inois Grain Holds 

 Rousing Meeting, Peoria 



G. C. JOHNSTONE 



AN INCREASE of 27 new niembeiF 

 during the year 1934 to a total of 

 175 elevators, but a decline of 

 around 10 per cent in volume of prain 

 handled, was reported by President G. C. 

 Johnstone of the Illinoi.* Grain Corpora- 

 tion at the annual meetinjr in the Pert 

 Manjuette Hotel, I'eoria, Feb. 12. It wa.« 

 a typical state-wide grathering of grain 

 producers, elevator managers and direc- 

 ting, and employees of the state and na- 

 tional grain co-operatives. The ballroom 

 of thf hotel wa> 

 crowded, attendance 

 estimatecf at 800 to 

 1,000. 



There was an in- 

 crease during 11'.34 

 in the percentage of 

 member grain over 

 non-rhember grain. 

 "This is an indica- 

 tion that our mem- 

 bew; are becoming 

 more and more con- 

 vinced that it is 

 greatly to their advantage to concentrate 

 • the marketing -of grain through their 

 own selling agency," .said Mr. Johnstone. 

 "The drouth has caused grain to move 

 in very unusual channels," he continued. 

 "Corn 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 has 

 reduced our volume. However, when the 

 : heavy movement of sealed corn was at 

 its peak and support to the market was 

 needed it was conceded by nearly all 

 . managers of member elevators that the^ 

 service rendered and prices pkid by Farp 

 ers National Grain Corporation 

 equal to those of any other firm, and 

 hijny times were better." 



' ' * ' *^ ' 



.^ Aids Corn Market 



'Speaking of the completion of new- 

 river facilities on the Illinois, Johns^tone^ 

 pointed out that corn sold on the rive 

 relieves the terminal market to that/ex- 

 tent and creates a better demaiui" for 

 corn which must move to term^iwls. 



The most controversial problem raised 

 during tlje year, he said, is that con- 

 nected with the operating agreement be- 

 ^ tween Farmers National and- Illinois 

 Grain. 

 ' The Chicago ^oard »of Trade cited 

 • Farmers National for violation of its 

 rules in. the contract provisions for pay- 

 ing co-operative commissions for organ- 



. M.4RCH. 1935 -, 



ization and educational piiirposes, ami 

 that an accounting should be made to 

 Farmers National ^rf' the amounts so ex- 

 pended during the fi.'^cal 'year, and any 

 amount remainhig unspent should Ik- re- 

 turned to the general fuml of Farmers 

 National. .. /^ ^ 



■ "Dire^tif th^-^pport "f the ,l^'.-\. -A. 

 and its ass<>eiatji>d cn^rjperatives," Mr. 

 Johnstone said, "'IllincJls <irain has been 

 able to secure a large volume of grain 

 at a comparatively small cost. This sav- 

 ing has been reflected back to the mem- 

 ber elevators in the form of a patronage 

 dividend. Under the new agreement ihyfi; 

 is no source^f revenue available f/iut of 

 which to pay preferred stock or patron- 

 age dividends. For this reason aiiiend- 

 ments to the Capper-Tincher .Act are be- 

 ing sought to correct this situation." 



Pays .Dividends 



In spite of the controversy with thr 

 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 w-as 

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

 for dividends, $1,160 for income tsixes 

 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, 

 andxd net profit of slightly more than a 



tlion, dollars was shown with a reserve 

 for adjustments at the eiid of the cur- 

 rent fiscal y»ear of $200,000. 



"Of course the big problem is to main- 

 tain this profit during the next six 

 months w;hen there will be only a small 

 volume of grain moving." he said. "But 

 th&^rospects are, due to large stocks of 

 rain strategically located, and with pre- 

 vailing premiums, we will hi' able to 

 weather the la.st half of the year in good 

 shape." 



Manager Harrison Fahrnkopf reported 

 "the total volume of grain handled by 

 Illinois Grain Corporation la.^t year was 

 13,415,172 bushels, about 12.000.000 bush- 

 els ofl-which was membff grain. 



He pointed out that trucking of grain 

 has been a point of gref^t 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 grain a-sociations, "he said. 

 In the same period Farmers National has 

 grown into the largest grain marketing 

 agency in the United States. 



Mr. Donald Kirkpatrick, legal counsel 

 for the I. A. A., gave a stin-ing and elo- 

 <|uent ad<lress in which he reviewed de- 

 velopments in co-operative marketing 

 legislation over a perio<l of years ami the 

 pending amendments to the .sor-called 

 Grain Futures and Packers and Stock- 

 yards Acts. 



The primary amemlmenls proposed 

 would "prevent Grain Exchanges from sus- 

 pending^ co-operative a.ssociation doing 

 busine^ thereon until alleged violations 

 are affirmed by the courts, would .seek 



, a new definition of a co-o^)erative asso- 

 ciation in line with the Capper-Vol.stead - 

 .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 ithe Secre- 

 tary of .Agriculture to aid hini in deter- 

 mining the influence of direct marketing 

 ori the price of livestock. 



Kirkpatrick suggeste<l that elevator 

 managers and directors begin thinking 

 about the opportunities in ceMtrali7,e<l 

 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 organi-zation like Illi- 

 nois Grain Corp.oration through which 

 they can get together and solve their. 

 common problems. The speaker closed 



'his address with a itlowing tribute to 

 Abraham Lincoln and a quotation from 

 the famous orator and thinker. Bob 

 Ingersoll whose home was ih Peoria. 



Huff Speaks 



Tracing the development of coopera- 

 tive grain marketing in the pa.st five 

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

 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,eoncerned as to what 

 he gets for his graiji. 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 grain, he continued, ^..^'e 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- 



/ 



