ANALYSIS OF TOBACCO GROWERS 1 ' ASSOCIATION § 



FORMATION OF THE TOBACCO GROWERS' COOPERATIVE 

 ASSOCIATION 



FACTORS LEADING TO ORGANIZATION 



Conditions after the World War stimulated and hastened the for- 

 mation of cooperative tobacco-marketing associations in nearly all of 

 the important tobacco-producing areas of the United States. It is 

 estimated that less than 1 per cent of the tobacco crop of 1919 was 

 delivered to cooperative associations and more than 48 per cent of 

 the crop of 1922. In 1925 tobacco cooperatives had a total estimated 

 membership of 300,000 and were transacting an annual business esti- 

 mated at $90,000,000. Among the tobacco organizations were two of 

 the largest cooperative -marketing associations in the United States in 

 regard to number of members (3, p. 61-62). 



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- 98 1900 '02 '04- 



"24 '26 '28 '30 



Figure 7.— Actual and Adjusted Price of United States Tobacco, 

 1899-1900-1928-29 



Adjusted prices are the United States Department of Agriculture December 1 prices 

 adjusted by the Bureau of Labor Statistics All-Commodity Index Number crop year 

 basis (1910-11 to 1914-15 = 100). Both the average actual and adjusted price of 

 United States tobacco show upward trends. The sudden drop of tobacco prices from 

 39 cents in 1919-20 to 21.2 cents in 1920-21 created much distress among the tobacco 

 growers. 



There were two main causes for the quick growth of the coopera- 

 tive movement among tobacco growers: (1) The sudden drop in to- 

 bacco prices and (2) dissatisfaction with the loose-leaf auction-floor 

 method of selling tobacco. 



TOBACCO PRICES 



During the World War, prices of tobacco, like those of other farm 

 products, reached abnormal heights. In fact, the prices of tobacco 

 increased even more than those of most other farm products and more 

 than the cost of living. Then the sudden decrease in foreign demand, 

 the rapid price deflation in the United States, together with a pro- 

 duction far in excess of domestic requirements, caused a disastrous 

 fall in tobacco prices in 1920. The average price of all tobaccos fell 

 from 39 cents in 1919-20 to 21.2 cents in 1920-21, a decrease of 45.6 

 per cent in one year. (Figure 7.) Table 1 shows the prices and pur- 



