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linois Grain Holds 

 Rousing Meeting, Peoria 



O. C. JOHHSTOXZ 



AN INfcHEASE of 27 new members 

 during the year 1934 to a total of 

 175 elevators, but a decline of 

 around 10 per cent in volume of grain 

 .handled, was reported by President G. C. 

 Johnstone of the Illinois Grain Corpora- 

 tion at the annual meeting i» the Pere 

 Marquette Hotel, Peoria, Feb. 12. It was 

 a typical state-wide gathering of grain 

 producers, elevator managers and direc- 

 tors, and employees of .the state and na- 

 tional grrain co-operatives. The ballroom 

 of the hotel was . 

 crowded, attendance 

 estimated at 800 to 

 1,000. 



There was an in- 

 crease during 1934 

 in the percentage of 

 member grain over 

 non-meipber grain. 

 "This is an indica- 

 tion that our mem- 

 bers are becoming^ 

 more and more con- 

 vinced that it is 

 greatly to their advantage to concentrate 

 the marketing of grrain through their 

 own selling agency," said Mr. Johnstone. 

 "The drouth has caused grain to move 

 in. very unusual channels," he continued. 

 "Com is worth more in the country than 

 in terminal markets due to feeding de- 

 -mand. This has made terminal bids un- 

 attractive in many territories and ha's 

 reduced our'volume. However, when the 

 heavy movement of sealed com was at 

 its pefik and support to the market was 

 needed it was conceded by nearly all 

 manager^ of member elevators that the 

 service rendered and prices paid by Farm- 

 ers National Grain Corporation were 

 equal to those of any other firm, and 

 many times were better." 



^ ' Aids Corn Market 



.- » 



Speaking of the completion of new 



river facilities on the Illinois, Johnstone 

 pointed out that corn sold on the river 

 relieves the ^rminal market to that ex- 

 tent and creates a better demand for 

 com which must move to terminals. 



The most controversial problem raised 

 during the. year, he said, is that con- 

 nected with the operating agreement be- 

 tween Farmers National and Illinois 

 Grain. 



The Chicago Board of Trade cited 

 Farmers National for violation of its 

 rules in thp contract provisions for pay- 

 ing co-operative commissions for organ- 



ization and educational purposes, and 

 that an accounting should be made to 

 Farmers National of the amounts so ex- 

 pended during the fiscal year, and any 

 amount remaining unspent should be re- 

 turned to the general fund of Farmers 

 National. 



"Due to the support 6{ the I. A. A. 

 and its associated co-operatives," Mr. 

 Johnstone said, "Illinois Grain has been 

 able to secure a large volume of grain 

 at a comparatively small cost. This sav- 

 _ingst]a.8 been reflected back to the mem- 

 ber elevators in the form of a patronage 

 dividend. Under the new ag^reement there 

 is no source of revenue available out of 

 which to pay preferred stock or patron- 

 age dividends. For this reason amend- 

 ments to the Capper-Tincher Act are be- 

 ing sought to correct this situation." 



Pays Dividends 



In spite of the controversy with the 

 "Board of Trade, Illinois Grain was able 

 to declare an annual seven per cent divi- 

 dend on preferred stock, and a patronage 

 dividend of one-fifth cent per bushel on 

 all grains except oats, and one-tenth cent 

 on oats. Net income during the year was 

 $33,491 from which |23,000 is set aside 

 for dividends, fl,160 for income taxes 

 and $9,331.44 to surplus. .^ 



Speaking of Farmers National Grain 

 Corporation, Mr. Johnstone reported 

 that in the six months' period ending 

 December 31, 1934 it had wiped out the 

 $600,000 loss of the previous fiscal year, 

 and a net profit of slightly more than a 

 million dollars was shown with a reserve 

 for adjustments at the end of the cur- 

 rent fiscal year of $200,000. 



"Of course the big problem is to main- 

 tain this profit during the next six 

 months when there will be only a small 

 volume of grain moving," he said. "But 

 the prospects are, due to large stocks of 

 grain strategrically located, and with pre- 

 vailing premiums, we will be able to 

 weather the last half of the year in good 

 shape." . 7 



llfanager Harrison Fahrnkopf reported 

 the total volume of grain handled by 

 Illinois Grain Corporation last year was 

 13,415,172 bushels, about 12,000,000 bush- 

 els of which was member grain. 



He pointed out that trucking of g^rain 

 has been a point of^grreat concern to the 

 directors of the Corporation and to eleva- 

 tor managers. In five years the Corpora- 

 tion has been built from the ground up 

 to a membership of 178 co-operative 



elevators and gr^n a^soeiatSons, he said. 

 In the same period Farmers National has 

 grown into the la^grest grain marketing 

 agency in the United States. 



Mr. Donald Kirkpatrick, legral counsel 

 for the I. A. A., gave a stirring and elo- 

 quent address in which he reviewed de- 

 velopments in co-operative marketing 

 legislation over a period of years and the 

 pending amendments to the so-called 

 Grain Futures and Packers and Stock- 

 yards Acts. 



The primary amendments proposed 

 would prevent Grain Exchanges from sus- 

 pending a co-operative association doing 

 business thereon until alleged violations 

 are affirmed by the courts, would seek 

 a new definition of a co-operative asso- 

 ciation in line with the Capper'<Volstead 

 Act, and would make possible the distri- 

 bution of co-operative commissions re- 

 ceived for services rendered by a co-op- 

 erative association as patronage divi- 

 dends. Similarly legislation is being 

 sought requiring meat processors to sub- 

 mit their books and records to the Secre- 

 tary of Agriculture to aid him in deter- 

 mining the influence of direct marketing 

 on the price X>f livestock. 



Kirkpatrick suggested that elevator 

 managers and directors begin thinking 

 about the opportunities in centralized 

 purchasing of their supplies and side- 

 lines — also establishing a clearing house 

 to develop standard elevator practices. 

 In these changing times, he said, eleva- 

 tors must have an organization like Illi- 

 nois Grain Corporation through which 

 they can get together and solve their 

 common problems. The speaker closed 

 his address with a glowing tribute to 

 Abraham Lincoln and a quotation from 

 the famous orator and thinker. Bob 

 Ingersoll whose home was in Peoria. 



Huff Speaks 



Tracing the development of coopera- 

 tive grain marketing in the past five 

 years, Mr. C. E. Huff, president. Farm- 

 ers National Grain Corporation, declared 

 that the American farmer now has a 

 marketing organization handling a very 

 large volume of grain in the terminal 

 markets, which is concerned as to what 

 he gets for his grain. Farmers National, 

 he stated, is one of the largest handlers 

 of grain in the country, operating thirty- 

 seven million bushels of terminal grain 

 elevators and holding large stocks of 

 grain of good quality in storage at 

 strategic points. Time and place of of^ 

 fering are important in the marketing 

 of g^rain, he continued. "We are at ease 

 in our finances and the banks are friend- 

 ly to us." 



Mr. Huff, who was active in framing 

 the Country Elevator Code, discussed va- 

 rious provisions of the code. He stated 

 that the N. R. A. Advisory Board has 

 recommended to the Administrator an in- 



MARCH. 1935 



