Page Ten 



I 1 



THE I. A. A. RECORD 



Do MiUion DoUar 



Business In 3rd Yr. 



Farm Supply Co. A Successful 

 Cooperative 



4 MILLION dollar business in less than three 

 -^*- years is the record of the Illinois fami 

 Supply Company as revealed in the report of 

 Manager L. R. Marchant, presented at the or- 

 ganization's annual meeting in Bloomingto^ on 

 Oct. 16. 



During the first six months' operation of the 

 company purchases of petroleum products and 

 supplies totaled $145,196.62. A year late^ the 

 business handled amounted to $672,872.59. The 

 third year, ending August 31, 1929, closed with 

 a business of $1,171,186.18. The petroleum 

 products handled were in excess of twelve mil- 

 lion gallons, consisting of 1102 carloadt of 

 gasoline, 438 carloads of kerosene, approximately 

 125 carloads of lubricating oils, and 90 tons 

 of grease. 



51 Stations 



Distribution of these products has been piade 

 from fifty-one bulk stations with a combined 

 storage capacity of 1,989,000 gallons, with 

 forty-four of these stations operating thej full 

 twelve months. 135 trucks are operated i^ the 

 territory surrounding these stations, serving 

 30,000 or more customers. The stations are all 

 operated by the 21 county supply companies 

 holding membership in the state agency. 



Steady expansion of the business of the 

 established companies and increased volume 

 brought about by new companies has been re- 

 sponsible for the remarkable growth in business. 

 Applications for membership were received and 

 accepted during the year from the DeWitt 

 County Service Company, Henry County Sup- 

 ply Company, Jersey County Farm Supply 

 Company, Peoria County Service Company!, '"d 

 Lake County Farm Supply Company. 



Capital Set-up 



The capital stock of the company includes 

 324 54 shares of Preferred "A" stock having a 

 par value of $100 per shfre, which is held 

 by the twenty-one 

 county companies, The 

 Series "B" Preferred 

 stock consists of 2500 

 shares having ai par 

 value of $1.00 per 

 share, held by the Illi- 

 nois Agricultural As- 

 sociation. These shares 

 of stock are subject to 

 7% cumulative I divi- 

 dends. The common 

 stock outstanding! con- 

 sists of 21 shales of 

 the nominal value of 

 $1 per share, which is 

 held by the member companies and entitles 

 them to participate in the patronage refund. 



The gross trading income of $6,008.32 re- 

 sulting from profits on purchases and sales, and 

 the brokerage income of $39,553.12, niake a 

 gross income of $45,641.44 for the fiscal year. 



Profit 93 Per Cent 



The operating expense for the period was 

 $15,834.58, or 34.69% of the operating in- 

 come, as compared to 45.47% for the year end- 

 ing August 31, 1928. The net operating in- 

 come of $29,806.86 with the additional ibcome 

 from interest and discounts of $2,504.64, and 

 deductions of $1^77.45 for federal income tax, 

 trade mark expense, and discounts allowid, re- 



L. R. Marchant 



suits in a net income in the amount of $30,- 

 534.05, or 66.9% of the gross operating, as 

 compared to $16,299.85, or 56.93% for the 

 preceding fiscal year. On the basis of the paid 

 in capital stock the earnings for the year repre- 

 sent a profit of 93.45%. 



In accordance with Article 8 of the By-Laws 

 a reserve has been established for the payment 

 of 7% dividends on Preferred stock in the 

 amount of $2,019.75, and also a reserve in the 

 amount of $20,772.74 for the payment of 

 patronage refunds. These amounts, with the 

 $817.31 returned to the member companies in 

 the form of a special refund, represent 51.08% 

 of the gross income, and reserve added to capital 

 stock 14.96%>, or the sum of $6,924.25. 



Total Assets 



Total current assets of the company, accord- 

 ing to the auditor's balance sheet, are shown as 

 $58,379.02, of which $18,521.62 represents 

 cash funds on deposit in the Transportation 

 Bank of Chicago, and $27,537.50 in government 

 securities, which are carried in a safety deposit 

 box in the Continental National Bank & Trust 

 Company. A total of $11,721.96 represents 

 unpaid stock subscriptions of the member com- 

 panies. This amount is offset in part by the 

 reserve for patronage refunds in the amount 

 of $20,772.74 shown in current liabilities. 

 Other assets consist of deferred charges cover- 

 ing laboratory and office supplies in the amount 

 of $237.92. 



Current liabilities are shown of $24,991.00 

 which includes reserves for dividends on "A" 

 and "B" Preferred stock and patronage refunds. 



