RESOLUTIONS 



Adopted By Board of Delegates at 31st Annual 

 Meeting in Chicago. Nov. 29. 1945 



FOREWORD 



Turning from the problems of war to 

 face a world seeking peace, the 

 farmers of Illinois give thanks to Al- 

 mighty God that the most terrifying 

 war known to mankind has at last 

 ended. We are thankful that America 

 still stands as a strong nation. We are 

 thankful that our fertile fields, our 

 cities and our homes have escaped de- 

 struction. We are thankful that we were 

 given the strength to meet the great 

 task. 



We honor and pay homage to the 

 brave young men who left our farms 

 and our homes to strike down the 

 enemy. In memory of those who 

 fought and died for our security we 

 dedicate ourselves and our organization 

 to the building of a world with the 

 strength, tolerance, equity and justice 

 to forever rid itself of the disease of 

 war. May God grant to all the grace 

 and power for this greater task. 



I. AGRICULTURAL ADJUSTMENT 

 ACT 



We favor the continuation of a well- 

 administered Agricultural Adjustment 

 program. We also favor the principle 

 of a high level of useful production, 

 and call for a program that will facili- 

 tate full production through our entire 

 economy. 



The Agricultural Adjustment pro- 

 gram must be available to prevent the 

 production of unneeded surpluses of 

 agricultural products. We will sup- 

 port programs designed to reduce pro- 

 duction in order to bring about a rea- 

 sonable balance between supply and de- 

 mand for agricultural products. We 

 believe that many needed adjustments 

 in agricultural production can be 

 brought about through the application 

 of proper soil conservation practices. 

 We urge that to the largest extent pos- 

 sible, emphasis be placed upon obtain- 

 ing the proper use of the land, rather 

 than simply reducing acreage. Soil 

 conservation is a sacred obligation of 

 each generation to future generations. 

 All agricultural programs must provide 

 for meeting this obligation. 



II. PARITY FORMULA 



The parity formula in the Agricul- 

 tural Adjustment Act is the yardstick 

 for determining currently prices for 

 basic agricultural commodities that are 

 necessary to give to these commodities 

 a fair exchange value with industrial 

 commodities in the markets of the 

 country. When written into law in 

 1933. it applied only to the basic com- 

 modities, corn, wheat, cotton, rice and 

 tobacco and through the years has 

 proven to be not only fair, but effective 

 in its application to these commodities. 

 Other laws enacted in more recent years 

 have authorized the application of the 

 principle of this formula to many other 

 farm commodities, but in carrying out 

 these mandates of law, many commodi- 

 ties have not been given equitable 

 treatment. 



We will oppose any change in the 

 parity formula as applied to the basic 

 soil crops, at least until such a time as 

 proposals may be made that are equally 

 fair, equally defensible and as effective 

 as the present formula has proven to 

 be. We urge, however, that every effort 

 be made to secure for livestock, live- 

 stock products, dairy products and any 

 other major farm commodity not fairly 

 protected under the present parity for- 

 mula, a change in the administration of 

 present law, if necessary, a legal for- 

 mula that will give to these commodi- 

 ties treatment equal to that afforded 

 the basic crop under the parity formula 

 of 1933. 



III. TAXATION OF COOPERATIVES 



Many charges and countercharges are 

 being made relative to alleged tax ex- 

 emption advantages of, or tax exemp- 

 tion abuses by, cooperative organiza- 

 tions. It is charged that some agricul- 

 tural cooperatives having complete ex- 

 emption from Federal income tax have 

 retained their earnings in their capital 

 structure and have not paid patronage 

 dividends to their patrons or members. 

 They have received exemptions upon 

 the theory that these earnings belong 

 to the members. Many of these co- 



operatives have been very successful 

 and competing private business con- 

 tends that exemption from Federal in- 

 come tax gives these cooperatives an 

 unfair advantage. To withhold current 

 earnings from the patron member with- 

 out his knowledge or consent and to 

 treat the savings so withheld as the 

 property of the cooperative to the ex- 

 clusion of the patron, is unwise. In 

 such a case current earnings are not 

 taxed either to the patron or to the 

 tax exempt cooperative. 



In Illinois generally it has been the 

 policy to provide adequate capitaliza- 

 tion through the sale of capital stock 

 at the time cooperatives are organized 

 or their operations expanded. This 

 has made it possible to p>ay patronage 

 dividends currently and it has not been 

 necessary to build a large capital struc- 

 ture from current earnings. 



We authorize the Illinois Agricul- 

 tural Association to support such 

 changes in the Internal Revenue Law 

 and Regulations as may be necessary to, 

 require agricultural cooperatives to an- 

 nually report their operations and earn- 

 ings and to provide that they shall have 

 income tax exemption or deduction 

 from taxable income on only that por- 

 tion of their earnings which is dis- 

 tributed to their members or patrons. 



The Association will not oppose the 

 extension of similar privileges to pri- 

 vate business corporations. It is be- 

 lieved that this policy extended to pri- 

 vate business corporations would en- 

 courage a much larger distribution of 

 the corporation's profits to stockholders. 

 Such income so distributed to stock- 

 holders would become taxable in the 

 hand^ of stockholders, would materially 

 add to the purchasing power of the 

 public and would be of substantial 

 benefit to those forced to depend upon 

 investment income. 



IV. PRICE STABILIZATION 



Inflation is one of the many perils of 

 war. During the war, the nation was 

 moderately successful in preventing ex- 

 treme inflation. History indicates, 

 however, that the period immediately 

 following war is one in which there is 

 likely to be rapid inflationary price in- 

 creases. History also indicates that in- 

 flationary increases in prices are fol- 

 lowed by periods of price collapse 

 which result in long periods of malad- 

 justment with prices for farm products 

 very low in relation to prices paid by 

 farmers for the products of others. 



We reaffirm our position in favor of 

 a program to control inflation. Such 

 controls as are necessary under such a 

 program during reconversion should be 

 equitably applied to industrial prices, 

 farm commodities and wages. 



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L A. A. RECORD 



