BULLETIN OF THE UNIVERSITY OF TEXAS NO. 355 SIX TIMES A MONTH EXTENSION SERIES NO. 60 AUGUST 25, 1914 CO-OPERATION IN AGRICULTURE, MARKETING, AND RURAL CREDIT BY CHARLES B. AUSTIN AND GEORGE S. WEHRWEIN Division of Public Welfare, Department of Extension PUBLISHED BY THE UNIVERSITY.OF TEXAS AUSTIN, TEXAS Entered is second-class mail matter at the posioffice at Auetin,'Texat ^^?»fJi? 540-714-20m-G0l»8 BULLETIN OF THE UNIVERSITY OF TEXAS NO. 355 SIX TIMES A MONTH EXTENSION SERIES NO. 60 AUGUST 25, 1914 CO-OPERATION IN AGRICULTURE, MARKETING, AND RURAL CREDIT CHARLES Br AUSTIN AND GEORGE S. WEHRWEIN Division of Public Welfare, Department of Extension PUBLISHED BY THE UNIVERSITY OF TEXAS AUSTIN, TEXAS Entered as second-class mail matter at the postofTice at Austin, Texas S57?. .Pit The benefits of education and of useful knowledge, generally diffused through a com- munity, are essential to the preservation of a free government. Sam Houston. Cultivated mind is the guardian genius of democracy. ... It is the only dictator that freemen ;^:cknowledge and the only security that freemen desire. Mirabeau B. Lamar. nhuf'li fiir Lnndwirtschaftliche Gonossenscliaften. published by tho TvPiehsverbniid dir dciitsclion bmdwirt. noiioss. (Darmstatt. 1010.) Cooperation in AgrivuUnre, Marketing, and Rural Credit Vo machiiU'iT, fertilizers and sell their hay, grain, cattle and eggs through their farmers' organizations. They own their ware- houses, slaughtering houses and grist mills. They have mutual insurance companies, breeding associations and even potato dry- ing associations. The little farm villages are often supplied with water by cooperative waterworks and lighted by electricity pro- duced by their own electric light plant where some rushing brook can be harnessed. In Belgium the Maisson du Peuple own its bakeries, tailor shops, moving picture houses and drug-stores. Denmark's chief products — bacon, butter, and eggs — are pro- duced, concentrated and^ exported by the farmers themselves. England's wonderful stores and Ireland's rapid progress in but- ter and egg production owe their success to cooperation. The following table is taken from the second Year Book of International Cooperation (1910) and shows the strength of the movement throughout the world : International Summaries — Statistics of Cooperative Societies A "Pnrnnp • No. of No. of Inhabitants .ji. i^LiiupK. Societies to one Society Austria 16,563 1,725 Belgium 2,270 3,282 Bulgaria 727 5,551 Denmark 5,033 51-1 Finland 1,929 1,5&5 France 10,983 3,578 Germany 30,555 . 2,12-1 Hungary 6,000 3,473 Italy .] 7,561: 4,569 Netherlands 2,679 2,184 Norway 3,078 777 Roumania 2,904 2,051 Russia 16,000 5,840 Servia . 1,252 2,148 Spain 274 71,909 Sweden 2,100 2,607 Switzerland 7,827 481 United Kingdom 2,500 18,086 Japan 5,149 10,048 United States 500 183.940 14: Bulletin of the Universitij of Texas In co-niparing the diflferent countries, interesting facts are brought out. Even little Bulgaria is credited with 727 associa- tions and Japan with 5,149. The United States has only 500. This is due to the fact that the figures for the United States are for 1905 .and since then the cooperative societies have made great strides forward. Secondly, the note accompanying the table says that it "has been difficult to obtain information as to the present development of cooperation in ISTorth America. The unions at present existing do not compile statistics and the returns with re- gard to cooperation published by the statistical offices are very in- complete." This accounts for the comparatively low figures for the United States. In the Year-Book of the Department of Agriculture, for the year 1913, Dr. T. N. Carver, in his article on the '^'Organization of Rural Interests," lists a total of 1867 farmers' mutual insur- ance companies, 2165 cooperative creameries, 336 cooperative cheese factories, 2020 cooperative elevators, which alone is a total of 6388. There are hundreds of purchasing societies and marketing organizations, stores, cow-testing associations, and breeders' asso- ciations which he does not mention at all. This shows that there are certainly more than 500 cooperative associations in the United States. He adds, however, "The question often arises as to whether these are all strictly cooperative. Undoubtedly many of them are, in form at least, merely joint stock companies, and not cooperative in the strict technical sense. Such a claim, however, is based upon the letter rather than the spirit of the enterprise." (For a discussion of cooperative vs. joint stock enterprises, see later in the chapter.) This table, however, is limited to strictly cooperative societies and, therefore, does not list many of the associations that Carver has enumerated. Many will dismiss such comparisons with, "0, well, conditions are different over there. Their laws, governments, and customs permit of cooperation, but it won't work in the United States." Some even say that cooperation is suited only to monarchial gov- ernments and, if we introduced it here, our own people would be reduced to peasants lorded over l)y aristocratic landlords. But the principles of cooperation hold true all over the world. If it has been the salvation of the European farmer, it will do much' for the United States. There is no use arguing that '"'conditions Cooperation in Agriculture^ Marl-etiiiy. and h'ural Credit 15 are different." Some so-called "conditions" need changing and uprooting. It is no use plowing around these stumps any longer. We had better blast them out — get rid of them ! Some funda- mental differences remain and we will plow around these for a while. Cooperation can be adapted to these conditions. Reasons for Success in Cooperation It would not be fair to compare Europe with America in the matter of cooperation without saying something about the differ- ences between the two continents. Permanent Settlers Europe has been settled for centuries. America is new and our people have not been permanent settlers. Some 23 per cent of our people do not reside in their native state. Thirty-seven per cent of our farmers do not own their farms, hut rent them and are here one year and on a different farm, and perhaps in a different county the next year. In Texas 52.6 per cent of our farmers are renters, and the problem is still greater. Teachers tell us that it is not uncommon to have 25 per cent or more of their pupils change during the moving season, and some schools are almost depopulated. It is not uncommon to find that people will not know neighbors living within a mile of their house, even though these people have lived there a year or more. Not knowing each other, people have no interest in their neighbors and how can we expect them to go into business organizations and risk their money in a venture with people they know nothing about? Many Nationalities of United States Our people are of many nationalities and it is hard to get peo- ple of different habits, traditions and customs to act together. A German citizen of Texas said, "As long as you keep the farmers' organization among Germans it is going to succeed, but as soon as you admit people of other nationalities it is going to fail." This is not because the Germans are so much better adapted to working together, but because different peoples won't "mix." 16 BiiUetin of the University of Texas Prosperity and Extravagance On the whole, the Aiuehcan people have been unusually pros- perous, and this is also true of the farming people. We have had a whole continent thrown open to us with seemingly inexhaustible resources of forest, mineral and agricultural wealth. And up to a few years ago no one thought of "conservation," but only ot "development," "exploitation" and "opening up the country." Our governments, state and national, have treated these natural resources in this light and have opened the door to any one who would "develop." Our prosperity has made us feel that we do not need to work together. Mr. Fay, the noted English writer on cooperation, says: "A cooperative society is an association of the weak who get together in order to lift themselves and others out of weakness into strength."^ When people do not feel that they are weak, they are not likely to feel the need of mutual organiza- tion. One farmer from Kendall county writes: "I know of no way you can be of any assistance to the farmer — I mean the pro- gressive farmer. He is on to his job, and gets all he is entitled to." A speaker at the first Conference on Marketing and Farm Credits in Chicago (1913) said: "I have had some experience in organizing cooperative associations, and I remember well talk- ing with one German farmer — he happened to be German — others are largely the same. I drove from farm to farm, to influence five or six men to go into an organization. I tried to explain to this man ; I talked hard and earnestly to him, and when I finally thought he was going to become a member, he said to me : 'Well, I made two thousand dollars last year; I think that has been enough.' "- In Europe things have been different. The land has been farmed for hundreds of years, the population is denser and more settled. The famines and wars have added to this natural eco- nomic pressure and people have been forced to cooperate. We had a taste of "hard times" in the seventies, when the over- production of wheat and corn, combined with the poor transpor- tation facilities, caused such low prices and farmers were brought together in the Grange. Other farmers' organizations had sim- *Fay, Co-operation at Home and Abroad, p. 3. ^Marketing and Farm Credits, p. 80. Codperal.ioii in Af/ricuJltire, Marl-ding, and Ilural Credit \\ ilar origins; all lost in membership and power when prosperity returned. The American people have not only been prosperous hut also extravagant. ^Ir. Ford in his book '"Coopcratiou in New Eng- land" says, "the American people are beyond all comparison, from the richest to the humhlest, the most unthrifty and extravagant in the world."' Our national extravagance is reflected in our {)ri- vate life; so European national economic thrift has its counter- part in the home life of the people. The Euro])ean farmer makes a living on ten acres of ground and enjoys conveniences unheard of in many American farm homes. This ideal of thrift is naively expressed in one of the Iiaiffeisen booklets, published by the Eaiffei- £en Society: '•'Our societies are usually called 'saving and loan hank socie- ties.' The word 'saving' is expressly put at the beginning of the phrase, because, in the industrial war that we are engaged in, the words of Frederick the Great are even more applicable, viz. : 'Warfare demands three things; first, money; secondly, nionei/, and, thirdly, money.' And money does not drop from the heavens without toil, but it has to be gathered laboriously through thrift and economy. God be praised if the virtue of thrift is found in the village, but if we see that if Gustie has a new hat Mith a l)ig feather on it, Minna at once goes to buy a still more expensive hat Avith a still bigger feather; if we notice that 'demon rum' swallows gigantic sums of money because our yonng fellows have too much money to spend, then it is clear that the virtue of thrift need's to be fostered. But thrift thereby does not become a sister to greed liy any means, but it simply follows the footsteps of Him who said 'gather the remaining crumbs.'"