112 CIRCULAR 10 0, IT. S. DEPARTMENT OF AGRICULTURE 



possible so to separate the different costs that valid comparisons 

 can be made for the performance of the same services. Cooperative 

 costs will usually be higher than the costs of private marketing chan- 

 nels because of the quality and number of services rendered. Al- 

 though a cooperative should be operated economically it should be 

 able to render helpful services to its members which will immediately 

 or ultimately assist them financially. But in this case it would 

 seem that the redrying of large quantities of tobacco decreased the 

 final prices paid to members. Far from improving the bargaining 

 position of the association, its redrying policy tended to place it in 

 a more disadvantageous position owing to the accumulation of large 

 stocks of low-grade tobacco. 



OPPOSITION TO THE ASSOCIATION 



It was inevitable that a cooperative tobacco marketing associa- 

 tion formed in an area where a different method of marketing had 

 existed for a long time would encounter opposition. This opposi- 

 tion naturally came from the leaf dealers, warehousemen, and buyers 

 of the large tobacco companies, who realized that if this association 

 were successful, the auction system of marketing would eventually 

 be displaced and they would lose their positions and business. The 

 association was also opposed by the tobacco manufacturers and by 

 merchants, bankers, and other business men in some of the larger 

 and more important tobacco markets. There was sharp competition 

 of interests outside of and opposed to the association. This compe- 

 tition, unfriendliness, and opposition was a large factor in causing 

 dissatisfaction on the part of members and gave rise to some of the 

 other difficulties of the association. 



The intentional or artificial raising of tobacco prices on the auc- 

 tion floors in attempts to defeat the association, or the raising of 

 prices there because the existence of the association reduced the 

 quantity of tobacco available for outside purchase, caused much dis- 

 satisfaction, disloyalty, and nondelivery among the members. The 

 rapid increase in production in new and existing localities, the de- 

 creased foreign demand for certain types, the lack of active competi- 

 tion for all grades, all worked to affect adversely the success of the 

 attempt of the tobacco growers of Virginia and of North Carolina 

 and South Carolina to market their tobacco cooperatively. 



The opposition of the four opposing groups and reasons therefor 

 are discussed separately. These groups were: (1) Warehousemen, 

 (2) buyers, (3) tobacco manufacturers, and (4) merchants and 

 bankers in certain tobacco markets. 



Perhaps the most intense and effective opposition came from ware- 

 housemen and trade associations of warehousemen. These saw 

 themselves with idle warehouses if the association were successful. 

 Different methods were used to undermine the morale of the mem- 

 bers : Special effort to get high prices for split crops of tobacco, 

 predictions of the failure of the association, spread of propaganda 

 in regard to the excessive salaries and in regard to the integrity and 

 honesty of the management, and other methods were reported to 

 have been used to break down the association. Some boards of 

 trade and other organizations at tobacco marketing centers waged an 

 incessant, varied and effective warfare against the association. It 



