nmry 14, 192S 



Fthmary 14, 192S 



The IlKnoi* AgrioJtund Awociation Record 



P^re 3 



ustry and La- 



ras introduced 

 augen (H. K. 

 1 as submitted 

 'icultural corn- 

 ed the f ollow- 



poratlon with 

 needs to the 

 ^ asaoctations, 

 rmers' export 

 ;tlve tariff ef- 

 productlon of 

 a and in com- 



ch commodity 

 de an amount 

 : capital, 

 idlvtduals. the 

 ^rlculture, and 

 ubllc interest; 

 Preaident. one 

 districts, from 

 flde farm or- 

 ixtend to June 



rom the funds 

 eaents practi- 

 irnable out of 

 in the manner 



grant of gen- 

 liness through 

 BCtly. Powers 

 L premium or 



^er of restrlc- 



lident, utlUza- 



collectlon of 



y clauses, etc. 



1 present short 

 djoums March 

 of in the ses- 

 rtunity in the 

 >ther measures 

 ied in this ses- 

 ,nd pleasure of 

 ' to give right 

 lasures. 



3nt individual 

 on, we are ad- 

 may not elect 

 It. The Coun- 



in Washingto.n 

 Ivance the bill. 

 a, the Council 

 d maintenance 

 ;arry the issue 

 ember 1, 1925. 



egittert 



he vital need 

 :ly and readily 

 terprise. The 

 he busineffi of 

 accounting for 

 more complete 



rst introduced 

 lered it a re- 

 punch a ma- 



d that it had 

 The cash regis- 



in many busi- 



ide in systems 

 aents in radio 

 dapted to the 

 em. The sys- 

 ient from the 

 necessary to 

 standpoint of 

 )ense to a min- 



liting. One is 

 he correctness 

 ries are made 



ily should in- 

 ed on figures, 

 be adopted, 

 iness and also 



ver called in 

 gotten away 

 ) in a bad con- 

 iential for the 

 f directors. It 

 rth any more 

 audit does not 

 r organization 



at ions are de- 

 iiting service, 

 roadest sense. 

 ^ive them the 

 the truth and 

 •d of directors 

 onfidenee and 



the auditing 

 inois Agricul- 

 1 functions as 

 ^counting. 



NEWSPAPER'S STORY INFERS DUSKY GENTLEMAN IN MERGER WOODPILE 



CHICAGO EVENING POST OF SAT., JAN. 31, 

 CARRIES STORY ON PAGE ONE DISCLOSING 

 INTERESTING NEWS ON $26,000,000 MERGER 



It* Story Re-printed to Show Farm Bureau Members Facts as Re- 

 lated by Newspaper Having Leading Financial and Market 

 Pages; Refutes Claim of Merger that it Caused the Increase in 

 Grain Prices; Merged Interests Did Not Answer Questionnaire. 



The Chicago Evening Post of Jan. 31, 1925 on page one carried the 

 story which is re-printed below. It pertains to the $26,000,000 grain 

 merger and represents the attitude of the Chicago newspaper which 



I is recognized as having the leading financial and market report pages. 

 The article is re-printed verbatim for the information of farm bu- 

 reau members. 



Since this article appeared in the Post, Senator Kessinger of 

 Kane county introduced a resolution in the Senate asking for a state 

 investigation of the Grain Marketing Company and Prairie Farmer 

 has printed the suppressed Livingston report which was unfavorable 

 to the merger and which President Thompson did not see until long 

 after the deal had been completed. He was a member, as you no 

 doubt remember, of the American Farm Bureau Federation which 

 was appointed to consider the advisability of taking over the old-line 

 companies and stood solidly against the deal. 



The attitude of the Illinois Agricultural Association is the same 

 now as when the results of its investigation were announced. The 



, attitude is one of non-indorsement. 



A searching investigation by the 



f Illinois commerce commission into 



the operating methods of the $26, 



1000,000 Grain Marketing corpora 

 tion has been aslted by the Illinois 

 Agricultural association, the leading 

 farmers' group in the state, it was 

 learned today. 

 i The outcome of the investigation 

 I is awaited eagerly, not only by the 

 I officers of the farmers' organization 

 'who have asked for information re 

 , peatedly without satisfactory re- 

 sponse, but by farmers' grain ele- 

 jvator men generally. 