^ Manner of Life Lastly, our history and natural environment have brought about a difference in living conditions. In many European countries the farmers have lived in village communities for hundreds of years, and in mediaeval times even the system of agriculture was often prescribed by the grou]). So the farmers there have Iieen ^See Introduction, page 10. -nns Raiffeison Doif. 38 Bulletin uf the L'nicersilij uf Texas traiufd in working together. Our farmers have had the opposite experience. We settled as pioneers and as individuals, rarely in groups and each man was for himself. When he could see the smoke of a neighbor's hearth, he moved, for he considered the country too crowded. This developed in him a spirit of inde- pendence and self-reliance which perhaps was very commendable in the early days. However, times have changed and we need to adjust ourselves to the new conditions if we expect to get the best out of our lives. ''Independence" This feeling of independence has been fostered by om* tradi- tions. AVe like the word "independence." Our political orators have harped upon the "independence" of the American people, — and the farmer in particular, — to such a degree that we prefer to lose money and the benefits derived from organization rather than give up our so-called "right to do as we please." The American farmer, as a class, is alone in this respect. Other classes of society have shed some of their "independence'" and woik as organizations. The laboring man has formed his labor unions and no longer bargains with his capitcilist boss as an individual, but makes his terms through his union. The capi- talist has merged individual business interests until we have trusts in every industry. The farmer on the other hand has usually faced the comniCnial world alone. Of course, we must make ex- ceptions in the case of the Grange, the Alliance, the Wheel and other like societies that have been mighty forces towards uniting the farmers. The Grange, the Farmers' Union and the Society of Equity of today are examples of great movements aiming to unite farmers for social, educational and economic betterment. Never- theless, it is true that the farmers are more independent and feel the need of organization less ilian otlier classes. There is always- suspicion of the motives of neighbors that makes it hard to build up a business enter))rise. They are afraid of their own powders or fail to see the value of cooperation. An instance is told us by a Texan of ]\[cCullocli county. This man's father lived in Massa- chusetts. He bought a farm in a community where farmers sold chickens at $1.25 apiece, while milk was sold to collectors at 9 cents a gallon. This gentleman tried to persuade the farmers to> Cooperation in, Agriculture^ j\Jar]a'liiig, and Rural Credit li> organize and sell their milk. But he could not get them to do so, and as a result, found it unpaotltable to go into the dairy business. This spirit of independence often shows itself in a lack of busi- ness sense or a feeling of obligation to the will of the majority. Some one finds that his plan cannot be carried out, and rather than yield for the good of the group, he breaks up the organiza- tion. A good illustration of this statement comes to us from a county iji the eastern edge of the Blackland Belt. '"A number of farm- ers formed an organization to sell their cotton seed. Cotton seed was selling at $8.00 per ton, and they thought they could do bet- ter by pooling their seed — calling in representatives of the vari- ous oil mills at a meeting and have them bid on it. It was agreed to sell the seed of the entire organization to the liighest bidder. The meeting was held, and a number of agents of the oil mills were present. The bidding was spirited and the price was driven up to fifteen dollars, the secretary was just ready to close the deal when one of the farmers jumped up and said, 'Mr. Secretary, if they CcUi pay fifteen, they can pay sixteen, and unless they raise it to sixteen, you can strike my name off the list.' This started a riot, and other farmers followed his example. A group of them felt that they ought to stay by theii" agreement to sell to the highest bidder, and they did their best to urge the others to do so. The result was that these linally agreed with the agent to sell their combined lots for fourteen dollars a ton, for the agent said he could not afford to pay fifteen dollars for the very much smaller lot that they had. The others, who refused, failed to make a sale that evening, and the result was that they hauled their seed to the same car at eight dollars, while their friends received fourteen dollars a ton." "Farmers won't stick," is the usual terse way of expressing the whole story. As one man from Wise county writes, "There is no community interest to speak of among farmers. It's every fellow for himself and the devil take the hindmost." LacJc uf Comniunitij Spirit The trouble is tluit farmers very often oiganize simplv for the dollars and cents there mav be in it for them individually. Thai is why an organization of farmei's is so easily hroken \^^. As soon 20 Build in of lite Universiltj of Texas as there is a loss, some lo^c faith and drop out. They don't realize that every business has its "growing pains"' and if members will only "stick together" it is bound to succeed. No one knows these weaknesses better than the middlemen whose business is being in- jured by the farmers' cooperative concerns. They l. 28 Bulletin of the LnicersUij of Texas the cowp. A Buna man told us that he would like to put in a silo but (•ould not afford to own the necessary maehiner}'. '"If I could get two or three ol; my neighbors to build silo?^ we could afford to buy the machinery together." he said. This is not only true in this case but wherever farming operations demand a large, expensive piece of machinery. If enough farmers are in the dairy Inisiness and a local cream- ery is not advisable, cream shipping associations may be organized to haul the cream of the association cooperatively, as the farmers of Xew Mexico have done. In one community they live thirty-five miles from the railroad and take turns in taking the cream to the station. "Wlicre the amount of milk produced is sufficient tliat a cream- ery would be desirable, it ought to be cooperative. There are sev- eral in Texas today. It is necessar}-, however, to make sure that there are enough patrons with enough cows to furnish milk to make it profitable. Promoters whose object is to sell machinery, have often induced farmers to l)uild cooperative creameries where business did not warrant it, and the machinery was usually sold at $500 to $1000 above the market price. In the northern part of Iowa, there are over five hundred cooperative creameries, while in the southern part, there is hardly one. The reason for this is that grafters came in and "ol-ganized creameries where there were not enough cows to keep a hand-clmrn going.'- It is impossible to organize farmers in that section now; in fact, it is impo>siljle to get farmers to believe in any cooperative ideas l)ooause tliov have been grafted upon so often.' Cooperalirr Breeders' Associaiions Tlie average cow in Texas produces about one hundred and fifty pounds of butter per year. This is not profitable. All our dairy associations and agricultural colleges are agreed that we need to improve our dairy herds as well as our other farm animals. But a pedigreed or registered sire is expensive and unless a farmer has a sufficiently large herd of his own, he is not in a position to own one himself. However, if there are enough farmers in a com- munity raising the same kind of stock, say Jerseys, it will l)e to ''\Inil«'1 inpf and Farm Credits, p. 91. Ctiopernllon in A (irl( allure, Marie iiiuj. and L'ural Crcdil 'Vd then- advantay-L' to Iniy a sire to head all the herds of tlie com- munity. ^\v. W. F. liaven, who I'epresented the State of Michi- gan at the Coin Show at Dallas, spoke at that meeting on the oro^anization oE these hrecders associations in his state. The plan hriefiy is this: When the owners of one hundred and'twenty cows decide upon the breed they wish to have, the state field agent lakes up tlic matter witli the farmcis. The cows are divided into tliree grou])s of about forty cows each and three bulls are piir- ehased. At the end of two years the bulls are changed from one group to another to avoid inbreeding. The initial cost is about $10 to $40 per member. Today there are seventy-seven centers and in Livingstone county the Holstein Breeders' Association has three hundred ap.d forty-seven members.' Cooperative Sale throufjh Associali'on.M Tliese In'eeders' associations also furnisli a nucleus for coopcr- ati\e buying and selling of animals. A buyer wishing to buy a carload of Jersey cattle has to spend a week among the unorgan- ized farmers to find what he wants. But Ijy having registered willi a secretary all the stock for sale in the community, there is no difficulty at all. The Breeders' Associations of Wisconsin have fouHil this very profital^le and not only hold pid)lic sales, but ad- vertise their cattle. In Bulletin Xo. IS!) oE the Wisconsin Ag-ri- eultiiial Experiment Station, this is brought out: '"The small town of Lake Mills, Wisconsin, is another example of what com- munity effort can accomplish in the way of breeding one specific kind of cattle. Through the efforts of a few men, many Holstein herds exist in the vicinity of Lake ]\Iills. The early activities of these men established a reputation for Lake Mills as being the greatest Holstein center of the Middle West. Buyers have gone there from all parts of the world to buy high-grade and pure-bred Holstein cattle. As high as $175,000 worth of Llolstein cattle have l)een shipped from Lake Mills in a single year. Breeders in the vicinity of Lake Mills have been unable to satisfy all of the demand. ■'Several of the associations now in existence in Wisconsin are advertising in the leading dairy papers of the country by carry- ^See eircular 4 of tlio ^fiolli.^■all Aprifiiltuiiil Cnllciic 30 Bulletin of the Univeraitij uf Texan ing, at the expense of the associations, such advertisements. In reply to inquiries, which these advertisements attract, sales lists,. published at intervals determined upon by the association, are sent out. These sale lists contain a complete enumeration of all stock for sale, together with the names of the respective owners. From this sale list the buyer may choose whatever he may desire. "A community organization may also render great a-ssistanee to its members in selling various farm products and in buying feed- ing stuffs and other supplies.'^ Some excellent breeders' associations are found in other States in connection with the United States Department of Agriculture. "Two such associations are now at work, — one in Minnesota, where short-horn cattle are being bred ; the other in North Dakota Avhere a group of German farmers in the semi-arid regions are breeding Holsteins. Tennessee breeders are thinking of applying the plans to the production of mules; and interest in it is being shown in other sections."^ The same type of associations could do a great deal in the South towards the community eradication of the cattle tick. At St. Elmo, Louisiana, there is a splendid dipping vat built bv and for the use of the community to fight the ticks. Cow Testing The breeders' associations often work together in cow-testing associations. The individual farmer cannot afford to have a large Babcoek tester nor give the time to the work he ought to. to find out whether his cows are up to standard or not. These associa- tions hire a man who goes from house to house and spend.s a day or so at each farrn house, tests the cows, and keeps the record for the farmer. In a short time the record of the cow will show whether she is paying for herself or is merely a 'hoarder.'" At Dickinson, Kansas, such an organization was formed in 1912. • They had twenty-one members and three hundred and seventy- jiine cows. They assessed eacli member one dollar per cow pa}- able quarterly with a minimum charge of twelve cows. It was found that the best cow in the herd })roduced $201.00 worth of butter and her feed cost $.55.91 ; the poorest cow produced $21.38' 'Procrrpssive Farnior. January 11, 15)1.'^. Cooperation in Agri<-ulture^ Marl-cliiuj. and Rural Credit 31 worth of butter and her feed cost $33.f the profits are divided on the basis of business furnished. Reserve Fund 7. As shown in the above, example, a certain reserve fund should be set aside before profits are declared. This is very im- portant, for in very many farmers' organizations nothing is set aside for repairs or depreciation, and the results are that they pay enormously high dividends for the first few years. But after awhile the bills come in for repairs and depreciation, t>e divi- dends drop off, and in fact members may be called upon for as- sessments instead, and then it is likely that the organization will be broken up. One of the reasons for the failure of the New England creameries is the fact that no reserve fund was laid aside. The Wisconsin Cooperative law requires that all institu- tions organized under that law must have a reserve fund. They must set aside ten per cent of their net profits, until this amount is thirty per cent of the paid up stock, after that five per cent must be set aside for an educational fund to be used in teaching cooperation. Judged by these standards there are not many farmers' organ- izations in the United States that are trulv cooperative. "But 42 Bulletin of Ike University of Texas any organization of this kind may be said to be cooperative in spirit when it is managed exclusively with a view to giving the farmer a better price for his butterfat or his grain, and not at all for the purpose of securing dividends on the stock/' says T. X. Carver/ "If the stock is owned by farmers and if each share 'Year Book, U. S. Department of Agriculture, 1913. of stock is in practice limited to a normal rate of interest and all surplus earnings go to the farmers in the form of better prices, the enterprise is cooperative in spirit, even though its form be that of the ordinary profit-making corpoi'ation. "However, it must in frankness be admitted that there is al- ways danger, under the joint stock form of organization, that the cooperative spirit will be destroyed and the organization shifted to the profit-making purpose. In a creamery, for example, if one man own a large number of shares and very few cows, or none at all, he will naturally be more interested in dividends than in the price of