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U N IT E D S T A T E S D E P A R T M E N T O F L A B O R Frances Perkins, Secretary BUREAU OF LABOR STATISTICS Isador Lubin, Commissioner (on leave) A. F. Hinrichs, Acting Commissioner + Activities o f Consumers’ Cooperatives in 1942 B ulletin 7s[o. 757 [Reprinted from the M o n th ly Labor R e v iew , O ctober 1943 w ith additional data] UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON : 1943 For sale by the Superintendent o f Documents, U . S. Governm ent Printing Office Washington, D . C. - Price 5 cents LE TT E R OF T R A N SM ITTA L U nited States D epartment of L abor, B ureau of L abor Statistics, Washington , D . C .} November 1, 1943. The Secretary of L abor : I have the honor to transmit herewith a report on the activities of consumers* cooperatives in 1942, prepared by Florence E. Parker of this Bureau. A. F. H inrichs, Acting Com m issioner . H on . F rances P erkins , Secretary qf Labor. C O NTEN TS Page Summary________________________ Local associations in 1942______ Cooperative wholesales in 1942: Membership of wholesales . Services and facilities______ Operations of wholesales___ Employment and wages___ ii 1 2 10 B ulletin 7^o. 757 o f the U nited States Bureau o f Labor Statistics Reprinted from the M onthly L abor R eview , October 1943, with additional data. Activities of Consumers’ Cooperatives in 1942 Summary IN SPITE of the beginning of wartime restriction of commodities and the regulation of sales, the year 1942 was marked by substantial in creases in cooperative business and earnings. As in 1941, many associations reported that 1942 was the most successful year in their history. Cooperative wholesaling was particularly successful and for most of the wholesales the 1942 sales represented an all-time high; for the whole group, business increased 23.3 percent and earnings 35.6 percent. Production more than doubled. The total cooperative wholesale business (including services as well as wholesale distribu tion) amounted to over $125,000,000. T a b l e 1.— Estim ated M em bership and Business o f Consumers* Cooperatives, 1942 Estimated number of associations Type of association Estimated membership Estimated business Local associations Retail distributive: Stores and buying clubs................ ............................. Petroleum associations....... ........................................ Other distributive....................................................... Retail distributive departments of marketing asso ciations..................................................................... Service: Associations providing rooms and/or meals................ Housing...................................................................... Medical care— On contract........................................................... Own facilities........................................................ Burial: Own facilities........................................................ Caskets.................................................................. Cold storage................................................................. Water........................................................................... Printing and publishing............................................. Recreation.................................................................. Miscellaneous............................................................... Electricity..................................................... ..................... Telephone........................................................................... Credit unions.................................................. ................... Insurance.................................................................. ......... 2,500 1.400 50 Individuals 540,000 650,000 19,000 525 175*000 275 59 23,000 2,100 4,000,000 1.575.000 30 11 100,000 15,000 1,600,000 1,150,000 35 6 50 33 16 25 45 850 5,000 10,601 2,000 25,000 2,500 25,500 2,000 75,000 3,500 1,400 1,210,000 330,000 3,139,457 10,000,000 260,000 10,000 925.000 375.000 475.000 72,500 188.000 35,000,000 5,485,000 251,439,862 185,000,000 2 Affiliated associations 24 Wholesale associations interregional....................... Regional: Wholesale distribution. Services........................ Production................... Retail distribution....... District: Wholesale distributive. Services......................... 1 } $195,000,000 197. 000. 000 165.000. 000 7.500.000 (0 3,203 116,250,000 1.607.000 *12,503,000 11,541,550 150 2.625.000 98,720 * *Impossible to estimate. 