureau Federation, in a meeting in Chicago, appointed a committee to study livestock marketing and kli to recommend a marketing program. This committee became known as the Committee of Fifteen.
The committee made its report in November 1921.
The plan was to include a network of sales agencies in the various terminal markets which were to be affiliated with a national association. There would also be separate but affiliated stocker and feeder associations, and all would be integrated with the existing system of local livestock shipping associations. The committee enthusias tically proposed a program of "orderly marketing."
In November 1921 the National Livestock Producers'
Association was organized largely under the sponsorship of the American Farm Bureau Federation. This was the national agency that the Committee of Fifteen had recommend ed in their report. It was established to provide an overhead organization to assist in organizing and coordinat ing the work of the selling agencies.
See Nourse and Knapp, op. cit.. Chapter 8 161
A rapid increase in the number of selling agencies on terminal markets took place during 1922 and 1923 as a result of the assistance of the National Livestock
Producers' Association. In 1953 there were 38 coopera- L.< tive sales agencies operating at 29 terminal markets. J
In 1930, with the assistance of the Federal Farm
Board, the National Livestock Producers Association became the National Livestock Marketing Association, but in 19M+ the organization changed its name back to National Live stock Producers Association.
The national association provides its member agencies with such services as credit, research and market information, transportation, and legal assistance. It also carries on educational work, represents its members in legislative matters, and performs public relations service for them. The association does not do any marketing.
Producers terminal sales agencies in Ohio. Encourag ed by the impetus given cooperative marketing by the
Committee of Fifteen, cooperative livestock leaders in
Ohio closely followed the development of the plan. For some years they had looked forward to establishing
^Farmer Cooperative Service. Bulletin 1, op. cit., p. 85. 162 cooperative commission houses at Ohio’s principal terminal markets. The volume of livestock shipped cooperatively by shipping associations in Ohio increased to the extent that an immediate need for the organization of coopera tive commission companies became apparent.
Although for the most part cooperative shipments received fair treatment when sold by old line commission firms, farmers realized that any circumstance which might change the attitude of these men toward cooperative shipments would practically render the shipping associa tions ineffective.
Livestock Interests in Ohio worked out a plan for the shipping association or farm bureau of each county to loan to the Ohio Livestock Shippers' Association $100.00 to $800.00. The amount assigned to each was determined by the volume of livestock in the county, strength of the cooperative association, and by the share Ohio furnishes of the livestock going to that market. This method of financing totalled approximately $2 5 ,0 0 0 , and out of this fund the Ohio Livestock Shippers' Association was to advance a loan to each producers' commission agency as a part of its working capital.
Wallace, op. cit., Pp. 6l*-65. 163
In 1922, six producers selling agencies were establish
ed on terminal markets in other areas. One of these at
Buffalo, New York; received a considerable volume of Ohio
livestock on consignment selling. Ohio livestock leaders
took an active part in the establishment of this agency.
On May 15, 1923» the Producers Cooperative Commission
Association, Cleveland, Ohio was opened; and on October 15,
1923, the Producers Cooperative Commission Association,
Pittsburgh, Pa., began operations on the Pittsburgh market.
The Producers Cooperative Commission Association at
Cincinnati was incorporated on October 8, 1921*, and began
operating on February 10, 1925. It was one of the last
livestock sales agencies formed under the impetus given to
cooperative livestock marketing by the Committee of Fifteenth
At present (1957) it has branches at Dayton, Hillsboro,
Springfield, Eaton, Ohio; and Bath, Indiana.
These cooperatives on terminal markets met with
stubborn resistance from the old line market dealers, but
the large amount of livestock comihg from local association^ was of sufficient volume to weather the opposition.
1+7 H. H. Hulbert, Cooperative Marketing of Livestock at Cincinnati (Washington, D.C.: Farm Credit Administration, Bulletin 3 S 1939), p. 3. The Decline in Shipping Associations in Ohio
Once the pattern was set, Ohio farmers organized
several shipping associations. By 1925-26, 7k had been organized. But after this, the number began to decline
(Table 18).
In 1937, cooperative associations were marketing live stock mainly on a county-wide basis at Circleville,
Coshocton, Belfontaine, Kenton, and Upper Sandusky.
Smaller cooperatives were located in Darke, Licking, High- 1+8 land, Putnam, and Holmes counties.
Of the original 63 county associations organized in the early 1920's — only those in Pickaway, Darke, Putnam, and Wyandot counties were operating as independent units in 19i+i+.i+9
At present (1957) only the associations located in
Putnam and Pickaway counties are now operating as indepen dent associations.
Until the railroad set the stage for transportation about the middle of the nineteenth century, overland cattle drives and transportation by water were common ways of moving livestock from producer to market.
^ O M o Cooperatives: Their Business Activities. op. cit.. p . *+. l+o 7Henning and Mann, jop. cit.. p. 10. 165 TABLE 18
NUMBER,* ESTIMATED MEMBERSHIP AND ESTIMATED BUSINESS OF COOPERATIVES MARKETING LIVESTOCK IN OHIO FOR SPECIFIED PERIODS 1913 to 195*+-55
Humber of Estimated Estimated Value of1 Period Associations Membership Net Sales** (SlOOO) 1913 1 *** 3 1915 1 ** * 58 1921 1+6 * ** 6,891 1925-26 7*+ 27,700 22,000 1927-28 70 32,000 20,500 1929-30 73 *** *** 1930-31 65 2 7 ,500 19,000 1931-32 63 35,000 15,000 1932-33 66 *+0,000 13,000 193^-35 1+6 38,000 15,500 1935-36 32 56,000 22,000 1936-37 19 *** * ** 1937-38 1*+ 56,000 28,500 1938-39 13 55,000 25,000 1939-V0 15 59,000 27,000 19*+0-*+l 13 62,000 27,000 19*+l-*+2 12 52,000 38,000 191+2-1+3 10 65,000 62,000 19*+3-*t-*+ 11 69,000 69,500 191+1^-1+5 10 76,000 7 5,ooo 19*+5-*'6 10 80,000 71,300 191+6-1+7 11 87,200 85,300 19*+7-*+8 11 107,900 178,000 191+8~l+9 10 109,700 168,500 191+9.5 0 9 116,100 212,000 1950-51 9 116,53^ 158,172 1951-52 9 125,659 170,56V 1952-53 9 133,5^6 186,012 1953-5l+ 8 128,628 178,9^7 195*+-55 7 126,900 183,VV5 *Classified according to major product handled. **Represents the value of livestock and livestock products marketed by specialized livestock cooperatives and other cooperatives which handled livestock as a sideline. ***Data not available SOURCE: Farmer Cooperative Service and other USDA publications. 1 6 6
It has been observed that with each change in the modes
of transportation there seems to have been a parallel move ment and change in the manner in which livestock has been marketed.5°
With improved highways and better rural roads in the 5l 1920's and early 1930's, truck transportation began to
compete with railroads in the transportation of livestock.
Therefore, the need for the rail shipping associations no longer existed in many areas of the state, and several county-wide associations had ceased operations by 1935. In fact, before the Ohio Livestock Cooperative Association passed out of the livestock picture, many county associa tions had ceased functioning.
Besides truck transportation, other factors were important in bringing about the decline of livestock ship ping associations. Among them were:
e>0 ' G. F. Henning and M. B. Evans, Livestock Auction Markets in Ohio (Wooster: Ohio Agricultural Experiment Station, Bulletin 7^3, 195*0, p. 7*
^There was a rapid increase during the 1920's in the use of the truck in shipping livestock to terminal markets. For a full discussion on this subject see G. F. Henning, The Truck and Its Relationship to Livestock Marketing in Ohio (Wooster: Ohio Agricultural Experiment Station, Bulletin M j-0, 1929). 367
1. Decentralization of the packing industry with the
location of more processing plants near sources of supply.
2. Growth of livestock auctions and small markets
throughout the producing areas.
3. Buying by packers and slaughterers at county points 52 or direct from farmers.
The lessened importance and the rapid decline of ship
ping associations is therefore understandable in the light
of changing economic and marketing practices. When they
were needed as marketing institutions they performed a
necessary marketing function; when they were no longer needed
they disappeared.
Direct Marketing
Livestock producers and livestock interests in the
Eastern Corn Belt can recall the days when large markets were almost the only outlet for their livestock. The one thought in marketing was to sell at a terminal market on a commission basis. This was the ultimate and traditional method of selling at that time.
But with changing marketing practices, both private and producer-owned agencies began breaking with this almost exclusive market outlet.
52 Farmer Cooperative Service, Bulletin 1, op. cit.. p. 8b. 168
It has been previously stated that with the use of trucks, and decentralization of packing plant operations, many changes in livestock marketing methods were brought about. More and more livestock began to move through auctions, small markets, concentration points, and direct from the producer to the packer.
But even before these new marketing practices were generally adopted, farmers of the Fayette County Associa tion at Washington Court House, Ohio had started selling cjo hogs direct to eastern packers.'-* Significant also is the fact that this association adopted the standard practice of the Danish cooperative bacon factories of selling on yield or dressing percentage. This method was little known in America until the Fayette Association began using it. Later the Eastern States Company adopted the practice.^
Likewise, the method of marketing feeder livestock during the past two decades has undergone many changes.
One significant change was the shift away from selling feeder sheep through terminal markets to selling them direct from ranges and farms to feed lots and pastures.
^ F o x and Kandell, op. cit.. p. 6.
Nourse and Knapp, op. pit., p. 200. 169
In later years, direct-to-paeker marketing was added
to the services given farmers because here again was a type
of marketing which had found favor with a large number of
farmers.
The Eastern States Company. ^ Cooperative selling of
livestock terminal markets was almost a success from the
start. To say this, it is not intended to ignore problems
which they ran into. For example, at or about the time
that the Fayette County Association was selling direct to
eastern packers, producers sales agencies on the Buffalo,
Cleveland, and Pittsburgh markets were having trouble in
getting satisfactory outlets. They ran into difficulty
because packer orders were controlled to a large extent
by ’’old line11 commission agencies who were antagonistic to
the cooperative agencies, and were inclined to discriminate against them. Besides, the r,old line” agencies bought as well as sold livestock and wished to protect their own
interest against the newly arrived cooperative terminal agencies.
To correct this problem the Ohio Livestock Cooperative
Association organized the Eastern States Company as a
subsidiary to establish direct selling connections with
^ I b i d .. Pp. 196-202. 170
eastern buyers similar to the system worked out by the
Fayette County Association. It was organized in October,
1923 as a stock company under the laws of Ohio, but did
not begin operations until February, 192^. Later,
cooperative shipping associations in Indiana and southern
Michigan joined the Eastern States Company.
In the beginning a large portion of the Eastern State
Company's business consisted of order buying for packers
on terminal markets at Buffalo, Cleveland, Pittsburgh, and
Cincinnati. Later its operations were extended to serve
county associations by first selling butcher hogs direct,
and later in selling lambs for its members.
In 1928 the Eastern States Company became a member
of the National Livestock Producers Association and was designated as its official order buying agency. It was reorganized and called the National Order Buying Company in 1930. In the meantime its activities were broadened to
supply direct marketing service to several terminal and regional agencies of the National Livestock Marketing
Association.
Because of losses and operating difficulties, the
National Order Buying Company was dissolved in 193^. The
Eastern States Order Buying Company was then organized to perform order buying services for producer agencies on the 1.71
Cleveland, Columbus, and Pittsburgh markets. With the con
solidation of the cooperative sales agencies at Cleveland,
Columbus, and Pittsburgh on October 1, 193*+, the Eastern
States Order Buying Company became a part of the new set up.
Livestock auctions. The auction is one of the oldest methods of marketing livestock in this country and abroad.
It has been used as the common method for selling livestock in England for centuries. Improvements in transportation and communication after World War I made it easier to assemble livestock at country points, and enabled buyers and sellers to have more accurate market information than ever before. The auction market afforded an outlet some what comparable with the terminal market in that it brought several buyers physically together at the same place. It made a relatively good market for small lots and odd weights or grades of livestock.
In the late 1920's and early 1930's, the marketing of livestock began to be decentralized, and privately owned livestock auctions sprang up at many points. As Henning and Evans observed that, 1.72
Though other items of change may be con sidered, truck transportation was a factor of primary importance in bringing the livestock auction market into the picture as a com ponent part in the trend toward a decentra lized livestock marketing system.which accompanied the^growing importance of highway motor carriers.
The first public livestock auction in the United States of which any record is available was held in Ohio in 1836 under the management of the Ohio Company for Importing Another early American livestock sales company was established ih 1853 at London, Ohio by a group of men operating under the name of the Madison County Importing Company.' This auction is considered to be the real beginning of the livestock auction sales method in America. A group of Mennonite farmers organized another live- 59 stock auction at Berlin, Ohio in 1911. And 20 years passed before another one was formed in Ohio. ^Henning and Evans, op. cit.. p. 7. 57c. G. Randell and L. B. Mann, Livestock Auction Sales in the United States (Washington, D.C.: Farm Credit Adminis tration, USDA, Bulletin 35, 1939U P« 3* 58Ibld. 59lbid., p. k. 173 Since the beginning of the livestock auction at London, Ohio (1853), the auction method of selling livestock in Ohio has become an important type of marketing agency. Ohio has been one of the most important states in the establishment of cooperative livestock auctions. Livestock auctions in Ohio were patterned to a great extent after Kentucky auctions. Kentucky auctions were built around the sales of lamb, and started operating at Lexington in 1922. The success of the Kentucky auctions prompted Ohio leaders to consider their methods of operations. Mr. James Caldwell, a native of Paris, Kentucky, probably did more towards establishing the livestock auction in Ohio than any other man.^° He established an auction at Gallipolis in Gallia County, Ohio in 1930 and others at Columbus, Hillsboro, and Lancaster at later dates.^ Although Ohio was a fertile ground for livestock auctions as borne out by the facts that in the early ^°P. S. Eckert and G. F. Henning, The Livestock Auction in Ohio (Wooster: Ohio Agricultural Experiment Station, Bulletin 557, 1935), p. £\"\ F. E. Duncan, The Development of Cooperative Live stock Marketing in Ohio (Columbus: Ohio State University, ’unpublished Master’s thesis, 1950), p. M+. 17*+ thirties privately owned auctions sprang up all over the producing areas; but livestock cooperatives were slow to take to them. As a result, when they did consider moving into this field, many of the best locations had already been taken. According to Ketner some cooperative livestock leaders at first failed to see the possibilities of the auction as a method of marketing livestock; although ...auctions had long been widely used in the sale of tobacco, fruits, and vegetables. But in the livestock industry they had something of a blackeye. There was a feeling that they were subject to Chicaneries. When Ohio pro ducers decided to try them out, we had our fingers crossed as to whether or not we could prevent sharp practices. But it was a bridge we worried about that we never had to cross.... A properly conducted livestock auction will secure as high a price as private treaty sales. As a matter of fact competition is at its best when all buyers are bidding at the same time on the same steers....The auction market provides an ideal market for the interchange of all kinds of livestock that should logically remain in the market area such as, breeding and feeder stock, shows and pigs, shotes and ewes.®2 Ketner further believed that livestock cooperatives in Ohio missed the boat when they did not sense the auction as the logical start of the trend of decentralization of Val C. Sherman, "This Co-op 'Does More Than Sell Live stock,'" News for Farmer Cooperatives (Washington, D. C.: Farm Credit Administration, Vol. tfl, No. 3» June, l ^ 1*) ? P* 3* 175 livestock marketing. They should have, he believes, quickly adapted their operations to meet the new changes. The Producers Livestock Association set up its first cooperative auction to sell to slaughterers, packers, 6 3 feeders and traders in 1931* It did so to meet competi tion at a time when livestock prices were low. In 1935 there were 58 livestock auctions operating in M+ counties in Ohio. Eight of these were cooperative auctions. According to the Bureau of Animal Industry, Ohio Department of Agriculture, there are at present (1957) 78 auctions licensed in the state. Sixty-one are privately owned and 17 are owned by cooperatives. Of the 17 auctions, the Producers Livestock Association operates 13, and >+ are independently operated. One of the auctions operated by the Producers Livestock Association is located at Vincennes, Indiana. Henning and Evans, in a study, found that livestock auction markets in Ohio had done a satisfactory job of operating their markets, but that some points in the 65 structure of their operations could stand improvements. ^Fox and Randell, oj>. cit.. p. 5. ^^ckert and Henning, op. cit.. p. 5« ^Henning and Evans, o£. cit.. p. 176 Livestock concentration yards. Concentration yards are market places where livestock is assembled in large lots for sale to nearby packers and feeders, reshipments, or sorting. Sales or purchases are made, not by auction, but by private agreements. These markets or concentration yards as they are called, have been particularly prominent in marketing livestock in Ohio. Doctor Sheeran established the first concentration yard at Fostoria in 1920, and others throughout the north- 66 western section of the state. Soon after the Fostoria development, the Brady Brothers, Kennett and Murray, Hostettler, and Kleinhenz, established yards throughout the northwestern part of the state. Again, in line with the many changes brought about in livestock marketing methods, concentration yards came into the picture as a component part in the trend toward a decentralized livestock marketing system. Cooperatives in many cases established local concentration yards as a machinery to serve their members at country points. The forerunner of the modern concentration yards was the centralized type of operation which has been noted 66 Duncan, opt. cit.. p. 35* 67Ibid. 177 in the county-wide shipping associations,^ and more particularly in the Fayette County Shipping Association. This association as has been noted, used the concentra tion yard mainly as a place to assemble hogs so they could be shipped to eastern packers in carload lots. Today, however, instead of using concentration yards solely for assembling livestock for further shipments, they are being used as a source of supply for feeders, local meat packers, and city butchers. According to the Bureau of Animal Industry, Ohio Department of Agriculture, there are 1^5 concentration yards in the State at the present time (1957)> and of these, 16 are cooperative yards. The Producers Livestock Association at Columbus, Ohio operates two kinds of concentration yards — small ones which draw livestock from a radius of about 10 to 15 miles, and which usually handles only hogs and sheep; and larger concentration yards which assemble livestock from an intermediate radius. Unlike the auctions, concentration yards are not evenly distributed over Ohio, but are located in the north western section in the center of heaviest hog production. ^^Farmer Cooperative Service, Bulletin 1, op. cit. P. 83. 178 Like other methods of decentralized marketing, con centration yards give the producer a greater flexibility in marketing his livestock, and in the case of cooperatives, they provide a concentrated supply from which they can buy and sell feeder livestock, and fill packers' orders. Consolidation of Cooperative Terminal Sales Agencies and Decentralized Marketing ° Consolidation of sales agencies. From the 1920's through the 1930's livestock cooperatives found it more and more difficult to increase their volume at terminal markets. Cooperatives were competing with each other and with private marketing agencies. Then too, the trend toward selling livestock at decentralized markets increased rapidly after 1930. Cooperatives were slow to follow this trend and soon lost volume because producers were turning to markets closer to their farms. Other developments such as hard surfaced roads, packers' efforts to establish buying points in Ohio, and the general demand of farmers for more and better services, awakened livestock cooperative leaders to the need for changes in the cooperative livestock marketing system. 69 Unless otherwise stated, this section is based on information by Fox and Randell, op. cit. 179 Ohio cooperative leaders faced the problem by decid ing to consolidate five large associations, with years of successful experience, into one organization that would have central management over country markets. This they believed would make for a stronger and more efficient marketing system, and would lower the marketing costs to farmers. As a result of the consolidation, the Producers Cooperative Commission Association was organized in July, 1931+ and began operating in September, 193^. It was the forerunner of the present Producers Livestock Association. A brief history of the associations that consolidated now follows: The Producers Cooperative Commission. Cleveland. Ohio, a terminal livestock selling agency, opened for business on the Cleveland market May 15, 1923. The coopera tive performed a complete selling, buying, and field ser vice for its members in the 11 years it operated as an independent agency. This organization pioneered in establishing cooperative trucking associations when the rail shipping associations began to fail as a result of truck competition. The Producers Cooperative Commission Association. Pittsburgh. Pa.. began operations on the Pittsburgh live- 180 stock market, October 15, 1923. The directors and manage ment of this association were among the first cooperative officials to sense the trend toward the movement of hogs, lambs, and cattle direct from country points to packers. A grading service was established in West Virginia where lambs and calves were graded and sold direct to packers. Later, grass-fat cattle were sold direct from farms to packers. The Producers Cooperative Commission Association, Columbus, Ohio, was organized in 1925 by central Ohio farmers as a livestock market and shipping association under the name of the Franklin County Livestock Producers Association. In 1928 the name was changed to the Central Ohio Livestock Cooperative Association with the idea in mind that it would develop into a district association 70 and serve farmers in the central section of Ohio. On October 17, 1929 the Cleveland and Pittsburgh producer agencies passed a motion to merge the Central Ohio Livestock Cooperative Association with their organizations, 71 and take over the operations at Columbus. 70 , Poling, op. £it., p. 63. 71Ibld.. Pp. 63-66. 101 The Producers Cooperative Commission Association of Columbus was not incorporated. It had no articles of in corporation or by-laws of its own. The name adopted was merely a trade name under which the Cleveland and Pittsburgh 72 agencies transacted business at Columbus. The Producers Cooperative Commission Association operated until February 2^, 19^3, at which time its name was changed to Producers Livestock Cooperative Association in order to clarify its functions. This was the final break according to Ketner, "from a tradition which for many years had tended to confine livestock associations almost entirely to the business of selling livestock on commission at terminal markets." In 1956 the name was shortened to Producers Livestock Association. The Producers Livestock Credit Association. Columbus. Ohio, which is now a subsidiary of the Producers Livestock Association, was established in 1932 to provide a credit service for members of the parent organization. At that time, loans were practically unavailable at any other source, and so there was need for credit at low rates of interest. Other details of this association are given in the chapter on cooperative credit. 72Ibid., p. 66. 