butterfat. If a majority of the shares are owned by such men, the company is almost certain to be managed in the interest of dividends rather than in the interest of the price of butterfat. It is therefore highly desirable that the form of organization be such as to prevent this result and insure that the management shall always be in the interest of the producers. Nevertheless, so long as the management is in the interest of the producer, it is reasonable to list such an organization as cooperative." CHAPTER II MARKETING INTRODUCTION Lt would not be possible to discuss in one short chapter all of the important questions in connection with the marketing of farm products. Marketing has been for some time a much studied question and there yet remains a vast amount of study and effort before some of the most perplexing difficulties can be removed. The purpose of this chapter will be to show some of the conditions which exist at this time in our own state, and to suggest improve- ments and solutions which may be offered by the individual farmer rather than by government action. The statements made here concerning conditions are from the people concerned. The chap- ter is a product of the evidence and testimony which have been given to us by faraiers, shippers, merchants and dealers. This information has been obtained either by correspondence or direct interview. Naturally, those who have furnished us with infor- mation have also given us much personal opinion. Of necessity much of this is omitted. The purpose of this chapter is not argu- ment except as the experiences of the producers tell their own story. Wherever opinion has been offered or scheme of solution by tJie government proposed, we have considered the same and placed it where those concerned with law making may have access to it when desired. Correspondence and interview have brought us charges and counter charge? of fraud, theft and dishonor. But producers, middlemen and consumers all make mistakes. Not all the present- day difficulties could be based upon mistakes, but we have hesi- tated before putting into print the charges brought in many cases and some of them will not appear. Enough is given in these pages to show that the widespread dissatisfaction of the farming class has a very solid basis. It is not personal opinion but a de- duction from facts that the farmer and producer markets his wares against great odds. Conditions in many places are chaotic. It is also a deduction from his own evidence that he is not doing 44 Bulletin of the University of Texas what he should to leinech' his own condition. The principles underljang what lie should do have been suggested in the previous chapter. The conditions and times demand action. We advise a cam- paign for cooperative marketing because it has succeeded. It will be well to note again the distinction drawn in the first chapter between true cooperation and some of the organizations which have paraded under its name. We advise cooperative marketing in the second place because it will eliminate from the produce world much of the personal antagonism and fraud which now exist. It will show that men in certain situations are victims of circum- stances. Methods and principles will be studied instead of per- sonalities. A third reason for advocating cooperation in market- ing is the fact that it will make students of the producers. To study the market is to find out what to produce, how much to produce, how to prepare it, and where to dispose of it to the best advantage. There are many other facts in favor of cooperative action and prominent among- them is that it is a method within the grasp and control of the smallest producers as well as largest and there need be no \\-ait for legislative action or further work on the part of those not actually following the plow. In this way private initiative, while not antagonistic to, may yei be in- dependent of, state action. Cooperation will eliminate conflict by making useless those who cause it in the marketing world. In time legislative action will assist that which has been done by the producer himself: that which he must do of his own action whether legislation comes first or second. Crops and Values During the past year nearly five thousand farmers have had an invitation from us by letter to give information on marketing con- ditions. Twice five thousand and more have had a direct per- sonal invitation. Out of the hundreds of letters which we have received, we tabulate the following facts: _ , Per cent of Letters in Products Mentioned. Which Mentioned. Cotton Qi Truck and vegetables 3gg Grains 17 Vodperation in Agriculture, Marketing, and Ilural Credit 45 Per cent of Letters in Products Mentioned. Which Mentioned. Corn IG Live stock 15 Fruit 13§ Poultry and eggs 131 Dairy products 9 Hay and feed !) Wool 3 Pecans ?, The eleven classes mentioned include nearly all products upon which we have been furnished informatidn. There is an average mention of about two products per letter. Of course, this does not mean that these farmers have an average of only two products to sell, but it does mean that they have only that many which they consider worthy of note when talking about marketing problems. The class of truck includes all the different kinds of vegetables. The grains include wheat, oats, etc. Kaffir, milo, etc., go under ■com or feed. All other products are very scattering. For ex- ample one mention of tobacco; one of sugar cane; one of molasses; and five of honey were given. It is worthy of note that even in a limited number of letters, grain, corn and live stock stand close together. Also that dairy products and hay and feed are tied for •eighth place. The following table taken from the last census shows the value •of these classes of products for the year 1909 : Cotton and seed $188,673,954 Truck and vegetables 12,122,255 Grains 16,545,305 Corn 50,564,618 Live stock 78,648,000 Fruit 2,304,574 Poultry and eggs 5,909,942 Dairy products 15,680,000 Hay and feed 12,824,433 Wool 2,202,342 Pecans 556,203 It will be seen from this that the following pages contain a •discussion of the marketing of all our principal agricultural prod- ucts. However, they are not discussed in the order of their value. 46 Bulletin of the University of Texas Grain As is well known, the rice producers have had some experience in cooperation or association work. Eice growers say freely that by association they have secnred much which could not have been obtained by individual action. What can be done further is well suggested in this statement : "The rice growers and truck growers seem to be having trouble in buy- ing feed which they do not raise. . . . The rice men have an organ- ization for selling, which handles their business in a manner satisfactory to them, but have failed tq see the need of cooperation in buying. To illustrate: The rice farmer has very little land suitable for feed crops, so he has to buy a large amount of feed; in fact, the larger part of his expense account is his feed bill. If the grain growers were as well organ- ized as the feed or grain dealers, they could sell direct to the rice growers through their association at a better price and the rice man would buy food cheaper. Corn has not sold for less than $1.00 per bushel for a long time, and often at $1.10 and $1.15. These prices are not governed by the price the farmer gets. In talking the matter over with my neighbors who grow rice, I find that they are hopeless of any relief from the exactions of the middlemen. Good table rice is sold by our local rice mill at from $3.50 to $5.00 per 100 pounds, yet rice retails in our local stores at 7i to 8^ cents per pound. Some of us are hoping that the feed growers will organize and divide the profits the middlemen now get between producer and consumer." The rice grower wants feed. Here is the man with the feed. It is simply a question of get together. "I raise corn, cotton and grain, the principal crop being oats. Marketed 15,000 bushels. I own and operate a farm with hired labor, doing every- thing from breaking land to threshing with own machinery. ... I sold my crop through local dealers. I think the price would be better if a more direct communication could be had with the consumer. My observa- tion is that our local buyers buy on a good margin, and sell to other brokers who also require a margin. Commission selling is very rarely satisfactory in the grain business, but I find it very much so in the cattle business; however, in the latter transaction, your prospective buyer is looking at your wares, while the displaying to a buyer of fifteen or twenty cars of sacked grain, or loose grain, would be quite an item in time, space, expense, etc., and after all the satisfactory handling of farm products through the channel of commerce to the consumer will remain, as a rule, an unsatisfactory business transaction." Cooperation in Agriculture^ Marketing^ and Rural Credit 47 Hay and Feed CloseJy related to the grain market is the market for hay ami other feed stuffs. Opinion is about evenl)^ divided as to satisfac- tion and dissatisfaction in buying and selling. In one case where satisfaction has been had the selling has .been done through an association. The large amount thus handled has attracted more buyers. The association manager received the bids from the buyers and the producer accepted or rejected any bid. This has been found effective in keeping the price up to the quoted market. Weekly meetings were held for the purpose of discussing the market and "the spineless ones were worked with until a better system of marketing could be worked out." Suc- cess in this case has been due largely also to the fact that a ware- house was constructed. Now the product is sold as a .whole : grading is easier and the buyer does business with the association as if it were one man. The association sells only in car lots and therefore does not have direct connection with the consumer. Another alfalfa association has trouble in reaching the small consumer because so many people want to do business on reference only. The distance over which some hay must be shipped makes all personal contact between buyer and seller impossible and thus the large buyer has the advantage over the smaller. It is sug- gested that greater security could be had with some kind of mar- ket supervision. At this time the safe way seems to be through the association, even for a man who produces as much as 150 tons of alfalfa and 25,000 pounds of seed in one year. The price of unorganized effort is stated in the following com- ment: •■'Hay season conies and the town is filled with hay wagons. Dull time with the town people; a few grain men buy it at $8.00 or $9.00 a ton, store it, and in the winter sell it at 50 cents a hale, or $16 to $18 per ton." With regard to this condition the question naturally arises, did the grain men come first or did they come second ? If second, then the producer must have been waiting for a market. Here is one producer who found out in time: "The bundled feed was loaded on wagons and hauled to be sold to any chance buyer who might happen along. I quit selling such feed because marketing consumed too much time, and because ultimately that kind of 48 Bulletin of the University of Texas marketing would impoverish the land. I sold direct to the consumer and the price was fairly good. Milo heads consumed less time marketing, the price was fairly good, and usually one could place a car with some mer- chant in the cotton country. The stalks could remain on the land. That looked fairly good, but I soon saw that my stock could graze the stalks to advantage, but this same stock would later need the grain. I sell no more mile heads." Satisfaction in selling hay and feed seems to come from the two sources of associated effort and ability to store and hold. Dissatisfaction comes from several sources. One example is where selling was done to a distant company upon exchange of telegrams. This system worked very well on a rising market but in certain cases of falling market the company would return mes- sage that the hay was not up to agreement or classification. One party who sells about sixty tons of alfalfa, claims that it was wholly due to local conditions that hay last year was worth only $14.00, while the year before it sold for $20.00. As with the grower of perishable produce, so with the seller of hay, it seems that sometimes he is out his feed and asked to pay something more to cover freight charges. One sorghum producer sold last year about 400 tons by carload throughout the state and found about three out of five dealers honest, honorable business men. Knowledge of only one market has caused several shippers to re- ceive a price which might have been refused if there had been any knowledge of another market. One shipper says he has had several unsatisfactory deals because he was afraid of "being stvick with a car of hay perhaps one hundred or two hundred miles from home." That he had a right to this opinion is