1 Not including production of separate subsidiary organizations. 556818—43 1 2 CONSUMERS* COOPERATIVES IN 1942 The local consumers' cooperatives—with retail sales amounting to about $564,000,000, plus services (meals, housing, burial, medical care, etc.) estimated at about $10,630,500— are believed to have done a total business of well oyer $575,000,000, serving about 1% million members and their families. Although this is still an insignificant proportion of the population and of the retail trade of this country, the figures are steadily increasing and the 1942 figures represent an all-time peak in both respects. In addition to the consumers' cooperatives proper, there were some 18,500 electricity, telephone, insurance and credit associations with an estimated membership of over 14% million. This figure represents a slight decline from 1941 for this group of associations, as a result of a 165,000 drop in membership among the credit unions in 1942. Local Associations in 1942 The local associations, like other retail businesses, were affected by rationing, wartime shortages of goods, and problems of transportation and delivery. The rationing of gasoline had not begun to be felt very severely in 1942, except among the urban associations in the East. Very optimistic reports on condition of local cooperatives were made in various sections of the country. In the State of Washington it was stated that in 1942 the Grange cooperatives “ almost without exception enjoyed the best year in their history."1 From Ohio it was reported that “ from the standpoint of all-round progress the year 1942 has been our greatest," and similarly encouraging statements were made con cerning the associations in Eastern Cooperative Wholesale territory (New England and Middle Atlantic States). The Farmers Union State Exchange, in Nebraska, reported that 1942 was on the whole a very good year for the member associations. The Nebraska Union Farmer, in its issue of April 14, 1943, gave the following estimates of 1942 business and net earnings of the Farmers' Union cooperatives in the State. Business 110 petroleum associations______________$4, 400, 000 75 store associations___________________ 6, 000, 000 240 grain elevators_____________________ 43, 200, 000 T o ta l___________________________ 5 3 ,6 0 0 ,0 0 0 Earnings $255,000 225,000 720,000 1 ,2 0 0 ,0 0 0 Reports received by the U. S. Bureau of Labor Statistics for. 1,385 local associations indicated a volume of business of nearly $202,000,000 for 1942 for these organizations. The more than 1,100 associations for which data for both 1941 and 1942 were available made note worthy gains in business and net earnings. Membership also in creased. For the whole group of associations business was nearly a fourth larger in 1942 than in 1941. The greatest progress was made by the store associations, but the petroleum associations also showed a volume nearly 14 percent above that of the previous year, even though over a fifth of their number sustained a falling off in business as compared with the preceding year, as against less than 10 percent of the stores (table 2). To some extent the amount of business was raised by the advance in price levels, but to some extent undoubtedly Orange News (Seattle), June 19,1943. 3 LOCAL ASSO C IATIO N by enlarged memberships and patronage. Membership of identical associations reporting for both years increased by about 9 percent, in spite of the fact that over a fourth of the associations had a smaller membership in 1942 than in 1941. Five percent of the total reporting associations operated at a loss in 1942; only 1.7 percent had a loss in both years and 3.3 percent had a gain in 1941 but a loss in 1942. Further, 2.9 percent went from a loss in 1941 to a gain in 1942 and 68.5 percent increased their earnings in 1942 over those in 1941. A larger proportion of the petroleum associations than of other types had a smaller amount of earnings in 1942 than in 1941. T able 2.— M em bership , B usiness and N et Earnings o f Local Cooperatives in 1942 as Compared with 1941 Membership Percent reporting— Type of association Per cent of in crease In De in crease total crease in in 1942 1942 Amount of business Net earnings Percent Percent which reporting— went from— Percent reporting— Percent of in Gain Loss In De in in crease In De crease crease in crease crease 1941 1941 Loss in in in to to total in in gain gain gain both 1942 1942 loss years in in in in 1942 1942 1942 1942 9.1 73.9 26.1 24.1 84.2 15.8 3.3 2.9 1.7 68.5 23.6 Stores and baying clubs.............. 8.3 Petroleum associations................ 