October, 1932 



THE I. A. A. RECORD 



Page Seventeen 



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ear of Progress 



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Thir+y-Five Million Gallons Petroleum Products Sets New Record For 



Farnn Supply Co. 



By L R. MARCHANT, Manager 



linois 



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^(^> ►t^HE effort put forth to organize 



1 the buying power of the Farm 



Bureau members in Illinois dur- 

 ing the past six years has progressed 

 to the point where fifty-two local 

 J, companies are serving approximately 



I 75,000 farmer patrons with Illinois 



Farm Supply Company products. This 

 marvelous growth in centralized pur- 

 chasing of petroleum products and 

 ; other essential farm supplies stands 

 : - : out as a splendid achievement in the 

 light of present business conditions. 

 The sixth fiscal year of the com- 

 pany has established a new record 

 ■ for cooperative purchasing of petro- 

 leum products. A number of new 

 county service companies have been 

 organized, the volume of business 

 has been increased, and the net earn- 

 :; ^ ings of the State Company for the 

 f^^ > period actually exceed the previous 

 : high mark of 1931. This concentra- 

 ^>. ';' tion of buying power, together with 

 the economies of distribution prac- 

 . ticed by the associated companies 

 has resulted in an annual distribu- 

 : tion of over $500,000 to Farm Bureau 

 V member patrons. 



' '^ 135 Oil Storage Plants 



; v' The fifty-two affiliated companies 

 r- .. own and control 135 oil storage sta- 

 ' tions with a combined storage ca- 

 • ;: ■• • ■: ' ■ ' pacity of over five million gallons and 

 operate 385 service trucks in some 

 ; • ' eighty counties. Five of these com- 

 panies were organized and placed 

 in operation during the year, name- 

 ly: Egyptian Service Company, Fruit 

 Belt Service Company, Madison Serv- 

 ice Company, Twin County Service 

 Company, and Vermilion Service 

 , Company. 



The capital stock investment of 

 Illinois Farm Supply Company and 

 associated companies totals $1,030,502 



• and of this amount $71,500 represents 

 ; the stock requirements to finance 



• the new companies. 

 Thirty-five million gallons of pe- 



, troleum products were handled dur- 

 ing the period. This is a gain of 6.83 

 per cent in comparison to the gal- 

 lonage handled during the preced- 

 ing year, — a most remarkable show- 

 ing in view of a general decline of 

 ' five to fifteen per cent in the con- 

 sumption of petroleum products ac- 

 cording to the most authentic infor- 

 mation available to the industry. 

 This total gallonage includes 23,704,- 

 640 gallons of gasoline, 8,754,487 gal- 

 lons of kerosene, 2,215,718 gallons of 

 distillate and fuel oil, 876,796 gal- 

 lons of lubricating oil, and 659,867 

 pounds of grease. This gallonage is 

 equivalent to 2,963 tank cars of gas- 

 oline, 1,371 tank cars of kerosene and 



: distillate, 292 cars of lubricating oil. 

 '^ • and 33 cars of grease. 



These figures speak for themselves. 

 They are convincing evidence that 



/ county service companies under 



proper management can not only 



, ; - maintain but Increase an established 



business under the most adverse con- 

 ditions. > 



The volume of miscellaneous prod- 

 ucts handled has made a notable in- 

 crease, particularly such items as Fly 

 Spray, Stock Dip, Mange Oil, Wood 

 Preserver, Cod Liver Oil, Alcohol, 

 and Radiator Glycerine. A tabulation 

 of the fly and insect killer and fly 

 spray shipments shows a gain of 34 

 per cent for the period, which is the 

 most outstanding among the entire 

 list. 



Two new products, automobile 

 tires and Soyoil paint, introduced 

 late in the year 1931, have developed 

 into leaders among the miscellaneous 

 products sold by a goodly number 

 of companies. First line tires and 

 tubes have been furnished under a 

 double guarantee of service, to sell 

 at popular prices. The response has 

 been a steadily increasing volume 

 of orders which would indicate a 

 most promising future for this par- 

 ticular service. 