Worth $45,000 Plus 



The net worth of the company is represented 

 by a capital stock investment of $34,971.00 and 

 a surplus of $10,376.89, making a total net 

 worth of $45,347.89. 



Distribution of the reserve for patronage re- 

 funds has been authorized on the percentage 

 basis of brokerage and trading income. Remit- 

 tance will be made in full for the following 

 amounts, after deductions are made to cover 

 any stock subscription notes and interest 

 charges: , 



Coles County Supply Company $ 870.61 



DeKalb County Agricultural Assn. 1,069.5 5 



DeWitt County Service Company 345.40 



Edgar County Farm Bureau Supply 



Co. - 334.98 



Ford County Service Company . 986.68 



Henry County Supply Company 637.2 5 



Jersey County Farm Supply Com- 

 pany 431.30 



Kendall Farmers Oil Company 981.54 



Knox County Oil Company 1,761.75 



Lake County Farm Supply Company 187.57 

 LaSalle County Farm Supply Com- 

 pany 1,725.74 



Logan Farm Supply Company 1,094.01 



McLean County Service Company 2,929.90 



Macon County Supply Company 1,301.69 



Marshall-Putnam Oil Company 1,430.22 



Menard County Farmers Supply 



Company 329.30 



Montgomery County Farmers Supply 



Co. _ 388.85 



Peoria County Service Company 5 62.49 



Shelby Farm Supply Company . 634.24 



Warren-Henderson Oil Company 1,599.45 



Will County Farm Supply Company.. 1,170.22 



$20772.74 



These figures indicate that the finances of 

 the organization are on a sound basis and that 



there is considerable merit to centralized pur- 

 chasing of petroleum products. 



Opinions Differ j f; 



"There is some difference of opinion among 

 those in active charge of the member com- 

 panies concerning the methods of purchasing 

 our necessary requirements, particularly gaso- 

 line and kerosene," said Marchant in his annual 

 report. "There are those who favor a regular 

 source of supply in order that they can assure 

 their trade of a uniform product at all times 

 thereby avoiding the criticisms which may come 

 if shipments are made from various sources. On 

 the other hand, there are others who are in- 

 clined to favor buying from a number of rep- 

 utable concerns on the spot market basis. 

 Both methods have some merit. 



"Insofar as contracts are concerned, their 

 value depends upon the trend of the market. 

 The pendulum swings both ways; sometimes in 

 favor of the seller and other times in favor of 

 the buyer. The past summer has been a 

 buyer's market on gasoline and kerosene and 

 a seller's market on lubricating oils. Conse- 

 quently, our lubricating oils contracts have 

 been exceedingly valuable; more so than those 

 covering our gasoline and kerosene require- 

 ments. If the market of petroleum products 

 could always be predicted several months in 

 advance there would be little need for negotiat- 

 ing contracts, but this is something that very 

 few, if any, can do. «, 



Contracts Advisable 



"In view of our ever increasing volume, it 

 would seem advisable to contract for at least 

 a portion of our requirements in the future, 

 preferably with more than one source of sup- 

 ply. To what extent this will be done will 

 depend somewhat upon the recommendations of 

 the county companies. The Illinois Farm Sup- 

 ply Company is administered by a board of nine 

 directors who are seriously concerned with the 

 movement and who are open-minded to sug- 

 gestions for improving the service, and there 

 should be no hesitancy on the part of any local 

 company to offer suggestions and constructive 

 criticisms at any time. 



"There is no question in the minds of those 

 who are most familiar with common trade 

 practices of large concerns about buying- 

 ' power increasing with volume, which is the 

 most outstanding reason for close affiliation of 

 these farmer service organizations. We cannot 

 accomplish the most for our people unless this 

 is done. Reports show the local companies to 

 be in a healthy and prosperous condition, which 

 is very commendable from the standpoint of 

 securing favorable price consideration from the 

 companies interested in our business. This can- 

 not be overlooked and encouragement of sub- 

 stantial reserves should be made. u . 



Must Strengthen All 



"Our organization will never be any stronger 

 than its weakest link and we must keep our 

 house in order if we are to thrive and grow 

 as we should. The future of the organization 

 will depend largely upon our ability to co- 

 operate. Competition can furnish plenty of 

 opposition to our plans without any internal 

 friction and it is our duty to organized agri- 

 culture to keep harmony within our ranks. 

 Furthermore, it is our duty to avoid any seri- 

 ous mistakes, if possible, and frequent gather- 

 ings of those most interested should help to 

 guide us in the right direction. 



"There may be difference of opinion among 

 us, which may call for open and frank diicus- 



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