182 The Eastern Order Buying Company. Columbus. Ohio, as noted earlier was first organized In 1923 as the Eastern States Company. In 1929 it reorganized as the National Order Buying Company. Its activities were broadened to supply direct marketing service to terminal and regional livestock agencies of the National Livestock Marketing Association. At the time of the merger in 193*+, the name of the agency was changed back to the Eastern Order Buying Company and became a subsidiary of the then Producers Cooperative Commission Association at Columbus. Its main purposes are to purchase livestock on order for packers and buy feeder stock for farmers. It is the sales agency for the 19 markets of the Producers Livestock Association, 10 local markets of Producers Marketing Association of Indiana, and 5 markets of the Cincinnati Livestock Producers Association. Until the first of 1957, the Eastern Order Buying Com pany sold most of the hogs handled by the Producers Livestock Association and the Cincinnati and Indianapolis markets. Now these sales are being handled by Eastern Order Buyers, Inc., — a newly formed sales subsidiary of the associations at Columbus and Indianapolis. 183 Decentralized marketing. It has already been noted that most of the sales agencies were set up to operate at terminal markets. It was customary for livestock to be assembled and shipped to market from country points by rail, either by individual farmer or by local shipping associations. Here it was received on consignment by cooperative sales agencies and sold to packers, feeders or dealers. Decentralized marketing of livestock was the outgrowth of (1) farmers wanting markets nearer their farms, (2) in creased use of trucks, and (3) decentralization of packing plant operations. These developments called for many changes in livestock marketing methods. The trend toward selling livestock at auctions, con centration points, and direct from the producer to the packer increased rapidly after 1930. Ohio cooperative leaders, as already noted, set out to meet these changes in livestock marketing methods by consolidating five live stock associations into one association — the Producers Cooperative Commission Association. This Association is now known as the Producers Livestock Association. It is the main livestock cooperative in Ohio. l8*+ The Producers Livestock Association is a centralized regional cooperative operating 19 area markets and 16 branch markets in Ohio, Pennsylvania, and Indiana. Table 19 shows the locations of the 19 markets. The Association has given Ohio farmers a better out let for their livestock, and provides them with many local markets close at hand. Here are the variety of decentra lized markets it provides for the farmer's choice: 1. Sixteen small markets which draw livestock -- usually only hogs and sheep — from a short radius of less than 25 miles. 2. Nineteen larger markets which bring in livestock of all types from an intermediate radius. 3. Thirteen weekly country-wide auctions held at the larger area markets. Two agencies operate on terminal public markets serving greater areas and attracting all types of livestock. Besides the different types of markets, the Producers Livestock Association also provides the following services: 1. Sale and distribution of stocker and feeder cattle, feeder lambs and breeding sheep. 2. Exchange of feeder pigs. 3. Developing and operating lamb pools. *+. Trucking livestock from farm to market. 185 TABLE 19 PRODUCERS LIVESTOCK ASSOCIATION AND ITS BRANCH MARKETS 1957 Name of Year Joined Year Area Markets* Association Organized Columbus 193*+ 1925 Cleveland 193*+ 1923 Pittsburgh, Pa. 193*+ 1923 Washington Court House 193*+ 193^ Wapakoneta 1935 1935 Mount Vernon 1938 1938 Hicksville 1939 1919 Findlay 19^0 19^0 South Charleston 19*+2 19^2 Coshocton 191+1+ 1921 Lancaster 191+1+ 19M+ Bucyrus 19*+6 19^6 Marion 19^6 19^6 Wilmington 19^6 191+5 Washington, Ind. 19^7 1921 Greenville 19^8 1921 Vicennes, Ind. 1950 1935 Chillicothe 1953 1953 Upper Sandusky 1953 195^ ♦Arranged according to year the Association began operating the market. SOURCE: Adapted from Fox and Randell, ££. cit.. p. 8. 186 5. Development of livestock improvement programs for all species of livestock. 6. Livestock feeding and production loans. 7. Reaching producers through timely and accurate market information. 8. Carrying on effective field service work. Since the merger of the five agencies on September 1, 193^, the Producer Livestock Association has grown steadily in membership, volume of business, and number of head of livestock handled. In 1935 the association had an estimated membership of 20,000. In 1956 the membership had grown to about 120,000. Ohio farmers represent about one half of the total membership. Table 20 shows the volume of business and number of head of livestock the Association has handled since its merger. The value of livestock handled amounted to more than 20 million dollars in 1935 and about 150 million dollars in 1956. The greatest increase has been since 19*+5* But much of this increase was due to the rise in the general price level. Another measure of the growth of the Association is the number of head of livestock handled. From less than one million head in 1935? the Association handled more TABLE .20 VALUE AND VOLUME OF BUSINESS OF THE PRODUCERS LIVESTOCK ASSOCIATION, COLUMBUS, OHIO 1935-1956 Value of Number of Year Livestock Handled Head Handled 1935 120,303,339 959,921 1936 19,20^,767 1 ,306,601 1937 25+,M+3 ,M+0 1 ,327,222 1938 20,772,987 1 ,332,000 1939 l8,l+73,33lf 1,189,^17 19^0 19,875,782 1,397,758 19*+1 27, ^3,0^4-8 1,397,758 19^2 M+,535,332 1,681,003 19*+3 52,510,032 1 ,789,166 19Mf 6 0 ,^89,29k 2,159,977 191+5 58,35^,870 1,796,291 19*+6 90,^03 ,7^ 2 ,30*+, 120 19^7 138,1 8 2 > 8 8 2 ,79^,226 19^8 1^7 ,785,2^0 2,819,399 19^9 137,0^2,686 3,079,92^ 1950 l1+6,572,90l+ 3,078,003 1951 180,051,076 3,313,75^ 1952 165,265,590 3,521,1^-1 1953 169,733,332 3,6^2,828 195*+ 177,^9,380 3 ,689,l!+2 1955 155,099,^99 3,932,986 1956 l5^,Mf2,210 M 3 6 , 8 9 5 SOURCE: Fox and Randell, .op. cit.« P. 55. Data from 1951 to 1956 are from records of the Association. 188 than four million head in 1956. Most of this increase has taken place during the last 6 consecutive years. For many years the Association hasmarketed more livestock than any other member of the National Livestock Producers n'x Association. The financial condition of the Producers Livestock Association as of December 31, 1956 is shown in the follow ing statement: Assets: Current Assets $3,501,882.93 Fixed Assets 1,278,103.6k Other Assets 573,872.6*+ Total $5,353,859.21 Liabilities and Net Worth: Current Liabilities $3,226,950.33 Other Liabilities 213,532.50 Net Worth (Savings-Certificates) 1,913,376.38 Total $5,353,859.21 The net savings of the Association amounted to $178,502.00 in 1956 compared with $1*+9,177 in 1955 and $83,112 in 195*+. ^Annual Report of the Producers Livestock Association, 1956. 189 The Producers Livestock Association is the only farm cooperative in the United States which has successfully engaged in all steps of the marketing of livestock and n)+ meat and meat products. Since 19^6 it has been one of the owners of Cooperative P and C Family Foods, Inc., which now operates 30 supermarkets in upper New York states. The Association has successfully engaged in the sale of livestock at terminal markets, at local interior markets, and has developed and put into practice the only centralized livestock sale system in the nation. And its marketing system has been closely allied to livestock improvement and financing, thus providing a complete service for livestock producers. According to officials of the Producers Livestock Association, if a comparison were made of prices at the markets operated by the Association with the prices in the other markets, it would be found that net returns to farmers definitely have been raised through the efforts of the Eastern Order Buying Company. ^Ohio State Grange Monthly. March 1937* 7*5 Annual Report of the Producers Livestock Association, 1956. CHAPTER IX POULTRY COOPERATIVES1 2 Early Developments The Illinois State Grange made the first effort to establish a cooperative association to market poultry products. It set up the Poultry and Produce Exchange in Chicago in 187^, however, the association operated for only a short time. After this venture poultry producers did not try cooperative marketing for some 25 years. Aside from this early effort, no poultry products were handled cooperatively until the beginning of this century. Poultrymen around Santa Rosa, California, organized the Unless noted otherwise the factual material contained in this chapter is largely from the three sources listed below. Much of the historical information is similar. a) C. G. McBride and Ralph L. Baker, Survey of Coopera tive Poultry and Egg Marketing in Ohio (Columbus: Ohio State University, Department of Rural Economics, Mimeographed Bulletin No. 126, May, 19^0). b) Ralph L. Baker, Cooperative Poultry and Egg Market ing in Ohio (Columbus; Ohio State University, unpublished Master's thesis, 19*+0). c) Harry E. Ratcliff, Cooperative Marketing of Eggs and Poultry in Ohio (Washington, D.C.: Farm Credit Adminis tration, USDA, Bulletin 59? May, 1950). ^Much of the early general history in this section is based on information in Farmer Cooperatives in the United States (Washington, B.C.: Farmer Cooperative Service, Bulletin No. 1, December, 1955). 190 191 Santa Rosa Poultry and Egg Exchange in 1901. It continued for 22 years. Producers in other areas soon started cooperatives patterned after the Santa Rosa Association. From 1905 to 19l'+ producers organized egg and poultry cooperatives in Minnesota, New Jersey, New York, Oregon, and Wisconsin. But most of these were short-lived. Beginning in 1913 poultry producers in many states formed egg circles. These were informal, local associations organized for the purpose of marketing eggs. Out of these egg circles developed a number of shipping-type associations that marketed eggs in carload quantities to distant buyers. In the 1920's farmers in nearly all parts of the country organized pool-type associations to market their eggs but this type of marketing was not successful in the north central states. During the 20-year period — 1920-1939 — more egg and poultry cooperatives than any other major commodity group went out of business. Many of those that went out of busi ness had patterned their operations after the pool-type of association so successful in the western states and in other specialized production areas. These failures caused cooperative leaders and poultrymen to recognize that pro duction practices and marketing problems were in many cases 192 different in many areas. As a result, in later years producers in many regions have organized several different types of associations suited to local conditions. Of the total 651 cooperatives marketing poultry products in 195*+-555 only 23 per cent or 1^0 specialized in handling these products.^ Three out of four cooperatives handling poultry products are doing so as a sideline business. This type of diversified marketing operation is more prevalent with eggs and poultry than any other major farm product. In Ohio, producers' effort to improve methods of marketing their poultry products goes back to the days when egg circles and shipping associations were popular. Although this marketing plan was never very prominent in Ohio, but on If three occasions Ohio poultrymen did try it. The first instance was in Licking County in 1921. The poultry shipping association mentioned most often in Ohio was the one at Pandora in Putnam County. Producers formed this association in 1923 and operated it for 10 years. Another shipping association got started at Montpelier, in Williams County, and was in business from 1931 to 1939• In 1923 it was ^Gessner, oja. cit., p. 31+« Lf Baker, oja. cit.. p. 11. 193 estimated that 2,000 Ohio producers were shipping their eggs to eastern markets. Competition between local markets and the markets eggs were shipped, reduced the differences in prices between the two markets, and led producers to turn to other types of associations. The development of cooperative marketing of eggs and poultry in Ohio has come about in an evolving manner. Several types of associations have been in operation at tne same time. Specialists in the Ohio State Extension Service early advocated farmers to try different types of marketing cooperatives. This was done to determine, if possible, the type that could best serve different produc tion and marketing practices. As early as 1925 the Farmers' Equity Union Creamery Company began handling eggs at its Lima plant. Later the Cooperative Pure Milk Association at Cincinnati and the Pickaway Dairy Cooperative at Circleville began handling eggs for the members. The Pickaway Cooperative still does. For a time the Farmers' Equity Exchange elevators at Lucas and Shelby in Richland County handled poultry products. 19*+ Ohio Farm Bureau Federation The Ohio Farm Bureau made little or no effort to market poultry products when it began developing its commodity marketing program. It became interested in egg marketing in the mid-twenties and continued its poultry marketing operations in one way or another until 1950. At the beginning, its interest was promotional and resulted in the organization of the Ohio Poultry Producers Cooperative Association at Wauseon, in Fulton County in 192*+. One of the main purposes of this association was to improve egg quality. It was a centralized pool-type association and leaders intended it to cover the whole state, but it became an effective organiza tion only in Defiance, Fulton, Henry, and Williams counties. Managerial and financial troubles caused the association to go out of business in 1932. In 1932 the Ohio Farm Bureau Service Company, which later became the Ohio Farm Bureau Cooperative Association, handling eggs at Jackson, Ohio, and at different times handled poultry products at 15 or 16 points in the state. It maintained sales outlets in West Virginia and Pennsylvania. er 'For a discussion of the Association's business activ ities see L. G. Foster, A Business Study of the Ohio Poultry Producers' Cooperative Association (Wooster: Ohio Agricul tural Experiment Station, Bulletin *+27, October, 1928). 195 Government grading was started in 1932, and in 193*+ the Farm Bureau Cooperative Association established the Cleveland Marketing Station as a branch sales office. It opened a marketing station in Columbus in 19*+7. The Farm Bureau Cooperative Association decided in 1939 to gradually turn over control of its poultry opera tions except the marketing stations at Cleveland and Columbus. In April 1950 these two stations were sold to Federated Egg Cooperatives, Inc. This association is discussed later on in this chapter. County Farm Bureau Cooperatives have also handled poultry products. The Fayette county Farm Bureau Cooperative Association at Washington Court House started handling poultry products in 1927, and is still doing so. Over the years about 10 county farm bureau cooperatives have handled poultry products. Before 19*+0 the Ohio Farm Bureau marketed a larger proportion of eggs than any other one type of cooperative.^ Auctions and Commission-Pool Associations As late as 1930 cooperative marketing of poultry prod ucts in the eastern states had been relatively unsuccessful ^Harry E. Ratcliffe. "Ohio Rolls Out Top Quality Eggs," Nev/s for Farmer Cooperatives (Washington, D.C.: Farm Credit Administration, Vol. XIV, No. 9, December, 19*+7), P* 8. 196 and unimportant — though this area had an important ad vantage in nearby markets. Yet, producers had become dis- 7 satisfied with prices, sales outlets and market practices. Buyers gave little attention to paying producers according to quality. Many poultry producers considered the spread between farm prices and consumer prices for nearby eggs too high, and there were frequent instances of unethical practices; such as giving of bad checks, dishonest weights, improper grading, unjustified complaints on quality of previous purchases, and unreliable service. Small flock owners particularly were at the mercy of unscrupulous buyers. Officials of the New Jersey Bureau of Markets thought that the answer to these problems as they concerned New Jersey poultry producers was to be found in the auction method of selling, organized along the line as the success ful auctions marketing New Jersey fruits and vegetables. The first association of the auction type was organized in New Jersey in 1930. From 1930 to 1939 poultry producers, principally in the eastern states, organized 32 such ^For a detailed discussion about the first auctions see John Scanlan and Roy W. Lennartson, Cooperative Egg and Poultry Auctions Associations (Washington, D.C.: Farm Credit Administration, USDA, Bulletin No. 37, June, 1939). 197 associations. These auction associations seemed to have been the immediate answer to the need for a new type of marketing agency suited to the production and marketing conditions of Q producers located near large eastern markets. Ohio producers became interested in poultry auctions soon after eastern producers introduced them. On October 29 and 30, 1931? officials of the Ohio Bureau of Markets, poultry and marketing specialists of Ohio State University, county agents, and poultry producers visited auctions at Flemington, New Jersey, and Doylestown, Pennsylvania. Dr. George F. Henning of Ohio State University was among the group that made the trip. A report of the trip was written by Dr. Henning. Among other comments about the trip Dr. Henning said; On the whole, however, it would seem from the two-day observations that the auction method has been of considerable benefit to the producers and has performed a very worthwhile service in the „ bettering of marketing machinery in that territory. Ohio is located between the industrial east and the agricultural west. Ohio poultrymen's problems were similar to eastern producers ^George F. Henning, Report of Investigation of the Doylestown. Pennsylvania and Flemington. New Jersey Egg Auctions (Columbus; Ohio State University, Mimeographed Report, November, 1931). 198 The information gathered from the trip to the Flemington and Doylestown auctions plus that obtained in a survey of the Wayne County territory resulted in the organization of the Wooster Cooperative Poultry Association on May 2, 1932. The Association held its first auction of eggs on July 11, 1932. It began selling poultry by auction in 1935 but discontinued in 19^3. The second auction association began operating at Bucyrus in 193^+* Because of the success of the association at Wooster, other producers became interested in auction selling. By 19^5 six such associations were operating (Appendix Table 3 5). The Association at New 'Washington replaced the auction at Bucyrus and the egg marketing activities of the county Farm Bureau Association at Shelby. The North East Ohio Poultry Association at Columbiana began operations in 193*+* It did not organize as an auction, but as a pool-type association, however, in 1936 it began a poultry auction. During World War II all Ohio egg auctions stopped operating as auctions. Because of the great demand during the war and maximum price regulations set up by the Office of Price Administration there was no need to auction eggs. All eggs were easily sold at maximum prices. This led to direct selling of eggs to buyers, and the use of commission- pool-type operations. 199 Ohio associations easily made the change from the auction method of selling to commission-pool-type. The majority of Ohio auctions never functioned as true auctions.10 With the exception of the 'Wooster auction, even before the war, there was seldom enough buyers present to make a good auction. Buyers were too few for the large volumes and a large portion of the eggs had long been sold on orders wired or telephoned to the managers. At the close of the 1956 fiscal year the seven Ohio cooperative associations had a combined membership of 13,726. This was two times the 19^6 membership. The associations' egg volume also has increased over the year. In the 1957 fiscal year they handled 1,513*331 cases of eggs compared with 566,178 cases in 19^7. The associations at Columbiana and Versailles were the only associations to market dressed poultry. They handled 1^,558,882 pounds In the 1957 fiscal year compared to 12,327,589 pounds in 1956. Figure VI shows that poultry cooperatives are well scattered over the State and are in easy reach of most Ohio poultry producers. 10Ratcliffe, o j d . cit. Figure '/ Location of Egg and Poultry Cooperatives in Ohio, 1957 > 3 H T A B V L A .AKE WILLIAMS LUCAS OTT. WOOD HENRY TRUMBULL LOR a IN JMC t> N A PUTNAM HANCOCK •ALLEN COL UMBIANA MARION AUGLAIZE MORROW Od AN UNION COSHOCTON |gui M(JSK I N6UM iisoTff b a n k u n Dl PERRV PiC kawav RO: HAMILTON PtKC SOURCE: Ohio Council of Farmer Cooperatives, Inc 201 Sales Federation The latest development in cooperative marketing of poultry products in Ohio is the closer coordination of effort among the seven local associations through a sales federation and other joint operations. In 1939 these associations formed the Federated Egg and Poultry Sales, Inc. at Wooster. This organization was formed to aid in marketing eggs and poultry beyond the local and natural territory of any one cooperative, to prevent harmful competition between cooperatives in the distant markets, and to enable member associations to purchase supplies jointly at reduced costs. Besides, the Sales Federation has helped to balance the supply of eggs in different parts of the state, and furnishes market in formation to its members. The sales federation took over the activities of the Cleveland Marketing Station which the Farm Bureau had operated since 19314* But because of lack of capital it agreed to cooperate with the Farm Bureau in operating the Cleveland Marketing Station until such time as it had enough capital of its own. In 19^7 it opened a marketing station at Columbus and Pittsburgh, Pennsylvania. In April 1950 the Farm Bureau divorced itself from all poultry operations. 202 Sales divisions are maintained at Cleveland, Columbus, and Pittsburgh, Pennsylvania. In 1957 member associations marketed about 25 per cent of their total volume of eggs 11 and 31 per cent of their poultry through the sales agency. The percentage which each sales division handled is as follows: Sales Division Eggs Poultry Pittsburgh 50% &3% Cleveland 3 % 9% 00 Columbus 15% Besides its member association, the sales federation handled some eggs and poultry for Land O'Lakes Creamery, Inc., Farmers Federation Cooperative, Ashville, North Carolina: Butler Cooperative Egg Auction, Inc., Butler, Pennsylvania; Rockingham Poultry Marketing Cooperative, Broadway, Virginia; and the Fayette County Farm Bureau Cooperative Association at Washington Court House, Ohio. The financial condition of the Federated Egg and Poultry Sales, Inc., as of June 30, 1956 and June 29, 1957, is shown in the following condensed financial statements: Data derived from Annual Report of Association, 1957. 203 Assets: 1956 1957 Current Assets $331,6^3 $329,056 Fixed Assets 28,718 33,09!+ Other Assets 8,331 l ^ ^ ^ Total $368,692 $376,399 Liabilities and Net Worth: Current Liabilities $ 33,191 $ 27,359 Net Worth (Membership, capital, reserve and certificate of ownership) 335.501 31+9.01+0 Total $368,692 $376,399 The association is in a very strong financial position, Its net worth in 1957 was about $3*+9,000 compared with $335,500 in 1956, and its liabilities in 1957 were $27,359 compared with $33,191 in 1956. Federated Egg and Poultry Sales is one of twenty poultry associations that is a member of the Northwestern Poultry Cooperative Association, Inc., in New York. This federation was organized as a sales and service agency for its member associations. Each member sells a specified quota through the federation on a regular basis plus whatever occasional surplus it desires. 20*+ Statistics of Poultry Cooperatives Table 21 shows the number, membership and amount of sales of cooperative associations in Ohio handling poultry products over the last three decades. While the number of associa tions in recent years has remained about the same, member ship and dollar volume, especially since the early l^O's, have increased steadily. Poultry cooperatives in Ohio represent almost 5 per cent of the total number of cooperative marketing associations in the state, about 9 per cent of the total membership, and *+.3 per cent of the net dollar volume (P. *+3, Table 5). In net cooperative sales of poultry products, Ohio ranked sixth in 195*+-55 (6 per cent of total sales). Only California, Minnesota, New Jersey, New York and Pennsylvania had greater dollar volume. On a regional comparative basis, Ohio poultry coopera tives' net sales accounted for about 56 per cent of the total sales of the East North Central States. But as Table 22 shows, the Ohio associations have not maintained the same growth as the East North Central States during the period from 1950-51 to 195^-55. Gessner, oj3. cit. 205 TABLE 21 NUMBER,* MEMBERSHIPS AND DOLLAR VOLUME OF POULTRY COOPERATIVES IN OHIO FOR SPECIFIED PERIODS, 1925-26 to 1954-55 Number of Estimated Estimated Value of Period Associations Membership Net Sales*11 ______(S1000) 1925-26 1 2,000 300 1927-28 1 1,800 500 1930-31 1 90 90 1931-32 1 90 90 1932-33 1 70 50 193^— 35 1+ 800 330 1935-36 5 1,130 610 1937-38 4 1,220 950 1938-39 4 1,600 780 1939-1+0 5 2,000 1,240 1940-41 6 3,000 1,800 1941-42 8 4,910 2,200 1942-4 3 7 4,900 3,700 1943-44 7 6,500 5,300 1944-45 7 7,800 5,600 1945-46 8 7,700 6,400 191+6-li7 8 10,000 7,100 191+7-1+8 8 10,600 11,100 191+8-1+9 9 14,900 16,200 191+9-ifO 9 17,100 16,500 1950-51 9 21,457 14,467 1951-52 9 24,121 18,467 1952-53 9 21,868 18,789 1953-54 10 22,855 22,086 1954-55 9 24,360 20,775 ^Classified according to major product handled. **Represents the value of poultry products marketed by specialized poultry cooperatives and other cooperatives which handled poultry products as a sideline. SOURCE: Farmer Cooperative Service and other USDA publications. 206 TABLE 22 TRENDS IN POULTRY COOPERATIVES* 1950-51 to l95*+-55 Percent Item and Area 195b-55 1950-51 Change Number of Associations: Ohio 9 9 0 East North Central States 18 15 /20.0 Membership: Ohio 2b,36O 21,1+57 /13.5 East North Central States 28,120 23,281 /22.2 Dollar Volume of Net Sales** (Thousands) Ohio 20,775 lb, >+6 7 A 3 . 