proved by the following: "I know of one party at this point who shipped a car of hay to North Texas and it was refused. He wired the parties to unload and sell for his account. His returns on same were 92 cents, but they kindly sent him $1.00. At this same time h« could have gotten $4.50 per ton on track here for bedding hay, and the hay he shipped was fairly good, fall cut, feeding hay, but a little dark. If there had been a bonded broker within fifty to one hundred miles of this hay, it would have paid him well to have paid ihis broker's expense and commission to go to the town and dispose of it for him, and he would have had the satisfaction of knowing he had not been robbed." The majority of growers of hay and feed make haste to explain Cooperalion in AijrlcuUure^ Mar/retiug. and J!ural Crcdil 49 that while they charge down-Jight dishniiesly uii tlic part of sume of the dealers, that tliey are assured that there aie uiaiiy lioiiest conniiissioi) men. The trouble seems to be uncertainty more than dishonesty. The producer is willing to admit that the majority of commission men are honest but that it is certain that thei-e are some dishonest ones who are largely responsible for the perplexi- ties and difficulties with which the average producer must deal. No one will deny that a number of commission men fill a legiti- mate place in the present marketing system. It would a])pcar, therefore, that the honest commission men would he \ery anxious to have the dishonest eliminated from the business. Could not the produL-er assist in this as well as the dealer? Take for ex- ample the case given above, where the town was filled up with hay wagons at the busy season. If there are among the buyers in tliis case dishonest men it is as much the fault of the sellers as it is of the buyers themselves. Xothing could be simpler than cooperative action on the part of the sellers and by a very simple association, dealing only with buyers who prove themselves trust- worthy. In other words, if the producers use no foresight, make no attempts to contract with a buyer in advance, but simply drive into town, sell to the best price, and if necessary compete with a neighbor who is also a seller, does not this kind of business man- agement get just the kind of a bu3^er that it deserves? The aver- ave dishonest commission man does not have much to do with an effective farmers' organization. As we might say in the case of hay, the fields are greener somewhere else. The principles lucntioned in the preceding paragraph apply not only to hay and feed but to pratticallv everything wJiieh the farmer has to sell. There is a general opinion on the ]iart of the consumers or those who buy hay. that retail prices are too high. They are prol)ably not too high considering the way the business of buying is carried on. The point is, that the average farmer has little defense when asked. "Why do you Ijuy feed?" But it is a well known fact that there are numy who could produce feedstuff, who prefer to buy. Of course, this kind of a preference is rather costly. If the farmer uses the busims- management, \vl i^h leads him to buy a manufactured article to feed to his live stock, is it not reasonal)le io supjiose that lie will have to pay manufacturers' 50 Bulletin of the Universitij of Texas profits and the commissions of the commercial world for so doing? To those who cannot produce their own feed, there is as much to be said on the side of unplanned and unorganized buying as there is to those on the side of helter-skelter selling. Corn With corn, as with hay and feed, although local supply does not equal our demand, the producers are about equally divided as to whether marketing is satisfactory or otherwise. Prices vary with local conditions. For example, out of the first half dozen letters glanced at the following prices are quoted : Eighty cents in shuck ; $1.00 a bushel; seventy cents in shuck; whatever the merchant says it is worth. The dollar corn was sold to neighbors. The seventy-cent corn was repoited satisfactory witli a yield of 35 to 40 bushels per acre. One letter reports : "Ten loads of corn will glut tlie market in Paris and prices go down 15 to 25 cents per bushel, and the same thing with oats." The next one says: "Corn is never considered a product for the market in East Texas coun- ties from the fact that it consumes all the grain crops at home. This countiy buys corn every j'ear." The solution of high prices and low prices in these two com- munities by their getting together in organized exchange is easy. One correspondent says : "I liave bought from tlie dealer at 75 cents per bushel, seventy-two pounds for a bushel, cash, in spring, and sold better corn the coming fall at 25 cents per bushel of seventy-five pounds for a bushel." Perhaps so, but this docs not mean that the farmer paid too mucli nor that he received too little. No one had corn in the spring perhaps, except the dealer. One seller and many buyers mean high prices. In the fall it was one buyer and many sellers, hence low prices. In addition to this fact we must remember that the value of an agricultural product depenrls largely uiwn where it is, and what time it is there. Since corn is usually regarded as a grain and is a large item Cooperation in Agriculture, 21 arreting, and Rural Credit 51 in feedstufl'e, what has been said above on grain and feedstuff!^, applies also in the case of corn. Marl-eUng of Live Stocl: Among the farmers who have given us information concerning tlie marketing of live stock, there is about one satisfied seller to two dissatisfied sellers. One satisfied seller cays that he sold (30 Jersey cows this year at a good price and that he did this by ad- vertising. This man, of course, is more than an average pro- ducer; he is (just the same as the cattlemen) in a specialized business. The majority of our correspondents belong to the class of general farmers. The following comment applies to the ma- jority of the producers who have written us : "I have a few fat hogf5 for sale. Our local dealer offers me &h cents, live weight. He sells pork from IG to 20 cents. Of course, I could do better by selling to San Antonio or Fort Worth packers, but I have no carload. Through the medium of our Farmers' Institute I tried to organize clubs, but the farmers won't organize." Another case is that of the producer who Jias several thousand acres of pasture, and half as much land in cultivation. He says: ''We market cattle, sheep, hogs, horses and mules, and these consume most of the rent feed on the place. What feed there is left is disposed of locally, and the selling becomes a personal proposition of salesmanship. The fat stock shipped to market is handled in a satisfactory manner by the live stock commission companies. There is so much competition be- tween these concerns that there is a constant incentive to better sales. On the whole, we have no fault to find with the present system of marketing stock and wool." Here is another case of the ])roducer who is al)Ove the average : "I market about $4000 worth of hogs of my own raising for some years, and find that selling through commission men, mostly at Fort Worth and Oklahoma City, has been satisfactory, though the slow movements of trains, that is, the long stops and lay-overs, caused heavy shrinkage, but in justice to the railroads, will say that though I have lost from that cause, I have never put in a claim that was not settled without suit. All feed stuflF was consumed on the farm, but poultry was never. soLd for a fair price except in a few cases where I sold to a man trying to load a car. My hogs were finished for the packer; my poultry the same. To the man who does not e.xpect too much, I believe cattle and hogs are pretty well handled if the leading stations were forced to furnish water for the stock at each and 52 lUilhiin of the Unirersily of Texas ex-ery station wlieu tliey are handled. I liave been forced to haul water a long distance at heavy expense to water stock after a long drive before I could load, as it would be twenty-four hours before I could compel the road to water." With regard to shipi^ing iacilities, and accommodations fur- nished by the railroad, opinion is divided, but the majority believe that this phase of the marketing situation is fairly satisfactory. It is to be regretted that so little is said concerning the quality of the product sold. Very little mention is made of improve- ment in breed or an attempt to furnish high-grade stuff. There is much criticism of the difference that exists between what the Ijroducer gets in the local market and what the consumer pays at the local meat market. Little counnent is made upon losses which mu'^t be incurred in transforming the product on the hoof into a finished meat product. Most of this kind of criticism comes from those who have had a very small amount of product to sell. In one case, there is criticism because certain local deal- ers have bought up cows, and after keeping the same for a cer- tain ninnber of weeks, have douljled their money. It would ap- l^ear that such ciitieisnis are unjust. The writer knows of sev- eral cases where such local buyers have built silos, and have sim- ply finislied out. the cattle in the way that the small producer c-ould not or did not want to do it. This is legitimate business. The writer has in mind one case of an Indiana farmer who bought fifty-three head of calves out of the Texas market, and after keep- ing tliem for a few months, during the winter season, on a little pasture, MJieat straw, and silage, sold to a profit of about $1300. The calves were finished to top the Indianapolis market. It appears that this is a case of regret not open for criticism except that the feeding out was not done in the State of Texas. Among tlie difiiculties that a certain man who sells from 400 to 500 sheep, and 200 to 300 head of cattle a year or more, has to deal with, are given the following: First, althougli commis- sion men are men of ability, their charges are high : second, that the price is controlled by a very few firms: third, tluit when hay is fed in the pen, that it is. sold at a higli price. Several examples are given to show the wide margin which exists between prices in the local market and the large city market. Tliis ])oint is brouglit out along anuthci' line l)v tlic iurkev market. Tliis letter shows Cooperation in AffricHlfiirc. Mnrl-cting. and Eiiral Credit 53 tliat (Ou])erative action could be applied to advantagx'. It is the testimony of a woman : "I tlionglit I would raise turkeys, but there is no market here and by the time I sliipi)ed them to Shreve- ])ort, paid the express and commission there, 1 could not afford to raise fowls, so have turned my attention to raising cattle." Word from the sections of the State tliat are classed as cattle country indicates that there would be a iiiucli greater production of cattle by the smaller producers, or general farmers, and there- fore the men who do not care to go extensively into the cattle 1)usiness, if the rates of interest on cattle loans were not so high. And if the small producer could have equal opportunity with the men who specialize in cattle. The following paragi-apli comes like a breath of the ojjen air: "I am making my living on tlie safe and snie plan by k»H^ping milch cows and hogs, and running them on green pasture all the year. Fat hogs and cream is always a good price and sure market. I have my farm fenced off in fields and plant only one kind of crop in a field, and when the crop is gathered I open the gate and turn in the cows and they clean up the field, stalks, weeds, grass, and everything, and have the field ready for the plow, and make cream enougli to pay all our running expenses." After reading the testimony of both sides, one is almost ready to agree with the "P. S." added by an earnest correspondent : '"The person that solves the marketing question satisfactory to both the buyer and seller must possess wisdom that would make Solomon hwk like 30 cents." Dairy Products The rapidity with which silos are l)eing introduced bespeaks an early increase in the amount of dairy products. In other states the farmers in many localities have had their first experience in cooperation through tlie creamery. In Texas, this has been a neglected lousiness. Wlint ])]'Oflucts have Ijeen ]>roduc('d liavc de- ]iended largely upon local markets and fluctuating ])rices. The future promises better prices and the government by giving us the l)arcels post has aided most in bringing about that situation where producer and consumer can get together. Opinions may differ, but actual experiences in marking dairy products by parcels post seem to be entirely satisfactory. "j^fv butter netted mo 2-^ cents l)y parcels post. At the same season 54 lluUelin of the Unirersll.i/ of Te.ras our country stores \v«'ro paying 12^ cents per pound. I save all my syrup buckets, mould butter in brick, wrap with bought butter paper as I mould. This paper keeps the butter fresh for quite a while." "Since