Co-operative Marketing
Fir.sl attempts were inside «luring* the days
off the Farmers Alliance. Other plsins also
were att«>mptc4l. but the e«»tton eo-ops alone
have worked out siice«»ssfully.
THE rise of the Farmers Alliance
was due primarily to the des¬
perate financial plight of the
farmer. Agriculture had not been
profitable. A large majority of
farms were under mortgage, on
which the interest rate was high
and the carrying charges large;
while on the other hand the price
of all farm products was low, cul¬
minating in the "Cleveland panic”
of 1893 when cotton dropped be¬
low five cents.
The Alliance sought relief not
only for the political ills from
which agriculture suffered, but
from economic ills as well. It cre¬
ated a Stale agency through which
agricultural implements, fertilizers
and essential supplies might be
purchased based upon a price of
manufacture direct to farmer. Pur¬
chases thus made resulted in con¬
siderable saving, but there were
only a few who could avail them¬
selves of these facilities. The
agency had little capital and was
unable to extend credit to its cus¬
tomers. and credit was the prime
essential in the life of the farmer.
Cooperative Stores
Under the auspicies of the Al¬
liance, cooperative stores were
established in many counties
where the Alliance was strong and
its membership numerous. Such
stores had to contend not only with
the same conditions which beset
the State agency, but other handi¬
caps. including lack of operating
capital, want of business experi¬
ence on the part of the manage¬
ment, disappoint on the part of
those who expected the venture
to prove a panacea, dissension in
the ranks of those delegated by the
local Alliance to have charge of
the venture. Then, too. these
stores had to meet fierce competi¬
tion and price cutting often re¬
sorted to by better established
merchants in an effort to drive the
cooperatives out of business. These
conditions all combined to spell
disaster to the cooperative stores,
the last of which disappeared
about 1893 — swallowed up by the
panic.
Thereafter the sole prop and
THE STATE. August 4. 1945
By It. C. LAWRENCE
stay of the average farmer was the
"crop lien." The "time merchant"
was a power in the land; economi¬
cally he could kill or make alive.
To him went the farmer in the
Spring and executed a mortgage
on the crop to be grown that year.
With the supplies furnished by the
merchant, the crop was made, but
when it was harvested in the Fall
and the merchant paid off, there
was usually nothing left for the
farmer himself. The system was
essentially one of credit, as it was
only here and there that a farmer
could be found who could pay cash
for his supplies.
High Prices
The crop lien was a poor form
of security at best, and to secure
supplies upon the faith thereof, the
farmer was charged anywhere
from 20 to 50 per cent above cur¬
rent cash prices. The sky was the
limit, and many times the time
merchant charged "all the traffic
would bear." It might be thought
that such high prices would spell
riches for the merchant, but such
was not the case. Twenty-five
years ago the "time merchant" was
in every town; the power behind
the local political throne; in control
of the local bank; a forceful figure
in the life of the community. But
today he has largely disappeared
from the scene, because the busi¬
ness in which he was engaged was
essentially speculative in its na¬
ture. The merchants themselves
were all too often in the power of
their creditors— the bankers, ferti¬
lizer manufacturers, wholesalers.
Moreover, one bad year, a crop
failure or a sharply declining mar¬
ket. meant the loss of tens of thou¬
sands of dollars. In 1920 when
cotton dropped from forty to ten
cents, many of these merchant
princes went into bankruptcy, re¬
ceiverships. or into the hands of
a "Committee of Creditors." In
most cases these Committees
served but to prolong the agony,
and in the end the business closed
up.
When agricultural products de¬
clined so sharply in price as an
after effect of the World War.
gatherings of farmers were held
everywhere, always resulting in
resolutions placing blame for exist¬
ing conditions upon someone from
the President or the Federal Re¬
serve Board down to the German
government. These meetings al¬
ways closed with the adoption of
resolutions for acreage reduction.
This was the standard formula.
The possibilities of cooperative
marketing were again brought for¬
ward. Such associations had been
numerous and successful in the
West, why not in the South? Co¬
operatives were established for the
orderly marketing of cotton, to¬
bacco and other staple crops.
Under the leadership of Aaron
Shapiro the Tobacco cooperative
was launched. At first it was
hailed with enthusiasm by the
growers, thousands of whom signed
its ironclad contract — a contract
upheld and sustained by our court
in 185 N. C. 265 and other cases.
But in practical effect the co¬
operative resulted in just the re¬
verse of what was expected from
it. There is little question but
that its existence stiffened the
market and raised prices. The non¬
member sold his crop and reaped
the benefit of the increased price,
but the member had to wait for his
money until the association decided
to sell a part of its pooled stock.
Often the grower had to wait long
for his money, and when it came
it was in such small driblets that
it failed to serve its purpose. The
result was contract evading on a
large scale, much dissatisfaction
from the growers, mistakes of
policy and judgment on the part
of the management, all combining
to result in a Federal receivership
which closed the career of this co¬
operative in 1925.
The Peanut Co-ops
The Peanut cooperative met a
similar fate, mistakes and errors
( Continued on page 21 )
9
