ANALYSIS OF TOBACCO GROWERS ' ASSOCIATION 91 



to the association were restricted to a percentage of the " bankers' 

 valuation." In Table 54 (appendix) is shown the total quantity of 

 tobacco received from members each year and the value placed upon 

 such tobacco by the bankers' valuation committee. When a member 

 delivered his tobacco to an association warehouse, it was immediately 

 graded, and he was given an advance payment based on the grade and 

 weight of his tobacco. This advance payment was made on a per- 

 centage basis: 40 per cent of the bankers' valuation the first year, 

 50 per cent the second and third years, and 65 per cent the last year. 

 The members were then issued participation receipts (or P. C.'s) 

 showing the quantities and grades of tobacco delivered. 



SALES COMMITTEES 



The most difficult phase of the leaf department's activity was the 

 selling of the tobacco delivered to the association. This department 

 was divided into two subdepartments, the bright leaf and the dark 

 leaf, each with a separate and independent general manager, who was 

 responsible directly to the executive committee. The selling of the 

 bright leaf and the dark leaf was entrusted to the general manager 

 of each subdepartment originally, but upon the death of the manager 

 of the dark-leaf department no successor was appointed, so both of 

 these sections came under the direction of the general manager of 

 the bright-leaf department. Sales committees composed of members 

 of the board of directors were appointed to assist and advise the gen- 

 eral managers. All sales had to have the sanction of this committee, 

 but in practice virtually the full burden and responsibility of mak- 

 ing sales fell upon the general managers of the two subdepartments, 

 as their recommendations to the sales committees were usually 

 affirmed. 



POLICIES 



It was the opinion of the leaders of the association that success was 

 contingent upon obtaining a dominant position in the market by con- 

 trolling at least 50 per cent of the crop. When the association was 

 formed in February, 1922, the members had contracted to deliver 

 (on the basis of the crop of 1920) over 350,000,000 pounds of tobacco, 

 or about 52 per cent of the crop. By the time the association was 

 ready to take delivery of the 1922 crop, nearly 16,000 more members 

 had been obtained and control was thereby extended presumably to 

 about 60 per cent of the crop. By the end of the first crop year 

 about 8,000 more members had been obtained, bringing the volume 

 supposedly controlled to nearly 70 per cent. 



The ultimate objective of the formation of the Tobacco Growers' 

 Cooperative Association was to bring about improvements in the mar- 

 keting of tobacco that would result in higher returns to members. 

 The association might have brought this about in one or all of four 

 ways: (1) By obtaining more uniform, stable, and just prices for 

 the same grade and quality of tobacco through sales of members' 

 tobacco, directly to the manufacturers, in large volumes; (2) by im- 

 proving the marketing organization so as to insure greater economy 

 in the handling and the processing of tobacco; (3) by performing 

 certain services for members which result in a saving of time and 