 ' The Grain Marketing corporation 

 was organized last July, ostensibly 

 as a co-operative wheat sales venture 

 for the benefit of grain-growing 

 farmers. The corporation absorbed 

 the properties of the Armour Grain 

 company, the J. Rosenbaum- Grain 

 company, Rosenbaum Brothers and 

 the Davis-Noland-Merrill Grain com- 

 pany. Since then claims that its op 

 eratlons have been responsible for 

 the high price of wheat have been 

 made repeatedly by Gray Silver 

 West Virginia fruit grower, and 

 other officers of the company, and 

 I have been ridiculed as impossible by 

 'those in close touch with the world 

 [grain situation. 



BeKan Stock Promotion Work 

 Stock promotion work was begun 

 I for the new corporation shortly after 

 ,its organization. Under the terms 

 of the merger $4,000,000 in class A 

 stock, with a par value of $25 a 

 share, must be sold by July of this 

 year in order to retire bank loans of 

 that amount advanced for working 

 capital. 



The stock sales have thus far met 

 with varying success. The leading 

 Indiana, Illinois and Kansas farm 

 ers' organizations refused to indorse 

 the corporation without more defl 

 nlte information as to the financial 

 status of the merged elevator com- 

 panies. Others were more favorably 

 inclined. At present an intensive 

 stock-selling campaign is in progress 

 in Illinois and Iowa. 



Pbm of .Organization In Brief 

 The plan of organization for the 

 corporation may be summarized 

 briefly as follows: 



■The four companies after leaving 

 their elevator properties for the year 

 'beginning last July, are to sell and 



i lease these properties, good will and 

 business to the corporation for ap 

 pro.\lmately $16,400,000, on the 

 « basis of an appraisal which has been 

 in progress for some time, and is 

 Jonly now being completed. 

 I The companies participating in the 



(merger also agree to furnish a board 

 of managers and $4,000,000 in work 

 ing capital for the first year's op 

 eratlons. 



(Meanwhile, the Grain Marketing 

 ^corporation agrees to dispose of $26, 

 000,000 in stock in order to ,pay the 

 purchase price set for the elevators, 

 land furnish additional working cap- 

 ital. As stated earlier in the article 

 $4,000,000 in this stock is to be dis- 

 posed of by July, 1925. 

 I Business is to be conducted as in 

 the past, with g per cent paid on the 

 Invested capital and all profits above 

 lliat figure, after deductions for op- 

 erating expenses-, to be refunded to 

 members on a patronage basis. 



Has Been Storm Center 

 1 From the outset, according to co- 

 (operative and grain market leaders 

 I the new company has been a storm 



center of controversy as to its real 

 nature and purpose. 



It has been charged variously thf 

 plan of organization takes in obso 

 lete elevators at inflated basis ol 

 physical valuation and good will 

 that the corporation is handling fai 

 in excess of the 50 pes cent inaxi 

 mum in grain allowed by the Cap 

 per-Volstead act for non-members 

 that the insurance rates on grain 

 stored in the elevators affected art 

 much higher than in modern struc- 

 tures and that the corporation a: 

 now constituted is in reality a bif; 

 commission house rather than a tru 

 co-operative venture, which is takiu^ 

 advantage of the privileges afforded 

 the farmers' sales groups by special 

 legislation. 



Refuses to Comment on Charges 



Opportunity to comment on these 

 charges was offered the corporation 

 and declined. 



The story of the attempt by the ex 

 ecutive committe of the Illinois Ag 

 ricuitural association to obtain light 

 on some of these phases of the raer 

 ger was told today by George A. Fo: 

 secretary of the association. 



In July of this year the associa 

 tion's e.vecutlve committee sought in 

 formation from the Grain Marketing 

 corporation as follows: 



1. Does the financial record of 

 each of the merging companies jus 

 tify the conclusion that the merger 

 will be a successful investment for 

 farmers over the next five years? 



2. Are the by-laws and contracts 

 of the new company so drawn le- 

 gally as to Insure full and complete 

 control of all the affairs by the board 

 of directors elected solely by the 

 farmer members? 



3. Are the terminal and local ele- 

 vators owned by the merger so sit 

 uated that they can successfully 

 serve the farmers in competition in 

 all the grain markets in the United 

 States? 



Data Souf;ht Re|ieatedly 



This information, according to Fox. 

 was sought repeatedly in the hope it 

 would enable the I. A. A. to reach an 

 independent conclusion on each of 

 these vital questions. 



"In the first place," Fox contin 

 ued, "no information was given the 

 I. A. A. as to the financial position 

 of the merging companies, showing 

 their profits or losses for the last five 

 years. 



