398 TWENTY-THIRD ANNUAL YEAR BOOK— PART V 



part of the institution until the board of directors and the executive 

 committee themselves came and asked us in a written statement to come 

 over and save the proposition. 



We found that the plan contemplated selling grain through some sort 

 of co-operative agency. No attempt was made to build that agency, at 

 least not in the beginning. The first thing was to go out and sign up 

 the farmers by contract, more than 60,000 of them, and I will say frankly 

 that it was wrong in principle to tie up 60,000 farmers scattered all over 

 the country to contract for the sale of grain through a sales agency that 

 didn't exist. 



Organization Proceeded on Wrong Basis 



Now, any time you neglect to apply sound business principles you get 

 into the red, and, soon or later, you have to back up. That is what hap- 

 pened, and my judgment is that we have got to back up completely and 

 go out and set up these sales agencies — that is, provide a place for mar- 

 keting this grain, and when we have them established to go to the co- 

 operative elevator. By co-operative elevator I don't mean one under 

 that name that is in the grain business as a speculator, but an elevator 

 where the individual owners and customers are real co-operators. We 

 have some problem there, but I believe the only sound policy is to back 

 up and establish sales agencies. 



Following that idea we went to all the boards of trade and asked for 

 seats on the exchange. The only place we got through was at Minne- 

 apolis. There are 3,300 contracts in Minnesota and about 6,200 in North 

 Dakota, and they should all function through that exchange at Minne- 

 apolis. These contracts are with individuals, in some instances tied up 

 to the elevators, but in a great many instances floating around Dakota. 



A certain percentage of the people move every year. In Minnesota and 

 Dakota the proportion is larger than in Iowa. The result is that in Wash- 

 ington, Montana, Oregon, Idaho, and in every little town in the Dakotas 

 men can be found who are signers of these contracts, which were to be 

 the foundation of the business and are now floating all over kingdom 

 come. That is why I say the individual is not the man to tie this propo- 

 sition to. This is a grain institution and it cannot be used for any othsr 

 purpose. We must tie it to the co-operative elevator, because if 20, or 

 30, or 40 per cent of the membership around that elevator moves next 

 spring it will be the business of the elevator to go out and get in con- 

 tact with the new men that come into the community — obviously a thing 

 the men at the Chicago office cannot do. 



Denied Seat on Grain Exchange 



Now, if we could go out and get fifty or seventy-five elevators in Illi- 

 nois that are friendly, it would give us something to start with. The 

 boards, generally speaking, are friendly but there is need of educational 

 work with the managers. If we had fifty co-operative elevators in Minne- 

 sota, and from fifty to one hundred here in Iowa we would have a nucleus 

 around which to build a sales agency. We would be starting on the 

 ground. 



We couldn't get seats on the exchange. We didn't go to the board and 

 try to do anything out of the ordinary. We didn't undertake to get onto 



