Page Fourteen 



THE I. A. A. RECORD 



November y 1951 



Co-Op. Buying Should 



Be Recognized by Gov't. 



£. D. Lawrence Discusses Distribu- 

 tion, and Oil Company Policies 

 At State Meeting 



GOVERNMENT encouragement of 

 co-operative buying associations 

 as well as selling organizations, and 

 amendment of the federal farm loan 

 and the Agricultural Marketing Acts 

 to recognize co-operative buying were 

 recommended by E. 

 I D. Lawrence, presi- 

 dent of the Illinois 

 Farm Supply Com- 

 pany at the com- 

 pany's annual meet- 

 ing at Bloominngton, 

 October 14. Mr. 

 Lawrence lauded the 

 member companies 

 on their fine achieve- 

 ments and pointed 

 out that Illinois 

 K. D. Lawrence farmers would no 

 longer accept the 

 doctrine that co-operative organizations 

 should confine themselves to selling 

 alone. 



"No small part of our difficulties," 



' he added, "are due to the high cost of 



distribution. Our problem is one of 



getting nearer the wholesaler as well as 



of getting nearer to the consumer." 



Dr. Warren Says 



-' Quoting Dr. George F. Warren of 

 Cornell University, he said: "Most 



. manufacturers buy at wholesale prices, 



;. which are low, and sell at wholesale 

 prices, which are also low. But in gen- 

 eral agriculture buys at retail prices, 



/ which are high, and sells at wholesale 

 prices which are low." 



Again quoting from the same au- 

 thority: "If the government wishes to 

 encourage co-operatives, it should en- 

 courage buying associations as well as 

 selling associations. The intermediate 

 credit bank and Farm Board acts should 

 be amended so as to clearly recognize 

 co-operative buying." 



Lawrence pointed out that the year 

 closed with 1 1 new companies com- 

 pared with 17 the year before; that the 

 period of rapid expansion is approach- 

 ing an end. Of the 95 counties of the 

 state having Farm Bureaus, 75 are now 

 providing their members with Illinois 

 Farm Supply Company products. 



Credit a Problem 



Referring to thj fact that the ab- 

 sorbing problem for all companies is 

 the matter of credit, he said, "Credit 

 extension costs money, and is by no 

 ; means a legitimate cost item in our 

 business, since we are selling goods at 



^ibttJ. This is not a new and heartless 

 doctrine. It simply says that he who 

 has no money cannot buy. This is a 



"fundamental rule of business from 

 which it will be unwise, if not disas- 

 trous, for us to depart. There are es- 

 tablished institutions whose business it 

 is to loan money. Ours is buying and 

 selling. Let us confine ourselves as 

 closely as possible to this field. 



"Our next move should be to estab- 

 lish more firmly and to bind together 

 more securely our widespread group of 

 member companies. We have made 

 progress in establishing uniform selling 

 prices. We all recognize that each 

 company has its own problems and un- 

 der stress of sharp competition the com- 

 pany may feel impelled to cut loose 

 from the prevailing price structure and 

 meet the cut prices of competitors. 

 Such a practice we have strongly urged 



against. ■■■■-■■;";,:■.::■>■ •,;;;:■;■:;■•;■■ '•:.' 



Cut Price Policy 



"Our selling prices are on a par with 

 those of the most conservative com- 

 panies doing business in our territory. 

 These prices usually provide a safe mar- 

 gin for operating expenses, and a patron- 

 age refund, also allowing for reasonable 

 fluctuations in costs. Therefore any 

 narrowing of this operating margin is 

 done at great risk to future welfare. 



"The practical-minded farmer-mem- 

 ber can be shown that in any event he 

 will get his products at cost and that 

 any initial saving effected may be at 

 the risk of jeopardizing the future 

 standing of his company. A cut price 

 policy invariably will be reflected in 

 reduced dividends at the close of the 

 year. 



"Competition between ourselves is 

 unthinkable, yet it has actually existed 

 in a few instances during the past sum- 

 mer. The solution of this problem 

 largely rests with the manager and 

 board of directors, but ultimately a 

 more positive solution must be found 

 which will prevent recurrence of such 

 instances. 



Strength in Unity 



"The achievements of the Illinois 

 Farm Supply Company should offer re- 

 assurance to those who are doubtful of 

 this type of co-operative organization. 

 So far as our own is concerned, most of 

 that doubt has vanished as time has 

 demonstrated the good faith of those 

 vested with authority. However, that 

 there still linger traces of this feeling 

 is evidenced by the fact that some of 

 the older member companies have never 

 taken steps to bring about a corporate 

 relationship with the State Company 

 through the issuance of a special class 

 of stock, in spite of broad limitations 

 placed upon the power to be exercised 

 under that stock. We think that this 



action indicates a reservation with re- 

 spect to a complete co-operative rela- 

 tionship which in the long run is detri- 

 mental to the best interests of such 

 member company. I advocate no blind 

 surrender of all rights and prerogatives, 

 but when close analysis reveals that cer- 

 tain prerogatives possess little value in 

 themselves while jealously guarded, yet 

 when surrendered contribute in impor- 

 tant measure to insuring the continua- 

 tion of the ideal of service, then their 

 withholding is most unfortunate. 



More Perfect Union 



"When this nation emerged from the 

 Revolutionary War as thirteen states, 

 these states had recently been joined to- 

 gether by the Articles of Confederation; 

 and it had required the entire duration 

 of the war to induce all the thirteen 

 colonies to yield to a central govern- 

 ment for the sake of better manage- 

 ment in large affairs which affected 

 them all. But, no sooner were the 

 Articles of Confederation placed in 

 operation than the best statesmen real- 

 ized that no enduring nation could be 

 built on such a foundation. There was 

 no president. Congress had no real 

 authority of its own. It was only an 

 adviser to the states. Each state became 

 again supreme in its own authority, and 

 commercial warfare between them was 

 disastrous. 



"To end this state of affairs, a con- 

 stitutional convention was called to see 

 what could be done, with the stated 

 purpose of forming 'a more perfect 

 union,' and under that Union we live 

 today. So, let us build our co-oi>eratives 

 for stability and lasting strength, bound 

 together in 'a more perfect union,* con- 

 fident that in making a contribution to 

 the welfare of the whole, we can best 

 insure the perpetuation of its integral 

 parts." ''.' :- ■ :-:-\' -' ^'' ':'-■',■ 



From 21 to 47 



During Mr. Lawrence's administra- 

 tion as president, the member companies 

 increased from 21 to 47 and the volume 

 of business more than doubled. Law- 

 rence was reared on a farm near Hud- 

 son, in McLean county, and graduated 

 from the University of Illinois in the 

 class of 1914. He has been active in 

 Farm Bureau work in McLean county 

 where he displayed much ability as sec- 

 retary of the Farm Bureau and chair- 

 man of the committee that established 

 the McLean County Service company 

 which he served as first president. He 

 has been a director in the State Farm 

 Supply Company for five years, two of 

 which he served as president. 



Uncle Ab says the wise man will wait 

 until he can afford to gamble; and then 

 he won't need to! . ,, . . .,. 