"This was a fair business question 

 — one any reliable banker would ask 

 before passing on any investment 

 propostion. Since no information 

 was forthcoming, the Illinois Agri 

 cultural association could get no In 

 formation as to the merger's possi 

 bilities for the next five years. 

 Three Months No Test 



"The Illinois Agricultural associa- 

 tion executives and officios realized 

 the grain business is subject to wide 

 fluctuations and feel certain no con- 

 clusion can be drawn by any refer- 

 ence to a short term of operation as. 

 say, the last three months, when, 

 every grain trading firm has made 

 great profits. 



"If the merging companies have a 

 satisfactory record on an average 

 over a five-year period, they have had 

 ample opportunity to furnish it to 

 the executive committe of the Illi- 

 nois Agricultural association for in 

 formation of its farm bureau mem- 

 bers whom it is seeking to protect 



Refusal to furnish that informa- 

 rion seems very significant. 



I/egai Control in Doubt ( 



"As to the second point," Fox con- 

 tinued, "the Illinois Agricultural as- 

 sociation has been given copies of 

 the by-laws and contract tor purchase 

 and lease. From an examination of 

 the papers furnished, it is quite evi- 

 lent legal control rests somewhere 

 between the mergii^ companies and 

 he board of managers. .\t least it 

 ■an be safely stated full and com- 

 ilete legal control, such as is abso- 

 utely necessary in any true co-op- 

 ■rative organization, does not rest 

 vith the farmer-members or direc- 

 ors elected by farmer-m'embers. 



"In the third place, the Illinois 

 \gricultural association has made a 

 ■areful survey of grain statistics as 

 Ificially published by the United 

 -states bureau of markets, and from 

 )ther official sources in the grain | 

 rade. This survey of business indi- 1 

 ^ates the properties of the merged [ 

 nterests operated by the Grain Mar-! 

 keting corporation are not located or 

 listributed advantageously under ex- 

 sting conditions of the grain trade, 

 ind that the present trend of general 

 movement of grain points to a rapid ! 

 lecline of the utility and value of 

 'hese properties in addition to obso- 

 escence and natural depreciation. 



"This business survey indicated 

 he merged facilities can only be used! 

 dvantageously where there is a ris- 

 ng market due to a world-wide grain 

 atastrophe. Averages determined by 

 lormal operations over a term of 

 ears is the only information upon 

 v'hich a conclusion can be safely 

 ■jased." 



The National Council of Farmers' 

 Cooperative Marketing assocaitione 

 s the outgrowth of the co-operative 

 larketing conference called a little 

 )ver a year ago by former Governor 

 .owden. From the outset, this or- 

 ganization, thru Aaron Sapiro and 

 Hher leaders, has opposed the new 

 marketing corporation. 



Sapiro ridiculed the claims of Gray 

 Silver, made recently in Washington, 

 that the marketing corporation was 

 responsible for wheat price levels. 

 Holds Claim as Itidirulous 



"The claims are ridiculous," he 

 said. "What do they think they are? 

 Do they think they created the world 

 wheat shortage? 



"What I object to most is their 

 posing as a co-operative marketing 

 association when they're operating 

 as a straight commission house." 



Specifically. Sapiro charged the 

 marketing company violated the Cap- 

 per-Volstead act by^ handling grain 

 at non-members in excess of the 50' 

 per cent allowed by the federal law, 

 and in other ways operating just as 

 any normal commission house does, 

 and was doing this under cover of 

 the privileges allowed co-operative 

 farmers' organizations. 



Sapiro's allegations, and those 

 from other sources, were embodied 

 in a questionnaire which, among 

 other things, asked for a statement 

 as to the percentage of non-member 

 wheat handled by the corporation if 

 it is not violating the Capper-Vol- 

 stead act. 



Questionnaire \ot .Answered | 



The qnestionnaire was submitted i 

 at the offices of the Grain Marketing: 

 corjioration and assurance wa.s given I 

 that they would be answere<l in writ- 

 ing b.v the following morning. 



The questionnaire was called for 

 <t the apiiointed time, but a change [ 

 of heart had occurred in the interral 

 The answers, it wa.s announce<l. could 

 iiot be given '*now.** 



So the farmers' organizations and 

 the other opponents of the corpora- 

 >ion are awaiting the inquiry by the 

 Illinois Commerce commission to as- 

 ■ertain whether the corporation is in 

 reality a true co-operative organiza- 

 tion. 