the parcels post has been in vogue we can get 35 cents per pound for butter, when the local market pays only 15 cents." "I market 2000 to 4000 pounds of butter or butter fat and 30,000 to 50,000 pounds of milk annually. First I sold through creameries and later found it more satisfactory and profitable to manufacture my ownti butter, and under the new parcels post laws find it very satisfactory, selling to city customers 200 to 300 miles distant." Some o})inions do not agree witli what has aetualiy been done. "We also sell about $400 worth of butter every year, at from 27 to 30 cents per pound. The merchants seem to have a set price to pay for butter. They think that 25 cents is all they should pay for it. It seems to me that the butter maker should be in touch with the butter eater. There is so much red tape about mailing butter that we think it won't pay. People want it fixed very secure. Our butter is very firm and solid. We use a separator and make the butter out of cream. Butter made from cream is superior to butter mad? from milk." Of course, there is "red tape'' about it. But red tape m this case is wortli money. It is the customer who demands the best and that best served to him in the way he wants it who is wortli while. The producer who tries to satisfy a want stands a better show to get l:is money than the producer who tries to make a con- sumer want something else. The producer can determine the character of the supply but the consumer determines the character of demand. He expresses his opinion in terms of money. N^ote how it is brought out in the following cases: "T have marketed during the present year about 200 pounds of butter to my Incal people, they being the actual consumer, receiving 25 cents per pound, or a total of $50, which has been very satisfactory to me under existing circumstances. Our butter was moulded in one-pound moulds and wrapped carefully in tissue paper, delivered direct to our customers by someone on the farm two or tliree times a week." "We are phinuing to build up a herd of Jersey cattle. We are eight miles out. At first I tried selling skim milk, buttermilk, eggs, and butter direct to consumer by making three trips a week. Prices were fair. The rovuid trip over a scattered town was too much for man and team, and my customers often moved without leaving their addresses, so that I would lose small bills in that way. \^'e found that plan unsatisfactory. We Cooperation in Ai/ricidiure, ]\far],'cti)ifj. and Ixiiral Credit 55 then began selling butter to our grocoryniau at 25 cents per pound. We got nice cartons, put our butter up in neat packages with trade name, character of contents, and maker's name printed on outside. People learned our trade name and our butter became popular. The price gradually rose, until we have received 35 cents per pound all the year of late. Our gro- ceryman always sells the butter at 5 cents more per pound than he gives us. This is satisfactory all around, as much as any plan can reasonably bg expected to be. Of course, if we made much butter we might be unable to sell it for quite so much a pound. Our groceryman will have bought about $850 worth of butter from us this year wlien this month has passed; the demand is so great that it causes the clerks some trouble to decide who shall have our butter when the number of pounds available varies. We expect to market eggs the same way, and have cartons ready, but, alas! not the eggi. (Price nf the butter is cash.)" The following case seems to present a problem which has been met successfully by parcels post. But even at the lowest figure mentioned butter is perhaps more piotitaljle than iiio.st of the staple products : "Our butter netted, or rather brought, us 30 to 35 cents per pound so long as local demand consumed the local supply. When local supply exceeded local demand, we got only 17 or 18 cents per pound. We sold to the local merchants, preferring to do this rather than make deliveries with s.-j few pounds. Creamery butter throughout the time we have been here — three years — has never been below 30 cents. One of our neighbors made deliveries for 35 cents all the time, her customers preferring her butter to the creamery product." In certain places, there are charges of unfairness against the creameries in the making of tests. In cases of this kind the farm- ers in many sections of the country have simply started their own creameries on the joint stock or cooperative plan. In general the marketing of dairy products is satisfactory. Prices quoted are usually high compared to prices in other sec- tions of the country. The regret is tliat the dairy business should have such a small development. roaltnj and Eggs The selling of poultry and eggs is usually closely connected with the selling of dairy products. So far as the producer is con- cerned the market is in most instances local but the parcels post is modifvincr this the same as in the case of dairy products. Re- 5G Bnlletin of ike Universiii/ of Texas eoiitl\-, ihei'e came to our oiiicc 1)\- pai'cels post a ti'st shipment of one dozen eggs from Long Island, Xew York". Tlie eggs and paste- board package were in perfect condition when they arrived. Par- cels post eliminates all middlemen liy substituting the postage stamp. Here cooperation is not needed on a large scale because there is a direct relation between ])roducer and consumer. Dressed poultry can be liandled in the same way. It appears to us that the government by giving the producer and consumer the parcels post has given them the solution for every problem men- tioned in the following case : "We liave marketed several liundred eggs, for wliicli we liave received an average of 15 cents per dozen only: sold to local dealers and consumers. Eggs were gathered up every day and carried to market twice a week. The price received was not very satisfactory. Have recently sold on the local market four dozen hens to a local dealer, who is buying and ship- ping, only paying 5 cents per pound, and I notice hens are quoted in Houston and other cities at 11 and 12 cents per pound. From these figures it seems that somebody must be getting something for nothing; the producer is not getting the worth of his poultry, and the consumer is paying a long price for what he gets, the producer getting 5 cents per pound for his hens, or about 22 to 25 cents per lien, and the consumer paying 12 cents per pound. ^Yhat poultry (that is, hens) that go on his table at 50 t > 60 cents per lien, or more than as much again as the pro- ducer gets, cnnnot be satisfactorv with the producer or consumer." In our effort to get at marketing conditions, we have welcomed information from merchants and dealers : "To give you an illustration of marketing of poultry, I give you below some figures which may prove interesting. Suppose I pay the producer $3.00 per dozen for two dozen chickens, which is about what the average shipping coop contains, and consign them to an honest commission man in San Antonio. Here are the results: Sold by commission man for $4.25 per dozen .$ 8 50 Commission. 85 cents : express, $1.00 1 85 Net to shipper $ 6 65 Bought by retailer for $4.25 per dozen $ 8 50 Sold by rctailiT fur 45c each 10 80 Difl'erence l)etween cost and selling price 4 80 So you can see how this expense runs up on a small item right at home, we might say. The selling expense on two dozen chickens is $3.80 and Cooperalioti in Ayruidture, Mnrh-ciing . and PiuraJ Credit 57 the transportation expense is $1.00, which don't look reasonable, hut it is a fact, nevertheless, and I Ix'lieve that T am putting it a little mild. . Now you will ask why don't the |)rodncc'r .ship his own produce? He would if he wasn't afraid of iM'iny skinned. He has no confidence in the commission man, wliere he would liave if tlie government was behind it to assure hini a square deal, and tlie same chicken that he got only 25 cents for could net liim that under my plan and go to the consumer at a little better tlian 30 cents, or give tlie producer 30 cents and charge tl'.e consumer a little Ix'tter tlian 3.t cents, and you w^uld ph'ase both of them." In other words, this means that the fanner receives $G.OO for 2 dozen eliickens, and the consumer ])aid $10.80. ^V]lo got the difference of $4.80? The sliip]^cr got 65 cents; the commission men, 85 cents; the ex])ress coni]iany. $1.00; the retailer, $2.30. If the retailer fed, he leceived $2. HO minus the cost of the feed. In no case was the profit exLCssive. The trouljle was that there were four parties standing between the farmer and the consumer. Fruit, Truck, and Vegetahles The marketing of perishable produce presents more problems than any other phase of the marketing question. These problems are due to many causes but discussions at this time and place must be brief. It appears at times as if the whole vexatious con- dition w^as the result of the action of some middleman or agency. In general this is by no means the case. In order to get a better understanding of the situation and conditions, and to show how some of the problems may be solved, we shall devote our attention to such questions as: preparing for the market; difficulties whicli confront the commission men; troubles met with in following a policy of consigning; difference between price paid l)y consumer and what was received by the producer; how home canning may help and what can be expected from cooperation. It should be remembered that the Texas farmer has no monop- oly in the production of early perishable pi-oduce. On the con- trary, after the very earliest part of the season his ])roducts must compete with those from other states having a similar climate To obtain and hold a market, the product must compare favorably with the products from otlier sections as to grading, packing, ap- 58 Bulleiin of the University of Texas pearanee, etc. Ou this point, a volume could be written. A dealer gets at the vital points in the following way : "The marketing problem is one that requires long experience in locating reliable houses, closely watching the market^, keeping posted by wire daily or oftener. knowing what you can safely expect' as a safe risk, buying only the best stock, and it properly packed^ establisliing a reputation for fair dealing, and living up to your agreements." This dealer has not only given the jn'oducer a glance at the middleman's business, but he has also indicated what would pay the producer best. Where there is cooperation to the extent that small producers comb'ine in loading a car, there many difficulties arise. These represent the troubles which arise even if there were no middle- men concerned. "Farmers have failed to learn the lesson of grading and packing, and as all farms in this section are too small for carload shipments singly, they have to join in loading, and the quality of the car. is judged by the product of the most belligerent man permitted to load. Personally, I have suffered considerable loss from this cause, especially in sweet potatoes and cabbage, where inferior stock passed the inspector, or where sweet potatoes were not sufficiently seasoned to stand shipment. ' I have known instances where entire carloads of sweet potatoes have been lost because of the loading of a few sacks of freshly dug potatoes, generally because someone had made a short estimate of car capacity and the inspector would permit thest to be placed in the car to fill. Of course, the chance was that they would spoil before reaching destination, and being the last loaded they are the first inspected on opening the car, and as a result the entire car is rejected." "There were 1500 ur more crates of beans shipped from this place last spring and two-thirds or more were packed in very poor condition. Many were refused by commission men, or prices were very poor." Tlie principles of quulit}-, culling, grading, testing, packing, etc., form a science. To disregard these things is just as disas- trous as to have no knowledge of trans|;ortation rates, lack of in- foijuation as to tlio amount of product in the market to which products are sent or dealing with catch-as-eatch-can commission men. In the marketing of perishable produce, not all of the trouble is on the producer's side. As a matter of fact, it is quite likely that the greater part of the trouble originates with the producer. Cooperation in AfjricuUure, Marlceting, and Rural Credit 59 The middleman has his side of the question : ■■!My experience is confined to cantaloupes and potatoes, and I lay the greater part of the trouble to the farmer. As to the cantaloupes, I liandled two cars a year or two ago, when I first got what I thought and what was recommended to me as an expert packer to come and pack same for mo. He had con.