6 East North Central States 37,251 2b,b32 / 52.b ^Classified according to major product handled. **Represents the value of poultry products marketed by specified poultry cooperatives and other cooperatives which handled poultry products as a sideline. SOURCE: Gessner, op. cit. 20 7 Ohio farmers received almost 112 million dollars from poultry marketing in 1956. This represented about 11 per cent of total cash receipts, and rated the poultry enter prise in fourth place as a source of cash income to Ohio 11 farmers. J Although the production of poultry products represents an important source of income to Ohio agriculture, it is becoming more and more a commercial and specialized enter prise, and of less importance as a sideline enterprise on iL the majority of Ohio farms. ■^Mervin G. Smith and Gustavo A. Tejada, op. cit. lV Ronald H. MacDonald, A Study of Economic Trends. Supply Patterns. and Marketing Practices, in the Ohio Poultry Industry (Columbus: Ohio State University, unpub lished Ph.D. dissertation, 1955), p. 280. CHAPTER X TOBACCO COOPERATIVES Early Efforts Many tobacco cooperatives have been formed. Connecti cut farmers as far back as 1862 made efforts to sell tobacco cooperatively. A decade later (1873) growers in Kentucky and Massachusetts built cooperative warehouses to store their tobacco so they could wait for better prices. Under the leadership of the Grange and the American Society of Equity, local farmer-owned warehouses and tobacco packing plants began in Wisconsin in 1902 and in Kentucky and Tennessee in 1901+. Others were formed in Maryland, Virginia, North Carolina, Massachusetts, Ohio, Pennsylvania, and Connecticut. These cooperatives tried to get higher prices for grower's tobacco by inducing growers to hold their crop until they received the price asked. Most of them operated for relatively short periods and then faded out of the marketing picture. During World War I and immediately afterwards, prices of tobacco were high and production increased. But in 1920 tobacco prices declined sharply. This led tobacco growers during 1920-23 to form several large cooperative tobacco marketing associations. Most of these, like the 208 209 ones formed earlier, were not successful and operated for only a short time. At one time Ohio farmers were among the largest pro ducers of cigar-leaf tobacco in the United States. Since 1930 production has declined sharply due to low prices which have made it less profitable than competing enterprises. Selling tobacco through cooperatives has made little progress among tobacco farmers. This is particularly so in the case of Ohio tobacco growers. At present there is one tobacco cooperative in the state. And even during some marketing seasons this association does not handle any tobacco. Organization in the Miami Valley'!' Ohio tobacco farmers, like others in other tobacco areas, saw the need of forming their own organizations to bargain with the "trust” who practically controlled prices. They learned of the efforts and reported successes of farmer- Information in this section unless otherwise;stated is drawn from G. 0. Gatlin, Cooperative Marketing of Tobacco in the Miami Valley of Ohio (Washington, D. C.: USDA, Bureau of Agricultural Economics, Preliminary Report, 1926. George R. Eastwood, History of Cooperative Marketing of Tobacco in the Miami Valley (Columbus: Ohio State Uni versity, Unpublished Master's thesis, 1931)* Dean, ojd. cit. 210 owned associations in Kentucky and Tennessee. These efforts aroused much interest in cooperative marketing among Miami Valley growers. On July 6, 1910 several hundred tobacco growers from all parts of the Miami Valley met at Dayton and organized the National Cigar-leaf Growers Union. The aim of the association was two-fold — to teach growers the best methods of production and to seek advantages and economy in marketing. This association lasted less than a year, but before it folded up it had signed up more than 6,000 grower-members 0 Even though the National Cigar-leaf Growers Union was short-lived, however, the spark of interest in cooperative marketing remained and resulted in the organization of a half dozen or more cooperative tobacco warehouses incor porated with capital stock varying from $5,000 to $10,000. Most of them were formed directly as a result of the low prices, these associations soon found their members leav ing when competitors also raised prices. By 1922 all had gone out of business. It was noted above that cigar-leaf growers of the p Miami Valley made two attempts before World War I to 2For the purpose of this discussion the Miami Valley refers to the area comprising Butler, Darke, Greene, Miami, Montgomery, Preble and Warren counties, 211 organize and develop their own marketing agency. The first effort in 1910 resulted in the organization of the National Cigar-leaf Growers Union; and in the second attempt (1911-12), local farmer-owned warehouses were organized and were in business for a period of six to ten years. The third and most enthusiastic effort followed the cooperative excitement and enthusiasm which swept over the Kentucky and tobacco belts after World War I. Tobacco prices had declined sharply, and farm organizations lost no time in urging tobacco growers to form farmer-owned or ganizations. In fact, in many instances they became the leaders in the movement. The Burley Tobacco Growers Association of Lexington, Kentucky, organized in 1921, and at one time had more than 100,000 members in Kentucky, Ohio, Indiana and other states. County Farm Bureaus in the burley district of Ohio had a hand in recruiting burley tobacco growers for this asso ciation. For a time growers received higher prices for their tobacco. The association handled about one billion pounds of tobacco from the date of its organization to the end of its five year contract which terminated with the 1925 crop.^ ^Farmer Cooperative Service, Bulletin 1, ojg. cit.. p. 120. 212 The notable and reported success of the Burley Associa tion caused tobacco cooperative interests -- especially the Ohio Farm Bureau Federation — to see possibilities for such an organization among tobacco growers in the Miami Valley. So the state and local Farm Bureaus began early in 1923 getting growers together. They held their first meeting in January 1923. Another meeting of repre sentatives of growers took place on May 18 of the same year. After these two meetings the group decided to choose an organization committee composed of 15 growers. This committee, with the help of the Ohio Farm Bureau, went to work and gathered information on some successful tobacco selling cooperatives in the United States. The legal department of the Ohio Farm Bureau drew up a contract and other legal requirements. On August 16, 1923 an organization was incorporated as the Miami Valley Tobacco Growers' Cooperative Association with direct affiliation with the Ohio Farm Bureau. Headquarters were established at Dayton. Membership was limited to farm bureau members, however, non-farm bureau members could use the marketing service of the association by paying an annual service charge equal to the cost of farm bureau membership. 213 Before starting organization work, growers agreed that the contract would not become effective until two- thirds of the tobacco acreage in the district was under contract through grower-membership. The Ohio Farm Bureau began a membership campaign. By November 6, 1923, ^,930 growers representing about 20 million pounds of tobacco had signed contracts, and the association was declared organized. The agreement entered into by the members and the association was a purchase and sale contract effective for five years. Later on in the discussion it should be noted that the contract became a lively point of contention, in fact, the failure of this association was due in part to the wholesale strike against the contract. Aaron Sapiro is believed to have sold the idea of a membership contract to cooperative leaders in Ohio. At about the time that organization plans were being made for this association, Sapiro came to Ohio and spoke at the annual Ohio Farm Bureau meeting of February 1923^ In the course of his visit he spoke to different commodity groups. He placed special emphasis upon the use of contracts as the basis of assuring the delivery of the product to the 1+ Green, op. cit.. p. 167. 21k association. And he predicted that associations without contracts from their members would fail. The members had to find a way to finance their associa tion. A syndicate of 60 banks in the Miami Valley, Cincinnati, and Columbus agreed to provide the money to make advance payments to members and also to meet other financial obligations of the association. From 35 to *+0 per cent of the bankerfts valuation was to be advanced to members on delivery of their tobacco. But due to methods of handling the tobacco and delay in making sales the whole arrangement proved unsatisfactory. On September 2, 192*+, the association liquidated its indebtedness to the syndicate and combined its loans in seven large banks in Cincinnati, Columbus, and Dayton. Later in 1925 the syndicate was reduced to five banks; two in Dayton, and one each in Cincinnati, Cleveland, and Columbus. In the meantime, members had organized the Miami Warehousing Corporation early in 192k as a subsidiary of the parent association. This organization issued ware house receipts to the banks as security for its loans. During its first year's operation the association leased or acquired 39 warehouses. From January 1, 1925 to February 28, 1925 rental and. equipment costs for these warehouses amounted to almost $30,000. 215 From its very beginning the association ran into a series of difficulties, •t'irst, it received nearly 20 million pounds (about 60,000 cases) of the 1923 tobacco crop. This was about 78 per cent of the total crop in the district. Members delivered the bulk of this amount with in six weeks, thereby making heavy work for a new and un trained office force. Growers packed and graded their tobacco on their farms, and the cases were not opened and inspected at the time they were delivered, but accepted as the grades marked, and advance payments made to growers accordingly. When the warehousemen opened the cases it was plain that the tobacco was not properly graded. Much of it was frosted, some was musty and rotten. It was un marketable in the condition in which it was received. This caused much extra expense and delay in making sales. Besides, the advance payments to members in many cases exceeded the value of their tobacco. For example, these advances came to a total of $1,2^7,7^8, and the net sales when the tobacco was finally marketed amounted to only $1,856,5*+1. Up to November 1, 192*+, only 17,000 cases of tobacco had been sold. As a result of a delay in selling the 1923 crop, not only were members dissatisfied, but the association also was unable to repay its loans to the banks. 216 A new management took over operations the next year. It found about ^3,000 cases of unsold tobacco in storage, but within six months the new management had sold it. The 192^ tobacco crop was small, growers were dis satisfied and as a result of these and other circumstances the association received only about five million pounds of tobacco. Throughout 1925, members continued to express their dissatisfaction with the association. They filed several suits in an attempt to force the association into the hands of a receiver. The management also filed suits against members for failure to live up to their contracts. In fact, it expelled 300 members for non-delivery of the I92U crop. Despite the ruling of the courts that the association's contracts were valid and enforceable, however, the wholesale strike against them produced disastrous effects. In October, 1925, dissatisfied growers and the manage ment held a meeting and reached an agreement to allow members to withdraw from the association; also to drop suits for breach of contracts. The association made no attempt to handle the 1925 crop. After the annual meeting on November 2, 1925, the association sent letters to members Still in the organi- 217 zatlon asking their opinion regarding the continuation of the association. Evidently the members1 response did not warrant efforts to revive grower's interest. After the 192*+ crop was sold, the association dissolved. The failure of this ambitious attempt to develop cooperative marketing among Miami Valley tobacco growers may be attributed in general to — 1. Mistakes in the membership campaign. 2. Poor quality crops during its two years of operation. 3. Decreasing demand for the type of tobacco pro duced in the Miami Valley. l+. Serious errors in operating policies and practices. 5. Trade opposition. 6. Lack of understanding of cooperative principles and practices on the part of both management and membership. Some six years after the Miami Valley Tobacco Growers' Cooperative Association folded up, a new urge to form a tobacco cooperative became evident among some Miami growers. This was about the time that the whole nation was headed for a depression. The Agricultural Marketing Act of 1929 gave some support to the growers' idea. This Act created a Federal Farm Board and authorized that Board to make loans to farmers' cooperatives. 218 About 100 growers in the Miami Valley organized the Cigar-leaf Tobacco Growers' Marketing Association in 1931 with headquarters at Brookville in Montgomery county. This move was against the advice of the State Extension Service and the Farm Board. Representatives of these two organizations had met with an organization committee of growers in an effort to work out an organization plan to present to growers. W. H. Collins of the Tobacco Division of the Farm Board stipulated that if a sufficient number of farmers signed up to market their tobacco through this proposed association, then the Farm Board would advance 75 per cent of the market value of the tobacco and see that the organization had finance to get going. It was expected that about 5 million pounds of tobacco would be signed up for the new organization. But only a tenth of that amount and about 100 growers signed up. This association didn't receive the financial back ing of the Farm Board. Evidently the Board didn't consider this a sufficient strong group to lend to. This is the association that is now serving Ohio growers in intermittent years. It undertakes to properly grade and pack tobacco for its growers. Farmers in the burley-growing section of Ohio organiz ed the Farmers' Cooperative Burley Tobacco Association, at 219 Russellville in 1933* This Association bought tobacco out right and resold it. Available Information regarding this association is lacking, but it is believed that it ceased to be a farmers cooperative, yet still serves growers by making available to them corporation warehouses where they can dispose of their tobacco. The problem facing tobacco cooperatives in Ohio are in part due to dissatisfaction resulting from previous un successful attempts. Another draw back has been the problem of pooling a crop which is very hard to grade so that small differences in value will be reflected. Competition by private tobacco warehouses together with declining pro duction have also added to the problem. CHAPTER XI WOOL COOPERATIVES Early Efforts Local wool pools date back to 1877 when farmers near Goodlettsville, Tennessee, pooled their lambs and wool for selling through the Goodlettsville Lamb and Wool Club. This Association is still operating. Another organization — the Putnam County Wool Growers Association, Greencastle, Indiana, was formed in 1885 and continued until 1931* Many other wool pools have been organized since these two associations were formed. As early as 1850 Ohio had become the leading sheep raising state, but beginning in 1870 sheep numbers began to decline and have continued to do so. In fact, since 1935 the sheep population in Ohio has declined almost $0 per cent. In northeastern Ohio, sheep raising was forced to compete with dairying which was relatively more profitable.! And as the production of wool increased not only in the western part of this country but in South America and Australia, the price of wool declined. In Ohio and Michigan in particular, tariff legislation also contributed ^Henry C. and Anne Dewes Taylor, The Story of Agricul tural Economics in the United States. Ioh-Q-1932 (Ames: The Iowa State Press, 19^2), p. 279* 220 221 p to the decline in sheep numbers in the 1890’s. Ohio sheep growers organized the first wool-growers organization in America — the Ohio Wool Growers Associa- •D tion in 1859. This Association stressed improvements in production rather than the marketing of wool, and continued to operate for more than ?0 years. The Ohio State Grange is reported to have made the first effort to market Ohio farmers' wool cooperatively. W. H. Hill, the Grange's business agent reported in 1876 that: The arrangemeht for the sale of wool was the best that could be made under the circum stances. An agent was employed at one-half cent per pound, to go to Philadelphia and receive all wool consigned by patrons in Ohio. The result was a saving of from five to seven cents per pound over wool to local agents.^ Hill also recommended that a wool house be established in some central location, where wool consigned by patrons could be received, graded, and sold direct to manufacturers. Such a warehouse was established in Steubenville, Ohio, but it did not last long because of financial difficulties. 2Ibid.. p. 280. ^Dorsey, og. cit.. p. 15. ^Diamond Jubilee History. Ohio State Grange. l872-191+7 (Columbus: Ohio State Grange, 19^7), p. 222 After the Ohio State Grange failed to establish a cooperative wool marketing agency, no other effort was made to market wool cooperatively in Ohio until 1918. Ohio Wool Growers Cooperative Association Wool growers in Ohio have been selling their wool cooperatively since 1918. That was the year the Ohio Wool Growers Association was organized. To understand the conditions leading to its organization a short background 5 may be helpful. During World War I the War Industries Board was formed to administer the general price control and to establish priorities on all important materials. The action which this Board later took regarding wool marketing figured very prominently in hastening the organization of wool growers in Ohio into a cooperative marketing association. To meet the abnormal demand for wool created by war conditions, the Department of Agriculture began a campaign to increase the production of sheep and wool. This campaign was aimed particularly at those states where Much of this information is based on various articles by J. F. Walker and C. J. Plumb found in The Ohio Farmer for May 25, 1918; June 8 and 22, 1918; April 12, 1919; May 1*+, 1921; and November 8, 192^. 223 L "fleece" wool was produced.0 It was thought that only in these states could a sufficient quantity of wool be produced to meet the demand. This was believed to be so because the "territory" wool states' had just about reached their maxi mum production. Farmers acting out of patriotic sentiments purchased a great many ewes at high prices in response to the govern ment's appeal to produce more wool. Prices of wool began to rise rapidly, and as a natural consequence the price of sheep rose appreciably. It was estimated that by the spring of 1918 wool prices had increased 300 per cent in three years, and cotton, a strong competitor of wool, had risen twice as high in the same period. The War Industries Board immediately took over the entire wool clip of 1918, although only a short time before it had announced that this would not be done. It put a price freeze on wool and rolled prices back to what they were on July 30, 1917. This was much below current market prices. Besides the freeze order, the Board also proposed Fleece wool states include all those states east of the Mississippi River; also Arkansas, Iowa, Louisiana, Minnesota, Missouri, and parts of Kansas, Nebraska, South and North Dakota, and Ohio. 7 Comprise the 11 western range states. 22k to dispose of the wool as it saw fit, and permit growers to sell their clips only to commission men established at disignated distributing centers. A committee of six, representing wool growers in Ohio, Pennsylvania, and West Virginia protested to the War Industries Board about its action, and requested that its decision on method of sale and price regulation be set aside pending a hearing from representatives of the wool growers. Another committee was appointed — this time a com mittee of three — to go to Washington and present its case to Lewis Penwell, Chief of Wool Division of the War Industries Board. The result of this meeting to some extent clarified what growers could do in preference to turning their wool over directly to the government. Growers were advised to pool their clips In quantities of not less than minimum carloads of 16,000 pouhds, and to consign it as one account to any approved dealer at an approved distribution center. Growers were urged to adopt this latter course through their county agent or some farm organization. Wheeling, West Virginia was the dis tribution center nearest Ohio. To speed up the action and take the necessary steps in promoting wool marketing, a meeting of wool producers 225 and wool Interests was held at Ohio State University May 25, 1918* This group decided to revive the Old Ohio Sheep and Wool Growers Association and incorporate it as a wool marketing cooperative. Arrangements were made in the summer of 1918 with Hockheimer Brothers, of Wheeling, West Virginia to receive, grade, and sell the wool on a com mission basis. Curing its first year of operation the association assembled 275,000 pounds of wool which netted the growers 72£ cents per pound as against 60 to 65 cents which local buyers had been paying before the Association was organis ed. A lively membership campaign immediately got under way, and by the spring of 1919 the association had over 8 8,000 members. On October 28, 192*+, the Ohio Sheep and Wool Growers Association was reorganized under the Green-Farnsworth cooperative marketing law of Ohio and changed its name to the Ohio Wool Growers Cooperative Association. The Association is an independent, centralized non stock cooperative. Any person producing wool in Ohio is eligible to become a member, and each member has direct contact with the central office. Q Erdman, op. cit.. p. 136. 226 There are no local wool associations operating as marketing cooperatives in the state, however, in the early years loosely organized county wool growers associations were formed in many counties of the state. Wool was then assembled in the counties and then shipped to the ware house. Now county farm bureaus, local elevator companies, and other cooperative associations act as representatives of the association in assembling and transporting the wool to the central warehouse in Columbus. All wool received at the warehouse is pooled accord ing to grade. Initial payments are made at the time of delivery, kinal settlements are made when the sales have been completed. The net returns to members are based upon the average price for the wool in the different grade pools less necessary marketing expenses. Over the years the association has handled almost three million pounds annually or about one-third of the total Ohio clip. As already mentioned, the sheep industry in Ohio has been declining in importance for the past 50 years. How far this trend can continue before it seriously affects the volume of wool that would be necessary to insure efficient operations in the association is a question to 22 7 be considered. It must be realized that an association must have a sufficient business for economical operation, and that without such volume the cost of marketing can not be lowered. After all, the reductions of marketing costs is one of the reasons for organizing a cooperative. Paul A. Getz, general manager and secretary of the Ohio Wool Growers Cooperative Association, feels that the association should get at least two and one-half million pounds of wool annually in order for the association to operate efficiently. The government program of incentive payments has aided both the grower and the association. When market prices are low these payments give the grower a higher total net return. The most important thing about the program accord ing to Getz, is the promotional work which can be carried on with the funds deducted from the incentive payments. These promotional projects will help build larger markets for wool and lambs. Table 23 shows the membership and dollar volume of business of cooperatives handling wool in Ohio from 1925-26 through the 195^-55 marketing season. The Ohio Wool Growers Cooperative Association is the ohly cooperative in the state whose business is and has been predominantly wool. However, over the years other cooperatives have 228 TABLE 23 NUMBER,* ESTIMATED MEMBERSHIP AND ESTIMATED BUSINESS OB1 COOPERATIVES MARKETING WOOL IN OHIO, FOR SPECIFIED PERIODS 1925-26 to 195^-55 Number of Estimated Estimated Value of Period Associations Membership Net Sales++ ($1000) 1925-26 1 12,000 2,000 1927-28 1 7,000 800 1930-31 1 6,200 1,300 1931-32 1 8,150 755 1932-33 1 8,100 b80 193^-35 1 7,000 760 1935-36 1 6,000 800 1937-38 1 2,000 990 1938-39 1 *+,000 700 1939-L-O 1 6,000 660 19^0-ifl 1 6,300 1,185 ^ l - ^ P 1 ^,MX) 1,360 19l+2-1+3 1 M-,000 1,500 19>+3-M+ 1 8,000 1,600 19M+-*f5 1 8,150 1,600 19L 5-I+6 1 8,200 1,650 19L6-I+7 1 6,500 1,120 19^7-^8 1 7,360 l,*f00 191+8-^9 1 7,200 1 A 00 19^9-50 1 8,000 l,MfO 1950-51 1 7,326 1,731 1951-52 1 7,650 1,6 77 1952-53 1 7,300 1,758 1953-5^ 1 6,593 1 ,1*80 19 51+-55 1 6,810 1 ,5*+6 ♦Classified according to major product handled. ♦♦Represents value of wool handled by all cooperatives. SOURCE: B’armer Cooperative Service and other USDA publications. 229 handled wool as a sideline business. During the 195*+-55 marketing season wool was handled as a sideline by two other cooperatives. Trends in wool cooperatives in the East North Central States and in Ohio over a five year period are shown in Table 2*f. The number of cooperatives in the East North Central States and in Ohio has remained the same, but in the East North Central States membership increased about 8 per cent, and the volume of business increased about b per cent between 1950 and 1955- For the same period, membership declined about 7 per cent and volume of business about 18 per cent for the associations marketing wool in Ohio. In spite of what seems to be an unimpressive growth record, cooperative wool marketing in Ohio has been successful. For over a period of 38 years the Ohio Wool Growers Cooperative Association has netted Ohio farmers Q more than three million dollars above local wool prices.7 The Ohio Wool Growers Cooperative Association offers a complete grading and marketing service to its members. Besides this, the association engages in other activities important to growers. Its educational program has helped ^From the records of the Association. 230 TABLE TRENDS IN WOOL COOPERATIVES,* 1950-51 to 195I+-55 Percent Item and Area 195^-55 1950-51 Change Number of Associations: Ohio 1 1 0 East North Central States 1+ 0 Membership: Ohio 6,810 7,326 -7.0 East North Central States 21,180 19,577 /8.2 Dollar Volume of Net Sales** (Thousands) Ohio l,5*+6 1,731 -16.7 East North Central States *+, 5 5*+ ^,388 /3.8 ♦Classified according to major product handled. ♦♦Represents value of wool handled by all cooperatives. SOURCE: Gessner, ojd. cit.. General Report 31 and Miscellaneous Report 169. 