DEMAND T. B. FREE 



MILK BY JULY 1 



The first resolution ever passed by 

 a co-operative organization of pro- 

 ducers in Illinois Imposing upop 

 themselves the strict requirement 

 that all herds within their organiza- 

 tion shall be either accredited or on 

 the way to accreditation by state and 

 federal authorities was passed at a 

 general meeting Feb. 9 of members 

 ■y! the Quincy Co-operative Milk Pro- 

 ducers Association, according to A. 

 D. Lynch, director of the department 

 nt dairy marketing, who addressed 

 the group. 



There are 92 herds represented in 

 the association. Lynch says, and the 

 restriction is to become effective on 

 and after July 1, 1925. 



Claim Department Makes 

 Macoupin Farmer Smile; 

 Strengthens F.B. Sup[>ort 



'Twas the tale of a lonesome 

 shoat. Down in Macoupin 

 county. Defective railroad 

 fence. Shoat wiggled through. 

 Got killed by locomotive, or 

 otherwise annihilated. Charles 

 Birkenmayer. Madora. ex-own- 

 er, demands redress. Wants 

 market price of porker. Rail- 

 road turns deaf ear. What to 

 do; Charles notifies I. .\. .\. 

 transportation department. 

 The fun begin."!. L. J. Quasoy. 

 director, investigates and later 

 negotiates a five-spot from UR 

 clain) agent. 



Tale tails off happily. Charles 

 is satisfied. "Writes to Quasey: 

 "I could not afford not to be- 

 long to our Jersey county Farm 

 Bureau, or to the Producers 

 Live Stock company, and the 

 bank, the store, and elevator. 

 I just joined another organiza- 

 tion in St. Louis recently — the 

 Missouri Valley Implement and 

 Hardware, which is $10.00 per 

 year. The good speeches I 

 heard by real he-men at their 

 ' convention was worth the price. 

 'Good equipment makes a cood 

 farmer better.' Hope you are 

 going good and have a big year, 

 and I feel we are. if we only 

 get good weather. 



"Your booster, 



"Chas. Birkenmayer." 



Have you a tale to tell like 

 this one? We are in the mar- 

 ket for it. The RntiRP is here 

 to serve you. 



I. A. C. A. MEMBERSHIP 

 IS STEADILY GROWING 



Knox county leads the state in the 

 numt>er of farmer co-ops holding 

 « Op membership >n the I.A.C.A. 

 I %^ Its sev^n members are the 

 *•"' Williamsfleld Live Stock 

 Shipping Association; the Wili%ms- 

 Held Farmers Co-operative Associa- 

 tion, Inc.; Altona Co-operative Grain 

 Company; Gilson Farmers Co-opera- 

 tive Company; Knox county Farm 

 Bureau; De Long Live .Stock Ship- 

 ping Association; and Rapatee Farm- 

 ers Co-operative Grain Company. 



The most recent farmer co-opera- 

 tive to Join the ranks of the I. .\. C. 

 .\. is the Savanna. Marcus, and Hick- 

 ory Grove Live Stock Shipping .\sso- 

 ciation, in Carroll county. This 

 brings the total memlwrship up to 

 135. "Farmers' co-operative associa- 

 tions, " says Vernon Vaniman. field 

 organizer, "are explaining one to 

 another the auditing service and are 

 appreciating the advantages of co- 

 operating together." 



Colusa Elevator Xot In 



It had been stated thru the I. A. 

 A. information department that the 

 farmers' elevator at Colusa in Han- 

 cock county had become a member 

 of the I. A. C. A. This information 

 was baaed on a request for an audi- 

 tor and a definite date was set for 

 his working on tb+ Colusa elevator's 

 books. This was taken as meaning 

 that the Colusa ebevator would sign 

 the contract. W^en the auditor got 

 there he found that other arrange- 

 ments had been made for an aud'it 

 and the contract h^d not been signed. 

 Field Organizer viniman states that 

 he will call on the board of directors 

 in the near future. 



UTAH MAN CHOSEN TO 

 REPLACE COVERDALE 

 AS A.F.B.F. SECRETARY 



Answers to Call of "Marketing 

 Counsel;" Was Attorney for 

 the Utah SUte Farm Bureau 



Frank Evans of .Sail Lake Cil.v 

 Utah, has bees secured as the new 

 secretary of the American Farm Bu- 

 reau Federation. His lille will b^ 

 that of "marketing counsel." H' 

 will also perform the secretarial du 

 ties. President Thompson was on :i 

 special committee ap|K>inted by Pref 

 idem Bradfute of the A. I" B. F 

 which recommended Mr. Evans. 