-;idcrable tremble with the farmers trying to put olT any class of stuff on him just to get rid of it, and I consider this one of the hardest points to overcome. I took the two cars to Kansas City and spent two weeks right in the market. When my stuff commenced to arrive I was ashamed of it. I put it alongside California and Colorado stuff, which came in there all separately wrapped and in a nice clean crate with nice labels, and looked very attractive, while my goods were not wrapped and my crates with no labels looked rougli. Right here I found that the pack- ing had a great deal to do with tlie selling of same. The goods were put on the market side by side, and the fruit vender would come in and look the two packages over. If he saw a single cantaloupe in my packing that 'looked the least bit off, he would refuse the crate, while he would feel one or two of the ones wrapped in the other crate, and if they were good ho would pay from 25 to 75 cents per crate more for the wrapped goods. . As to the cantaloupes, you simply can't trust them to allow them to crate their own stuff at home, for tliere is always someone ready to put in a Iittli> bad stuff." ■"Before coming to Texas I was in the wholesale produce businocs for seventeen years in Iowa, and I wish to state in the beginning that the commission man is blamed for a groat many things for which he is not responsible. As an example of what has to be contended with, it is only in the case of a big surplus and a consequent overst( ck of the markets that he is able to get goods consigned to him. In times of scarcity and high prices he has to go on the market and pay the price for the goods. It is also not unusual for him to get the goods after they have been lying around in the railroad yards for several days, after having been rejected by some party to whom they were sold. In this case, he has to go on tlie market with the goods and get the best price he can, which is usually under the regular market, and this fact has a tendency to lower the price of the first-class product which has to come into competition with it. This grade of stock usually has to be handled quickly on account of spoilage, and when the shipper gets his returns there is no question what he would reasonably expect from the condition of the goods when ship(Kxl and thinks he has been robbed by the commissiim man, and there is no doubt but that the shipper is taken advantage of in a good many cases of this kind. Another tiling that must be remembered, and tliat is the manner of pack- ing goods in an honest manner. It is next to impossible to get a car of goods that are packed honestly all tlie way through, and there is another place where the' commission man loses a lot of his profits, as he cannot inspect but a small per cent of the car he receives, and while all shippers Gd J'uJhtin of the University of Texas nr<' not (H.-lioiK'sf . the dislioiiost ones imist be made to pack tlieir gnods rifllit for llic good of all." One of the most I'roqneiit complaint;? against the middleman and the ])olic\' of consigning is summed up bv these experiences: "In a few instances when tlie market was overnin we have shipped to commission merchants generally with unsatisfactory results. Sometitaes getting such reports as this: That our produce being too long in transit was received in A'ery bad condition, and had to be sold for about what the freight charges came to." "I had the handling of several carloads of poaches in charge during the season of 1912. The peaches were fine and well graded, and we made a contract to let a company have them for 50 cents. There was a large crop of peaches that year, with the result that prices went down, and we leceived a message from the party with whom we contracted stating that the peaches were not up to specifications. We were completely at their mercy, the peaches were perishable, and we had to sell them, so we let them go to a Chicago firm, some bringing !) cents, others bringing nothing. I became so disgusted that I traded my orchard off and came to this place to tly trucking. I find there is some difficulty here along the same line, so I guess there is no use in iiuining. If we could get reasonable rates and men could be placed along at the large stations to look after ship- ments as they pass through, we might be able to get our produce to the consumer and realize some profit from it; that is, if we could have rep- resentatives at the point of destination to see that the stufi' was properly graded also." ."Have had but little experience in shipping fiom this section, but will state what I did once in shipping from my old home in Louisiana. 1 shipped five crates each of Elberta peaches to four different dealers in St. Louis, Mo., and the peaches were picked the same day. packed by the same packer, shipped the same day by express, arrived the same day in St. Louis, were sold the same day, and the result was: I got net from the four firms I shipped to, and all charging the same commission: $1.47 net, $2.42 net, $4.87 net, and $5.00 net each for the five crates. . . . Can you give a reason why? I can't, unless it was robbery." Most truck and J'luit dealei's and growers know that experi- ences similar to the above ai'e rapidly disappearing where growers aie oi'gani/cod and have llicir ]iersonal representatives at destina- tions. One of tlie most ])ressing probk'uis in marketing is the great difference between what the producer gets and what the consumer pays. Tpon this diUVrciicc hiugos the wliojc (|U('stion of limited Cooiieralivn in A'lricnllnrc, Murl-clhnj . and llural Credit 01 production becau.^c of a low price and limited consumption be- cause of a \\\»\\ i)ri(c. Abundant evidence can be had of this en- hancement of price. The following are examples: "I own and operate a large irrigated farm and liave been raising Ber- muda onions, lettuce, beets, and other truck which we can raise in large quantities. However, on accouht of sucli poor prices obtained for our products we are now being forced to resort to other means for a livelihood. . . . Season of 1913 I could not realize even 2 cents per head for fine head lettuce, when at the same time such lettuce was being retailed in Dallas and other cities for 15 and 12^1 cents per head to consumers. It is quite obvious to me that wo have to contend with entirely too many com- mission men throughout the entire United States." "The trouble with the truck is the distribution, as also with fruit. I will give one example: In 1912, I was in a vineyard and the grapes were going to waste, and seventy-five miles from there the same quality sold at \2l and 15 cents per pound. You ask why they were not ship^ied. Both places were on the railroad and the same system, but when a package was started there was no assurance it would get there." "Relating to some experience in 1912, I dumped several carloads of cucumbers, besides wliat was never picked from the field. The commission housi^' could not sell tliem, cause given, market overstocked. By investi- gation at Ciiicago, 1 found that the retail price was not below 5 cents a piece, and thousands of people never will enjoy a cucumber at that price, and I know that to a consumer that is a prohibitive price and blocks the demand for them, which soon results in an overstocked market. Cucum- bers at that price are at about the rate of $3.00 per Texas standard crate, and we were dumping them for want of demand (reported at any price), while 50 cents per crate delivered at Texas common points is a good price for the cukes, which is less than 1 cent a piece. Allow another cent for freight and other expenses, there is no reason tliat the consumer should be taxed 3 cents more for a little cucumber." "In 1010 we formed a watermelon association, elected a business man- ager, and paid $80 for a 'Blue Book' (o give us all the inside information in regard to produce dealers and commission lirnis. And shipped fourteen cars of watermelons to difl'erent parts of tiie Xorth. They all praised us in regard to the loading of the cars and also the quality of the melons. One car sold in Kansas City for $10; not enough to pay freight and other expenses. One of our townsmen was in Kansas City the same daj', and the class of melons we shipped was retailing for 60 cents a piece. That year's business left us to pay, at the least calculation, $200, but the figures I haven't at hand. The trouble in this case seemed almost wholly with commission men. Our country is new and we haven't had much experience yet, but all that we have shipped out we have shipped at a loss. I am 63 Bulletin of the University of Texas sending you a letter wliicli will explain itself in regard to another load of watermelons." "I sold some tomatoes, thirty crat«s, by express. I received $8.40, and some I did not get anything for. I had in one car 590 pounds of cabbage. I did not get but $5.80 from thirty bushels of potatoes, yet we will plant four acres to tomatoes again, hoping prices will be better." "I sold ten tons of watermelons to local dealers; eight cars of sweet potatoes to local dealers, sacked and put in car: Two cars at 70 cents per bushel; one car at 60 cents per bushel; four cars at 55 cents per bushel; one car at 50 cents per bushel. Our potatoes went to Greenville, Farmersville, McKinney, and Bardwell, and sold for $1.50 per bushel." "For instance, I sell a barrel of spinach or lettuce here. I get here at cash deal, $1.50, or somewhere in the neighborhood of it; when that reaches St. Louis it sells for about $5.00; commission on that is from 50 to 75 cents; express, $2.50; icing and barrel, 50 cents, which in all is $4.50 or $5.00. Consumer at that end of line pays at the rate of 5 cents jjer pound, and sometimes 10 cents, which will retail at $8.00 and more a barrel (there is always from 150 to 200 pounds to a barrel). 1 have seen lettuce sell at 15 cents a head that won't make a pound to a head. The farmer who raised it only got about 1 cent a head, and lots of times i cent; a man in a city who eats such vegetables must pay for some barrels at the rate of $10 to $15 a barrel, which makes too much profit for the middlemen who work at the business. When we ship through an asso- ciation we get $1.50 to $2.25 per barrel, and it sells at the .same price as before, and the consumer gets it at a little less because they go direct to market men. What we need is a standard marketing plan through the government, the same as the postoffiee." "Two years ago our potatoes were bringing 35 to 50 cents here in May, and were sold in retail stores in Joliet and Blue Island at $3.00 per bushel. As freight is about 30 cents per bushel, the farmer of Caney evidently did not get a fair price. . . . Our potatoes are sacked, the average sack weighing 115 pounds, with an average of 220 sacks to the car. I shipped this year eight cars through the association. Their charge is 7 cents per hundredweight, er an average of $18.18 per car, plus $10 brokerage, bring- ing commissions to $28.18 per car. My point here is the unreasonable payment of two commissions by the farmer, though I averaged 42 cents per bushel. My net profit on thirty acres was $23.31. I know of several men who either had to pay freight charges or received two or three dollars net for a car of spuds. These potatoes were shipped in June and July, through commission men. 1 believe a fair price to growers of early potatoes for Northern markets should be $1.00 per bushel F. O. B., at least, judging from five years' experience." During the eoiiiiiig year we ^\va\\ make a study of thu causes of Cooperation in Agriculture, Marketing, and Ihiral Credit 63 failure and success of cooperation in Texa?