ANALYSIS OF TOBACCO GROWERS' ASSOCIATION 125 



SUMMARY 



The Tobacco Growers' Cooperative Association of Virginia, North 

 Carolina, and South Carolina was incorporated on February 9, 1922, 

 with the main office at Raleigh, N. C. Relatively low prices for 

 tobacco in 1920 following high prices during the World War, to- 

 gether with a general dissatisfaction with the auction-floor system 

 of selling tobacco and encouragement from some men who believed 

 that relief from the conditions then existing could be secured 

 through farmers' cooperative associations were the principal fac- 

 tors which caused the creation of the association. Nearly 96,000 

 tobacco growers signed contracts to deliver their tobacco to the asso- 

 ciation during the four years of its operation. 



The association attempted to secure delivery of over half of the 

 Virginia sun-cured, Virginia dark-fired, and flue-cured types of 

 tobacco grown in the three States in which it operated. Conditions, 

 however, were unfavorable to the successful operation of the large- 

 scale tobacco cooperative as it was organized and operated. In 

 1922, instead of handling the anticipated 50 to 60 per cent of the 

 tobacco crop of the three States, it received only 35.4 per cent. In 

 1923 the receipts decreased to 28.5 per cent; in 1924 to 22.9 per 

 cent; and in 1925 to 14.6 per cent. In the new-belt area of North 

 Carolina the receipts were only 19.5 per cent during 1922, the first 

 year of operation, and in 1925 they had decreased to the low per- 

 centage of 5.16 per cent. In June, 1926, at the end of its fourth 

 year, after receiving a total of over 531,000,000 pounds of tobacco 

 valued at over $100,000,000 from its members, the association was 

 put in the hands of receivers. 



The failure of the association was not due to any one cause but 

 to many causes. Some of these alone might, in time, have resulted 

 in the downfall of the association; others merely hastened the 

 failure. 



These causes of failure may be grouped under four general head- 

 ings: (1) Conditions among tobacco growers, (2) policies and 

 practices during the organization of the association, (3) mistakes 

 in operating policies and in management, and (4) market condi- 

 tions and commercial interests unfavorable to the association. 



In spite of its failure, and in spite of some of the temporarily 

 harmful effects, the association has to its credit many accomplish- 

 ments some of which will have a lasting and beneficial influence 

 upon the conditions and future of the tobacco growers of Virginia 

 and the Carolinas. 



There is reason to believe that a new organization, or organiza- 

 tions, will eventually be formed in the tri- State area, built upon 

 the principles of service, stability, and economy for both the tobacco 

 growers and the tobacco manufacturers, and with cooperation 

 between these two groups instead of opposition. 



APPENDIX 



ARTICLES OF INCORPORATION OF TOBACCO GROWERS' COOPERATIVE 



ASSOCIATION 



We, the undersigned, a majority of whom are residents and citizens of the 

 State of North Carolina, engaged in the production of agricultural products. 

 do hereby voluntarily associate ourselves together for the purpose of forming 