In additipn t<i the selection of Mi 

 Evans as ceneral marketing counsel 

 the .\. F. B. F. Kxecutive Board m 

 its last meeting announced the re 

 establishment of complete amity b<' 

 tween the national office and the In 

 (liana .<iale Farm Bureau office; the 

 appointment of K. V. Taylor as di 

 rector of organization; the adoption 

 of a rfM^olution endorsing bills nou 

 in Congress which propose amend 

 ments of the packer-stock >ard ad 

 ministration act which will prevent 

 that act from prohibiting certaii 

 state government services in stoci< 

 >"ards. and adoption of a- resolution 

 .-itating the Farm Bureau's (>o8itioii 

 regarding pending legislation on lh< 

 disposition of Muscle Shoals. 



'This Muscle Shoals resolution 

 urges "first, thai farni--r board of 

 control should be provided for; sec 

 ond. that rf>asonable limitation b« 

 placed on profits to be realiz<'d. and 

 that if less power i»er ton of fertilizei 

 IS found practicable in future years. 

 such development will be reflected 

 in decreased tonnage of fertilize! 

 rather than in sate or rental of tie 

 power." 



E. P. Taylor, who was named di 

 rector of organization of the A. V 

 ' B. F.. has been in charge of organi 

 jzation field activities for the Fedei 

 ation'for the paKt three years and hi-.^ 

 [been actively in charge of the depart 

 ment of orRanizalion for the past six 

 months. ^ 



Frank Kvans, who has b«»4»n named 

 general marketing counsel, hav 

 served as the attorney for the Ulal! 

 State Farm Bureau for thr»H' years, 

 has been a directoc of the Utah State 

 Farm Bureau for three years and has 

 been member of the executive board 

 of the A. F. B. F. for the same length 

 of lime. Mr. Evans, who is owi^er 

 of farming interests in Utah and whu 

 has actively practiced law in Sail 

 I^ke City for the past 23 years, has 

 been closely identified with develop- 

 ment of co-oiM-rative marketing 

 throughout the West. He has been 

 organizing counsel for a great num- 

 ber of commodity associations in 

 Utah and Idaho and other western 

 slates. 



FOUR COUNTIES HIRE 



FARM BOOKKEEPER 



Another step in increasing farm 

 efficiency has beep taken by farm 

 bureau members in four progressive 

 Illinois counties. 



No less than 232' farmers of Wood- 

 ford. Livingston. Tazewell, and Mc- 

 Lean counties ha\*e enrolled in the 

 new four-county fprm bureau man- 

 agemejit service, the first such proj- 

 ect to be organize! In America. M. 

 L. Moshcr, extension specialist in 

 farm organization and management 

 for the state college of agriculture, is 

 to be iU fleldman. The project It- 

 self is the outgrowth of a farm ac- 

 counting project Mr. Mosher conduct- 

 ed during the site years that he 

 served as farm adviser for the Wood- 

 ford county Farm Bureau. 



Presents Resolution 



Asking I. A. A. to Have 

 I. C. C Representative 



Samuel Sorpells. executive com- 

 'mitteeman for the 2l8t district, pre- 

 sented at the Feb. 6 meeting of the 

 executives, a resolution passed by the 

 Montgomery County Farm Bureau 

 instructing him "to ask the I. A. A. 

 executive committee to 'secure the 

 services of a competent man to reji- 

 resent the farmers of Illinois before 

 the Illinois Commerce Commission. 

 His first job is to investigate the 

 proposed raise in rates of the Illi- 

 nois Telephone companies and to-6ee 

 if these companies are eniiiled to the 

 raise. Secondly, to work to secure a 

 ruling to compel telephone compan- 

 ies to transfer messages froiA one 

 company line to another allowing 

 them to charge sufficient toll to cov»'r 

 cost of transfer. Furthermore, thai 

 said representative be on hand at all 

 limes to imestigate ^opoB<*d rate in- 

 creases by public unlity conipanles 

 and to secure the neissary infonifti- 

 tion, facts and figures to protect the 

 farmers' interests." 



The executive committee voted to 

 leave It up to the officers to deter- 

 mine the advisability of securing 

 such representation and report back 

 at the next executive committee 

 meeting. 



CHILD LABOR BOX. FAILS 



The child labor amendment to the 

 Constitution has been beaten. The 

 measure has fallen short of ratifica- 

 tion by the necessary three-fourths 

 of the state legislatures. 