231 to bring about better preparation of wool for market, a more complete knowledge of the grades of wool, a more efficient control of parasites, and proper methods of flock feeding and management. Up until the early part of 1957, the Ohio Wool Growers Cooperative Association sold its wool independent ly. But now it is a member of the National Wool Market ing Corporation of Boston, and markets its wool through it. CHAPTER XII FARMERS' MUTUAL INSURANCE COMPANIES Farmers' mutual fire insurance companies, or assess ment associations as they are sometimes called, are among the oldest types of agricultural cooperatives. There are 99 such associations plus 3 non-assessment mutual companies now serving Ohio farmers (Appendix Table 36). The assess ment associations, in the majority of cases, were organized to provide farmers with protection against fire; but later some of them began insuring for hail, windstorm, and tornado damages. These associations have for almost 100 years provided insurance protection for Ohio farmers at an average cost well below what members would have to pay for similar protection from most other sources. The Farmers1 Mutual Fire Insurance Association of Montgomery County, Dayton, Ohio was established as far back as 1859. As early as l8*+3» Ohio farmers obtained a special charter from the Ohio Legislature to incorporate four mutual fire insurance companies.’*' Between l8*+3 and 1877 others were organized. For instance, the Ohio State Grange had organized three Grange mutual insurance Moore, oj). cit., p. 5l. 232 233 companies before there was a mutual insurance law enacted.^ Afterwards, it organized some others which are still in business. In 1877 the Ohio Legislature enacted a law authoriz ing 10 or more persons to associate themselves together to insure their property against loss or damage from fire, lightning, wind or other like hazards. This law made it easier for a local group of farmers to organize — for as Table 25 shows, 29 or about 30 per cent of the associations now active were organized in the decade 1870-1879. And only about the same per cent has been organized since 1900. As shown in Figure VII , almost the entire state is served by farmers' mutuals; the greatest concentration being in the upper half of the state. In 1956 farmers' mutual assessment associations in Ohio had assets amounting to more than 10 million dollars, ■3 and liabilities of about $*+39,000. The assets ranged from about $ 500.00 to more than $9^9,000 per association, or an average of about $10,000 for each association. Thus, in most cases farmers' mutuals are small local associations. ^Diamond Jubilee History l872-19*+7. Ohio State Grange (Columbus: Ohio State Grange, 19*+7) > p. 61. ^Ninetieth Annual Report of the Superintendent of Insurance (Columbus: State of Ohio, 1957)» Pp. 102-105. 23^ TABLE 25 PERIODS WHEN 102 FARMERS' MUTUAL INSURANCE COMPANIES WERE ORGANIZED IN OHIO 1850 to 1956 Period Number 1850-1859 1 1860-1869 1 1870-1879 29 1880-1889 16 1890-1899 23 1900-1909 13 1910-1919 8 1920-1929 3 1930-1939 5 19^0-19^9 1 1950-1956 2 SOURCE: Appendix Table 36 Figure Vit -L '• "VL Location of Farmers' Mutual Insurance Associations in Ohio, 1957 ASHTABULA WILLIAMS LUCAS- xx; OTTAWA W O l iANDUJKY LORAI SUMMIT HANCOCK MAHONING ASHLAND 'YANDOT If COLUMBIANA HARDIN MARION X [CARROLL; AUGLAIZC L O G A N 5 H E L D V COSHOCTON C H A M P A iCj Is* FAiRfiti.DI PCRRV DlC K AW A V HAMILTON GALL' SOURCE: Ohio Council of Farmer Cooperatives, Inc 236 Table 26 shows the number, amount of Insurance in force, and costs of the farmers1 mutuals in Ohio. The Agricultural Marketing Service of the United States Depart ment of Agriculture, classifies insurance companies as farmers1 mutuals if half of their insurance in force is on farm property. On the basis of this definition the number of associations reported by the Agricultural Marketing Service will in most cases be less than the number reported by the Ohio Superintendent of Insurance. For the past 15 years the amount of insurance in force has increased. Perhaps this is due to the increased value of farm property during World War II and the boom years that followed. Total annual assessment rates or costs have averaged about 22 cents per $100.00 of insurance. About three- fourths of this amount has been used to pay losses. In 1955 the 99 assessment associations listed in Appendix Table 36 received about 8.2 million dollars in premiums and assessments, and paid out losses amounting to 6.8 million dollars. k Ibid. 237 TABLE 26 NUMBER* OF FARMERS' MUTUAL FIRE INSURANCE COMPANIES, INSURANCE IN FORCE, AND COSTS IN OHIO 1935 to 1955 Amount of Insur Cost Per ^100 of Insurance Year Number ance in Force Losses Expenses Total ($1000) cents cents cents 1935 109 859,687 l*+.0 *4-.9 18.9 1936 * * 860,000 ** ** ** 1937 105 919,8*4-0 16.6 5.9 22.5 1938 105 966,151 18.9 5.1 2*+.0 1939 101 923,*+21 18.6 *+.2 22.8 19*+1 101 1,218,272 17.8 5.** 23.2 19*+2 98 1,027,80*+ l*+.6 *+.i 18.7 19M-3 97 1,07*4-, 829 17.2 3.7 20.9 1 9 ^ 96 1,119,937 17.7 3.9 21.6 19*+5 96 1,173,680 15.7 3.9 19.6 19*4-6 95 1,278,176 18.1 M-.5 22.6 19*+7 95 1,*4-25,952 17.9 *+.5 22.*+ 19*4-8 9** l,57*+,**5l 30.2 *+.8 35.0 19*+9 93 1 ,687,*4-25 l*+.l *+.6 18.7 1950 93 1,83*+,617 13.6 *+.6 18.2 1951 92 1 ,913, *+^5 15.1 *+.8 19.9 1952 92 2,136,06*+ 15.2 5.7 20.9 1953 91 2 ,3*4-3,667 16.8 5.9 22.7 195** 93 2,51**, 302 18.9 5.2 2*+.l 1955 92 2,673,99** 21.3 5.3 26.6 ♦Includes farmers' mutuals that have half of their insurance on farm property. **Data not available SOURCE: Various issues of the Agricultural Finance Review (Washington, D.C.: Agricultural Marketing Service, USDA). 238 As already mentioned, many of the farmers1 mutual assessment associations are not very large. But many of them have, by reinsurance, shifted a part of their larger risks to larger companies. Such an arrangemeht has helped the smaller local associations to continue to furnish farmers with efficient insurance service at lower than average prevailing rates. In 1926 the Ohio Farm Bureau Federation went into the insurance business because Ohio farmers were paying the same automobile insurance rates as city people. But the farmers were better risks because of less congested road conditions. In 193^> out of the savings from the automobile insurance business, the Federation organized a mutual fire Insurance company. Then in 1936 it purchased controlling interest in a legal reserve insurance company. The success of the Ohio Farm Bureau insurance venture is noted in the Increase in its assets from $11^,000 in 1926 to more than 5 million dollars in 1936, and 275 million dollars in 1956.^ Today, Nationwide Insurance Company (On September 1, 1955 the name was changed from Farm Bureau Insurance Companies to its present name.) sells tZ -'Records of the Association 239 practically all kinds of insurance — not only to farmers but to city dwellers as well. It operates in 13 states and the District of Columbia and has been licensed to operate in 17 additiohal states. CHAPTER XIII CREDIT COOPERATIVES One of the major complaints of farmers throughout American history has been the high cost of credit. At the beginning of the century, loans to farmers were frequently hard to get on any terms. Both individual farmers and farmer cooperatives found it difficult to borrow adequate amounts of money on terms adapted to the peculiar needs of farming and at reasonable rates. Before the Federal land system was established in 1917? farmers had to get their credit from regular lending insti tutions that had been developed primarily to meet the needs of industry and commerce. These borrowers' businesses had a much more rapid turnover than farming. The commercial and industrial credit of America had been built upon short-term credit. But those credit insti tutions were not particularly adapted to the conditions in agriculture. When and where available, mortgage loans ran for 1, 3) or 5 years at most. Interest rates were often as high as 8 or even 10 per cent.’*' R. L. Farrington, "Better Credit Helps Co-ops and Farmers," News for Farmer Cooperatives. Vol. 17, No. 10 (Washington, S.C.: Farm Credit Administration, January, 1951), p. 21. 2k0 2»+l In 1930 the interest rate and commission on farm mortgages in the United States averaged 6.2 per cent. The averages were for Ohio, 6.2 per cent; Indiana, 6.1 per cent; A Kentucky, 6.1 per cent; and Tennessee, 6 A per cent. In the last decade the average farmer has been required to increase his investment in land, machinery, fertilizer, hybrid seed, commercial feed, insecticides and a host of other new but necessary items as much as 75 per cent.^ Not only has mechanization increased the amount and variety of items a farmer must buy, but it has increased his need for cash. Today a farmer must pay cash to buy diesel fuel to run his tractor, he must figure replacement costs, repairs, taxes and insurance as cash outlays. Farm credit has become a primary tool in modern agri culture. Credit cooperatives such as national farm loan associations, production credit associations, and banks for cooperatives have been pace-setters in bringing down the rate of interest on special types of agricultural loans. Not only that, but farmers and cooperatives with a good and sound credit record can now get loans on terms fitted to p Agricultural Credit (Louisville, Kentucky: Farm Credit Administration of Louisville, 19*+7), Pp. 56-57. 3New York Times (March 17, 1957, Section 3). 2 *4-2 their needs from many commercial lenders. But today the problem facing farmers is not so much a lack of credit; rather it is the large amount of capital required to farm efficiently. The Federal Land Bank and National Farm Loan Associations The widespread interest expressed by farmers, farm organizations, and others for cheaper long-term mortgage loans led Congress to pass the Federal Farm Loan Act on July 1 7 , 1 916. This Act provided for twelve Federal Land Banks and marked the first significant legislative develop ment in making long-term credit available to farmers. The Federal Land Banks were organized in 1917 to give farmers long-term (5 to *4-0 years) amortized loans secured by first mortgages on their farms. They were authorized to sell bonds to the public based upon these farm mortgages. Farmers could now make loans to buy farm real estate, pay or consolidate debts, improve land and buildings, buy live stock and equipment, and for other general agricultural uses. At present farmers can borrow up to 65 per cent of the appraised normal agricultural value of their farm. The Federal Farm Loan Act further provided for the organization of local cooperative farm-loan associations to assemble the mortgages, endorse them, and thus enable farmers to borrow from the Federal land banks. Ten or more 2^-3 farmers who wished to get the benefits of this cooperative credit system could form a national farm loan association by offering satisfactory security for land bank loans amounting to $20,000 or more, and incorporate with a charter granted by the federal government. Today some 1100 national farm loan associations make up the Land Bank System. Farmers obtain loans through their local associations. When a farmer gets a loan he becomes a member of his local credit cooperative by buying stock in the association in an amount equal to five per cent of the amount borrowed. The association in turn buys an equal amount of stock in the land bank of its district. The association endorses the farmers' loans and handles the servicing of the loans after they are made. Money loaned to farmer-members is obtained through the sale of land bank bonds to private investors through the Federal Land Banks. The federal government supplied most of the capital to get the Land Bank System started. By June 30, 19*+7, all the land banks had returned to the United States Treasury all the government-owned stock. The system is now owned entirely by farmers who use it. On July 25, 1917, Lake County farmers organized Ohio's first national farm loan association in Madison, Ohio. 2^*+ Farmers chartered twelve associations that year and most of L the others from 1919 to 1923. In 1936 there were 91 local association in Ohio, but since then the number has been reduced by consolidation to prevent overlapping and dupli cation of territory. There are now 26 national farm loan associations in Ohio (Appendix Table 37). All government capital in the Federal Land Bank of Louisville was repaid by 19*+0. The interest rate on land bank loans to Ohio farmers from 1935 to December 1956 was b per cent. It was then raised to *+£ per cent. And since March, 1957 it has been 5 per cent. Once a loan is granted and closed, the interest rate cannot be increased during the life of the loan. Table 27 shows the extent of Federal land bank loans to Ohio farmers from 1933 to 1956. In 193^ Ohio farmers made 8,8^0 loans amounting to $27 million dollars. This was the peak in both number and amount of loans. After 193^ the number and amount of loans tapered off, but began to rise in 1950. ^Henning and Mann, op. cit.. p. *+. 'Dorsey, op. cit.. p. 21. 2k5 TABLE 27 FEDERAL LAND BANK LOANS MADE AND OUTSTANDING IN OHIO, 1933-1956 Loans Made Loans Outstanding Year Number Amount Number Amount ($1000) rtiooo) 1933 733 $ 2,160 8,260 $27,036 193^ 8,81+0 27,292 17,^60 51+, 6 56 1935 1,866 6,371 19,036 59,^32 1936 655 2,151 19,228 58,678 1937 5l*+ 1,585 19,159 57,155 1938 51+3 1,623 19,208 55,757 1939 596 1,791 19,lM+ 53,8^3 19*+0 629 1,898 18,985 51,859 19^1 671 1,93*+ 18,1+52 ^8,522 19^2 51+2 1,652 16,92^ i+2 ,66i+ 191+1+ !f06 1,291 12,617 29,872 19^5 35^ 1,298 10,1^2 23,227 19*+6 397 1,93*+ 9,230 20,235 19^7 396 1,821 7,865 17,085 19^8 560 2,755 7,155 16,239 19*+9 7 20 3,506 6,850 16,815 1950 9>+3 *+,853 6,812 18,530 1951 902 *+,569 6,692 19,737 1952 851 5,279 6,665 21,615 1953 1,037 7 ,2^6 6,777 2!+,862 195*+ 1,056 7,700 6,90i+ 28,098 1955 1,363 11,722 7 ,2^+0 33,^09 1956 1,569 16,096 7,550 1+1,815 SOURCE: Annual Reports of the Farm Credit Adminis tration. 2*4-6 In 1956 Ohio farmers made 1,569 loans for 16 million dollars. This was the third highest number of loans made and the second highest in the amount loaned* In 1956 Ohio farmers had a total of almost 33*4- million dollars of mortgage debt outstanding. And at the same time they had *4-2 million dollars of long-term debts outstanding with the Federal land bank. This represented about 13 per cent of the total mortgage credit outstanding on Ohio farms. The Federal Intermediate Credit Banks Conditions after World War I focused attention on farmers’ need for short-term credit. Farm prices had fallen while the things farmers bought had increased. Many farmers, especially livestock producers in the central and western states, were finding it difficult to get operating credit for short periods — up to two or three years. Merchants, implement dealers, and commercial banks faced an increased demand for credit while at the same time loanable funds in commercial banks were in short supply. The short supply of loanable funds compelled commercial banks to call loans, and farmers more than ever felt the need for addi tional specialized credit to meet their operating purposes. To meet this need, and create a permanent, dependable, and self-supporting short-term credit system (1 to 3 years) fitted to agriculture, Congress in 1923 passed the Agricul 2 k7 tural Credit Act providing for Federal Intermediate Credit banks to be located in each of the Federal land bank districts. The Intermediate Credit Banks do not lend money to farmers directly, but refinance other lending agencies which lend to farmers. For example, the Intermediate Credit Banks discount notes from agricultural credit corporations, live stock loan associations, state and national banks, produc tion credit associations, and the banks for cooperatives. They make low-interest credit available to these credit agencies which in turn lend to farmers. The Federal Intermediate Credit Banks though not a co operative, are important to farmers credit needs because they bring together surplus funds from a very wide area and make them available to lending agencies without any cost whatsoever to the government. As in the case of the production credit corporation and banks for cooperatives, Congress in the Farm Credit Act of 1953 asked the Federal Farm Credit Board to submit a plan for retiring the Government capital in the Federal Intermediate Credit Banks. Such a plan is in the process of development. 2^8 Credit Subsidiaries of Ohio Cooperatives Financial distress among Ohio farmers reached an acute stage in the early 1930's. In some cases non-real estate loans became unmanageable and were converted into additional farm mortgage debt. Many farmers were unable to obtain funds for production expenses. As already stated, the Federal Intermediate Credit Banks were authorized to buy farmers' notes from lending institutions that would make loans to farmers. But these institutions, at that time mostly state and national bank, failed to take advantage of their privileges to discount farmers' papers through the £ Intermediate Credit Banks. To provide Ohio farmers with credit for production purposes through the intermediate credit system, the Ohio Farm Bureau Federation in 1931 organized the Ohio Farm Bureau Agricultural Credit Corporation. A year later (1932) the Ohio Livestock Shipping Association incorporated the Producers Livestock Credit Association to provide a credit service for its members. The Farm Bureau Agricultural Credit Corporation. Al though organized in 1931* this credit corporation was not licensed until 1933* Green attributed this long delay to ^Green, op. cit.. p. 202. 2k9 the political influence of bankers on the Intermediate Credit 7 Board. The Ohio Farm Bureau Federation organized the credit corporation to provide a reasonable source of credit to county Farm Bureau Cooperative Associations particularly as needed to (1) finance sales to their patrons and (2) provide a source of cash for inventory and operating capital needs. The corporation also makes loans direct to individual Farm Bureau members. The capital stock is fully owned and its policies fully controlled by the Ohio Farm Bureau Cooperative Associa tion and its affiliated county Farm Cooperative Associations. Commercial banks supply about 75 per cent of the corpora tion's loanable funds. The balance comes from the Federal o Intermediate Credit Bank of Louisville, Kentucky, But Mr. E. K. Augustus, Secretary-Treasurer and General Manager of the credit corporation, expressed the hope that in the future the Intermediate Credit Bank would supply a larger portion of their funds. Commercial banks provide funds to the Ohio Farm Bureau Credit Corporation based solely upon the corpora tion's credit record, whereas the Intermediate Credit Bank 7IMl. O Data obtained from E. K. Augustus in an interview June 18, 1957. 250 must have the farmer’s note before it will make loans to any financial agency. As of May 31» 1957 the volume of loans outstanding totaled about 5.5 million dollars. This represents about 5)000 loans.^ The Producers Livestock Credit Association. Like the Ohio Farm Bureau Credit Corporation, the Producers Livestock Credit Association was organized at the bottom of the 1930 depression. It makes loans to its patrons for the purchase of feeding and breeding livestock, and to further a live stock production program. Besides Ohio, the Association does business in Indiana and Pennsylvania. Interest was held to 5 per cent until April 1956, then raised to 5£ per cent. Because of the higher cost of money, it was raised to 6 per cent in November, 1956. Loans made by the Producers Livestock Credit Associa tion have a great deal of flexibility. This is necessary to best meet the requirements of livestock production and feed ing. Borrowers pay interest on each dollar for only the actual number of days it remains outstanding. Borrowers get the full amount of their loan; there is no stock of any kind 9Ibid. 251 to buy. No payments on loans are required until the live stock is sold. Loans are secured by a note and mortgage, and discounted through the Intermediate Credit Bank. Table 23 shows the loan business of the Association. It made *+57 loans in 1935 for $306,000, and 656 in 1956 for more than two million dollars. The volume of loans out standing totaled 1.7 million dollars in 1956. Production Credit Associations As the depression of the thirties became more severe, the need for additional credit services for farmers in Ohio and other states became clearly recognized. Farmers were in need of operating or production credit, but such credit was frequently and nearly always scarce in most areas. What loans that were available were on the basis of 3 0 , 60, or 90 day notes and came due at an inconvenient time. Farmers needed a permanent source of dependable short-time credit at reasonable rates, and with repayment of the loan arranged to coincide with the sale of livestock, crops, and other farm products. In 1933 Congress established the Farm Credit Act which among other things established twelve Production Credit Corporations. A Production Credit Corporation was located in each of the twelve Farm Credit Districts. It assisted farmers in organizing their production credit associations 252 TABLE 28 LOAN BUSINESS OF THE PRODUCERS LIVESTOCK CREDIT ASSOCIATION, 1935-1956 Loans Outstanding Year Number of Total Amount Number of Amount Loans Loaned Loans 1935 1+57 $ 306,000 396 $ 265,326 1936 1+18 315,000 350 273,636 1937 627 51+2,000 577 1+1+8,021 1938 717 516,000 569 1+09,9^0 1939 81+5 635,000 585 1+97,825 19*+0 1 ,01+0 781+, 000 896 625,161+ 19^1 1,081 909,000 803 636,371 19*+2 1,067 1 ,150,000 693 721,805 19^3 878 l,20l+,000 600 710,760 19M+ 61+0 851,000 1+38 538,081+ 19^5 1+98 658,000 350 1+53,581 19^6 638 1,018,000 M-15 631,927 19*+7 81+6 1,59*+, 000 537 966,628 19^8 1 ,01+1 2,027,000 691 1 ,1+03,280 19^9 1,272 2,517,000 867 1,776,529 1950 1,287 2,953,636 970 2,220,370 1951 1,158 3,559,761 915 2,61+8,903 1952 961+ 2,881,551 821+ 2,361+, 658 1953 635 1,53^,122 530 1,220,966 1955 500 1 ,235,112 1+01 1,179,972 1955 688 1 ,968,691 553 1,659,792 1956 656 2,lM+,872 500 1,723,*+99 SOURCE: Fox and Randell, ojo. cit.. Table *+, p. 38. Data from 1951 to 1956 obtained from the Association's records. 253 and helped capitalized them with government funds. There are 500 of these associations in the United States. They are chartered by the Farm Credit Administration and operate under its supervision. Farmers apply for loans directly to their local pro duction credit associations. Loans are made for general agricultural purposes including breeding, raising and feeding of livestock and poultry, growing, harvesting and marketing of crops, purchasing and repair of farm machinery, re financing of debts, home improvements, and family needs. Most loans are secured by a first lien chattel mortgage on crops, livestock, and machinery. In some cases members who have established a reputation for promptness and dependability may obtain credit on an unsecured note. In general, the security required varies with the degree of risk involved. Each farmer who borrows from a production credit association becomes a member and stockholder by purchasing class B voting stock in the association equal to five per cent of the amount borrowed. When production credit associa tions were first organized the government through Production Credit Corporation invested in A or non-voting stock to provide them with capital to get started. Since then, the A stockholdings of the production credit corporation have been gradually reduced. 25b Funds loaned to farmers through production credit associations are obtained from the sale of debenture bonds to private investors through the Intermediate Credit Banks. Ohio farmers from the early beginning became a part of the nation-wide credit system. In the winter and spring of 193^- they organized the production credit associations listed in Appendix Table 38. These associations provide short-term credit to farmers in every county in Ohio. Ten of these associations are completely owned by its members; only the Jackson association still has some government capital tied up in it. In January 1957 most production credit associations in Ohio raised their interest rate from 5£ to 6 per cent. Most cooperatives farm lending agencies have been forced to increase their rates because they borrow funds in the central money market. The total amount of loans made to Ohio farmers by the Production Credit Associations during 1956 was 55.7 million dollars, and the number of loans made was l5>553 (Table 29). With few exceptions, the amount of loans has increased each year since 193^. Between 19*+0 and 1956 it increased about five times. The amount of loans outstanding in 1935 was 2.2 million dollars compared with 37.7 million dollars in 1956. 255 TABLE 29 PRODUCTION CREDIT ASSOCIATION LOANS MADE AND OUTSTANDING IN OHIO, 193*+-1956 Loans Made Loans Outstanding Year Number Amount Number Amount ($1000) ($1000) 193*+ 2,8*+9 I 1,21*+ * $ 998 1935 6,639 3,30*+ 5,763 2,250 1936 10,709 5,031 9,635 3,183 1937 10,038 7,851 8 ,682 5,106 1938 11,575 9,719 10,*+17 6,l*+7 1939 11,713 10,577 10,538 6,580 19*+0 ll,3*+6 10,821 10,329 6,893 19*+1 10,737 11,509 9,369 6,581 19*+2 10,130 12,979 8 ,*+32 6,716 19*+*+ 9,608 15,121 8,58*+ 8,501 19*+5 8,83*+ 13,923 7,799 8,097 19*+6 8,985 15,753 7,903 9,655 19*+7 9, *+86 20,323 8,355 ll,*+8*+ 19*+8 ll,0*+7 26, 5*+*+ 9,825 16,122 19*+9 12,503 3,350 1,256 19,361 1950 13,977 33,871 12,*+ 5*+ 21 ,*+0*+ 1951 1*+,831 *+l,*+58 13,089 25,*+02 1952 l*+,8*+6 *+5,870 13,550 29,613 1953 l*+,365 *+6,203 13,312 29,693 195*+ l*+,6*+7 *+6,362 13,221 30,038 1955 15,282 52,680 13,856 3*+,555 1956 15,553 55,752 1*+, 572 37,702 ♦Data not available SOURCE: Annual Reports of the Farm Credit Adminis tration. 256 Bank For Cooperatives In the early days directors of cooperatives often had to sign personal notes to obtain loans for their associa tions. Over the years the need for adequate credit for cooperatives became more and more apparent. The first step to remedy the situation was taken when Congress passed the Agricultural Credit Act of 1923 providing for the establish ment of the twelve Federal Intermediate Credit Banks. This Act provided, among other things, that these banks could make loans to cooperatives on the security of warehouse receipts. Then in 1929, Congress in an effort to stimulate the growth of cooperatives provided other types of credit for them through the Federal Farm Board. When the Farm Credit Administration was established in 1933, Congress used the remaining assets of the Farm Board to help capitalize the thirteen banks for cooperatives. The banks were established to provide a permanent source of credit on a sound business basis for farmers cooperative associations. A bank for cooperatives is Ideated in each of the twelve Farm Credit Districts. Farmers in Ohio, Indiana, Kentucky and Tennessee are served by tne Fourth Farm Credit District Bank located in Louisville, Kentucky. 