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BY HUGH J. HUGHES
YO-OPERATION has been a house or a poor business manager, or of under cause one or more of these four basic
hold word in the Middle West for taking too much or too little—things laws of co-operative self-preservation
so many years that when one sug that may happen to any organization, no have been disregarded. gests that there is something new de- matter how well planned it may be. In addition, the association that hopes veloping along that line he is in danger Improper organization can somehow be to succeed must put aside any philanof being passed by as an idle tale-teller, tolerated in the local association, where thropic roseate dreams. Unless the yet the fact is that we are on the verge hard common sense comes in and saves ledger can be made to show a favorable of a great forward movement in co-opera- a situation that a little careful planning balance; unless there is fair assurance tion that seems destined to do for the might have avoided, but improper or that it will do so, stay out of the trouble local co-operative groups what these ganization is fatal to a large associa that lies just ahead-unless, in other groups, in the days of our fathers, did tion, where the actual management is words, working with each other pays for the isolated farmers in the com- out of the hands of the individual mem better than working alone-work alone. munity. bers.
The time may come when you can sucTo put it in a sentence: The next big And under this head fall the mis- cessfully co-operate, but that time has advance in co-operation is the federation takes and blunders and misjudgments not yet arrived. of the local co-operative groups and the that have made the whole question of It is a social blunder amounting to a creation by such federative action of "What is a co-operative concern?" such crime to start a co-operative concern central selling and buying agencies. . a hard one to answer.
where the business does not warrant it, There are those who will tell you that These blunders include proxy voting or in such fashion that it fails for lack farmer co-operation is perfectly all the holding of an indefinite number of of support. right, provided it sticks to the local shares, the payment of all dividends And right at this point enters a new neighborhood, but that it cannot go far. upon the basis of the shares held, and phase of co-operation, in so far as the ther without certainly running into the cash buying and selling of produce. Middle West is concerned. In times trouble and disaster. And in support of Nor am I forgetting the worst blunder past we have been entirely too anxious their contention they mention large co- of all-that of starting a co-operative to get “co-operators"—falsely so called. operative enterprises that have failed, association without sufficient reason for We have taken it for granted that the and because these have failed they ar- its existence or with too little capital. man who bought a share or two of stock gue, perhaps with some seeming of These are some of the known dangers in the creamery or cheese factory or logic, that all other attempts of the to avoid, though there are others, such elevator would give the association his farmer to carry his business beyond his as the diversion of paid-in capital to or- patronage, forgetting the long and bitlocal neighborhood are bound to fail. ganization expense, that cannot be for ter experience of neighborhood after
So, they argue, it is the business of one little moment forgotten. And, neighborhood where men dreamed and the farmer to produce his crops and live knowing where trouble lies ahead, it planned and invested their money in costock and dairy products, and, if he ought to be fairly easy to lay a course operative ventures, only to see the memwants to do so, he may organize breed for the future.
bers of the association listen to the ing circles and co-operative shipping Over against these things that tear voice of the tempter and sell their prodassociations and creameries and eleva- down the co-operative organization sup- uce to competitive concerns. tors, or any other purely local body of pose we put the positive factors that Our Danish friends learned a long farmers and there he should stop! time and experience show should be a while ago the lesson which we are just
If that were true—if the field of co- part of the well-knit, socially correct, taking to heart: That one's patronage operation were so limited—1, for one, and businesslike co-operative associa is of far more account than one's share should feel pretty discouraged about the tion. The things that build up a solid membership. future of the farmer. But I am not dis- co-operative business may also be And the new thing we are introducing couraged as to the progress the farmer grouped under two heads. They are: into Middle Western co-operation the is going to make in the future, because (A) Correct organization.
thing that is going to make it practiI do not believe that his horizon is fixed (B) Good management.
cally invulnerable against the attacks or that his hands are tied to the things Correct organization assumes, first of of competition-is the "produce conthat he has done, and only to these. all, that there is a real business need tract."
The co-operative failures of the past, for the co-operative concern. If not, it According to this plan, the association and there are many of them, are not at is a waste of time to start one. And it is not merely a group of men who have all confined to the more ambitious at likewise is a waste of time to start built an elevator or a creamery or a tempts of the farmer to follow his prod- an organization which is not heartily potato warehouse with their joint capiuce to market. The local co-operative backed by those taking stock in it. The tal; it is also a group of men who have association has gone to pieces times essential principles involved in proper pooled their selling by pledging it, unwithout number. One has no right to co-operative organization are:
der a written and bonded guaranty, to assume that co-operation will succeed or (a) One man, one vote.
the association. fail according as to whether it is or is (b) A limited number of shares to the This assures the association, provided not local. Some other test must be ap- stockholder.
it has been organized in response to a plied than that of size, or than that of (C) A reasonable rate of interest on real business need, the necessary volume distance from the farmyard gate. shares held.
of business with which to maintain itFailures have been due principally, if (d) The distribution of all surplus self, in spite of outside competition. not entirely, to two groups of causes: earnings, after the running charges of The Minnesota Potato Exchange plan, (A) Improper organization.
the business have been met, and after for instance, provides that the grower (B) Bad management.
provision has been made for the safe. shall give the local association a conThe latter cause accounts for the ma- guarding of the business, according to tract to deliver a stated acreage of potajority of failures of local co-operative the patronage given the association. toes, and performance of this contract enterprises, and the former for the more Cast over in your mind the co-opera- is guaranteed by a $100 note given to ambitious attempts at organization. tive ventures that have failed, and you the association for that purpose. If the
Bad management includes such mat. will be surprised to find how many of grower deserts his association and sells ters as the selection of poor directors, them have gone down to disaster be to its competitors, the margin of profit