Soyoil Paint Wins 



Soyoil paint, the pioneer paint to 

 be placed on the market containing 

 not less than 25 per cent of soybean 

 oil, has commanded the attention of 

 farmers throughout the state. Some 

 twelve thousand gallons have been 

 distributed within the course of a 

 few months with very satisfactory 

 results. Judging from the experience 

 with this product up to date a very 

 substantial increase in volume can be 

 expected in another year. 



The business of the company for 

 the fiscal period ending August 31 

 totaled $1,852,571.78 at wholesale 

 prices, exclusive of Federal and State 

 taxes. This figure is $100,000 more 

 than the value of the merchandise 

 purchased during the preceding year 

 even though lower prices for most 

 commodities prevailed throughout 

 the period. 



The Net Worth of the company 

 as of August 31, 1932 was represented 

 bv a capital stock investment of $96,- 

 002.00 and a Surplus of $60,370.40, 

 which with reserves for dividends 

 total $242,887.08. Of this amount 

 $186,671.73 was invested in U. S. Se- 

 curities, $3,750 in the National Com 

 Credit Corporation, and the balance 

 used for current requirements of the 

 business. The capital stock of the 

 company includes 934^2 shares of 

 Preferred "A" stock, having a par 

 value of $100 per share. This stock 

 is held by the fifty-two member com- 

 panies. These shares are subject to 

 7 per cent cumulative dividends. The 

 common stock outstanding consists 

 of 52 shares, having a nominal value 

 of $1 per share, which are held by 

 the member companies and entitle 

 them to participate in the patronage 

 refund. 



The gross operating income for the 

 year was $145,572.55, an increase of 

 11.7 per cent over last year. Broker- 



age income of $110,318.47 was an ad- 

 vance of 6.39 per cent, and the trad- 

 ing income of $35,254.08 resulting 

 from profits on purchases and sales, 

 a gain of 32.37 per cent. 



A net operating income of $104,- 

 273.97 with additional income of $9,- 

 777.30 from interest and discounts 

 earned, less deductions of discounts 

 allowed and loss on sales of bonds, 

 resulted in a net income of $107,916.- 

 44 or 74.13 per cent of gross operat- 

 ing income, before deduction for pat- 

 ronage and Federal income tax, as 

 compared with $100,811.41 for the 

 preceding yenr. On the basis of the 

 Daid-ln capital stock held by all 

 member companies, the earnings 

 represent a profit of 112.4 per cent 

 on the investment. 



Capital stock dividends in the 

 amount of $6,424.25 will be paid to 

 the member companies. This amount 

 represents 4.41 per cent of gross in- 

 come, and the addition of $17,580.84 

 to Surplus, 12.22 per cent of gross 

 Income. Approximately $80,000.00 in 

 patronage refunds will be distributed 

 to these member companies on a 

 percentage basis of the brokerage 

 earned and trading income on pur- 

 chases and sales. This will result 

 in a total of $86,514.68 being returned 

 to the associated companies on the 

 year's business. 



Pay Stock With Refunds 



Forty-seven of the companies to 

 participate in the distribution of 

 earnings were in operation the full 

 time and the remainder from three 

 to nine months. All companies or- 

 ganized prior to the calendar year 

 1931 have made full payment for 

 their subscriptions for capital stock 

 in Illinois Farm Supply Company 

 from the annual patronage refunds. 

 The majority of the companies or- 

 ganized in 1931 have earned suffi- 

 cient patronage this year to entirely 

 clear their notes covering subscrip- 

 tions for stock. 



The total aggregate sum of $243,- 

 737.01, or more than double the capi- 

 tal stock Investment, has been re- 

 turned to the member companies in 

 the form of Preferred Stock divi- 

 dends and patronage refunds during 

 the past six years. This Is an annual 

 yield of 77.85 per cent on the invest- 

 ment, according to the amount of 

 stock invested in the company, and 

 253.7 per cent returned on the basis 

 of the total capital stock investment 

 as of August 31, 1932. 



This progress and achievement Is 

 now a matter of cooperative history. 

 The future is of far greater concern. 

 The period of most rapid expansion' 

 from the standpoint of new com- 

 panies Is almost at an end. Further 

 development and advancement must 

 necessarily come through concentra- 

 tion of effort in the territory already 

 served. Economical and efficient 

 (Continued on page 18) 



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