2 57 To be eligible to borrow from the banks for cooperatives, an association must be operated for the mutual benefit of its members and not do more business with non-members than with members. Wo member may have more than one vote, and the dividends on its stock or membership capital must be limited to wight per cent. In other words, to be eligible for a loan an association must meet the requirements of the Capper-Volstead Act. A cooperative association borrowing from a bank for cooperatives is required to have an investment in the capital stock of the bank. The amount of capital interest which the borrowing association must have is approximately five per cent in the case of facility and operating capital loans, and approximately one per cent of commodity loans. Upon repayment in full of a loan, the association’s capital interest in the bank acquired in connection with the loan is retired unless the association desires to continue its ownership interest. Loans are made to finance or refinance the purcnase, construction, or lease of needed physical facilities. A cooperative may also get short-term loans to provide money for carrying on its everyday operations and enable it to make advance payments to farmers based on the security of staple commodities. 258 In 1935 the Louisville Bank for Cooperatives had loans outstanding to M+ cooperative associations in Ohio amounting to £^85,000 compared with 111 cooperatives and 116 million dollars in 1956 (Table 30). The Banks for cooperatives have been instrumental in helping cooperatives toward sounder business methods. Applications for loans from these banks must pass very critical appraisers. In so doing, many errors in plans or operations have been detected. Many a loan has been rejected 10 just to get this evaluation. H. E. Erdman, "Trends in Cooperative Expansion 1900- 1950," Journal of Farm Economics (Menasha, Wisconsin: The American Farm Economic Association, Vol. XXXII, No. *+, Part 2, November, 1950), p. 1029. 259 TABLE 30 NUMBER* AND AMOUNT OF LOANS OUTSTANDING MADE BY THE LOUISVILLE BANK FOR COOPERATIVES TO OHIO COOPERATIVES, 1935-1956 Loans Outstanding Year Number Amount ...... (-11000) 1935 Mt $ ^85 1936 56 625 1937 61 1,197 1938 66 1,22*+ 1939 62 1,^38 19^0 60 2,8^5 19^1 53 3,373 19^7 b 6 3,137 19^8 65 7,752 19^9 6*+ 7,569 1950 75 8,906 1951 8** 10,765 1952 91 11,007 1953 93 7,987 195^ 97 7,863 1955 100 8,291 1956 111 11,659 ^Represents number of cooperative associations having loans outstanding. SOURCE: Annual Reports of the Farm Credit Administration. CHAPTER XIV RURAL ELECTRIC COOPERATIVES After World War I, farmers in some of the midwestern and northwestern states had formed electric cooperatives to help themselves get power lines to their farms. But only a few of these were successful. Lack of capital, unwillingness of the electric industry to supply power, unfavorable state laws, and a general lack of understanding of cooperative principles and practices were some of the obstacles that had to be faced.^ Although farmers were demanding that power lines be extended to their farms; and across the country state committees were formed to study the relationship of electricity to agriculture, still the power industry maintained that the farm market was too limited to warrant the investment needed to build costly power lines. The pros and cons of extending power to farm homes at a cost that the farmer could pay were aired across the nation. But it was not until 1935 that a step was made to bring electricity to farm homes. ^Farmer Cooperative Service, Bulletin 1, oj). cit.. P. 189 260 261 Rural electrification was among the projects covered by the Emergency Relief Appropriation Act of 1935. By Executive Order, the Rural Electrification Administration was established on May 11, 1935. Then in 1936 Congress passed the Rural Electrification Act which offered to loan money to private power companies to build rural power lines. But the power companies were slow to act — for they knew that they would have to lower farm rates and simplify their rate schedules before they could obtain loans.2 Either they found this impossible to do or they were unwilling to supply the electric power. Finally farmers were given the opportunity to join together in electric cooperatives to build their own power lines. Thus, the same cooperatives principles which had brought a high standard of living to the nation's farmers were now applied to meet another one of their needs — electric power. The Rural Electrification Administration makes loans to electric cooperatives only where the revenue expected from sales of power will be enough to retire the principal amount of the loan within a period of 25 to 35 Marquis Childs, The Farmer Takes a, Hand: The Electric Power Revolution in Rural America (Garden City, New York: Doubleday and Company, Inc., 1952), p. 55. 262 years. The local electric cooperative signs notes and mortgages to guarantee repayment of each loan plus interest. Before 1935, less than 11 per cent of farm homes in the United States had electric power. But 20 years later, more than 90 per cent of the farms are using electricity.^ Eighty per cent of the farm homes in Ohio had no electric service until the Rural Electrification Adminis- lf tration came along. Now 29 rural electric cooperatives in Ohio (Appendix Table 39), with about 130,000 members, are credited with bringing electricity to nearly 100 per cent of Ohio farms. Twenty-six of these cooperatives were organized in 1935 and 1936. Miami county farmers were among the first in the nation to take advantage of the Rural Electrification Act. On October 17, 1935 they incorporated the Miami Rural Electric Cooperative, and on November l^f, 1935 set the first electric cooperative pole in the nation.^ On April 26, 1936, the Miami county cooperative became a part of the Pioneer Rural Electric Cooperative at Piqua. ^Farmer Cooperative Service, Bulletin 1, op. cit. ^Co-op Power in Ohio. Ohio Rural Electric Cooperative, Inc., Undated. 5Ibid. 263 Much of the early success of Ohio’s electric cooperatives was due to the work of the Ohio Farm Bureau Federation. In 1935 it organized a state wide associa tion, the Farm Bureau Rural Electrification Association, to help farmers take advantage of the benefits offered by the Rural Electrification Administration. The Associa tion was capitalized to serve as an engineering, construc tion, and purchasing organization for the county associations. On July 8, 19*+1, Ohio's electric cooperatives organiz ed a state wide organization -- the Ohio Rural Electric Cooperative, Inc. The Association was organized to assist member cooperatives with their programs. Its present pro gram is concerned with public relations work, legislation, training schools for employees and directors, wholesale power supply studies, and to a limited degree, group purchasing. In 19^2, the National Rural Electric Cooperative Association was organized. It represents local electric cooperatives in national legislative matters. Rural electric cooperatives in Ohio have steadily increased the number of miles of distribution lines, with the results that more and more Ohio farmers are able to obtain electricity. For example, in 1936 these coopera tives had 700 miles of line serving about 900 members. 26b By 19^6 they had 21,000 miles going to 79»000 members, and In 1956, 29,000 miles serving 130,000 members.^ In 1935 Ohio's electric cooperatives sold a half million dollars worth of electricity to farm homes compared with 15 million dollars in 1956. Both the amount of loans made and the amount out standing have increased during the past decade (Table 3 1 ). Ohio electric cooperatives had about 16 per cent of the total amount of rural electrification loans outstanding in 1956. When rural electrification cooperatives began operat ing in Ohio, power rates generally were sliced in two, not just for cooperative members but for all rural users of 7 electricity. Like other Ohio cooperatives, electric cooperatives serve as a yardstick to measure the efficiency of private power companies. Ohio's rural electric coopera tives were organized to deliver electricity to unserved rural areas at cost. Records of the Ohio Rural Electric Cooperatives, Inc. ^Murray D. Lincoln, "Co-ops: How Big Can They Get?," The Reporter. Vol. XI, No. 10, December 2, 195*+. 265 TABLE 31 LOANS MADE AND LOANS OUTSTANDING BY OHIO RURAL ELECTRIC COOPERATIVES, 19^5-1956 Loans Made Loans Outstanding Year (SlOOO) ($1000) 19>+5 1,39^ 18,019 19*+6 2,637 18,830 19 ^7 *+,325 20,725 19*+8 3,869 2^,25^ 19*+9 3,230 27,305 1950 2,38^ 29,^51 1951 1,98*+ 30,731 1952 2,189 31,335 1953 * 32,122 195^ 2,289 3 M 1 2 1955 2,^51 33,989 1956 * 3^,30^ ♦Data not available SOURCE; Various issues of the Agricultural Finance Review, USDA. CHAPTER XV SUMMARY AND APPRAISAL In the preceding chapters the extent of cooperation among Ohio farmers has been discussed. Ohio, with its diversified agriculture and large numbers of family farms, has been a fertile spot for the growth of almost every major type of farmer cooperative. Unlike some of the farmers farther west, Ohio farmers for the most part did not manifest any widespread interest in cooperatives until during World War I and immediately after. The war years had brought consolidation of business interests; post-war inflation had caused prices and wages to rise, but prices of farm products stayed about the same. Over the years, many farmer cooperatives have been organized in the interest of farmers. Some have succeeded, while others have failed. Today, almost every major type of farmer cooperative is found in Ohio. Ohio farmers have 181 marketing associations — cooperative grain elevators, livestock associations, milk marketing cooperatives, and associations selling eggs and poultry, fruits, vegetables, wool, and other commodities. There are more than 100 pur chasing associations from which Ohio farmers buy feed, fertilizer, farm machinery, oil, and many other farm 266 26 7 supplies. And there are more than 100 farmers' mutual fire insurance companies, 26 national farm loan associations, 11 production credit associations, and 29 rural electrification cooperatives. Farmers have organized these cooperatives because private agencies have, from the farmer's point of view, failed to do the jobs properly. They have often followed practices that were not in the interest of farmers. Cooperatives in Ohio have now passed the development stage — they are about mature. And a large number of Ohio farmers have accepted them as their agents to help them operate a better and more efficient production unit. In view of the growth and development of cooperatives in Ohio, it seems appropriate to evaluate them in terms of their objectives, and also in terms of the larger require ments brought about by changes in the economy, and partic ularly changes in the agricultural sector. Objectives — accomplishments. For the purpose of this discussion the general objectives of cooperatives are to improve the income, security, and competitive position of farmers. To what extent have cooperatives in Ohio been able to achieve these objectives for their members and patrons? The whole picture is not clear, but a few examples 268 will perhaps show the progress that some of these coopera tives have made. Cooperatives in Ohio, in many cases, have been the leaders in many phases of agriculture affecting the farmer. Take fertilizer for example. When Ohio farmers first began pooling their orders to buy fertilizer by the carloads, prices dropped 10 per cent. Later cooperatives led in manu- factoring the open-formula high-analysis fertilizer which today is handled throughout the industry. About 83 per cent of the Ohio cooperatives handling supplies, handle fertilizer. Better feed formulas have been developed with the help of research specialists from Ohio State University. There was a time when Ohio farmers were forced to buy feeds by brand name only. They were given no guarantee of formula and oftentimes paid excessive prices for an inferior product. Now, farmer cooperatives in Ohio have provided feed of higher quality and at lower prices to their members, and feed supply is handled by about 83 per cent of the total coopera tives. In 195^-55 feed represented about 35 per cent of the total net dollar of the farm supply business. In fact, dollar- wise it ranked first. In 19^9, Ohio farmers had to sell their wheat as much as 35 cents below the government loan price because storage space was inadequate to store it until the market got better. 269 But in 1950 the average wheat price in the United States increased 17 cents over the 19*+9 price, while in Ohio the price increased about 25 cents. In Ohio this was made possible because Ohio farmers invested their money in an additional 2£ million bushel grain elevator at the Columbus terminal. This move caused other terminals to offer storage space as a service too. As a result all farmers in Ohio, not just Ohio farmers who were members of the Ohio Farm Bureau, gained an average of eight cents per bushel. But nothing happened until the Ohio Farm Bureau Cooperative Association saw the need and was able to provide the service in the farmers' interest. In livestock marketing, cooperative leaders in Ohio were among the first to sense the trend away from terminal livestock marketing toward decentralized country markets near the farm. As a result, out of the merger of five live stock associations, the present Producers Livestock Associa tion was organized to operate in local markets. According to the Association officials, "net returns to farmers definitely have been raised through the efforts of the Eastern Order Buying Company." In 1950? cash payments of certificates of savings were made totaling $10l+,305. for the years 193^ through 19*+2. From 19*+3 through 1956, certificates of equity representing 270 savings due members, totaled $595,503.'*' Before rural electrification came to rural Ohio, 80 per cent of farm homes were without electricity, but when the rural electrification program began operating, power rates generally were cut in half, not just for cooperative members, but for all rural consumers of electricity. And today nearly 100 per cent of rural homes have electricity. The introduction of more efficiency in farm business tends to make better use of farm resources and reduces the cost of producing farm products. New techniques in agri culture have accounted for much of the increase in farm efficiency in recent years. But many of the new techniques in agriculture require additional capital. Farmers' credit associations — national farm loan associations, production credit associations, and other subsidiary credit associa tions play an important role in making available to Ohio farmers money to incorporate some of these new techniques. In 195^ farmers received 1.5 per cent more income by selling their products through marketing cooperatives, and saved *+.5 per cent by purchasing farm supplies cooperative ly.2 Through cooperatives, these farmers improved their ^Annual Report of the Producers Livestock Association 1956. ^Advisory Council Guide (Columbus: Ohio Farm Bureau Federation, Inc., Vol. XIII, No. 3, February, 1956). 271 parity ratio by 6 per cent. Where cooperatives were strong in Ohio, farmers increased their parity ratio even more.^ Farmer cooperatives in Ohio have also influenced the production practices of egg producers, fruit and vegetable growers, and livestock and wool producers. These producers and growers, who once sold ungraded and non-standardized products, are now doing just the opposite. Payments are based on quality and these farmers' net return depends upon the quality of products they produce and place on the markets. Trends in number. membership and business volume. In 1925-26, Ohio farmers had a total of 395 marketing and pur chasing associations. This was the greatest number in one year. But since then, the trend in number has been downward. In 195*+-55 there were 29^ marketing, purchasing, and related service associations. But at the time that the number of marketing associations was declining, the number of purchas ing associations was increasing. In the last few years the number of purchasing associations has leveled off. Over-all — in both marketing and purchasing, the long term trend appears toward fewer but larger associations with more diversified business, particularly for those operating at the local level. For example, since 1925-26 the average 3ibid. 272 membership per association has increased from about 290 to about 1300. And in the same period, average volume of business per association has grown from about $271,000. to almost 2 million dollars. Of course, a considerable part of this increased business can be traced to the change in the general level of prices. Memberships in farmer cooperatives in Ohio have been moving steadily upward during the last decade. Almost 385,000 were reported for 195^-55. There are about 170,000 farms in Ohio. On the basis of membership this means that if memberships were evenly divided, as an average, every farmer in Ohio held membership in slightly more than two cooperatives. Actually, the range in memberships held by individuals is from none to perhaps three or more. Thus, farmers' memberships in Ohio cooperatives in relation to the number of farms in Ohio would seem to give a pretty reliable index of the acceptance of cooperatives by Ohio farmers. Looking to the future, any growth in physical volume handled by Ohio cooperatives is likely to come from their attracting a larger portion of the business of present members rather than from additional memberships. The trend toward more integration. Farmers through their cooperatives are achieving more integration — both verti cally and horizontally — thus bringing about a closer linking 273 of supply, production, and marketing operations so familiar in the industrial and business picture generally. Ohio cooperatives are not nearly as tightly organized as they might be, but they have made steps in that direction. As noted in Chapter IV, diversification of operations is one of the characteristics of marketing, purchasing, and service cooperatives in Ohio. About 86 per cent of the total number of associations do some marketing, although marketing associations represent about 62 per cent of the total number of associations. Specialized purchasing associations represent about 3 5 per cent of the total number of associa tions, yet about 82 per cent of the total number of associa tions handle some farm supplies. In the future it is expected that Ohio cooperatives will further extend such diversification of operations. For this is one way to expand — new lines of services help reduce overhead costs and increase membership satisfactions through providing savings over greater areas of service. Besides adding new lines of service, some of Ohio cooperatives have achieved a closer coordination of efforts among local associations through sales federations and other joint operations. This applies particularly to the egg and poultry cooperatives in Ohio. 2 7b Then there is the Producer Livestock Association with its centralized selling operations in decentralized markets, and the Ohio Wool Growers Cooperative Association that grades and pools growers' wool at a central warehouse and uses the National Wool Marketing Corporation at Boston as its sales agencies. Many milk cooperatives in Ohio operate under federal milk orders which tend to stabilize prices and establish bargaining procedures for milk producers and dealers. Some processing and manufacturing of dairy products are also done by milk cooperatives. The Cincinnati Pure Milk Association is among the few cooperatives in the United States that handles producers' milk all the way to the consumer. Prospects for future growth. Cooperatives are farmers' agents, and as such they may be considered as an extension of farming activities. Improved techniques have enabled a smaller number of farmers to increase output at a rapid rate. This has brought about more specialization in agri culture, and has caused marketing and purchasing problems to become more significant for farmers. In an effort to get more for the things they sell and save money on farm supplies, it is probable that in the future farmers may do a larger portion of their farm business with cooperatives. 275 But today, cooperatives are facing stiffer competition for farm business than ever before. This is especially so in the case of marketing associations with small volumes. Cooperatives need to be stronger and more efficient. Many cooperative leaders in Ohio are of the opinion that farmer cooperatives in Ohio are too small to give farmers the kinds of services they need -- that is, more fertilizer plants, feed mills, grain terminals, oil refinieries, etc. But to expand these operations farmers will have to invest more of their capital in their cooperatives than they are now doing. John W. Sims, of the Ohio Farm Bureau Coopera tive Association, thinks that 10 per cent of a farmer's capital ought to be invested in his marketing and procure ment facilities. Today in Ohio that figure is less than 3 per cent. Cooperatives must be run efficiently so as to make greater savings possible for farmers to invest. The question may well be asked, whether a farmer, for example, is better off to receive $100.00 in cash than he is to receive a hundred-dollar ownership interest in a fertilizer plant which can assure him of high-quality, open-formula fertilizer throughout his entire lifetime at cost to him. Perhaps with a continuous educational program among cooperative member ships, more of them could see the advantages of larger in vestments in their cooperatives. 276 Many cooperatives today place some of their savings in a revolving fund v ere they can be used as operating operating capital over a period of years, this seems to be a fair and sound way to finance cooperatives. But again, the greater the volume of business farmers do with their cooperatives, the greater savings will be. The whole trend of business is toward more integration. Cooperatives must be flexible enough to meet new conditions. For example, as cooperatives get further into the merchandis ing field and as they move closer to the sources of raw materials, they may find it necessary to change their or ganizational structure and operational methods — yet main tain democratic farm control. With the shift toward larger organizational structures, cooperative leaders must not forget membership relations programs. Members must recognize and accept their responsi bilities. ihey must be made to feel that the organization belongs to them. 1'here still seems to be too many cooperatives that are in competition with each other, performing duplicate services. These associations could better use their resources if they would consolidate with nearby associations. In the years ahead, the pressures of competition will eliminate many of the smaller and poorly operated associations. 2 77 Changes in marketing practices will perhaps be an outstanding factor that will affect some of the milk and grain cooperatives in Ohio in the near future. Tank trucks will probably be used to haul milk from more and more of the farms. When milk is hauled in a tank truck rather than in 10-gallon cans, it is practicable to haul it considerably farther. This practice could reduce the number of milk cooperatives operating in the smaller markets in the over lapping areas. It is reported that farmers are hauling increasing quantities of grain directly to terminal or subterminal elevators rather than to local elevators. This practice will also tend to reduce the number of local grain elevators now operating at close distance to each other. In the past, the costs of cooperatives have been used as a yardstick to judge the effectiveness of private agencies. If cooperatives are strong they will continue to set the pace in many fields and provide effective competition with other businesses. APPENDIX A Cooperative Marketing Act of the State of Ohio Otherwise known as Senate Bill 266, Session of 1923 Legislature "Green-Farnsworth Law” Section 1729 -oOl to .28 Revised Code of Ohio 278 279 1729.01 (10186-1). Terms used in sections governing agri cultural co-operatives. In sections 1729.01 to 1729.27, inclusive, of the Revised Code: A. "Agricultural products" includes horticultural, viticultural, forestry, dairy, livestock, poultry, bee and farm products; B. "Association" means any corporation organized under sections 1729.01 to 1729.27, inclusive, of the Revised Code; C. "Member" includes actual members of associations without capital stock and holders of common stock in associations organized with capital stock; D. "Person" includes individuals, firms, partnerships, corporations, and associations. Associations shall be deemed non-profit inasmuch as they are not organized to make profit for themselves as such, or for their members as such, but only for their members as producers. A co-operative milk marketing association, organized and existing under this act is not an illegal trust or com bination in restraint of trade. Where the issue presented is whether a milk marketing contract made pursuant to this act is unreasonable and void as against public policy, such unreasonableness and invalidity may be proven by a prepon- 280 derence of the evidence. Producers* Assoc, vs. Milk Co, 129 159, 19^ NE 16. Co-operative marketing agreement may be so drawn as not to constitute violations of (6390 to 6397) inclusive or of 10186-1 to (10186-26.) Early v Co-operative Pure Milk Associations, 115 OS 185, 152 NE 390. (GC 6390 to 6397 now RC 1331.01 to 1331.08; GC 10186-1 to 10186-26 now RC 1729.01 to 1729.20). Co-operative marketing associations are "moneyed, business or commercial" corporations which may be adjudged involuntary bankrupts under the bankruptcy act in spite of the statute providing that such associations are not or ganized to make profit for themselves as such, or for their members as such, but only for their members as producers. Schuster v Milk A.ssoc. 6l F (2d) 337. "Profit is the gain made on any business or investment when both the receipts and payments are taken into considera tion." 1925 OAG 2^28, quoting the US Supreme Court. 