^. Many truckers'' asso- ciations have either failed oi" are inactive. Dozens of others in different parts of the state are makino; nionev for their members. The success of these warrant us in advocatino- cooperative buying and selling. The following cases ai'e cited merely to show what may cause the failure of local associations, what type of problems may- be solved and how success may be attained. For the prin- ciples of cooperation, the reader is referred again to Chapter T. "We had a very good association here in 1912, and I acted as sales manager. Most of our vegetables were sold tlirougli commission men, and although I still believe most of those people are honest, I must say I was sometimes very much disappointed with the returns received. We handled twelve cars of cucumbers, ten cars of Irish potatoes, about twenty cars of yellow yams, besides various other small truck, all of which was sold to commission men. All of our stuff was put out as attractive as it was possible to make it, and we made it a point to send out excellent grades." "There were sixty-four solid car lots of tomatoes shipped from here this season, 1913, and fully one-half as much express, bought and shipped by merchants, including all kinds of vegetables. There were some that had extra early and heavy yields per acre that did very well. We are not satisfied with the present prices, owing to the heavy expense of pro- ducing. The price for the first few crates is very satisfactory, but before we can get anything near half of our crop off, the price runs down so low that, as a general rule, there is very little money in picking. The people are doing much better since tliey have organized and hire their own sales- man. Crates cost from 3 to 4 cents less than before. Fertilizer, ^8.00 to $10 less per ton; seed and everything else in proportion. We pay our salesman 3 cents per crate for selling in car lots, he furnishing all his own help." The difference between wliat the producer gets and what the consumer pays can only be cut down by eliminating the people who get that difference. This can be done only by the process of cooperation on the ])art of producers and consumers. It is not sufficient that growers organize and then sell as an association to the same middleman to whom the individual producer might have sold. This merely means a small increase in price for the pro- ducer, but the middleman will still control the situation entirely by maintaining the present high price to the consumer and thereby keeping the demand down to a minimum. Cooperation must do for perishable j)roducts on a larger scale what the parcels post has done for butter and eggs or could do for fruit and vege- 64 Bulh'iin of ike University of Texas tables in sjiiaJl amounts. Cooperation will succeed onl\- when it proves itself more efficient than the middleman. Under present conditions there is a large and undeveloped mar- ket for perishable produce within the borders of our own state. Again there is the possibility of the home canner and the saving of surplus stock. The following are given as examples of what may he done in this way: ''I market plums, peaclies, black and dewberries, tomatoes, melons, and a number of good hogs. My stuff is always well prepared for market and generally commands top prices. I always sell and buy as an individual. I have sold quite a lot of fruit and truck through a commission merchant in San Antonio very satisfactorily. I've never shipped anything when 1 could find a good market at home for my stuff. Prices with me are gen- erally satisfactory." "My best results were selling to grocery merchants in places some dis- tance from wholesale houses. I wrote to express agents at these places and got names of retail grocery merchants, and quoted them and sold direct. I was enabled to sell cabbage, for instance, at li to 2 cents per pound, with no loss, as they accepted my weights; whereas, my neighbor shipped in carloads to wholesale houses and got from i to f cent per pound, after loss was taken out. He loaded in bulk." "We raise vegetables and strawberries in quantities large enough for shipment. We packed in one-third bushel boxes and crates, or bushel boxes. Some commission men dealt fair with us; others took every advan- tage possible. I often shipped from forty to fifty crates of tomatoes daily at good prices, from 75 cents to $1.00 for one-third of a bushel. In Feb- ruary and March our strawberries brought $7.00 a crate. For some years we liave shipped very little in our own name. W^e sell to a merchant in Rockport. When we have a fair idea how much we will have for the daj^ we call him up and ask him what he is paying then, and when he wishes the stufl' shipped. We find this fur more satisfactory; then we run no risk and know just what we will get before we let it go out of tlie packing iiouse. . . .'■ "A certain farmer liad four acres of tomatues. From these four acres lie canned several thousand cans. Of the four products — figs, tomatoes, beans, and peas — he canned with a home canning outfit about thirty thou- sand cans. In this way he was able to fix his own price for his product. These canned goods were carried to the Beaumont fair for exhibit pur- poses. The farmer sold all of these products, and could have sold more. The goods were sold to two retail dealers in Beaumont and to some private parties from different points. It was stated that lie liad tried to sell in bulk to a wholesaler. 'I'lie wholesaler would not talk about the farmer's jiricc, neither would the fainu'r i-onsider the i)rici' ollVr<'d by the Cooperation in AfiriruUure, Marketing, and IhiraJ Credit 60 wholesaler, as it was nbout 55 cents less per case of two dozen two-pouu'l cans; but when he got in touch with a retailer he sold at the price whicli he asked of the wholesaler." "Last year I i^old canned fruits and vegetables to the amount of $50. I advertised in a Dallas daily, and most of my customers were from that city. I received many orders without remittance for same. To these people I would send personal reference and state I could not ship goods without check for same. But I never received an order from anyone I refused to send goods to. However, many would send cash with order. 1 still have these customers this year. I find I receive very little money for my produce, as it costs so much to deliver. Express on small packages eats up the profit. But I find it equally as cheap as to deliver by parcels post. ... I have 200 bushels of sweet potatoes. They are rotting fast, but cannot find a market for them. My highest offer is 40 cents per bushel, sacked F. O. B. at Mt. Pleasant. Sacks cost 9 cents each, and to haul eight miles over rough roads, you see would leave me scarcely anything for my potatoes. For this reason I am feeding them to my hogs. I have written several letters to Dallas houses, offering my potatoes at 80 cents per bushel. They say that the transportation will make the potatoes too costly.'" Cotton As stated on a ijrevious page, three out of every five fannei's furnish information on the marketing of cotton before they pass to another subject. By far the greater majority are much dis- satisfied with present conditions. But there are those wlio from one reason or another have found the market either satisfactory or fairly so. We gives a few examples : "I raised and marketed at the local market twenty l)ales of cotton at an average of 13 cents per pound. I marketed my cotton very early. Later in the season the ])rice was much lower." "I have marketed this year forty bales of cotton, which I received a good price for. I store away in a warehouse, watch the market reports and turn loose wlien a fair price prevails." "We produced through labor on our farm over fifteen bales of cotton. and in regard to prices we were very well satisfied, considering the season. We got a five months' drouth and cotton did not open till late, and pick- ing hard, and that run prices .lown, and we got late rain tliat caused mildew. Prices were better here this year than IxTttoforo. Tlie first prices here on cotton were from 12J to 14i cents." "Have been selling my cotton locally, but shipped last bale to ■ & Co., Galveston. A neighbor has been making $3.00 to $4.00 net profit per bale by shipping liis cotton to Galveston." 66 Bulletin of the University of Texas "The price was satisfactory for us. As we plant early, our products always are the first on the market; our cotton yielded an average price at 12i cents per pound. We need but 1400 pounds of seed cotton to make a bale of 550 pounds. The bale will bring $68.75; the seed of one bale averages to about $7.75, so the bale with seed and wool together yields $76.50; the expense for picking is about $11, so it leaves us $68.50 per bale." '•'I market cotton and cotton seed from 100 to 200 bales and from 50 to 100 tons of seed properly prepared for market. I grow it on my farm, sell at home when prices are satisfactory, consign when prices are below 10 cents per pound. When I consign I ship to the commission merchant, who sells when told to do so. I get market price, don't expect anything more; always know what the price is when I order sold, hence have no complaint to make. Transportation is satisfactory. Sometimes delays arise, but never unreasonable. I look after my shipments and require my commission mcreliant tal and interest, but thirty days' notice must be given, and the Board of Directors may waive such notice. Tn such cases, a release fee of twenty-five cents is collected on each sliare. In case tlie liorrower fails to pay monthly dues for ninety days the Association may order the sale of the property. Proceeds are to be used in the payment of taxes and assessments: to defray expenses of sellins:: to pav amount due the Association as secured In' the trust deed ; and if any remains it is given to the ineiuber. Xinetv davs' written notice must bo given to the Directors before the shareholder can withdraw bis funds. At time of withdrawal the inember receives Cooperation in Agriculture, Marketing, and Rural Credit 91 the monthly dues which he has paid in, minus charges against him. In case of death, the heirs, or regular representatives of the shareJiolder, may continue the payments on unredeemed shares and with the consent of the Directors, they may have the de- ceased's unredeemed shares cancelled. No amendment to the by- laws may be passed unless submitted in writing one month previ- ous to action and then only by a two-thirds vote of all the Di- rectors. We have gone into the above details concerning this one at- tempt at securing better credit for the southern farmer not be- cause of the ])roven success of the venture, but because the plan and system of organization and control cover in such a definite wiay so many of the problems which must be met in most any com- munity when the actual work of organization is attempted. The fact should not be lost sight of that loose control in bank- ing anrl moiietai-y affairs in the past has cost different sections of the cou2itry years of triI)ulation. It is well therefore that in the future all details should be carefully thought out. 7/0?^ to Form a Codjieratirc Credit l/nioii Under the Texas Law Get together ten or more men of the community who have the welfare of the community at heart; men who have among other characteristics, thrift, lionesty, and the ability to read and w-rite. It is not necessavs that they have any money. Elect a chairman, secretary, and treasurer; discuss the importance of knowing more about the problems of the community; plan for a series of meet- ings; get acquainted: learn to work together; don't talk about be- coming your own banker. Talk about cooperating with each other and becoming better farmers. Ask the Division of Public Welfare of the University of Texas to send you literature describing the University Home and School League, and the various kinds of farmers' clubs that are doing effective work in other places. Ap- point a time for a meeting to discuss the provisions of the Kural Credit Union Law as it stands in Texas at the present time. Provide for the dues for your present association. Have the treasurer hold such dues as a fund belonging to the society. Let such mouthlv dues be an encourasrement to savint;-. Study that 9t Bulletin of the University of Texas part of the literature sent you by the University which tells of the places where farmers are organized to help each other save. If your community is one in which every cent must count, invest your fund which is accumulated from such dues, when such funds are large enougli, in some way so that they will continue to grow. For example, in a calf or pig, and permit the members to take turn about taking care of same. This may seem like too small a matter to begin with, but you must begin somewhere or never have anything saved, and it is better to begin in a small way than to come down to the close of life without anything. Begin on as large a scale as possible, but if you have nothing, begin any- way. In the mean time, the Commissioner of Insurance aijd Banking at Austin will furnish you with a copy of the law which permits the incorporation of the Kural Credit Unions. Have a meeting to discuss the various features of the law. Don't be in ^a hurry to ask for a charter from the Commissioner of Banking. The law won't provide any money for you. It merely explains how to conduct business. The law provides that the credit union shall have shares of $25 each. It may be before the credit union is ready for its charter that the fund of the association built up from the dues, or from the investment that has been made of them, will be a sufficient amount to pay the first installment of such shares. It may be even possible that since at least ten members are required, that your common fund belonging to the society may amount to $250, or enough to buy one share for each of the ten members. This takes for granted that you have found a treas- urer to whom you are wdlling to intrust, without bond, at least $250 either in money or property. If out of ten men you cannot find such a treasurer, there is very little use to talk about a rural credit union, even if organized under the strongest law possible, for, as the famous financier said, "Character is the basis of credit." It might be added here that there are among those who have studied the rural credit institutions of Europe, where they have made such a marvelous success, those who would like to separate the financial side from the moral side. It would seem decidedly unwise to do so, as badly as the farmer may need cheaper money, there are other things that must not be lost sight