74 CIRCULAR 10 0, U. S. DEPARTMENT OF AGRICULTURE 



The board of directors does not seem to have even considered 

 the matter of operating its own redrying plants during its first 

 receiving season. The 1923 crop was a large one and the associa- 

 tion was faced with the problem of redrying a much greater volume 

 than during the previous year at what appeared to be an increased 

 redrying rate. Evidence was produced which purported 34 to show 

 that some redrying companies were about to increase their charges 

 for redrying. Whether or not this alleged combination of redrying 

 interests against the association was ever dangerous is a matter of 

 question. 



The suggestion was then made to the board of directors that 

 the association erect its own redrying plants. After considering 

 tins suggestion it was rejected by the board because the association 

 had already assumed large obligations in the matter of purchasing 

 warehouses and the board did not believe that it was in a position 

 to assume further obligations for capital outlays at that time. 35 



The same problem was brought before the executive committee 

 at a meeting held on June 9, 1925. The executive committee also 

 did not look with favor upon the additional expense of purchasing 

 or erecting redrying plants because of the heavy obligations in- 

 curred in the purchase of warehouse property. A resolution was 

 passed authorizing the investment by officers, directors, employees, 

 and members in redrying plants for the purpose of redrying asso- 

 ciation tobacco. This resolution, however, was not included in the 

 minutes of the executive committee presented to the board of direc- 

 tors at its subsequent meeting. It was not discovered until at the 

 board meeting held on August 18, 1925, that this resolution of the 

 executive committee had been omitted. The resolution 36 was then 

 approved and the board assumed responsibility for the policy. 



The permission of the executive committee, however, seems to have 

 been clothed in a great deal of mystery, and the irregularity did 

 not serve to place the matter in a better light. Many members of 

 the board of directors maintain that they had no knowledge that any 

 officers and directors of the association had any interest in redrying 

 plants until the report of the agricultural investigating committee 

 appeared in the spring of 1925. In any case, the least desirable 

 aspects of the redrying policy came to light only with the publication 

 of the Federal Trade Commission's report in December, 1925 {12). 



At a meeting of the board of directors on January 16, 1926, in the 

 face of the report of the Federal Trade Commission, the board ex- 

 pressed its approval of its officials engaging in the redrying of 

 tobacco delivered to the association, and approved the resolution 

 adopted on August 18, 1925. On April 3, 1926, however, the board 

 adopted the following resolution : 



Resolved that this board does hereby rescind all resolutions hereto passed 

 approving or ratifying in any sense any redrying transactions whatever with 



34 Senate Document34 (12, p. 91). "The evidence does not indicate there was a gen- 

 eral tendency on the part of the redriers, either in concert or individually, to raise the 

 charges for redrying in 1923. * * * " 



35 Report of the agricultural investigating committee, 1925. 



36 From the minutes of the board of directors meeting on Sept. 22, 1925. The secretary 

 presented to the board a correction in the minutes of the executive committee meeting of 

 June 9, 1923, as authorized in the resolution of the board of directors of Aug. 18, 1925. 

 This correction is as follows : " On motion the executive committee of the Tobacco 

 Growers' Cooperative Association authorizes the investment by officers, directors, em- 

 ployees, and members in redrying plants for the purpose of redrying association tobacco ; 

 Director Hurt requested that he be recorded as voting against this resolution." 