1729.02 (10186.3). Purposes An association may be organized to engage in any activity in connection with the marketing or selling of the agricul tural products of its members, with the harvesting, preserv ing, drying, processing, canning, packing, grading, storing, handling, shipping, or utilization of such products, or with 281 the manufacturing or marketing of the by-products of such products; to engage in any activity in connection with the manufacturing, selling, or supplying to its members of machinery, equipment, or supplies of any kind; to engage in services in connection with activities authorized by sections 1729.01 to 1729.27, inclusive, of the Revised Code; or to engage in the financing of the activities enumerated in this section. Such association may be organized to engage in any one or more of such activities, but this secton does not authorize any professional services other wise prohibited by law. 1729.03 (10186-*+). Powers. Each association incorporated under sections 1729.01 to 1729.27, inclusive of the Revised Code shall have the following powers: A. It may engage in any activity in connection with the marketing, selling, preserving, harvesting, drying, pro cessing, manufacturing, canning, packing, grading, storing, or utilization on any agricultural products produced or delivered to it by its members or others, or with the manu facturing or marketing of the by-products of such products; any activities in connection with the purchase, sale, hiring, or use, by its members or others, of supplies, machinery, or equipment of any kind; may engage in services 282 in connection with any activities authorized by sections 1729.01 to 1729.27, inclusive, of the Revised Code, or may engage in the financing of such activities. Such association may engage in any one or more of the activities specified in this section but this section does not authorize any professional services otherwise prohibited by law. Any such association may limit its activities to the handling or the marketing or products of its own members, except for storage. If it handles the products of non members, the total of such non-members' products handled by it in any fiscal year must not exceed the total of similar products handled by the association for its own members during the same period. B. It may borrow money without limitation as to amount of corporate indebtedness or liability except in the case of associations organized with capital stock and may make advance payments and other advances to members or others. C. It may act as the agent or representative of any members in any of the activities mentioned in divisions (A) and (B) of this section. D. It may purchase, otherwise acquire, hold, own, exercise all rights of ownership in, sell, transfer, pledge, guarantee the payment of dividends or interest on, or guarantee the retirement or redemption of shares of capital 283 stock or bonds of any corporation or association engaged in any activity directly related to the association's own authorized activities or in the warehousing, handling, or marketing of any of the products handled by the association. E. It may establish reserves and invest the funds therefor in bonds or in such other property as is provided in the by-laws. F. It may buy, hold, and exercise all privileges of ownership over such real or personal property as is necessary, convenient, or incidental to the conduct of any authorized business of the association. G. It may establish, secure, own, and develop patents, trademarks, and copyrights. H. It may do everything necessary, suitable, or proper for the accomplishment of any of the purposed enumerated in this section, or conducive to or expedient for the interest or benefit of the association, and may contract accordingly. In addition it may exercise and possess all powers, rights, and privileges necessary or incidental to the purposes for which the association is organized or to the activities in which it is engaged, and also any other powers, rights, and privileges granted to ordinary corpora tions by the laws of this state, except such as are incon sistent with the express provisions of sections 1729.01 to 28*+ 1729.27, inclusive, of the Revised Code, it may do any such thing anywhere. Co-operative agricultural association organized under the provisions of (10186-1 to 10186-30), in addition to being directly authorized to issue both common and preferred stock may provide for classification of such shares as authorized in this section, so long as none of such shares provides for the payment of dividends in excess of eight per cent per annum and appropriate restrictions are incor porated in the by-laws and printed on all classes of common stock to persons engaged in the production of agricultural products handled by the association as required by (10186-13) 19l+0 OAG 2395. (GC 10186-1 now RC 1729.01; GC 10186-13 now RC 1729t 10). 1729.0*+ (10186-21). Use of word "co-operative." No person, firm, corporation, or association organized or applying to do business in this state on or after July 17, 1923, as a farmers’ marketing association for the sale of farm products shall use the word "co-operative" as a part of its corporate or other business name or title, unless it has complied with sections 1729.01 to 1729.27, inclusive, of the Revised Code. 285 1729.05 (10186-2). Number of incorporators. Five or more persons, a majority of whom are residents of this state and engaged in the production of agricultural products, may form a non-profit cooperative association with or without capital stock, under sections 1729.01 to 1729.27, inclusive, of the Revised Code. 1729.06 (10186-6). Articles of incorporation. Each association must prepare and file articles of in corporation which set forth: A. The name of the association; B. The purpose for which it is formed; C. The place where its principal business will be transacted; D. The number of its directors, which must be not less than five; the terms of office of such directors; and the names and addresses of those who are to serve as directors, either for the first term or until the election and quali fications of their successors, or both; E. If the association is organized without capital stock, whether the property rights and interests of all members are to be equal or unequal; if unequal, the general rule applicable to all members by which the property rights and interests of each member are to be determined; and pro vision for the admission of new members entitled to share 286 in the property of the association with the old members in accordance with such general rules, which provision shall not be altered, amended, or repealed except by the written consent or vote of two thirds of the members; F. If the association is organized with capital stock, the amount of such stock, the number of shares into which it is divided, and the par value per share; and if the capital stock is divided into preferred and common stock, a statement of the number of shares of stock to which pre ference is granted, the number of shares of stock to which no preference is granted, and the nature and definite extent of the preferences and privileges granted to each. The articles must be subscribed by the incorporators and acknowledged by them before an officer authorized by law to take and certify acknowledgements of deeds and con veyances, and shall be filed in accordance with sections 1701.01 to 1702.*+3, inclusive, of the Revised Code. When so filed, said articles of incorporation, or certified copies thereof, shall be received in all the courts of this state as prima-facie evidence of the facts contained in them and of the due incorporation of such association. 1 OJur 2d Acknowledgements (5)- 287 1729.07 (10186-7). Amendments to articles. The articles of incorporation of an association may be altered or amended at any regular meeting of the association or at any special meeting called for that purpose. An amendment must first be approved by two thirds of the directors and must then be adopted by a vote representing a majority of all the members of the association. Amend ments to the articles of incorporation, when so adopted, shall be filed in accordance with sections 1701.01 to 1702. *+3, inclusive, of the Revised Code. 1729.08 (10186-30). Filing fees. For filing articles of incorporation or amendments thereto, and with respect to the issuance of shares of stock, an association organized under sections 1729.01 to 1729.28, inclusive, of the Revised Code, shall pay to the secretary of state the fees imposed by section 111.16 of the Revised Code upon corporations organized for profit. 1729.09 (10186-5). Membership limited. A. Under the terms prescribed in the by-laws adopted by it, an association may admit as members, or issue common stock to, only co-operative marketing associations or per sons engaged in the production of agricultural products for the market, including the lessees and tenants of land used for the production of such products and any lessors 288 and landlords of such land who receive as rent any of the crop raised on the leased premises. B. If a member of a nonstock association is not a natural person, such member may be represented by any individual, associate, officer, manager, or member, if such a representation is authorized in writing. C. Any association organized under sections 1729.01 to 1729.27, inclusive, of the Revised Code, may become a member or stockholder of any other association organized under such sections. 1729.10 (10186-13). Membership, stock ownership, individual liability. A. When a member of an association established without capital stock has paid his membership fee in full, he shall receive a certificate of membership from the association. B. No association shall issue stock to a member until it has been fully paid for. The promissory notes of the members may be accepted by the association as full or partial payment for stock. The association shall hold the stock as security for the payment of the note; but such retention as security shall not affect the member's right to vote. C. No member shall be liable for the debts of the association to an amount exceeding the sum remaining unpaid on his membership fee or on his subscription to the capital 289 stock, including any unpaid balance on any promissory notes given in payment of such membership fee or subscription. D. The directors of the association shall be liable for its debts only as members of the association. E. No stockholder of the association shall own more than one twentieth of its common stock, and the association in its by-laws may limit the amount of common stock which one member may own to any amount less than one twentieth. F. The association shall limit its dividends on stock to any amount not greater than eight per cent per annum; and all its other net income, less specified reserves which shall be provided for in the by-laws, shall be dis tributed to its members only on the basis of patronage. Any receipts or dividends from subsidiary corporations, or from stock or other securities owned by the association, shall be included in the ordinary receipts of the associa tion, and shall be distributed accordingly. G. No member in any such association organized without capital stock shall be entitled to more than one vote. H. Any such association organized with stock may issue preferred stock which does not have the right to vote. Such stock may be sold to any person and may be redeemable or retirable by the association on such terms as are provided for by the articles of incorporation and printed on the face of the certificate. 290 I. The by-laws shall prohibit the transfer of the common stock of the association to persons not engaged in the production of the agricultural products for the market; and such restriction must be printed upon every certificate of stock subject to them. J. The association may, at any time specified in the by-laws, except when the debts of the association exceed fifty per cent of its assets, purchase its own common stock at the book value of such stock, as determined by the board of directors, and pay for it in cash within one year there after. Co-operative agricultural association in addition to being directly authorized to issue both common and preferred stock, may provide for classification of such shares as authorized in (8623-^), so long as none of such shares pro vides for the payment of dividends in excess of eight per cent per annum and appropriate restrictions are incorporated in the by-laws and printed on all classes of common stock, restricting the sale of common stock to persons engaged in the production of agricultural products handled by the association as required by (10186-13). 19*+0 OAG 2395. (GC 8623—Li now RC 1701.06; GC 10186-13 now RC 1729.10). The word "stockholder" as used in the fifth paragraph of this section, with respect to the ownership of common stock of a co-operative agricultural association should be 291 construed to mean ’’natural person owning stock.” The secretary of state may accept for filing the proposed articles of in- corporatioh of a co-operative agricultural association which is organized, and intended to be operated, owned and con trolled by another co-operative agricultural association. 193*+ OAG 3569. 1729.11 (10186-8). By-laws. Each association must, within thirty days after iifes incorporation, adopt for its government and management a code of by-laws not inconsistent with the powers granted by sections 1729.01 to 1729.27, inclusive, of the Revised Code. The vote or written assent of a majority of the mem bers is necessary to adopt such by-laws. The by-laws shall provide that they may be amended and shall specify the voting power by which amendments may be made. It may also provide for any of the following matters: A. The time, place, and manner of calling and conduct ing the association's meetings; B. The number of members constituting a quorum; C. The right of members to vote by proxy or by mail, or both, and the conditions, manner, form, and effect of such votes; D. The number of directors constitutihg a quorum; 292 E. The qualifications, compensation, duties, and terms of office of directors and officers, and the time of their election and the manner of giving notice thereof; F. Penalties for violation of the by-laws; G. The amounts of entrance, organization, and member ship fees, if any, the manner of collecting them; and the purposes for which they may be used; H. Any amount which each member is to be required to pay annually or from time to time to carry on the bus;. >ess of the association; any charge to be paid by each member for services rendered by the association to him, and the time of payment and the manner of collection of such charge; and any marketing contract between the association and its members which every member may be required to sign? I. The number and qualifications of members of the association and the conditions precedent to membership or to ownership of common stock therein; the time and manner of permitting members to withdraw or the holders of common stock to transfer their stock; the manner of assignment and transfer of the interests of members and of the shares of common stock; the conditions upon which and the time when the membership of any member shall cease; the suspension of the rights of a member when he ceases to be eligible to membership in the association; the manner and effect of the expulsion of a member; and the manner of determining the value of a member's Interest, and provision for its purchase by the association, upon the death or withdrawal of a member or upon the expulsion of a member or the forfeiture of his membership, or, at the option of the association, provision for such purchase at a price fixed by appraisal by the board of directors; but in case of the withdrawal or expulsion of a member, the appraisal of his property interests in the association and the fixing of the amount thereof in money shall be done equitably by such board, and such amount shall be paid to him within one year after such expulsion or withdrawal; J. Any other provision for any matter relative to the control, regulation, operation, management, or government of the association. 1729.12 (10186-9). Meetings of members or stockholders. In its by-laws, each association shall provide for one or more regular meetings annually. The board of directors may call a special meeting at any time. Ten per cent of the members or stockholders may file a petition stating the specific business to be brought before the association, and demand a special meeting for such business, at any time, and such meeting must thereupon be called by the board. Notice of every meeting, together with a statement of the purpose thereof shall be mailed to each member at least ten days prior to the meeting, unless the by-laws require that such 29^ notice may be given by publication in a newspaper of general circulation, published at the principal place of business of the association. 1729.13 (10186-10). Board of directors. The affairs of an association shall be managed by a board of not less than five directors, elected by the mem bers from their own number. The by-laws may provide that the territory in which the association has members shall be divided into districts and that the directors shall be elected according to such district either directly or by district delegates elected by the members in each district. In such a case the by-laws shall specify the number of directors to be elected by each district and the manner of reapportioning the directors and of redistricting the territory covered by the association, and may provide that primary elections shall be held in each district to elect the directors apportioned to such districts and that the result of all such primary elections may be ratified by the next regular meeting of the association or may be con sidered final as to the association. The by-laws may pro vide that one or more directors may be appointed by any public official or commission or by other directors selected by the members or their delegates. Such directors shall represent primarily the interest of the general public in 295 such associations, and need not be members of the association, but shall have the same powers and rights as other directors. The association may provide a fair remuneration for the time actually spent by its officers and directors in its service, and for the services of the members of its executive committee. No director of the association, during the term of his office, shall be a party to a contract for profit with the association differing in any way from the business relations accorded regular members or holders of common stock of the association or others, or differing from terms generally current in that district. The by-laws may provide that no director shall occupy any officer’s position in the association except that of president and secretary or either, on regular salary or substantially full-time pay. The by-laws may provide for an executive committee and may allot to such committee all the functions and powers of the board, subject to the general direction and control of the board. When a vacancy on the board occurs other than by ex piration of terra, the remaining members of the board, by a majority vote, shall elect a director to fill the vacancy, unless the by-laws provide for an election of directors by district, in which case the board shall immediately call a 296 special meeting of the members or stockholders in that district to fill the vacancy. 1729.1^ (10186-11). Officers. The directors of an association shall elect from their number a president and one or more vice-presidents. They shall also elect a secretary and a treasurer, who need not be directors or members of the association; and they may combine the two offices and designate the combined office as that of secretary-treasurer, or unite both functions and titles in one person. The treasurer may be a bank or any despository and as such, shall not be considered as an officer, but as a function of the board of directors, and the secretary shall perform the usual accounting duties of the treasurer, but the funds of the association shall be deposited only as and where authorized by the board. '1729.15 (10186-12). Bonds of officials. Every officer, employee, and agent handling funds, negotiable instruments or other property of or for an asso ciation shall execute and deliver adequate bonds for the faithful performance of his duties and obligations. 1729.16 (10186-1^). Removal of officers or directors. Any member of an association may bring chatges against an officer or director of the association by filing them in writing with the secretary of the association together 297 with the petition, signed by five per cent of members, requesting the removal of the officer or director in question. The removal shall be voted upon at the next regular or special meeting of the association and, by a vote of a majori ty of the members, the association may remove the officer or director and fill the vacancy. The director or officer against whom such charges are brought shall be informed in writing of the charges previous to the meeting and shall have an opportunity at the meeting to be heard in person or by counsel and to present witnesses and the persons bringing the charges against him shall have the same opportunity. In case the by-laws provide for the election of direc tors by districts with primary elections in each district, then the petition for removal of a director must be signed by twenty per cent of the members residing in the district from which he was elected. The board of directors shall then call a special meeting of the members residing in that dis trict from which he was elected to consider the removal of the director and at such meeting, by vote of the majority of the members of that district, the director in question shall be removed from office. 1729.17 (10186-15). Actions of director reviewed by members. Upon demand of one-third of the entire board of direc tors of an association, made and recorded immediately at the 298 same meeting at which the original motion was passed, any matter of policy that has been approved or passed upon by the board must be referred to the entire membership of the association for decision at the association's next special or regular meeting; and a special meeting may be called for this purposes 1729.18 (10186-16). (10186-17). Marketing contracts. An association and its members may make marketing contracts, requiring the members to sell, for any period of time not over ten years, all or any specified part of their agricultural products or specified commodities ex clusively to or through the association or to or through facilities to be created by the association. The contract may provide, among other things, that the association may sell or resell the products delivered to it by its members, with or without taking title thereto, and pay over to its members the resell price, after deducting all necessary selling, overhead, and other costs, such as interest or dividends on stock not exceeding eight per cent per annum, reserves for retiring stock, and any other proper reserves, and any other deductions.1 Source1 GC, (10186-16) 299 The by-laws or the marketing contract may fix, as liquidated damages, specific reasonable sums to be paid by the members to the association upon the breach by them of the marketing contract in regard to the sale, delivery, or withholding of products, and may further provide that the member may pay all costs, premiums for bonds, expenses, and fees, in case any action is brought upon the contract by the association. Such provisions shall be enforceable in the courts of this state; and such provisions for liquidat ed damages shall be enforceable as such and shall not be 2 regarded as penalties. Source2 GC (10186-17). A contract whereby tobacco growers are to deliver all their product for five years to an association., to be polled, graded and resold at the best prices, obtainable under a penalty of five cents per pound as liquidated damages, does not violate the anti-trust laws (aff 25 NP (NS) 1). List v Burley Tobacco Growers Co-op Ass’n 22 LR ^55. The Co-operative Marketing Act is not in conflict with Ohio Constitution, art 1, (2) nor with the provisions of the Valentine anti-trust act, (6391) et seq. Co-operative Ass'n v Gardener, 25 NP (NS) 1. (GC 6391 now RC 1331.01). 3 0 0 1729.19 (10186-23). Co-operatinn contracts. An association may, upon resolution of its board of directors enter into all necessary and proper contracts, and make all necessary and proper stipulation and arrange ments, with any other co-operative corporation or association formed in this or any other state, for the co-operative or more economical carrying on of any of its business. Any two or more of such associations may, by agreement between them, unite in employing or separately employ the same personnel, methods, means, and agencies for carrying on their respective businesses. Such associations, acting singly or collectively, may meet in conference with two or more purchasers of their products who are acting collectively, and may at such conference fix by agreement the prices to be paid by such purchasers to the associa tion or associations for such products. Such agreements are subject to section 1729.20 of the Revised Code. Such concerted action by such purchasers is not a contract in restraint of trade. 1729.20 (10186-26). Associations and agreements not in restraint of trade. As association complying with sections 1729.01 to 1729.27, inclusive, of the Revised Code, is not a conspiracy, a combination in restraint of trade, and a legal monopoly, or an attempt to lessen competition or to fix prices 3 0 1 arbitrarily; and the marketing contracts between such an association and its members, or any other agreements author ized in such sections, are not illegal as such in unlawful restraint of trade, or part of an conspiracy or combination to accomplish an improper or illegal purpose. A contract between co-operative milk marketing association and a milk dealer or distributor by which the latter agrees to buy all milk for his business from pro ducers who are members of the association, at prices, and to sell under classifications, to be mutually agreed upon by him and the marketing department of the association, and to pay a portion of the proceeds of his sales to the association for the purpose of maintaining a pooling fund and a blended selling price among dealers, with the ulti mate purpose of securing to each producer a uniform price for his milk regardless of the price at which it is sold, is not void as against public policy, or in violation of the anti-trust laws of the State of Ohio, unless such con tract, in its restraint of trade, is unreasonable as to character, scope or operation (List v Tobacco Growers' Asso, ll*f OS 361, 151 NE U-71 app & fol) Producer^ Asso v Milk Co, 129 OS 159, 19^ NE 16. 