9.5 Other consumers’ cooperatives— 5.8 Distributive departments of farmers’ marketing associa tions........................................... i6.8 75.5 73.8 50.0 24.5 26.2 50.0 30.8 13.6 41.8 90.8 78.9 81.8 9.2 21.1 18.2 5.4 2.0 4.9 1.2 2.2 .4 50.0 69.5 64.7 50.0 17.9 31.7 53.3 46.7 43.1 87.5 12.5 ......... 3.7 ......... 90.9 7.4 All types....................................... As the first full year of*war, 1942 brought serious problems of pro curement of supplies, of transportation, and of distribution. Many commodities became scarce and some practically disappeared from the market altogether. Rationing of certain items, such as tires and petroleum products, cut down the volume of business particularly in urban areas; the associations serving farmers maintained their volume fairly well. T o some extent, the procurement problem was met by the substitution of new lines for those in falling supply. Diversification of business has been urged by the cooperative whole sales for some years and the associations which heeded the advice have begun to reap the benefits since the war began. Petroleum asso ciations have added groceries, hardware, seeds, fertilizer, etc., the sales of which compensate for the decreases in or disappearance of such items as electrical appliances, refrigerators, tires, and metal goods. Also, numbers of cases have occurred in which two or even three local cooperatives have consolidated into a smgle*association, in the inter ests of efficiency and economical operation. In some cases, store and gasoline associations operating in the same town have merged. 4 CONSUMERS’ COOPERATIVES IN! 1 9 4 2 Cooperative Wholesales in 1942 MEMBERSHIP OF WHOLESALES The 19 reporting regional wholesales had a total membership of 2,683 local associations at the end of 1942 (table 3), and the 8 reporting district associations were serving a membership of 128 associations. The number of associations affiliated to regional wholesales report ing for both 1941 and 1942, rose from 2,554 to 2,683, or 5.1 percent. One association reported that it had membership applications pending, from 65 additional associations. The membership of identical district associations increased from 120 to 128, or 6.7 percent. In addition, the wholesales were serving a considerable number of associations that had not become members. The interregional asso ciations reported 11 nonmember patrons, the regional associations 1,067, and the district associations 60. National Cooperatives, Inc., is composed of 16 wholesales, of which 2 are Canadian organizations (Saskatchewan Cooperative Whole sale and United Farmers Cooperative Co. of Ontario). Table 2 shows data for 13 of these affiliates (associations bearing asterisk); the other member, Farmers’ Cooperative Exchange of Raleigh, N. C., is omitted because it is neither a consumers’ cooperative nor a wholesale of the federated type. The affiliates of National Cooperatives had a com bined membership of 2,539 local associations (with 874,324 members) and had an aggregate business for 1942 amounting to $103,488,956. United Cooperatives, Inc., has as its members the associations marked with a dagger in the table. Other members not there shown (because they either were not federations or were not consumers’ organizations) were Washington Cooperative Egg and Poultry Asso ciation (Seattle), Cooperative Grange League Federation Exchange (Ithaca, N. Y .), and Farmers’ Cooperative Exchange (Raleigh, N. C.). T able 3.— M em bership o f Cooperative W holesale Associations, 1941 and 1942 [Associations marked * are members of National Cooperatives; those marked t are members of United Cooperatives] Association Year in which organized Number of affiliated associations 1942 1941 Interregional Illinois: National Cooperatives............................................................ Ohio: United Cooperatives................................................................... Regional Illinois: Central States Cooperatives*......................................................... Illinois Farm Supply Co........ ...... ........... ............ . ...................... Indiana: Indiana Farm Bureau Cooperative Association*!............. Iowa: Iowa Farm Service C o._...................... ..................................... Michigan: Farm Bureau Services*!................................................... Minnesota: Midland Cooperative Wholesale*................................................. Farmers Union Central Exchange*......... ............ ....................... Minnesota Farm Bureau Service Co............................................. Missouri: Consumers Cooperative Association*................................. Nebraska: Farmers Union State Exchange......................................... New York: Eastern Cooperative Wholesale*...................................... Ohio: Farm Bureau Cooperative Association*!................................. Pennsylvania: Pennsylvania Farm Bureau Cooperative Association*!. South Dakota: Farmers Union Cooperative Brokerage.................... Texas: Consumers Cooperatives Associated*.................................... Utah: Utah Cooperative Association.................................................. Virginia: Southern States Cooperative!............................................... Washington: Pacific Supply Cooperative*.......................................... Wisconsin: Central Cooperative Wholesale*....................................... 1933 1930 16 8 16 7 1936 1927 1921 1927 1920 102 137 93 30 139 94 176 93 29 139 1926 1927 1928 1928 1914 1929 1933 1934 1924 1931 1936 1923 1933 1917 252 300 45 592 319 155 87 22 25 82 6 80 87 130 220 300 45 504 292 151 87 21 35 68 9 80 86 125 COOPERATIVE WHOLESALES 5 T able 3.— M em bership o f Cooperative Wholesale Associations, 1941 and 1942 — Continued Association Year in which organized Number of affiliated associations 1942 1941 District California: Associated Cooperatives of Northern California*.. ......... Michigan: Cooperative Services1......... ...................................... ............... Northland Cooperative Federation.._____ ___________________ Minnesota: Trico Cooperative Oil Association____________ _____________ _ Range Cooperative Federation--------------------------------------------Wisconsin: Fox River Valley Cooperative Wholesale_______________ _____ A & B Cooperative Association...^_________ ________________ Cooperative Services— ------------------------------------- ------ --------- 1939 17 15 1932 1938 11 7 10 7 1929 1924 16 26 16 22 1936 1930 1928 42 4 5 39 5 6 i Formerly named H -O-B Cooperative Oil Association. SERVICES AND FACILITIES Certain new services were added by the various wholesales in 1942. Central States Cooperatives established its own auditing service and Consumers’ Cooperative Association undertook store-management service. Among the associations which added new lines of consumer goods were Eastern States Cooperative Wholesale (fresh fruits and vegetables2) and Illinois Farm Supply (tire recapping). The latter and Indiana Farm Bureau Cooperative Association each acquired a towboat and the Indiana association bought a barge as well. Associated Cooperatives of Northern California entered the ware housing field with the purchase of its first warehouse, and three other wholesales (i. e. those in New York, Texas, and Virginia) opened new branch warehouses. The Texas association, Consumers Cooperatives Associated, also added a new bulk plant, and Southern States Co operative opened several retail branches. Central Cooperative Whole sale added a grain elevator to its feed mill and enlarged its main whole sale warehouse, besides starting a repair shop for its own growing fleet of trucks. At the end of 1942 the 19 reporting regional associations were operating a total of 67 wholesale warehouses. Most of them had 1 to 3 each, but one operated 4, two had 6 each, one had 7, one 11, and one 12. The Farmers Union Central Exchange expanded into the wholesale distribution of groceries, taking over the functions of the Northwest Cooperative Society, a joint grocery-purchasing agency serving several store associations in North Dakota and Montana; that society went out of existence toward the end of the year. By arrangement, also, the Farmers’ Union Cooperative Brokerage (South Dakota) liquidated its business, and the service of its member associations was assumed by the Farmers Union Central Exchange which established a wholesale warehouse in Sioux Falls, for that purpose. Retail branches.— Comparatively few of the wholesales operate re tail branches, it being recognized that it is far more desirable from the cooperative standpoint that localities be served by a retail co operative which the townspeople own and operate themselves. At the end of 1942 only 6 regional associations and 4 district associations 2 Central States Cooperatives also added these commodities, early in 1943. 