Page Sixteen 



THE I. A. A. RECORD 



February, 1931 



Capital Stock Policy, 



Commercial Services 



Review of Business Service Projects 

 Discloses Growth and Progress 



(Notri FollovrinK nre excerpt* from 

 the PrexIdent'N nddreMn at the recent 

 annual convention, Sprlnsfleld.) 



''O 



CCASIONALLY we hear that 

 there is either lack of under- 

 standing or some uneasiness among the 

 membership regarding the extent of 

 capital stock organizations in the farm 

 field. There is, no doubt, justification 

 for some concern on the part of those 

 who do not thoroughly understand the 

 underlying reasons prompting a policy 

 of this kind. 



"The policy of the I. A. A. through- 

 out recent years has been to develop 

 commodity organizations as separate 

 and distinct institutions. This is prompt- 

 ed first by the belief that each com- 

 modity organization should be under 

 the control of its members. It should 

 provide its own capital and participate 

 in all of its own profits and losses. 



Policy Is Sound 



"Experience of the Association justi- 

 fies ever-increasing confidence in the 

 soundness of that policy. It is true 

 that the capital requirements of differ- 

 ent commodity interests vary widely. 

 While a nominal amount of capital 

 stock is needed in some cases, very sub- 

 stantial amounts are needed by others. 

 Regardless of credit facilities that may 

 now be or may hereafter be made avail- 

 able, any co-operative corporation that 

 may be or is usually called upon to 

 carry substantial portions of its com- 

 modity for varying periods of time 

 should in all cases have paid-in capital 

 stock equal to ten per cent (10%) of 

 the normal total commodity handled. 

 Such safeguards not only make avail- 

 able credit easily accessible, but re- 

 moves the danger of being called upon 

 by creditors and forced to sell a com- 

 modity at a time that might defeat the 

 very purpose of the organization. 



Some Grave Problems 



"As farmers move forward in the 

 field of commodity marketing and the 

 development of other services, they 

 must expect to meet opposition. We 

 have less to fear from those outside our 

 ranks than from friction, misunder- 

 standing, wasteful competition and 

 false doctrine within. The elimination 

 of competition between farmers* or- 

 ganizations and co-operatives, and con- 

 sequent duplication df effort constitutes 

 one of our gravest problems. The es- 

 tablishing of too many organizations 

 n^y become a discouraging influence 

 impeding worthwhile accomplishment. 



The reluctance of a minority to abide 

 by the ruling of a majority for the 

 "common welfare is. often a stumbling 

 block to achievement. The betrayal of 

 the farmer and his best interests by 

 those who pose as his friends, while 

 secretly working for his economic ene- 

 mies is a danger constantly lurking in 

 the path to success. 



Commercial Service Corporations 



"Although marketing activities have 

 held a dominant position in the year's 

 program, yet the so-called commercial 

 service organizations have in no wise 

 been neglected, "as is shown by their 

 continued development and achieve- 

 ment.:''.:;,, /;■■,,!;■;■;,;:" ':'■■■'::■::■' r ■■--'■ ■:-■:.':.::.. 



"While to the membership belongs a 

 large portion of the credit for the very 

 substantial and continuous growth of 

 these business activities, yet we are not 

 unappreciative of the devoted loyalty 

 and outstanding ability of the active 

 management of these various service 

 organizations. 



"On former occasions I have dealt 

 at some length as to the reasons 

 prompting the development of the va- 

 rious service corporations. I shall, 

 therefore, not take your time for a 

 repetition of previo|us statements. 



Illinois Agricultural Co-op. Assn. 



"The value of the service rendered 

 by the Illinois Agricultural Co-opera- 

 tives Association is becoming increas- 

 ingly apparent. The association had its 

 best year in 1930. It completed 303 

 audits for 285 co-operative and farm 

 organizations, and closed the year with 



a net increase of 54 members. 



t 



Farmers Mutual Reinsurance Co. 



"Considering the abnormal fire losses 

 experienced in Illinos during 1930, the 

 Farmers Mutual Reinsurance Company 

 had a good year. The company shows 

 steady, but substantial growth, having 

 in force about $41,000,000 of insur- 

 ance, which shows an increase of about 

 sixty per cent (60%) during the year. 



Illinois Farm Supply Company 



"The Illinois Farm Supply Company 

 enjoyed by far the best year in its short 

 history. From an organization four 

 years ago consisting of six (6) char- 

 ter members with less than a dozeft; 

 bulk storage stations, it has grown to 

 38 companies with 95 stations operat- 

 ing 250 trucks and serving approxi- 

 mately 50,000 farmers in 60 different 

 counties. ~ 



"Membership applications have been 

 received and accepted from 17 com- 

 panies within the year. The petroleum 

 products piu'chased during the year ex- 

 ceed 24,000,000 gallons, which is a 

 gain of 73 per cent over that of 1929. 



Fifty-two per cent (52%) of the gross 

 income of the Illinois Farm Supply 

 Company was returned to its members 

 in the form of capital stock dividends 

 and patronage refunds, and 16 per cent 

 of its gross income was added to its 



surplus. ■,■;-....' :::•,'.■■':;>;■■.:■.: 



Illinois Agricultural Mut. Ins. Co. 



"The Illinois Agricultural Mutual 

 Insurance Company has also had a 

 splendid year. On December 31, ap- 

 proximately 25,000 policies were in the 

 hands of Farm Bureau members of 

 Illinois, an increase of over 30 per cent 

 for the year. 



The admitted assets of the company 

 increased $188,882.00 and at the close 

 of the year aggregated $615,760.00. 

 All funds of the company are invested 

 in the highest grade securities, and the 

 company operates so smoothly as to 

 very seldom call for any particular at- 

 tention of its executive officers. 



Country Life Insurance Company 



"Approaching the close of its second 

 year, the Country Life Insurance Com- 

 pany is far in advance of the fondest 

 expectations of those responsible for its 

 development. At the close of business 

 for the year, 22,047 policies were in 

 force aggregating $35,251,250 of in- 

 surance, showing an increase of 83 per 

 cent of paid-for business put in force 

 during the year. 



"The fast development of the com- 

 pany justified its board of directors in 

 authorizing the payment of a policy 

 dividend upon the payment of the third 

 premium by its policyholders, which is 

 one year in advance of any obligation 

 embodied in the policy contract. The 

 company paid to its owner, the Illinois 

 Agricultural Holding Company, suffi- 

 cient dividends to justify the Holding 

 Company in declaring and paying a 

 dividend of seven (7) per cent on all 

 of its outstanding stock. : ^' ■:,;•[,: >.■ 



"In addition thereto, the company 

 has placed in policy reserve during the 

 year $321,213.00 and added to its sur- 

 plus $81,224.22. The total admitted 

 assets of the company at the close of 

 1930 were $644,75 8.46, an increase of 

 163 per cent over the total a year ago. 



"I cannot speak too highly of the 

 conservative manner in which the Fi- 

 nance Committee has handled invest- 

 ments for the company. Everyone rec- 

 ognizes the maimer in which securities 

 have declined throughout the year; yet 

 investments of Country Life Insurance 

 Company show the total market value 

 of its bonds on December 31st as 

 $5,757.34 over the amount paid by the 

 company for such securities. t 



Illinois Agricultural Service Co. 



"The general management of the va- 

 rious business service corporations which 



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