3 0 2 1729.21 (10186-18). Payment for purchases in preferred stock. If an association, organized with preferred capital stock, purchases the stock of, any property of, or any interest in any property of any person, it may discharge the obligations so incurred wholly or in part by exchanging, for the acquired interest, shares of its preferred capital stock to an amount which at par value would equal the fair market value of such acquired interest, as such fair market value is determined by the board of directors. The trans fer to the association of the interest so purchased is equivalent to payment in cash for the shares of stock so issued. 1729.22 (10186-22). Membership in other corporations. An association may organize, form, operate, own, control, have an interest in, own stock of, or be a member of any other corporations engaged in preserving, drying, processing, canning, packing, storing, handling, shipping, utilizing, manufacturing, marketing, or selling the agricultural prod ucts handled by the association or the by-products of such products. If such other corporations are warehousing corporations, they may issue legal warehouse receipts to the association or to any other person against commodities delivered to them, and such legal warehouse receipts shall be considered 303 an adequate collateral to the extent of the usual and current value of the commodity represented by them. 1729.23 (10186-20). Exemptions. Any law which is in conflict with sections 1729.01 to 1729.27, inclusive, of the Revised Code, shall be con strued as not applying to the associations provided for in such sections. Any exemptions under law applying to agricultural products in the possession or under the control of the individual producer shall also apply to such products delivered by its farmer members, as long as such products are in the possession or under the control of the associa tion. 1729.2b (10186-19). Annual reports. Each association shall prepare and file with the director of agriculture, on forms to be furnished by him, an annual report containing the name of the association; its principal place of business; a general statement of its business operations during the fiscal year, showing the amount of capital stock paid up and the number of stock holders, if it is a stock association, or the number of members and amount of membership fees received, if its is a nonstock association; the total expenses of such operations the amount of its indebtedness or liabilities; and its balance sheets for such fiscal year. 30^ 1729.25 (10186-21+) Any corporation or association organized under laws of another state that are generally similar to sections 1729.01 to 1729.27, inclusive, of the Revised Code, may carry on any proper activities in this state upon compliance with the general regulations applicable to foreign corporations desiring to do business in this state. All contracts which could be made by any association incorporated under such sections, that are made by or with such foreign associa tions, shall be enforceable in this state with all of the remedies set forth in such sections. 1729.26 (10186-25). Associations organized and con tracts made before July 17, 1923. Any association organized before July 17, 1923, may, by a majority vote of its members, be brought under sections 1729.01 to 1729.27, inclusive, of the Revised Code, through the limitation of its membership and the adoption of other restrictions as provided in such sections. Upon such vote it shall make out in duplicate a statement, signed and sworn to by its directors, to the effect that the associa tion has, by a majority vote of the members, decided to accept the benefits of, and to be bound by, sections 1729.01 to 1729.27, inclusive, of the Revised Code, and has authorized all changes accordingly. Articles of incor poration shall be filed as required in section 1729.06 of 305 the Revised Code, except that they shall be signed by those who are, at the time of filing, members of the board of directors. The filing fee shall be the same as for filing an amendment to articles of incorporation. When any association can be incorporated under sec tions 1729.01 to 1729.27| inclusive, of the Revised Code, all contracts made by or on behalf of such association before July 17, 1923, by its promoters in anticipation of its becoming incorporated under the laws of this state, whether or not such contracts were made by or in the name of some corporation organized under the laws of another jurisdiction, are hereby validated as if made after July 17, 1923, if they could be entered into under sections 1729.01 to 1729.27, inclusive, of the Revised Code. Any corporation heretofore organized as an agricultural association for purposes similar to those for which a corporation may be incorporated under (10186-1) et seq, may become a co-operative agricultural association as therein provided. 1930 OAG I960. (GC 10186-1 now RC 1729.01). 1729.27 (10186-28). General corporation laws apply. Sections 1701.01 to 1702.^3 inclusive, of the Revised Code, and all powers and rights under such sections, apply to an association organized under sections 1729.01 to 1729.27, inclusive, of the Revised Code, except where sec- 306 tions 1701.0 to 1702.^3, Inclusive, of the Revised Code, are in conflict with sections 1729.0 to 1729.2 7 , inclusive, of the Revised Code. 1729.28 (10185) (10186). Consumers' co-operatives. An association incorporated for the purpose of pur chasing, in quantity, grain, goods, groceries, fruits, vegetables, provisions, or any other articles of merchan dise, and distributing them to consumers at the actual cost of purchasing, holding, and distribution, may employ its capital in the purchase of such merchandise as it desires, and in the purchase or lease of such real and personal estate, subject always to the control of the stockholders, as is necessary or convenient for purposes connected with its business.1 Source1 GC (10185) Such association may adopt such plan of distribution of its purchases among its stockholders and others as is most convenient and best adapted to secure its proposed ends. Profits arising from the business may be divided among the stockholders from time to time, as the associa tion deems expedient, in proportion to the several amounts 2 of their respective purchases. Source^ (10186) Corporation may not be incorporated under this section, where the corporation intends to distribute merchandise to 307 its members for resale. 1938 OAG 2809. Cooperative trade associations organized under this section, should be Incorporated as corporations not for profit. 1935 OAG klk3. Taxation and Filing Fees for Cooperative Associations The Cooperative law was amended by Senate Bill No. 25*+ and signed by the Governor on June 3, 19^7. Coopera tives now pay the same franchise taxes and filing fees of articles of incorporation or amendments thereto as corporations for profit. A. FRANCHISE TAXES. 1. Under this law both agricultural coopera tives organized under Section 10186 (1-30 ) and consumer cooperatives organized under Sections 10185-10186 "shall annually between the first day of January and the 31st day of March...make a report to the tax commissioner in such form as the commissioner may prescribe. It shall be the duty of the commissioner to furnish corporations on request copies of the forms prescribed." (Section 5^95) 2. Section 5^98 describes in detail how the value of the outstanding stock of the corporation shall be determined. In essence this value is what is normally called "net worth" of the corporation, but it must be recognized that the tax commissioner in determining this value may derive from any corporation's report a figure somewhat different from that of the company's auditor. 3. Section 5^99 provides: "On or before June 15th the auditor of state shall charge for collection from 308 309 each such corporation a fee of one-tenth of one per cent of such value so certified and shall immediately certify the same to the treasurer of state but in no case shall the fee be less than twenty-five dollars.” '•The treasurer of state shall promptly mail to each corporation...a statement showing the value ...for the shares of stock upon which such fee is charged and the amount of the fee. Such fee shall be payable to the treasurer of state on or before the fifteenth day of the following July.” *f. Senate Bill 29+ also adds a Section 5^98-1: "The phrase 'issued and outstanding shares' as used in Section 5^98 shall apply to corporations not for profit and shall ihclude but not be limited to mean membership certificates and other instruments evidencing ownership of an interest in the corporation not for profit.” Thus membership cooperatives must file reports and pay franchise taxes on the valuations deter mined from such reports. B. PENALTY FOR FAILURE TO REPORT OR TO PAY FRANCHISE TAX. 1. Section 5509 provides: If a Corporation required by law to file a report or to pay a franchise tax or fee fails or neglects for ninety days after the time prescribed by law for making such report or paying such 310 tax or fee the commissioner shall certify such fact to the secretary of state. The secretary of state shall thereupon cancel the Articles of Incorporation of any such corporation, and "shall immediately notify such corporation of the action taken by him." 2. Section 5510 provides: "Any person or persons who shall exercise or attempt to exercise any powers, privileges or franchises under articles of incor poration after same are cancelled shall be fined not less than one hundred dollars nor more than one thousand dollars." C. FILING FEES. Senate Bill 25*+ also makes cooperatives subject to the same law as corporations for profit in respect to fees for filing articles of incorporation or amendments thereto. Section 176 of the Code provides: The secretary of state shall charge and collect the following fees for filing and recording articles of incorporation: 1. Wherein the corporation shall not issue any shares of capital stock, the sum of twenty-five dollars. 2. For corporations issuing shares of stock with or without par value - 10^ per share on the first thousand shares. 56 per share on the next 9,000 shares. 2 6 per share on the next *+0,000 shares, 1 6 per share on the next 50,000 shares. \ 6 per share on the next *+00,000 shares. i 6 per share on the remainder. £he minimum filing fee is $2?.00. For filing amendments to already exist ing articles of incorporation - $2 5 .00, and if the amendment increases the number of shares authorized the fee as determined above for the total number of shares authorized, less credit for the shares previously authorized. Example: A cooperative files articles of incorporation providing for capital or 8,000 shares of common stock of $10.00 par value each, arid *+,000 shares of preferred stock at $25*00 each, a total of 12,000 shares. Filing fee is determined thus: 1.000 shares at 106 each...... $100.00 9.000 shares at 56 each...... *+50.00 2.000 shares at 2 6 each...... *+0,00 Filing fee...... $590.00 In case of increase of authorized capital by amendments, — 312 Examples A company with 500 shares of stock of a par value of $100.00 per share amends its capital set up to provide an authorized capital of $100,000 made up of ^,000 shares of $25.00 each. Filing fee is determined thus: For filing the amendment $ 25.00 1.000 shares at 106 each..... 100.00 3.000 shares at 5«* each 150.00 $275.00 Credit for shares already issued 500 shares at 106 each...... 50.00 Fee to be sent with amendment$225.00 DISSOLUTION PROCEDURE Obtain dissolution forms from secretary of state. Pay all current and delinquent taxes. Note: The legal requirements of the state are numerous and complex. Employment of competent legal counsel is justified and advised where dissolution is desired. The certificate of dissolution for a corpora tion not for profit is $25 .00. APPENDIX B List of Tables 313 TABLE, 32 DAIRY MARKETING COOPERATIVES IN OHIO, 1957 Date Incorporated * County Name and Address V22/21 Allen Equity Dairies Incorporated Lima, Ohio 10/31/33 The Equity Dairy Stores, Incorporated Lima, Ohio V l A 3 Ashtabula The Dorset Cooperative Milk Company Dorset, Ohio b/5/3k Athens Athens Milk Sales, Incorporated Athens, Ohio 1/20/56 Farmers Milk Cooperative, Incorporated Athens, Ohio 2 /23/% The Hocking Valley Dairyman's Cooperative Athens, Ohio 6 /27/38 Belmont Barnesville Dairymen’s Cooperative Association Barnesville, Ohio 12/11/M+ Coshocton Coshocton Dairy Cooperative Company Newcomerstown, Ohio 11/9/37 Cuyahoga Milk Producers Federation of Cleveland Cleveland, Ohio t—1 -r TABLE 32_ (Continued) Date Incorporated County Name and Address 12/ 10A 0 Erie Sandusky Cooperative Milk Producers Association Castalia, Ohio 1 0 /3 0 /3 3 Fairfield The Lancaster Milk Producers Lancaster, Ohio 3 /1 /3 9 Franklin The Central Ohio Cooperative Milk Producers, Incorpon Columbus, Ohio 6 / A / 2 1 Gallia Gallia County Cooperative Dairy Sales Association Gallipolis, Ohio 5/ 15A 2 tt Huntington Interstate Milk Producers Association Gallipolis, Ohio 3 /2 9 /5 6 Geauga Middlefield Swiss Cheese Cooperative Association Middlefield, Ohio 5 /7 /3 8 Guernsey Guernsey County Milk Producers Association Cambridge, Ohio l / l 7 A 8 » Muskingum Valley Cooperative Dairy Sales Association Cambridge, Ohio 1 /1 7 A 8 it Muskingum Valley Cooperative Dairy Sales Association Cumberland, Ohio TABLE 32 (.Continued) Date Incorporated County Name and Address 12/23/2*+ Hamilton K.I.Q. Milk Producers Association Cincinnati, Ohio 5/2*+/33 11 Milk Producers Union Cincinnati, Ohio 1 0 /1 0 /3 5 it Cincinnati Sales Association, Incorporated Cincinnati, Ohio 5 /1 5 A 2 it The Cooperative Pure Milk Association Cincinnati, Ohio 3 / 6 A 1 Holmes Holmes Cheese Company Holmesville, Ohio 1 1 /2 8 A 9 J ackson Southeastern Ohio Cooperative Dairy Sales Association Incorporated, Oak Hill, Ohio 9 /1 1 A 2 Logan Mad River Milk Producers, Incorporated West Liberty, Ohio 7 /1 7 /3 5 Lorain Lorain County Dairy Sales Association Elyria, Ohio I / 8A 3 Lucas The Northwestern Cooperative Sales Association, Incorporated, Toledo, Ohio 0 1- c TABLE 32 (Continued) Date Incomorated County Name and Address 11/30/37 Madison Farmers Cooperative Cream Association West Jefferson, Ohio 9/19/30 (Foreign) Mahoning Dairymen’s Cooperative Sales Association Youngstown, Ohio (Pittsburgh, Pa.) 8 A A 5 Marion Marion Milk Producers Association Caledonia, Ohio 2/2/56 Meigs Producers Dairy Cooperative Association, Incorporated Middleport, Ohio 9/28/35 Miami Miami County Cooperative Milk Producers Troy, Ohio 6/16/22 Montgomery Miami Valley Milk Producers Association Dayton, Ohio 1/17A8 Morgan Muskingum Valley Cooperative Dairy Sales Association Stockport, Ohio 1/27/23 Muskingum Muskingum Valley Cooperative Dairy Sales Association Zanesville, Ohio 1/17A8 tt Muskingum Valley Cooperative Dairy Sales Association New Concord, Ohio 317 TABLE 32 (Continued) Date Incorporated County Name and Address 1 /1 7 A 8 Noble Muskingum Valley Cooperative Dairy Sales Association Caldwell, Ohio 5/31/35 Pickaway Pickaway Dairy Cooperative Association, Incorporated Circleville, Ohio 7/12/22 Richland North Central Ohio Cooperative Dairy Sales Association Mansfield, Ohio 2/29/36 Ross Ross County Milk Producers Association Greenfield, Ohio 1/ 22/ 2*+ Scioto Scioto County Cooperative Milk Producers Association Portsmouth, Ohio 3/16/26 Stark Stark County Milk Producers Association, Incorporated Canton, Ohio 7/19/33 Summit Akron Milk Producers, Incorporated Akron, Ohio *+A/20 Tuscarawas Tuscarawas Valley Cooperative Dairy Sales Association New Philadelphia, Ohio 3/17/33 Broad Run Dairy Farmers Cooperative Association Dover, Ohio C aJ m 00 TABLE 32 (Continued) Date Incorporated County Name and Address k / 6 A 9 Warren Associated Dairy Farmers, Incorporated Lebanon, Ohio 1 / 2 7 A 2 Washington Marietta Cooperative Milk Producers, Incorporated Marietta, Ohio ♦Date of incorporation may not be the actual date the cooperative first began its operation. In some cases cooperatives have been reorganized and incorporated with a change in their dates of incorporation. SOURCEs Ohio Council of Farmer Cooperatives, Inc. TABLE 33 FRUIT AND VEGETABLE COOPERATIVES IN OHIO, 1957 Date Incorp.* County Name and Address 3/29/21 Cuyahoga Cleveland Growers Marketing Company Cleveland, Ohio 2/5/27 Ohio Hothouse Cooperative Association Cleveland Ohio 5 A /27 Cleveland Hothouse Vegetable Grovers Cooperative Assn. Cleveland, Ohio 3A /30 Greenhouse Vegetable Packing Company Berea, Ohio 3/5/3^ Fairfield Fairfield County Horticultural Cooperative Association Lancaster, Ohio b/zb/ih Franklin Columbus Fruit and Vegetable Cooperative Assn., Inc. Columbus, Ohio 5/10/A Ohio Potato Growers Association Columbus, Ohio 3/22/32 Geauga North Eastern Ohio Growers Cooperative Chesterland, Ohio 3/11/35 Hamilton Cineihnati Produce Growers Association Lo Cincinnati, Ohio IO o TABLE 33-(Continued) Date Incoro. County Name and Address 2/23/39 Hamilton Hamilton County Vegetable Growers Association, Inc. Cincinnati, Ohio 8 /7A 3 Jackson Ohio Valley Food Product Association Jackson, Ohio 7/8/36 Lake Lake Shore Growers Cooperative Auction, Inc. Painesville, Ohio 9/30/39 Lorain Ohio Fruit Growers Cooperative Association, Inc. Avon Lake, Ohio 1/17/27 Lucas Toledo Hothouse Cooperative Association Toledo, Ohio 2/17/31 I! Toledo Gardeners Cooperative Association Toledo, Ohio 6 / 2 V 3 7 Mahoning Salem Fruit Growers Cooperative Association Salem, Ohio 3 / 1 5 A 7 Meigs Meigs County Truck Growers Association, Inc. Letart Falls, Ohio 6/2 1 /5 0 Ottawa Danbury Island Gypsum Fruit Growers Association Port Clinton, Ohio 321 TABLE 33 (Continued) Date Incorn. County Name and Address 10/9/32 Sandusky Fremont Beet Growers Association Fremont, Ohio 2/25/37 Stark Hartville Growers Incorporated Hartville, Ohio 12/26/22 Summit Summit Growers Market Company Akron, Ohio 7 / 3 0 A 8 Union Leesburg Magnetic Springs Cannery, Inc. Magnetic Springs, Ohio 2/28/38 Washington Marietta Truck Growers Association Marietta, Ohio ♦Date of incorporation may not be the actual date the cooperative first began its operation. In some cases cooperatives have been reorganized and incorporated with a change in their original dates of incorporation. SOURCE: Ohio Council of Farmer Cooperatives, Inc. 322 TABLE 3b LOCATION OF FARMERS' GRAIN ELEVATOR COMPANIES IN OHIO SHOWING LAWS AND CODE SECTIONS UNDER WHICH THEY ARE INCORPORATED AND DATES OF INCORPORATION, 1957 Date of Charter Name County Incoro. Co-op Act* The LaFayette Cooperative Co. Allen V 2 /1 9 it Spencerville Farmers Union Co. it 6 /2 5 /1 9 tt The Farmers Grain Co. ii 7 /2 8 /1 9 GCA-p** Cairo Elevator Co. it 5 /1 /2 0 Co-op Act Farmers Elevator Co. ii 5 A /2 0 ti Ohio Equity Exchange Co. (Regional) ii 3 /2 3 /2 6 ti The Elida Farmers Equity Exchange Co. ii 8/6/28 ii Equity Elevator Co. it 9 /1 9 /3 ^ it Ashland Equity Exchange Co., Inc. Ashland 5 /1 /1 6 ti Londonville Farmers Equity Co. ii 1 0 /1 8 /2 8 GCA-p The Austinburg Cooperative Co. Astabula 6 /2 6 /1 9 TABLE 3 W (Continued) Date of Charter______Name______County Incorp. Co-op Act Wapakoneta Farmers Grain Co. Auglaize 6/30/19 tt The Minister Farmers Cooperative Co. 11 6/ 5 /2 0 11 The Buekland Cooperative Co. tt 6/1 3 /2 8 GCA-p Farmers Cooperative Supply Co. Belmont 12/1 7 /2 0 it The Carrollton Farmers Exchange Co. Carroll 5/6/20 it The Westerville Grain Co. Champaign *fA/l9 GC 8638-39*** The Valley Grain Co. Clark 6/1V 20 GCA-p Salona Supply Co. Columbiana V l /1 3 tt Kensington Supply Co. tt 1 /2 0 /2 3 n Homeworth Supply Co. it 2/1 9 /2 3 Co-op Act The Coshocton Farmers Exchange Co. Coshocton 7/22/21 it New Washington Equity Co. Crawford 10/8 /2 8 tt The Gallion Equity Exchange Co. it 7/1 0 /2 9 tt The North Robinson Equity Exchange Co. it 8 /1 /3 2 TABLE 3*+ (Continued) Date of Charter Name______,______County J n coEBt,, GCA-p The Farmers Exchange Co. Crawford 6/3/38 Co-op Act United Farmers Exchange Cuyahoga 6/13/19 GCA-p The New Madison Grain Co. Darke 9/11/18 Co-op Act Gettsburg Equity Exchange Co. tt 6/13/19 Ii The Jewell Grain Co. Defiance *+/3/12 GCA-p The Hicksville Grain Co. 7/29/1*+ Co-op Act The Farmers Cooperative Co. 2/23/15 GCA-p Ney Cooperative Grain Co. I! 3/3/19 Co-op Act The Delaware Farmers Exchange Association Delaware 2 /2 0 /1 9 GCA-p The Ostrander Farmers Exchange Co. ti 3/12/20 Co-op Act Shinrock Elevator and Supply Association Erie 2 / 2 V 1 9 The Castalia Elevator and Supply Association *f/2/19 Central Erie Supply and Elevator Co. *f/23/19 GCA-p The Linworth Farmers Exchange Co. Franklin 6/21/20 TABLE 31* (Continued) Date of Charter Name County Incorp. Co-op Act Westerville Farmers Exchange Association Franklin 6/21/20 ti Grove City Farmers Exchange Co. ii 10/2/20 ii Farm Bureau Cooperative Association (Regional) tt 7/31/33 GCA-p The Delta Farmers Cooperative Grain and Supply Co.Fullon 3/12/19 it The Xenia Farmers Exchange Greene 3/18/20 Co-op Act The Osborn Cooperative Grain Association it 5/17/20 it Vanlue Grain and Supply Association Hancock 3/1/16 ii Arlington Elevator and Supply Co. it 6/26/17 ii Jenera Cooperative Association ti 6/17/18 tt McComb Farmers Cooperative Association It 2/2/31 g c 8638-39 The Dola Farmers Exchange Co. Hardin 2/20/20 Co-op Act Ada Farmers Exchange H lf/6/20 ii The Farmers Grain and Seed Association Henry 12/7/10 M The Farmers Elevator Grain and Supply Association it 1/31/12 TABLE (Continued) Date of Charter Name County Incorn. Co-op Act Liberty Center Elevator Association Henry 7/ 16/12 GC 8638-39 The Napoleon Grain and Stock Co. tt 7 /7 /1 3 Co-op Act Holgate Grain and Supply Association tt 1 0 /9 /1 3 tt Gerald Grain Association tt 1 0 /2 8 /1 3 GCA-p The McClure Elevator Co. n 2 /7 /1 7 Co-op Act Hamler Cooperative Grain Association tt 2 A /3 1 tt The Deshler farmers Elevator Co. tt V 2 0 A 2 tt Millersburg Equity Exchange Co. Holmes 1 2 /1 7 /1 9 n Bellevue Farmers Cooperative Co. Huron 2 /2 6 /0 9 GCA-p Monroeville Cooperative Grain Co. it 3 /2 V 2 0 Co-op Act The Collins Farmers Elevator Association it k/21/20 tt GC 8638-39 Willard Farmers Exchange 9 /2 V 2 0 tt Co-op Act The Firelands Elevator Association 1 /2 9 /3 2 tt New London Equity, Inc. tt 7 /1 1 /5 ^ TABLE 3*4- (Continued) Date of Charter______Name______County Incoro. Co-op Act The Mt. Vernon Farmers Exchange Co. Knox 1 /2 /1 9 " The Gambler Farmers Cooperative Co. 11 V25/19 GCA-p Granville Cooperative Co. Licking 7/22/21 Co-op Act The Kipton Elevator Association Lorain 2 /2 0 /1 9 H The Farmers Cooperative Supply Co. 11 7/20/20 GCA-p Farmers Elevator Co. tt 1 1 /1 5 /2 0 " The Oberlin Elevator Co. 11 2 /1 9 /2 1 •' The Whitehouse Grain and Supply Co. Lucas 5/5/16 Co-op Act The Waterville Farmers Elevator Co. 11 2 /2 7 /1 7 " Green Camp Cooperative Elevator Co. Marion 5/25/22 GC 8638-39 Prospect Farmers Exchange Co. ti V 1 5 /2 0 GCA-p Lodi Equity Co. Medina 6 /2 V 1 9 Co-op Act The Litchfield Exchange Association 11 6/1M-/20 GCA-p BHL Elevator Supply Co. 11 6/19/20 TABLE 3^ (Continued) :?■ Date of Charter Name County Incorn. Co-op Act Ft. Recovery Equity Exchange Co. Mercer 5 /1 7 /1 9 it Celina Equity Exchange Co. it 8 /5 /2 0 tt Troy Grain and Supply Association Miami 5 /1 7 /1 9 « Pleasant Hill Farmers Exchange Association 11 1 1 /1 3 /2 0 GCA-p Brookville Farmers Grain Co. Montgomery 1 2 /2 3 /1 9 tt Farmersville Exchange Co. it b/3/20 tt The Trotwood Farmers Exchange Co, ti b/3/20 Co-op Act Ottawa County Cooperative Co. Ottawa b/29/dk GCA-p Farmers Elevator Co. tt 3 / 3 / H Co-op Act Oak Harbor Cooperative Co. it 8/b/ik GCA-p Genoa Farmers Exchange Co. it 5 /2 7 /1 9 Co-op Act Payne Equity Exchange Co. Paulding 11/ 8 /1 6 n The Antwerp Equity Exchange it 2 /2 7 /1 7 it Paulding Equity Exchange Co, tt 8/ 2 2 /2 8 TABLE 3*3- (Continued) Date of Charter Name Countv Incorn. GC 8638-39 The Pickaway Grain Co. Pickaway V 3 /2 3 Co-op Act Fort Jennings Equity Co. Putnam 8/ 11/2 8 it The Farmers Equity Exchange Co. Richland 1 /1 6 /1 5 » The Shelby Equity Exchange Co. it 6 /2 2 /1 5 tt The Butler Cooperative Co. tt 6 /1 5 /2 0 GCA-p The Farmers Mercantile and Elevator Co. Sandusky 7/ 29/0 7 Co-op Act Peoples Elevator and Supply Co. it 5 /1 1 /1 5 GCA-p Erlin Farmers Elevator and Supply Co. tt 6 /6 /1 7 Co-op Act Gibsonburg Elevator Co. n 1 1 /9 /2 5 tt The Green Springs Cooperative Association it 2 /2 /3 1 11 Peoples Mercantile and Elevator Association Seneca 2 / I I ./13 it Bascom Elevator and Supply Co. it V 3 /1 3 GCA-p The Maple Grove Farmers Elevator Co. tt b/i/ib Co-op Act Republic Mercantile and Elevator Association tt 1 /2 V 2 0 330 TABLE 3^ (Continued) Date of Charter Name County Incorn. Co-op Act The Tiffin Farmers Cooperative, Inc. Seneca 1/ 2U-/20 n Ohio Farmers Grain and Supply Association, Inc. it 9 /1 0 /2 9 (Regional) it Ohio Farmers Grain Corporation (Regional) ii 6/ 8/38 it The Kansas Co-op Elevator ti 7/ 28A 8 GCA-p The Farmers Elevator Co. Shelby 2 /2 0 /0 5 it Co-op Act The Pemberton Farmers Exchange Co. 6 /2 6 /1 9 it The Anna Farmers Exchange Co. ti 7 /7 /1 9 it Sidney Farmers Exchange Co. ii 7 /2 5 /1 9 ti Swanders Farmers Elevator Co. ti 8 /1 /1 9 ti The Russia Equity Exchange C0 ., Inc. it 10/ 22/20 ti Sugarcreek Farmers Equity Co. Tuscarawas 2/ 2*+/20 ii Convoy Equity Exchange Co. Van Wert 1 0 /5 /1 ^ tt The Middle Point Equity Exchange Co. it 8 /2 l+/17 tt GCA-p The Scott Equity Exchange Co. 1 2 /8 /1 9 TABLE 3^ (Continued) Date of Charter Name County Incom. Foreign Monroeville Cooperative Equity Union Exchange Van Wert (Indiana) Co-op Act Lebanon Farmers Cooperative Co. Warren 1 /3 /2 0 ii Waynesville Farmers Exchange 11 6 /1 6 /2 1 GCA-p The Wooster Equity Co. Wayne 3 /2 0 /1 7 Co-op Act The Marshallville Equity Co. ti 12/ 3 0 /2 0 ti West Salem Equity Exchange Co. ti 2/ 2V 31 it Dalton Cooperative Equity Exchange Co. 11 6/lb/bQ n The Edon Farmers Cooperative Association Williams 6 /2 1 /1 9 GC 8638-39 The Stryker Farmers Exchange Co. 11 6 /1 7 /2 0 Co-op Act The Sun Grain Association Wood 5/2*f/12 GCA-p Rural Grain Co. tt b/l/lb Co-op Act The Grand Rapids Farmers Grain Association n 5/6/lb 11 Perrysburg Grain and Supply Association ti 1 2 /2 1 /1 5 it The Liberty Grain Association 11 2 /2 3 /1 6 TABLE 3*+ (Continued) Date of Charter Name Countv Incoro. Co-op Act The Pemberville Elevator Association Wood 8 /2 3 /1 6 u The Tontogony Farmers Association it 5 /1 2 /1 7 ti The Sugar Ridge Grain Association it 3 /1 3 /1 8 ti Hub Grain Association tt V 6 /1 8 ti The Prairie Farmers Cooperative Co. tt 1 /3 /1 9 ti The Luckey Farmers Exchange Association tt 6 /2 2 /2 0 ti North Baltimore Grain Association tt 1 0 /3 0 /3 0 m The U. S. Commission Co. Wyandot 1 /2 7 /1 9 GCA-p The Carey Farmers Cooperative Co. tt 5 /1 /1 9 Co-op Act The Nevada Farmers Grain Association ti 5 /2 7 /2 0 **(GCA-p) General Corporation Act, 8623, for profit ***(GC 8638-39 ) General Code, now deleted from code SOURCE: A Mid-Century Directory of Ohio Cooperatives and other Farm Owned Business Corporations (Columbus: Ohio Council of Farmer Cooperatives, Inc., June, 1951). 