EDITORIAL 



The Charter 



AN OVERWHELMING majority of the American 

 people, and farmers are no exception, realize that 

 the hope of avoiding future wars is largely tied up 

 in the San Francisco Giarter, signed June 26 by the rep- 

 resentatives of fifty nations. By the time this issue of the 

 lAA RECORD reaches its readers, the document will have 

 been placed before the U. S. Senate for its ratification. 



No one, we think, feels that the Charter represents 

 perfection, nor that it signifies more than one step forward 

 toward international comity and fair dealing. It was prob- 

 ably the best that could be obtained at this time, just as 

 Washington is reported to have said of the newly-framed 

 Constitution of the United States. 



Granted that it may have imperfections, it is still to be 

 hoped that the United States Senate will give immediate 

 and sympathetic consideration to this important document 

 and that partisanship will have no part in the deliberation. 



Facts You Should Enow 



FARM Bureau members rightfully assume that their 

 cooperatives not only follow ethical business practices 

 but that they meet their tax obligations fully and with- 

 out any attempts at evasion through technicalities. 



In the midst of a propaganda campaign conducted 

 by a relatively small group, charging that cooperatives have 

 unfair tax exemptions (and sometimes it is inferred that 

 they pay no taxes!) it should be understood fully by our 

 members and the general public that Farm Bureau-spon- 

 sored cooperatives in Illinois, many of which operate with- 

 out tax exemption, meet their obligations fully and up to 

 the letter and spirit of the law. 



Specifically, they pay property taxes both on real and 

 personal holdings, license fees applicable to their businesses, 

 federal excise taxes where applicable. Federal income 

 taxes are paid by the non-exempt cooperatives on all non- 

 member earnings and such earnings as are not annually 

 distributed to members. 



Antagonistic interests complain seriously because co- 

 operatives are tax exempt on patronage refunds paid to 

 members. It should be understood that all sums paid in 

 the form of patronage refunds to members, however, enter 

 into the member's income, either as reduced costs or added 

 income and there become subject to taxation. Moreover, 

 the courts have held that any corporate or individually- 

 owned business, may, by agreeing in advance to pay its 

 patrons such refunds, be tax-exempt to the extent of such 

 payments. Cooperatives enjoy, therefore, no unfair priv- 

 ilege in this regard. 



Farm Bureau members may be assured, and they 

 should reassure their business friends, that their coopera- 

 tives measure up in meeting tax obligation, as on all other 

 matters involving business ethics, legal or moral duty. 



Cooperation That Pays 



SOME 40 County Farm Bureaus in Illinois either have 

 set up or are in the process of setting up complete 

 soil testing laboratories, according to the latest avail- 

 able report on this project. Some 15 more are contemplat- 

 ing setting up such laboratories. 



The installation of these complete soil testing services 

 in so many counties is one of the significant developments 

 of the Farm Bureau in the past year. These laboratories 

 will make a vital contribution to soil building and improve- 

 ment and aid farmers in discharging their responsibilities 

 as trustees of the land. 



They also furnish an excellent positive example of the 

 cooperation that has existed in Illinois and elsewhere be- 

 tween Farm Bureau and the Extension Service. Financed 

 by Farm Bureaus out of membership fees paid by farmers, 

 the laboratories furnish the concrete, practical means of 

 illustrating and making eflPective the teachings of the Ex- 

 tension Service. They will help get things done; and after 

 all, education, or information, or research, call it what you 

 will, is only effective when it is actually put to work. 



It is one of the great facts in Illinois agriculture that 

 this happy co-working of theory and practice, information 

 and action, research and its practical application, has been 

 made possible. 



Cooperative Credit 



THE members and directors of the Federal Land Bank 

 of St. Louis should be highly commended. The last 

 remaining capital stock subscribed by the government 

 was repaid in 1940. Since that time the capital stock of 

 the bank has been owned completely by the farmers' co- 

 operative National Loan Associations in Illinois, Missouri 

 and Arkansas. Since November of 1944 the bank has 

 been repaying to the federal treasury the "paid-in surplus" 

 at a rate of a million dollars a month. According to pres- 

 ent plans, all federal funds in the bank will have been 

 repaid by June 30 of this year. After that date the in- 

 stitution will be completely financed by farmers. 



The Federal Land Bank of St. Louis is one of twelve 

 such banks established in 1917 under authority of the 

 federal farm loan act. These banks are permanent in- 

 stitutions designed to provide long-term farm mortgage 

 credit to farmers at reasonable rates of interest. The land 

 banks make loans only on the security of first mortgages 

 on fvm land. 



The Federal Land Bank of St. Louis is a splendid 

 example of the results of cooperation. Farm people of 

 Illinois, Missouri and Arkansas may well be proud of this 

 institution. It has been well managed, it has served the 

 interests of farm people, it has not been a drain upon the 

 federal treasury. It is hoped that this splendid example 

 will be followed by other institutions which have been 

 created under federal laws in order to facilitate the devel- 

 opment of cooperation in agriculture. 



To our way of thinking, farmer owned and controlled 

 cooperatives are among our soundest institutions. There 

 are some people in this country who would eliminate co- 

 operatives, or greatly reduce the encouragement which is 

 being given to them. Let those who would undermine 

 our cooperative system note well the results in Germany 

 and Italy where cooperatives were abolished and there was 

 established in their place a system of fascist controls. Let 

 them contrast the situation in Germany and Italy with 

 that in Sweden and other Scandinavian countries where it 

 has been the policy to encourage and promote the organ- 

 ization and operation of cooperative associations. 



\, 



