Consumer Cooperatives and Farmers' 



By CLIFFORD V. GREGORY 



C^'Sk URING the past months the 

 ^^/ 1 subject of consumer coopera- 

 - 3 y tives has been talked about, 

 has been written about, has attracted a 

 great deal of attention and a great deal 

 of wonderment on the part of people 

 who did not quite know what this 

 was all about and perhaps would like to 

 know. In some quarters, considerable 

 alarm has been expressed over the growth 

 of this movement and particularly over 

 the possibilities of future growth. 



I think perhaps there has been more 

 alarm about this in some farm circles and 

 in business circles, particularly among 

 retailers, than in other circles. You 

 know it is natural when a strange rooster 

 comes into the barnyard the old roosters, 

 who have been there so long that they 

 think the barnyard belongs to them, to 

 eye this strange rooster with suspicion. 

 So perhaps it might be well for us to 

 take a look at this consumer cooperative 

 rooster to see just what sort of bird he 

 is, what effect this movement may have 

 on us as farmers. 



In the first place, what is this thing 

 anyway.' In just a few words perhaps 

 I can give you a little idea of the situa- 

 tion of consumer cooperation in Europe, 

 where it has had its greatest development. 

 Consumer cooperation in most countries 

 in Europe is big business. In England, 

 the consumer cooperatives have about 

 seven million members. They are a big 

 overhead organization. The consumers 

 cooperative wholesale does an annual 

 business of about five hundred million 

 dollars, almost the same volume of an- 

 nual business that is done here in this 

 country by Sears Roebuck & Company. 



The general set-up of the consumers 

 cooperative movement is much the same 

 in all these countries. The local unit 

 is the store. A group of people around 

 the store own that on a cooperative basis. 

 The stores own shares in the wholesale 

 society, and gradually as the development 

 proceeds the big wholesale society which 

 is organized primarily to buy at wholesale 

 the goods to be distributed in the stores 

 comes to be the spokesman and the real 

 center and heart of the consumer co- 

 operative movement. 



"The farmer is a capitalist 

 to own something" 



. he wants 



Excerpts from address by Mr. Gregory be- 

 fore lAA Convention Friday, Jan. 29- 



These consumer cooperatives in most 

 of these European countries have some 

 real accomplishments to their credit. One 

 of the things we need to understand in 

 order to understand the growth of the 

 moverhent abroad is that until recently re- 

 tailing has been very inefficient in most 

 of these countries. Until very recent 

 years they have had nothing comparable 

 to the chain store movement here in the 

 United States, so the consumer coopera- 

 tives came into the field of retailing at a 

 time when the margins were wide, busi- 

 ness per store was small and the whole 

 thing was rather inefficient. They did 

 very much the same job over there that 

 chain stores have done in this country in 

 increasing efficiency in business, in set- 

 ting standards and in cutting down dis- 

 tributive costs. 



In addition to that saving which, of 

 course, has gone to the benefit of con- 

 sumers either in lower prices or in pat- 

 ronage dividends, the greatest accom- 

 plishment of the consumer cooperatives 

 in Europe has been the elimination of 

 financial racketeering. There, as here, 

 it is customary in private business for 

 finance to have a rather dominating voice. 

 When a business of any size is organized, 

 the bankers come in, the brokers come in, 

 the people who make a business of fi- 

 nancing business. There are extensive 

 promotion schemes, commissions on stock 



and all that stuff about which I need not 

 remind you in a meeting in this particular 

 building. 



The consumer cooperative local, in so 

 far as it has entered into the field of busi- 

 ness, has almost completely eliminated 

 this. Starting out in a small way with 

 financing by its members, building up 

 reserves rapidly with no banker combina- 

 tion, no control from the financial ele- 

 ment in the community, racketeering is 

 practically eliminated. I think perhaps 

 that has been its greatest accomplishment. 

 It has gone even further than that by the 

 • policy of setting aside from the operating 

 margins large reserves every year; they 

 have built up a large volume of interest 

 free capital, paying for their facilities, 

 their buildings, their factories, the vari- 

 ous things they operate, putting them on 

 a basis where there is no interest charge 

 against them. Of course, an interest 

 charge can be paid in only one way, in 

 the price of the goods. There is, I think, 

 a real accomplishment to their credit 

 along that line. 



Another major accomplishment has 

 been the encouragement of thrift. In 

 most of these countries, the consumer co- 

 operative movement is primarily a labor 

 movement. The people who start it and, 

 for the most part, the people who par- 

 ticipate in it are workers and to a con- 

 siderable degree the'class of workers who 

 are not any too well paid, folks who 

 normally both abroad and in this country 

 do not save much money, folks who do 

 not buy insurance, who do not have 

 savings accounts,^ just ' living on the 

 ragged edge all the time. The consumer 

 cooperative movement has very definitely 

 had the policy of encouraging their mem- 

 bers to leave their patronage dividends 

 with the society until they have grown 

 into great banking institutions. Their 

 savings departments have contributed 

 very materially to the thrift of their mem- 

 bers and to the collective resources that 

 have been built up in that way. 



The other major thing they have done, 

 working again with this same class of 

 people, is to stimulate in them a sense 

 and a pride of ownership. I think I need 

 not say very much about that to an audience 

 like this. You all know there is no stabilizing 

 influence in a democracy like, having as large 



(Continued on next page) 



FEBRUARY, 1937 



II 