33*+ TABLE 35 LIST OF POULTRY COOPERATIVES IN OHIO, 1957 Date Incorporated Name and Office County 5 /2 /3 2 Wooster Cooperative Poultry Wayne Association Wooster, Ohio 2/13/3*+ North East Ohio Poultry Columbiana Association Columbiana, Ohio 5 A /3 8 Poultry Producers Association Darke of Versailles Versailles, Ohio 5 /1 8 /3 9 Northwestern Ohio Poultry Henry Association, Inc. Napoleon, Ohio 1 1 /6 /3 9 Federated Egg and Poultry Wayne Sales, Inc. Wooster, Ohio BRANCHES: Pittsburgh, Pa. Columbus, Ohio Cleveland, Ohio 3 /1 5 A 1 North Central Egg and Poultry Crawford Cooperative New Washington, Ohio 7 /9 A 1 Southeastern Ohio Egg Auction Athens Association Nelsonville, Ohio 3 /6 A 5 Ohio Valley Egg Cooperative Clermont Milford, Ohio SOURCE: Ohio Council of Farmer Cooperatives, op. cit. TABLE 36 FARMERS1 MUTUAL INSURANCE ASSOCIATIONS IN OHIO, 1957 Date of Incorp. Countv Name 1 0 A /1 8 9 8 Adams Farmers’ Mutual Insurance Company 9 /2 1 /1 8 7 7 Allen Allen County Mutual Insurance Association 8 /1 9 /1 8 7 9 11 German Mutual Insurance Company of Delphos 3 /1 3 /1 8 8 6 tt Richland Township Farmers' Mutual Insurance Association V lO /1 9 0 7 ti Mennonite Mutual Aid Society of Putnam, Allen and Hancock Counties 1 1 /1 7 /1 9 3 ^ it Elevators Mutual Insurance Association 5 /3 /1 9 5 0 tt Equity Insurance Association of Delphos 9 /1 3 /1 9 5 2 tt State Mutual Fire Insurance Association 8 /3 0 /1 8 7 8 Ashtabula Ohio Grangers' Mutual Insurance Company 1 0 /1 /1 9 1 2 Athens Athens County Grangers' Mutual Insurance Company 1 /2 V 1 8 6 0 Auglaize German Farmers' Mutual Windstorm Association 6 /2 /1 8 8 0 it Farmers' Home Mutual Fire Insurance Company 7 /2 6 /1 9 1 2 tt German Farmers' Mutual Fire Insurance Company TABLE 36 (Continued) Date of Incorn. County Name 7 / 2 V 1 8 9 7 Beliaont Belmont Insurance Association 5/5/1896 Butler Butler County Mutual Fire Association 8/1^-/1877 Clark Clark County Farmers' Mutual Protection and Aid Association 3/12/1906 Clinton Clinton Mutual Insurance Association 10/13/1877 Columbiana Sandy and Beaver Valley Farmers' Mutual Insurance Company 9/19/1881 11 Butler and Goshen Townships Mutual Aid Society 8/27/1877 Crawford Crawford County Farmers' Mutual Fire Insurance Company 3/5/1901 it Ohio Mutual Windstorm Insurance Association if/16/1901. tt Home Mutual Fire Association 6/18/1918 Cuyahoga Florists and Gardeners' Insurance Association 11 / 1 V 1 8 7 7 Darke Farmers' Mutual Fire Insurance Company of Darke County 9/1/189^ 11 Darke County Mutual Cyclone Insurance Company 7/27/1885 Defiance Farmer Mutual Fire Protection Association of Defiance County Delaware County Farmers Mutual Insurance Company 9 A / 1 8 7 7 Delaware 0s* TABLE 3 6 (Continued) Date of IncorPo County ______Name______ 6 /2 8 /1 8 7 7 Erie Erie County Farmers Insurance Company 1 2 /2 6 /1 9 0 7 Fairfield Fairfield County Farmers’ Mutual Fire Insurance Company 3 /2 /1 8 9 8 Fayette Farmers’ Mutual Union Fire Insurance Company 1 2 /1 7 /1 9 2 5 Franklin Nationwide Mutual Insurance Company 1 2 /2 7 /1 9 3 3 Nationwide Mutual Fire Insurance Company 3 /2 8 /1 9 3 5 Grange Mutual Casualty Company 1 1 /1 9 /1 8 9 7 Guernsey Patrons’ Buckeye Mutual Insurance Company 3 /2 8 /1 8 8 9 Hancock Mutual Fire Insurance Company of Eagle and Adjacent Townships 9 A /1 8 9 5 Farmers’ Mutual Protective Association of Hancock County 6/7/1898 Madison Mutual Insurance Company 6/A/1898 Mutual Fire and Storm Insurance Company of Jackson, Amanda, and Delaware Townships 3 /2 7 /1 9 2 8 United Mutual Insurance Company of Hancock County 6 /2 1 /1 8 9 5 Harrison Eastern Ohio Mutual Fire and Tornado Insurance Company u> OJ U /25/1898 Farmers’ Mutual Insurance Company of Harrison County -o TABLE 3 6 (Continued) Date of Incorn.______County______Name 1/ 20/1897 Henry Henry County Farmers' Mutual Insurance Company 10/ 28/ 19^1 tt German Mutual Fire Insurance Association of Henry and Defiance Counties 5 A /1 8 9 9 Highland Central Mutual Fire Insurance Association 9 /1 7 /1 8 7 8 Holmes Washington Township Mutual Fire and Lightning Insurance Association 3 /1 3 /1 8 7 8 Huron Huron County Farmers' Insurance Company 2 /2 1 /1 8 9 ^ Jefferson Richmond Farmers' Mutual Insurance Company 6 /2 1 /1 9 3 2 Licking Ohio State Grange Mutual Insurance Association 12A /18 7 8 Logan Patrons Mutual Insurance Association of Ohio 9 /9 /1 8 9 9 11 The Mennonite Aid Plan V 6 /1 8 8 7 Lorain Farmers' Mutual Home Insurance Company M-/26/1899 11 German Catholic Fire Insurance Brotherhood Association 8 /1 8 /1 8 9 1 Lucas Lucas County Farmers Insurance and Aid Association 9 /3 /1 9 1 5 n Trinity Mutual Fire Insurance Association 5 /2 7 /1 9 3 0 n St. Petri Mutual Fire Insurance Association TABLE 36 (Continued) Date of I n c o m . County ______Name______ 2/ 19/1892 Mahoning Springfield Township Mutual Fire Insurance Association 9/ 26/1878 Marion Mutual Insurance Company of Richland Township 11/ 18/ 188*+ Medina Farmers' Mutual Fire and Lightning Insurance of Medina County 3 /8 /1 8 9 7 Meigs Sutton and Chester Farmers' Mutual Fire Insurance Association 2/ 18 /1881 Mercer Marion Mutual Insurance Association of Mercer County 8 /1 0 /1 8 7 7 Miami Miami Mutual Insurance Association 1 /2 8 /1 8 9 7 n Buckeye State Mutual Insurance Association 1 2 /3 /1 8 7 9 Monroe German Farmers' Mutual Insurance Association of Morton 7/ 8/ 188*+ 11 Switzer Mutual Fire Insurance Company 6 /7 /1 8 5 9 Montgomei Farmers Mutual Fire Insurance Association of Montgomery County 1 0 /1 1 /1 8 7 7 ti Miami Township Farmers' Mutual Insurance Association 1+/18/ I 888 n Jackson Township Farmers' Mutual Fire Insurance 5 /3 /1 9 0 6 Morgan Morgan County Grangers' Mutual Insurance Company 339 9 /6 /1 8 7 7 Perry Perry County Mutual Fire Insurance Company TABLE 3 6 (Continued) Date of Incom. County Name 3 A /1 9 0 1* Pickaway Pickaway County Farmers’ Mutual Fire Association 1/2^/1878 Putnam German Mutual Insurance Association of Glandorf 12/8/1888 tt Palmer Township Mutual Fire Insurance Association 9 /6 /1 8 9 5 tt Putnam County Farmers' Mutual Insurance Company 2/23/190** 11 Farmers' Mutual Aid Association 6 /6 /1 8 7 7 Richland Patrons' Mutual Relief Association 8 /3 /1 9 2 0 ti Richland Equity Mutual Insurance Association of Shelby 10/10/1878 Sandusky Farmers' Mutual Relief Association of Sandusky County 1 0 /6 /1 8 8 5 it German Farmers' Mutual Protective Association 1 /6 /1 9 0 9 tt German Farmers' Mutual Protective Cyclone Association 6 /3 /1 9 1 3 11 Farmers Lightning Protected Mutual Insurance Association 5 /1 2 /1 9 1 9 it Home Insurance Association of Fremont **/22/l878 Seneca Farmers' Mutual Insurance Association of Seneca County 1+/3/1889 Shelby Shelby County Farmers Mutual Insurance Association TABLE 3 6 (Continued) Date of Incorp.______County______Name 2/ 7 /1 8 7 8 Stark West and Knox Townships Farmers' Aid Society 2/ 12/1878 11 Pike Mutual Insurance Company 3A /1 8 7 8 tt Lake Mutual Insurance Company 3 / 26/1878 it Stark County Patrons' Mutual Insurance Company 7/ 11/1881 11 Paris and Washington Townships Home Insurance Company 2/ 7 / 188*+ ti Farmers' Mutual Fire Protection Association of Plain and Jackson Townships 3 /6 /1 9 0 8 tt Tri-County Mutual Insurance Company 3 /1 3 /1 8 7 9 Summit Norton Mutual Fire Association 3 /5 /1 8 7 8 Trumbull Lordstown Farmers Mutual Insurance (Fire) Company 1 /1 5 /1 8 7 9 Van Wert Farmers' Mutual Aid Association of Van Wert County 3 /2 9 /1 8 9 7 Washington Washington County Farmers Mutual Insurance Association 2 /1 5 /1 9 0 5 Wayne Sonnenberg Mutual Insurance Association 2 /2 7 /1 9 0 5 tt Mennonite Mutual Insurance Association 3 /7 /1 9 0 6 ti Lightning Rod Mutual Fire Protective Association TABLE 3 6 (Continued) Date of Incom. Countv Name 1/10/1910 Wayne Wayne Insurance Association 2/17/1910 Williams Northwestern Ohio Mutual Associated Insurance 11/15/1881 Wood Lime City Farmers' Mutual Fire Insurance Association 11/27/1891* »i Wood County Farmers' Mutual Fire Association 6/18/1877 Wyandot Farmers' Mutual Relief Association SOURCE: Ohio Council of Farmer Cooperatives, Inc. Ninetieth Annual Report of the Ohio Superintendent of Insurance u> -r ro 3*+3 TABLE 37 NUMBER AND LOCATION OF NATIONAL FARM LOAN ASSOCIATIONS IN OHIO, I9B7 Name and Location of Main Office Counties Served Bellefontaine National Farm Hardin, Logan and Union Loan Association Bellefontaine Buckeye NFLA Hancock, Henry, Lucas and Bowling Green Wood Central Ohio NFLA Coshocton, Knox, Licking Mt. Vernon and Morrow Columbus NFLA Delaware, Franklin and Columbus Pickaway East Ohio NFLA Carroll, Harrison, Stark Canton and Tuscarawas Farmers NFLA Clinton, Fayette and Washington Court House Madison The Fireland NFLA Erie and Huron Norwalk Fremont NFLA Ottawa, Sandusky and Fremont Seneca Homeland NFLA Ashland, Holmes, Richland Wooster and Wayne Lake Erie NFLA Ashtabula, Geanga and Lake Jefferson Lebanon NFLA Brown, Clermont, Hamilton Lebanon and Warren Mahoning Valley NFLA Columbiana, Jefferson, Canfield Mahoning and Trumball Marion NFLA Crawford, Marion and Marion Wyandot 3“+^ TABLE 37 (Continued) Name and Location of Main Office______Counties Served Maumee Valley NFLA Defiance, Fulton and Bryan Williams Mercer-Wapak NFLA Allen, Auglaize and Mercer Celina Miami-Shelby-Darke NFLA Darke, Miami and Shelby Piqua Miami Valley NFLA Butler, Montgomery and Eaton Preble Muskingum County NFLA Morgan and Muskingum Zanesville Ohio Valley NFLA Adams and Scioto West Union The Ridge NFLA Paulding, Putnam and Van Ottawa Wert Ross-Highland NFLA Highland, Pike and Ross Hillsboro The Royal NFLA Belmont, Guernsy, Monroe, Cambridge Noble and Washington Sherman-Sheridan NFLA Fairfield, Hocking and Lancaster Perry Springfield NFLA Champaign, Clark and Green Springfield United NFLA Athens, Gallia, Jackson, Laurence, Meigs and Vinton Western Reserve NFLA Cuyahoga, Lorain, Medina, Ravenna Portage and Summit SOURCE: Records of the Columbus National Farm Loan Association. TABLE 38 NUMBER AND LOCATION ON PRODUCTION CREDIT ASSOCIATIONS IN OHIO, 1957 Date Counties Date Counties Name Organized Served Name Organized Served Black Swamp 3/19/3*+ Wood Farmers PCA 2/16/3*+ Lorain Hancock of Ashland Richland Sandusky Medina Ottawa Holmes Seneca Knox Huron Cambridge 2/12/3*+ Harrison Wayne Noble Carroll Jackson 2/12/3*+ Athens Coshocton Ross Washington Gallia Tuscarawas Pike Muskingum Adams Columbus 1/31/3*+ Pickaway Lebanon 1/31/3*+ Clermont Delaware Butler Fairfield Highland Union Clinton Licking Fayette Marion 2/12/3*+ Crawford Hardin Defiance 1/30/3*+ Williams Morrow Henry Wyandot Putnam L k > -r Paulding vn Fulton TABLE 38 (Continued) Date Counties Date Counties Name Organized Served Name Organized Served Miami Valley 1/31/3“+ Preble Warren 2/16/3“+ Stark Darke Ashtabula Clark Columbiana Miami Champaign Greene Wapakoneta 1/30/3“+ Logan Mercer - Allen Shelby Van Wert SOURCE: Files of the Columbus Production Credit Association. Co-r Os TABLE 39 RURAL ELECTRIC COOPERATIVES IN OHIO, 1957 Date I n c o r p . ______County______Name and Address 7/2 5 Ao Adams Adams Rural Electric Cooperative Incorporated West Union, Ohio 3/17/36 Auglaize Mid-West Electric, Incorporated St. M a r y ’s, Ohio 2/11/38 Belmont Belmont Electric Cooperative, Incorporated St. Clairsville, Ohio *+A/36 Butler Butler Rural Electric Cooperative, Incorporated Hamilton, Ohio 12/27/37 Carroll Carroll Electric Cooperative Carrollton, Ohio 6/5/38 Coshocton Tuscarawas Coshocton Electric Cooperative, Incorporated Coshocton, Ohio 6 A / 3 6 Darke Darke Rural Electric Cooperative Greenville, Ohio if/2/36 Delaware Delaware Rural Electric Cooperative, Incorporated Delaware, Ohio 6 / 2 1 A 9 Erie Lake Erie Electric Cooperative, Incorporated Kelleys Island, Ohio 5/30/36 Fairfield South Central Rural Electric Cooperative, Incorporated Lancaster, Ohio 8/29/38 Gallia Buckeye Rural Electric Cooperative, Incorporated Gallipolis, Ohio TABLE 39 (Continued) Date Ineoro. County Name and Address V15/38 Hardin United Rural Electric Kenton, Ohio 3/2V 36 Henry Tri-County Rural Electric Cooperative Napoleon, Ohio 12/23/35 Highland Inter-County Rural Electric Cooperative Hillsboro, Ohio 10/30/35 Holmes Holmes Rural Electric Cooperative, Incorporated Millersburg, Ohio 2/20/38 Huron Firelands Electric Cooperative, Incorporated New London, Ohio V 7 / 3 6 Licking Licking Rural Electrification, Incorporated Utica, Ohio 12/16/35 Logan Logan County Cooperative Power and Light Association, Inc Bellefontaine, Ohio 12/10/35 Lorain Lorain-Medina Rural Electric Cooperative, Incorporated Wellington, Ohio >+/2/36 Marion Marion Rural Electric Cooperative Marion, Ohio 10/17/35 Miami Pioneer Rural Electric Cooperative Piqua, Ohio 6 /IO/36 Morrow Morrow Rural Electric Cooperative, Incorporated Mt. Gilead, Ohio TABLE 39 (Continued) Date Incoru. Countv Name and Address b/b/38 Muskingum Guernsey-Muskingum Electric Cooperative New Concord, Ohio 6/16/36 Paulding Paulding-Putnam Electric Cooperative Paulding, Ohio b/17/36 Seneca North Central Ohio Electric Cooperative, Incorporated Attica, Ohio 5/20/36 Union Union Rural Electric Cooperative, Incorporated Marysville, Ohio 9/l^AO Washington Washington Rural Electric Cooperative, Incorporated Marietta, Ohio 6/16/36 Williams North Western Electric Cooperative Bryan, Ohio *1-/20/38 Wood Hancock-Wood Electric Cooperative, Incorporated North Baltimore, Ohio SOURCE: Co-op Power in Ohio, Ohio Rural Electric Cooperatives, Inc. Lo -r \D BIBLIOGRAPHY 1 . Advisory Council Guide. Vol. XIV, No. 5. Columbus: Ohio Farm Bureau Federation Inc., May, 1957. 2. Agricultural Credit. Louisville, Kentucky: Farm Credit Administration of Louisville, 1 9 l+7. 3. Annual Report of the Louisville Bank for Cooperatives. Louisville, Kentucky, June 30, 19%. if. Arneson, Edgar. "The Cooperative Marketing of Livestock by the Local Shipping Association and Farmer Ele vator." Unpublished Master’s thesis, Ohio State University, 1928. 5. Baker, Ralph L. "Cooperative Poultry and Egg Marketing in Ohio." Unpublished Master's thesis, Ohio State University, 1 9 ^0. 6 . Bakken, H. H. and Schaars, M. A. Economics of Coopera tive Marketing. New York: McGraw-Hill Book Company, Inc., 1937. 7. Blosser, R. H. "A History of the Major Agricultural Movements in the United States." Unpublished Master's thesis, Ohio State University, 1937. 8. Buck, Salon J. The Granger Movement. Cambridge: Harvard University Press, 1913. 9. Clemens, R. A. "Cattle Trails as a Factor in the Development of Livestock Marketing," Journal of Farm Economics. Vol. VIII. Menasha, Wisconsin: The American Farm Economic Association, October, 1926. 1 0 . Columbus Dispatch. September 11, 1955. 11. ______. October 2, 1955. 12. Dairymen's Price Reporter. The Dairymen's Cooperative Sales Association, July, 1957. 13. Dean, Frank C. The Farm Bureau in Ohio. Columbus: Ohio Farm Bureau Federation, 192*+. 350 351 Ik. Diamond Jubilee History. Ohio State Grange. 1872-19^7. Columbus: Ohio State Grange, 19*+7. 15. Dorsey, R. L. Farmer Co-ops is Ohio. Louisville, Kentucky: Louisville Bank for Cooperatives, 1939. 1 6 . Dowell, A. A. and Bjorka, K. Livestock Marketing. New York: McGraw-Hill Book Company, Inc., 19*+1. 17. Duncan, F. E. “The Development of Cooperative Live stock Marketing in Ohio.1' Unpublished Master’s thesis, Ohio State University, 1950. 18. Eastwood, George R. "History of Cooperative Marketing of Tobacco in the Miami Valley." Unpublished Master's thesis, Ohio State University, 1931. 19. Eckert, P. S. and Henning, G. F. The Livestock Auction in Ohio. Wooster: Ohio Agricultural Experiment Station, Bulletin 557? 1935. 20. Ellis, S. H. "History of the Grange in Ohio," Ohio Farmer. Vol. 101, January 9, 1902. 21. Erdman, H. E. Organization Among Farmers. Wooster: Ohio Agricultural Experiment Station, Bulletin 3*+2, 1922. 22. ______. Marketing Whole Milk. New York: The Mac millan Company, 1921. 23. ______. "Trends in Cooperative Expansion 1900-1950," Journal of Farm Economics. Vol. XXXII, No. Part II. "Menasha, Wisconsin: The American Farm Economic Association, November, 1950. 2k. Falconer, J. I., Lloyd, W. A. and Thorne, C. E. The Agriculture of Ohio. Wooster: Ohio Agricultural Experiment Station, Bulletin 326, 1918. 25. Farmer Cooperatives in the United States. Washington, D.C.: Farmer Cooperative Service, USDA, Bulletin 1, 1955. 352 26. Farrington. R. L. "Better Credit Helps Co-ops and Farmers," News for Farmer Cooperatives. Vol. XVII, No. 10. Washington, D. C.: Farm Credit Adminis tration, USDA, January, 1951. 27. Foster, L. G. A Business Study of the Ohio Poultry Producers Cooperative Association. Wooster: Ohio Agricultural Experiment Station, Bulletin b-27, October, 1928. 28. ______. Economic Aspects of Ohio Farmers' Elevators. Wooster: Ohio Agricultural Experiment Station, Bulletin bl6, 1927. 29. Fox, R. L. and Randell, C. G. Decentralized Market ing by Producers Livestock Cooperative Associa tion. Columbus. Ohio. Washington, D. C.: Farm Credit Administration, USDA, Bulletin 65, 1951. 30. Gardner, Chastina. Beginning of Cooperative Fruit and Vegetable Marketing. Washington, D. C.: USDA, Preliminary Report, Mimeographed, April, 1928. 31. ______. Beginning of Cooperative Livestock Market ing. Washington, D. C.: USDA, Preliminary Report, Mimeographed, April, 1929. 32. Gatlin, G. 0. Cooperative Marketing of Tobacco in the Miami Valley of Ohio. Washington, D. C.: USDA, Preliminary Report, 1926. 33* Gessner, Anne L. Statistics of Farmer Cooperatives. 195m— 55. Washington, D. C.: Farmer Cooperative Service, General Report 31> June, 1957. 3^. ______. Statistics of Farmers' Marketing. Purchasing and Service Cooperative s. 1950-5l. Washington, D. C.: Farmer Cooperative Service, Miscellaneous Report 169, March, 1953- 35. Goldsborough, George H. Cooperative Marketing of Potatoes in the United States. Washington, D, C.: Farm Credit Administration, USDA, Bulletin 62, May, 1951. 3 6 . Green, Perry L. History of the Ohio Farm Bureau Federation. Columbus: Ohio Farm Bureau Federation, Unpublished Manuscript, October, 1955* 353 37. Hall, Thomas E. "Times and Grain Elevators Have Changed," Mews for Farmer Cooperatives. Vol. XXIII, No. *+. Washington. D. C.: Farmer Cooperative Service, July, 195©. 3 8 . Heckman, John H. and Goldsborough, George H. Coopera tive Marketing of Apples in the United States. Washington, D. C.s Farm Credit Administration, USDA, Bulletin 55* November, 19^8. 39. Hendrickson, Roy E. "Grain Cooperatives — The First Century," Cooperative Digest. Vol. XVIII, No. 1, January 11, 195?. *+0. Henning, George F. Report of Investigation of the Doylestown. Pennsylvania and Flemington. New Jersey Egg Auction. Columbus; Ohio State Univer sity, Mimeographed Report, November, 1931. *+1. . The Truck and its Relationship to Livestock Marketing in Ohio. Wooster; Ohio Agricultural Experiment Station, Bulletin ¥+0, 1929. b 2 . , and Evans, M. B. Livestock Auction Markets in Ohio. Wooster: Ohio Agricultural Experiment Station, Research Bulletin 7*+3» 195*+• ^•3. , and Mann, L. B. Relationship Between Coopera tive Organizations Servicing Farmers in Five Ohio Counties. Wooster; Ohio Agricultural Experiment Station, Bulletin 660, 19^6. ¥+. House Committee on Small Business. The Committee of Cooperatives with other Forms of Business Enter prise . House report #1888, Seventy-ninth Congress, 2nd Session. Washington, D. C.: United States Government Printing Office, 19*+6. ^5. Hulbert, H. H. Cooperative Marketing of Livestock at Cincinnati. Washington, D. C.: Farm Credit Administration, Bulletin 3^» 1939. M-6. Kenkel, Joseph B. "The Cooperative Elevator Move ment: A Study in Grain Marketing at County Points in the North Central States." Washington, D. C.: Catholic University of America, Ph.D. dissertation. 35^- M-7. Kile, M. The Farm Bureau Through Three Decades. Baltimore: Waverly Press, 19*+$"I U-S. Let* s Look at Ourselves after Twenty-Five Years. Miami Valley Cooperative Milk Producers Associa tion, 19*+6. ^-9. Lincoln, Murray D. "Co-ops: How Big Can They Get?," The Reporter. Vol. II, No. 10, December 2, 195*+. 50. MacDonald, Ronald H. "A Study of Economic Trends, Supply Pattern and Marketing Practices in the Ohio Poultry Industry. Unpublished Ph.D. disser tation, Ohio State University, 1955. 51. Manning, T. B. and Smith, R. C. The Ohio Farm Bureau From the Farmers* Viewpoint. Washington, D. C.: United States Bureau of Agricultural Economics, 1931. 52. McBride, C. G. "The Effect of Milk Control Programs on Cooperatives," Journal of Farm Economics. Vol. XXIV, No. 1. Menasha, Wisconsin: The American Farm Economic Association, February, _19*+2, 53. . State and Federal Milk Marketing Orders in Cincinnati and Toledo. Wooster: Ohio Agricul tural Experiment Station, Research Bulletin 6 7 8 , October, 19^-8. 5*+. , and Sherman, R. W. Farm Sales of Ohio Milk Through Different Outlets. Columbus: Ohio State University, Department of Rural Economics, Mimeographed, Bulletin 131, Part 2. 55. , and Baker, Ralph. Survey of Cooperative Poultry and Egg Marketing in Ohio. Columbus: Ohio State University, Department of Rural Economics, Mimeographed Bulletin 126, May, 19*+0. 56. Miller, J. D. "The Philosophical and Legal Background of the Cooperative Movement in the United States," American Cooperation. Washington, D. C.: The American Institute of Cooperation, 1935. 355 57. Mischler, Raymond J. "Agricultural Cooperatives Have Legal Foundations," Farmer Cooperatives in the United States. Washington, D. C.: Farmer Cooperative Service, Bulletin 1, 1955. 58. Moore, H. R. Development of Legislation in Ohio that Relates to Agriculture. Columbus: Ohio State University, Department of Rural Economics. Mimeographed Bulletin 112, September, 193$. 59. New York Times. March 17, 1957. Section III. 60. Nourse, E. G. and Knapp, J. G. The Cooperative Marketing of Livestock. Washington, D. C.: The Brookings Institution, 1931. 6 1. Ohio Cooperatives: Their Business Activities. Columbus: Ohio State University, Department of Rural Economics, Ohio Agricultural Extension Service, Bulletin 191* 1937. 62. Ohio Farmer. October 1, 1921. 6 3 . Ohio State Grange Monthly. March, 1937. 6 b . Plumb, Charles S. Marketing Farm Animals. New York: Ginn and Company, 1927. 65. Poling, Earl B. "The History of Cooperative Live stock Marketing in Ohio." Unpublished Master’s thesis, Ohio State University, 1939. 66. "Productivity of Farm Labor," Monthly Review. Kansas: Federal Reserve Bank of Kansas City, April, 1955. 6 7 . Randell, C. G. "Livestock-Wool Co-ops Blanket Most of Nation," News for Farmer Cooperatives. Vol. XVII, No. 10. Washington, D. C.: Farm Credit Administration, January, 1951. 68.______, and Mann, L. B. Livestock Auctions Sales in the United States. Washington, D. C.: Farm Credit Administration, USDA, Bulletin 35, 1939. 356 69. Ratcliffe, Harry E. Cooperative Marketing of Eggs and Poultry in Ohio. Washington, D. C.: Farm Credit Administration, USDA, Bulletin 59, May, 1950. 70. ______. "Ohio Rolls Out Top Quality Eggs," News for Farmer Cooperatives. Vol. XIV, No. 9. Washington, D. C.: Farm Credit Administration, December, 19*+7» 71. Robotka, Frank, "A Theory of Cooperation," Journal of Farm Economics. Vol. XXIX. Menasha, Wisconsin: The American Farm Economic Association, February, 19*+7. 72. . "Fifty Years of Agricultural Cooperation," Journal of Farm Economics. Vol. XXXII, No. k. Part II. Menasha, Wisconsin: The American Farm Economic Association, November, 1950. 73. Scanlan, John and Lennartson, Roy W. Cooperative Eggs and Poultry Associations. Washington, D.C.: Farm Credit Administration, USDA, Bulletin 37, June, 1939. 7^. Sherman, R. W. A Study of Cooperative Milk Marketing Associations in Four Ohio Markets. Wooster: Ohio Agricultural Experiment Station, Bulletin 57*+, 1936. 75. Smith, M. A. and Greenbaum, Harry. Estimated Cash Receipts by Ohio Farmers from the Sale of Agricul tural Products and from Government Payments. by Counties. 1955. Columbus: Ohio State University Department of Agricultural Economics and Rural Sociology, Mimeographed, Bulletin AE269, October, 1956. 76. Spencer, Leland. "Impact of Marketing Agreements and Orders on the Marketing of Milk," Journal of Farm Economics. Vol. XXXII, No. If, Part II. Proceed ings Number. Menasha, Wisconsin: The American Farm Economic Association, November, 1950. 77. Taeusch, C. F. Rural Cooperation and Cooperative Marketing in Ohio. Wooster: Ohio Agricultural Experiment Station, Circular 1*+1, 1913. 357 78 . Taylor, Henry C. and Anne D. The Story of Agricul tural Economics In the United States.1855-1932. Ames: Iowa State Press, 1952. 79. Thomsen, F. L. Agricultural Marketing. New York: McGraw-Hill Book Company, Inc., 1951. 80. United States Census of Agriculture. Washington, D.C.: 81. Walker, J. F. and Plumb, C. J. The Ohio Farmer. May, 1918; June 8 and 22, 1918; April 12, 1919; May l5, 1921 and November 8, 192*+. 82. Wallace, B. A. Cooperative Livestock Marketing in Ohio. Wooster: Ohio Agricultural Experiment Station, Bulletin 375* 1925. 8 3 . ______. Development of Farmer Elevator Movement in the United States of Ohio. Unnumbered Mimeograph ed Bulletin, October, 1958. 8*+. ______, and Falconer, J. I. Farmers* Elevators of Ohio — Fifteen Years. 1920-53. Wooster: Ohio Agricultural Experiment Service, Bulletin 650, 1955. 85. Warner, Amos G. History of Cooperation in the United States. Studies in Historical and Political Science, Vol. VI. Baltimore: John Hopkins University, 1888. 86. Warren, George F. and Pearson, Frank A. Prices. New York: John Wiley and Sons, Inc., 1933* 87. Welden, William C., and Stitts, T. A. Milk Coopera tives in Four Ohio Markets. Washington, D. C.: Farm Credit Administration, Bulletin 16, 1937. 88. What Is Farm Bureau? The Story of the Ohio Farm Bureau. Columbus: Ohio Farm Bureau Federation, Booklet. 8 9 . Young, Paul A. Dairy Marketing Information on Ohio Markets. Columbus: Ohio State University, Department of Rural Economics, Agricultural ' Extension Service, Bulletin 63? September, 1933* AUTOBIOGRAPHY I, William Taft Richie, was born in Hawkinsville, Georgia, April 21, 1920. I received my secondary school education in the public schools of Hawkinsville, Georgia. In 19*+1 I received the Bachelor of Science degree from Georgia State College, Savannah, Georgia. From The Ohio State University I received the Master of Science degree in 19^8. I taught at the West Virginia State College during the 191+8-1+9 school year, and at The Agricultural and Tech nical College of Greensboro, North Carolina.from 19^9 to 1951. In 1951 I began working toward the Ph.D. degree at The Ohio State University. 358