FARM BUREAU CO-OPS 



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A VICIOUS attack upon the Illinois 

 Agricultural Association and its af- 

 filiated organizations is contained 

 in an anti-cooperative pamphlet 

 now being circulated throughout 

 the state. 



The ridiculousness of the charges 

 against the Association clearly - indicates 

 that the authors of the pamphlet are not 

 only misguided but misinformed. The 

 authors claim to represent Illinois business 

 men. 



Directors and officers of the association 

 issuing the pamphlet which attacks the 

 Farm Bureau are listed in a solicitation 

 letter as follows: B. E. Wrigley, presi- 

 dent, Peoria ; Wilbur Goddard, Freeport, 

 Norman R. Johnson, Taylorville, Homer 

 Robinson, Lincoln, Louis Abenbrink, Ed- 

 wardsville, and Barnett Faroll, Chicago, 

 all vice-presidents; Frank Stebbins, secre- 

 tary, 231 South LaSalle Street, Chicago; 

 Leo J. Doyle, treasurer; Kenneth W. 

 Lineberry, Arthur Farrell, Henry Stefany, 

 Leo J. Doyle, Floyd Cerf, T. E. Gormon, 

 all of Chicago; H. J. Harshbarger, Ur- 

 bana; William D. Ward, Decatur; W. M. 

 Patterson, Williamsville; A. C. Koch, 

 Breese; W. S. Whipple, Genoa; G. V. 

 Johnson, Joliet; F. E. Morrison, Marion; 

 A. L. Lake, Waukegan ; L. W. Marrow, 

 Joy; Victor C. Dewein, Decatur; E. Huot. 

 Kankakee; D. S. Hahan, Lexington; Gail 

 Butterfield, Pecatonica, and N. R. Peine, 

 Minier. 



Leaders of recognized and established 

 groups in the state who have been joint 

 sponsors with Illinois Farm Bureau lead- 

 ers of many conferences during the past 

 several years and know the lAA prob- 

 ably will not give serious consideration 

 to either the pamphlet or its authors. 



However, the appearance of this pam- 

 phlet again emphasizes the constant need 

 for an informed membership to present 

 the true facts about Farm Bureau and its 

 cooperatives and thus improve local com- 

 munity relations. 



For example, the pamphlet carries a 

 picture of the new home of the lAA 

 in Chicago and states, "Boasting that this 

 valuable Chicago Loop property was pur- 

 chased with cash, the association neglects 



1) 



to say that the building was bought with 

 income tax-exempt profits collected from 

 14 associated cooperative companies, en- 

 gaged in almost every type of business 

 in Illinois." 



The facts are these: 



1. The lAA purchased the building 

 with funds from membership dues. The 

 lAA receives no profits from the opera- 

 tions of any of the associated cooperative 

 companies. 



2. As most Farm Bureau members 

 probably know, the funds of the Associa- 

 tion are kept entirely separate from any 

 of the associated companies. Each of 

 the associated companies operates inde- 

 pendently and keeps its funds separate. 



3. Separate annual reports and certi- 

 fied audits are made and published by 

 the Association and the associated cooper- 

 ative companies. The records are open 

 for all to see. 



The other charges in the pamphlet are 

 aimed at the associated companies with 

 Illinois Farm Supply Company as center 

 target. The main impression the pam- 

 phlet seeks to give is that Illinois Farm 

 Supply Company enjoys an unfair tax 

 advantage over private business in Illi- 

 nois. 



Here are the facts: 



1. Illinois Farm Supply and its local 

 county service companies, like all other 

 Farm Bureau-type cooperatives in the 

 state, are subject to every state and local 

 tax that a privately-owned business or 

 corporation is. 



2. Illinois Farm Supply Company re- 

 turns to its member companies a very 

 large proportion of its net income in 

 the form of patronage refunds, and such 

 patronage refunds are subject to federal 

 income tax in the hands of member com- 

 panies. 



Likewise, patronage refunds paid to 

 members of county service companies on 

 products used in the production of agri- 

 cultural commodities are subject to fed- 

 eral income tax in the hands of the 

 farmer member. 



3. If any corporation will agree in ad- 

 vance to pay back a certain fixed propor- 

 tion of its earnings as patronage refunds 



Above Is front page of pamphlet ottocklng 



the Illinois Agricultural Association and 



Associated Companies. 



to its customers, such patronage refunds 

 are deductible in determining net taxable 

 income and are not subject to income 

 tax. Thus any corporation that wishes 

 to share its profits with its custonjers can 

 arrange the conduct of its business so as 

 to receive the same tax consideration as 

 any cooperative. A federal district court 

 decision supports this statement. 



It is a matter of record that neither 

 the Illinois Agricultural Association nor 

 its associated companies has ever sought 

 a tax advantage over private business. 



The lAA board of delegates adopted a 

 resolution at the annual meeting in Chi- 

 cago on Nov. 29, 1945 which supports 

 the above statement. 



The resolution stated that the lAA 

 would not oppose changes in the internal 

 revenue law which would exempt cor- 

 porations from paying income tax on that 

 portion of their annual earnings distrib- 

 uted to stockholders as dividends. 



10 



I. A. A. RECORD 



