KEPORT OF THE SECRETARY OF AGRICULTURE. 39 



sion. The first great cooperative movement in agriculture reached 

 its apex about 1874, but lasted for only a few years thereafter. 

 Local work went forward in the later years of the nineteenth cen- 

 tury, but it was not until after 1900 that the present period of ex- 

 pansion began. It increased gradually for a number of years, gain- 

 ing momentum about 1914, and is now at a maximum. 



There have been many failures of cooperative associations, al- 

 though there is no reason to believe that the number of failures 

 of such organizations during a given period varies materially from 

 the number of failures in other enterprises under analogous con- 

 ditions. It was only natural that the number of failures of co- 

 operative associations should be especially large following the 

 World War, during the period of falling agricultural prices, just 

 as the number of business failures in cities should be and was very 

 large. The causes of the failures appear to be similar to the causes 

 of failure in other lines. The main cause was falling prices. Other 

 causes were poor management, inadequate financing, and too small 

 a volume of business in proportion to the overhead expenses. Some 

 associations purchased, largely on credit, buildings and equipment 

 at war prices, and the subsequent decline in the value of such prop- 

 erty, coupled with the decline in the price of agricultural products, 

 was largely responsible for their failure. 



Business failures in cities are a natural economic phenomenon 

 which we record statistically from day to day. It is a barometer 

 of business activity. It is taken as a matter of course. When a 

 cooperative enterprise composed of farmers fails it flashes across 

 the metropolitan press in glaring headlines. Business failure is the 

 cut and dried method by which society has decreed that the un- 

 necessary enterprises be eliminated. 



The Capper- Volstead Act, which became a law on February 18, 

 1922, specifically recognizes the right of farmers to associate for 

 the purpose of marketing their products. This act clears the way for 

 cooperative effort. 



A principle which can not be too strongly emphasized is that 



cooperative associations will succeed or fail in proportion as they 



are efficient. The measure of their success will be determined by 



their ability to perform the marketing functions which they under- 



78007— AGE 1923 4 