of. Among theee are the personal characteristics of industry, intelligence, stability, and honesty. Upon these things as a basis the farmers Cooperation in Agnculture, Marketing, and Rv/ral Credit 93 of Europe have established their reputation for ability to provide themselves with funds in time of need. On this point note the following taken from an address by the Hon. Luigi Luzzatti, a leader of the Italian people : "The Eural Bank, for instance, which arose without capital, rich only in its invisible treasure of mutual trust and human solidarity, is the fruit of the modest, unrecognized virtues of the country folk, bound together by bonds of mutual affection, who assist and watch over each other with the subtle vigilance of neighbors. And, lo and behold, these humble folk, void of eco- nomic lore, have accomplished a miracle, — due to the fact that a moral and not a material impulse guided their work — the miracle of creating capital out of nothing. They have succeeded in coin- ing their simple good faith and their honor, and in transforming into concrete credit, — so rebellious to all idealistic considera- tions, — promises of payment guaranteed only by their obscure immortal souls. And now in Germany and in all the other coun- tries which have followed in its footsteps, the business transacted by these banks, founded without capital, and which have labori- ously built up their own reserve funds, amounts to 10 billions each year, and they represent the billionaires of agrarian poverty." Some one may say that this is all right in Europe, but that it would not do in America. If this is true, then the American needs something else more than he needs money. Again it is said that cheap money for the American farmer is a dream which may be realized some time in the distant future. On this point we need only say that there are farmers who are getting cheap money, and there is no copyright on their methods which pro- hibits the Texas farmers from applying them right now. Neces- sity has driven some people to cooperation and necessity will drive other people to it. Wliat we are asking for, is leadership with a vision clear enough and enthusiasm strong enough to bring about the benefits that have been secured by others without wait- ing until necessity forces us to do something. In the literature which you may secure from the Division of Public Welfare' your association can study out all of these questions. Take up the Texas Eural Credit law and compare it to other laws. Study its provisions. Among them you will find that it takes at least ten people to form a Union ; that shares sell for $25, but may be paid 94 Bulletin of the University of Texas for in installments, and that tlie smallest savings may be applied toward this end. The law provides that members borrowing from the Association shall not be charged more than 6 per cent interest. Study its provisions of one man one vote, and note how you are studying an association of men rather than dollars. There is no limit to the amount of capital or the number of shares which j'ou may own, except as you limit your own savings. Discuss in open meeting the provision which is laid down that loans shall be made only for productive purposes, or urgent needs. Discuss in open meeting past experiences as to length of time for which loans have been granted. You will see that the law provides that no member shall borrow an amount in excess of $300. Ex- amine the question as to whether you think this law would limit your action. You will find out when you compare it with other state laws or foreign laws, that it is not perfect. But it cer- tainly is wide enough and broad enough and good enough to allow a great beginning, and it can be changed at the next ses- sion of the Legislature. Above all things, remember that it ought to be far from your purpose to form any sort of organiza- tion for the express purpose of eliminating any landlord or mer- chant or banker. You are to be concerned with business and business principles and not personalities, and if it is not clear to you that there need be no conflict between you and the legitimate business that is done by the local merchants and bankers, or if it is not clear to the merchants and bankers, then there is lack of understanding of the situation, or the community at large is be- ing run at the present time hy those who have an obscure vision and short-sighted business policies and abilities. It is to be hoped that what has l^een said above will make clear the fact that in some communities it will be best to have a tem- porary organization or societv before the real chartered credit union is launched. Tn other places it may be possible to start such unions without mucb preliminary work. In either case it takes leadership before the work will start at all and up to date, June, 1914, the law has not been used. The preliminary work as suggested above will clear up many perplexities. To begin is the most difficult thing. In otlier places it has been surprising how people with surplus savings bave become interested and invested in an institution when a group of farmers got together, pledged Cooperation in Aijvuallure^ Marketing , and lUual Credit 5J5 their mutual aid and lesponsibility and vowed tliat they would go deeper into the si^ludy oi' their problems than they had before. However, not much can be reasonably expected from outside sources until the members of the association have denionstrated their earnestness of purpose and business ability. After the mem- bers concerned have proved this to themselves, then it is time to transfer from the preliminary organization into a regular char- tered and incorporated credit union, which can safely make loans as well as receive savings. BIBLIOGRAPHY General American Commission KeiDorts on Agricultural Cooperation and Eural Credits in Europe : Evidence, Senate Doc. 314, 63 Cong., 1st Session. Observations, Senate Doc. 261, 63 Cong., 2nd Session. Minority Eeport, Senate Doc. 261, Part II, 63 Cong., 2nd Ses- sion. Bibliography, Senate Doc. 214, Part II, 63 Cong., 2nd Session. Cooperation in Agriculture. Henry W. Wolff. P. S. King & Son. London. Cooperation at Home and Abroad. C. E. Fay. P. S. King & ^on. London. Produce Markets and Marketing. Wra. T. Seibels, Chicago. jCooperation among Farmers. John Lee Coulter. Sturgis & Walton Co. Cooperation in New England. James Ford. Survey Associ- ates, Publishers for the Eussell Sage Foundation. Few York. Cooperation in Agriculture. G. Harold Powell. The Mac- millan Co. Marketing and Farm Credits. Eeport of the First Natioiial Conference on Marketing and Farm Credits, at Chicago, 1913. Cooperation Magazine, Minneapolis, Minn. Proceedings of the First Meeting of the Southern States Asso- ciation of Markets. Texas Department of Agriculture, Bulletin No. 36. Henry Exall Farm Book. Texas Industrial Congress, Dallas, Texas. Yearbooks of the ITnited States Department of Agriculture, Washington, D. C. Marketing Yearbook of Ignited States Dejiartment of Agriculture, 1909, p. 161. Yearbook, 1911, p. 16.5. "Eeduction of Waste in Marketing." Yearbook of United States Department of Agriculture, 1912, p. 285. Couperalioii in Agriculture, Marketing^ and Rural Credit 97 Annals of American Academy of Political and Social Science, July, 1913. A Terminal Market System. Mrs. Elmer Blade, N. Y. (Dis- cusses City Markets). Third Annual Meeting of Texas Farmers' Institute, 1913, p. 73. Texas Farmers' Congress, 1911, Texas Department of Agricul- ture, p. 40. Texas Farmers' Congress, 1913, Texas Department of Agricul- ture, p. 56. • Country Gentleman. Selling Services Department in practi- cally all numbers of 1914. Country Gentleman. Oct. 4, 1913; Nov. 8, 1913; :\rar. 28, 1914. "Municipal Market." Harper's Weekly. Nov. 8, 1913. "Waste in Shipping of Food." Outlook. Feb. 1, 1913. "The Waste in Eetailing." MarJceting. — Schemes for Bettering Farm and Eanch. Xov. 2, 1912; Feb. 14, 1914; Mar. 28, 1914. "Sumner's Plan." Farm and Eanch. May 24, 1913; June 28, 1913. "Harry Tracy's Plan." Farm and Eanch. Aug. 16, 1913. E. W. Kirkpatrick. Mark-eting. — Proper Packing and Preparation Country Gentleman. Feb. 7, 1914. "Boxes and Crates for Vegetables." Country Gentleman. April 12, 1913; Oct. 4, 1913; April IS', 1914. "Parcels Post." MARKETING OF SPECIAL CROPS {Cooperative and Otherwise) Ajoples. Hood Eiver. Farmers' Bulletin No. 309. Cattle Breeders. Wisconsin. Bulletin No. 184. Cotton. United States. Yearbook U. S. Department of Agri- culture, 1912. Cotton. United States. Yearbook U. S. Department of Agri- culture, 1911. 9S Bulletin of the University of Texas Cotton. United States. Kej^iort of Southern Association of Markets. Cotton. United States. Senate Document jSTo. 113, 63rd Con- gress, 1st Session. Cotton. United States-. Yearbook U. S. Department of Agri- culture. "Marketing and Handling." Cotton. United States. Bulletin U. S. Department of Agri- culture No. 3.5. "Cotton Studies in Oklahoma." Eggs. Minnesota. Farmers' Bulletin No. 445. Eggs. Farmers' Bulletin Xo. 405. Eggs. Farmers' Bulletin No. 517. Eggs. Farmers' Bulletin No. 112. Eggs. Yearbook Department of Agriculture, 1912, p. 345. Eggs. Yearbook Department of Agriculture, 1911, p. 467. Eggs. General. Yearbook of U. S. Department of Agricul- ture. 1910, p. 461. ^ Fruit. General. Yearbook of U. S. Department of Agricul- ture, 1909, p. 365. Fruit. General. Yearbook of U. S. Department of Agricul- ture. 1910, p. 437. Fruit. General. U. S. Department of Agriculture Bulletin No. 63. (Orange Shipping.) Purchase of Farm Supplies. Oregon. Oregon Agricultural College Bulletin No. 71. Poultry. General. Bulletin of U. S. Department of Agricul- ture No. 17. Truck and Vegetables. General. Yearbook of U. S. Depart- ment of Agriculture, 1912. Tegetables. General. Bulletin No. 144. Illinois Experiment Station. "Tomatoes for the Early Market." COOPEKATIOX AXD FARMERS' ORGAXIZATIONS Annals of American Academy of Political and Social Science. July, 1913. Oregon Agricultural College Bulletin No. 71. Senate Document 992. Notes by Maurice F. Egan, on Den- mark. "Cooperation.'" A magazine published in ^Minneapolis. Nortli Anioi-ir-an Peview. June, 1913. (Jouperaiion in Agriculture, Marketing, and Rural Credit 99 World's Work. Sept., 1912. (Wisconsin.) Metropolitan Magazine. Jan., 1914. (Denmark.) The Mission, History and Times of the Farmers' Union. Chas. S. Barrett. Senate Dociiincut 1071, 63rd Congress, 3rd Session. "The American Commission and Its Work."' Quarterly Journal of Economics. May, 1913. "Eenters' Union." American Society of Equity. "The Third Power." (J. A. Everitt, Indianapolis, Ind.) See Equity ISTews, Published at Madison, Wis. Farmers' Fireside and Bulletin. (Farmers' Educational and Cooperative Union.) Published at Arlington, Texas. RURAL CREDITS Boohs Yearbook of the United States Department of Agriculture, 1912, p. 25. (Investigation of present credit conditions.) Yearbook of the United States Department of Agriculture, 1913, p. 257. Principles of Eural Economics. T. N. Carver, p. 275. Marketing and Farm Credits. Cooperation Magazine, Minne- apolis, Minn. People's Banks. H. W. Wolff. P. S. King & Son, London. Reports and Pamphlets Banking Laws of Texas, Digest, 1913. Has the text of the Texas Rural Credit Law. Send to the Commissioner of Insur- ance and Banking. Credit Conditions in a Cotton State. L. H. Haney. Pub- lished in American Economic Eeview, March, 1914. Also as a separate pamphlet. Eeport of the Agricultural Credit Commission of the Province of Saskatchewan, Canada, 1913. Senate Document 251, Part I, GSrd Congress, 2nd Session. ^'jSTeeds of the Ainerican Farmer." 100 Bulletin of the University of 'Texas Senate Document 260, GSrd Congress, 3nd Session. (Fred. J. Haskin.) Agricultural Credit and Cooperation in Germany. Eeport to the British Board of Agriculture and Fisheries, by J. E. Cahill, Published in the United States as Senate Document 17, 63rd Congress, 1st Session. Senate Document 380, Parts 1 and 2; 63rd Congress, 2nd Ses- sion. Keport on European system with suggested legislation for United States. Senate Document 865, 62nd Congress, 2nd Session; European systems modified to meet United States' conditions. Senate Document 141, 63rd Congress, 1st Session. Davis plan of Eura-1 Banks. Hearings before the Sub-committee of the Committee on Bank- ing and Currency; House of Eepresentatives, Parts 1-23 — ready. Senate Document 1006; C. H. Davis; Eural Credit Plan for Virginia. Bulletin 289. University of Texas. Senate Document 158, 63rd Congress, 1st Session. Bill of Senator Fletcher on jSTational Eural Banking System. Senate Document 260, 63rd Congress, 1st Session; David Lubin's address on Eaiffeisen. Senate Document 380, Part TIT, 63rd Congress, 2nd Session; Personal or Short-Time Credit. A Cooperative Plan to Provide 5% Money for Farmers. Jobn Spruut Hill, Durham, ISTorth Carolina. Magazine Articles Farm and Eanch, April 19, 1913. "Texas Eural Credit Law.'' Progressive Farmer, Dallas, Texas, Feb. 28, 1911. "Symposium on Eural Credits."