128 AGRICULTURAL MACHINERY AND TRUST QUESTION 



ated on the necessity of a cost system, and the length of time 

 required to put one in, saying it would take about a year. When 

 pressed as to the per cent of profit in the manufacturing end of 

 the business, nothing definite was forthcoming except beads of 

 perspiration on the brow of the auditor. We do not know whether 

 the business is on a paying or losing basis, so far as figures obtained 

 . . . Mr. T. (the president of the company) stated that he owned 

 seven hundred and eight shares of the stock in the company. 

 Upon being questioned as to his salary as president, he said, ' One 

 thousand dollars per month, and that is not enough.'" 



The suit against the former officials of the Independent Har- 

 vester Company came to an abrupt end in 1917, when the govern- 

 ment, after four years of preparation, went down to defeat. The 

 United States District judge took the case from the jury and threw 

 it out of court. The court held that the government had failed 

 to prove that there was any intent on the part of the defendants 

 to defraud purchasers of stock in the company as charged, and 

 that the evidence, on the contrary, showed that the defendants 

 were sincere in their belief that the company would be a glowing 

 success, a clear case of " sincere even if visionary optimism." 

 When the company got into trouble, an entirely new management 

 took charge of it (in June, 1913). The manufacturing end of the 

 business was systematized, and a sales organization was built up. 

 A "through-the-dealers-only" policy of distributing the products 

 was adopted and adhered to. The twenty-four thousand farmer 

 stockholders buy the product through regular dealers. A full line 

 of binders, mowers, and general farm machinery is offered by the 

 company. But the reorganized company is suffering from the 

 handicap imposed by the early exploitation of the word " coopera- 

 tion" in connection with heavy promotion costs. Damage was 

 done both to the cause of real cooperation and to this company 

 as a manufacturer and distributor of farm machinery. 



The financial affairs of this company, however, went from 

 bad to worse, after the company once got into the courts. In the 

 year 1918 the assets of the Independent Harvester Company of 

 Piano, Illinois, were sold to the Independent Harvester Company, 

 Limited, for $604,506.21. Other items of expense put the cost up 

 to about $1,000,000. Under this reorganization neither the pre- 

 ferred nor the common stockholders could hope for any return of 

 any part of their investment unless they advanced 20 per cent of 

 their original investment for notes of the new company, running 

 one year. 