6 CONSUMERS’ COOPERATIVES IN' 1 9 4 2 had any retail outlets; they were running 49 and 4 branches, respec tively. The number operated by each of these associations in 1941 and 1942 was as follows: Regional Number of retail branches y 1942 Michigan Farm Bureau Services_________________________ 8 Farmers Union Central Exchange_______________________ 2 Consumers’ Cooperative Association____________________ 23 Farmers Union State Exchange__________________________ 14 Ohio Farm Bureau Cooperative Association____________ 1 Farmers Union Cooperative Brokerage_________________ 1 1941 10 2 21 13 District Northland Cooperative Federation______________________ Trico Cooperative Oil Association_______________________ Range Cooperative Federation___________________________ A & B Cooperative Association__________________________ 1 __ 2 1 1 2 2 1 Productive facilities.— In the United States practically all of the commodities that are produced in the cooperative movement are manufactured in plants owned by the regional or national wholesales, either individually or jointly. A noteworthy expansion took place in the productive facilities in 1942. Consumers Cooperative Association bought a cannery, saw mill, and bottling plant. The Indiana Farm Bureau Cooperative Association bought its second oil well and acquired petroleum-storage facilities. (Consumers Cooperative Association had 12 wells.) The Farm Bureau Cooperative Association of Ohio purchased two feed mills and a brooder plant, in addition to a petroleum refinery. Three other refineries were already in cooperative ownership, two being owned by Consumers Cooperative Association and one by Indiana Farm Bureau Cooperative Association; in addition, the Pacific Supply Cooperative owned a third interest in a privately owned refinery.3 OPE R ATIO N S OF W H OLESALES The business, earnings, and patronage refunds of individual whole sales are shown for 1941 and 1942 in table 3. One association shown— Farmers Union Cooperative Brokerage— was placed in liquidation at the end of its fiscal year. As noted, its territory and members will hereafter be served by the Farmers Union Central Exchange. The Cooperative Wholesale for southern Cali fornia, a small association that had been having increasing difficulty in obtaining supplies, suspended operations late in the year. No data on volume of business, etc., are available for it, or for the North west Cooperative Society whose business was taken over by Farmers Union Central Exchange. a It sold this interest in 1943. 7 COOPERATIVE WHOLESALES T able 4.— Business , N et Earnings, am/ Patronage Refunds o f Cooperative Wholesales, 1941 and 1942 Amount of business1 Net earnings Patronage refunds Association and State 1942 All associations: Interregional, distributive__ Regional: Distributive, wholesale. Service............................ District: Distributive................... Service............................ 1941 $9,905,611 $4,204,059 1942 $11,702 1941 1942 1941 $277,021 $105,343 $238,093 111,606,247 90,562,69 ^5,411,897 3,812,642 4,325,712 3,106,925 759,170 1,595,257 2,178,180 2,352,522 } 98,720 101,340 125,829 128,791 107,734 115,906 11,702 38,928 238,093 11,117 94,226 238,093 Interregional Illinois: National Cooperatives.. Ohio: United Cooperatives........ 0 9,905,611 4,204,059 ( 3) Regional Illinois: Central States Cooperatives: 7,230 229,394 6,119 Distributive, wholesale................... 264,025 Services: ■ 6,645 2,402 Educational.............................. ( 3) } 1,264 0 Auditing.................................... 204 Illinois Farm Supply Co....................... 15,083,781 8,359,583 1,055,499 1,094,408 902,813 Indiana: Farm Bureau Cooperative Assn.. Distributive, wholesale....... ................. 9,255,394 9,498,598 Services: Auditing........................................... 11,637 10,075 Trucking.......................................... 225,104 169,717 Auto repair....... ............................... 15,333 397,371 496,897 8.605 > 793,428 Insurance bonds, etc....................... 25,384 22,568 21,381 Finance (credit).............................. ( 3) Other............................................... 297,441 169,774 Productive departments........................ <4,233,097 <3,200,005 Iowa: Iowa Farm Service Co........................... * 63,488 *54,359 45,549 39,690 35,518 Cooperative Service C o ........................ 10,888 30,814 20,815 83,763 0 M a s s a c h u s e t t s : U n i t e d Cooperative Farmers...................................................... 2,631,424 1,842,445 69,058 0 0 Michigan: Farm Bureau Services: 4,343,815 3,523,985 ) Distributive, wholesale......................... Productive departments........................ 416,214 .................. 1[ 247,052 88,420 232,773 Services: Management........................... 11,413' 0 Distributive, retail........ ....................... 1,244,298 206,376 J Minnesota: Midland Cooperative Wholesale......... 6.949,509 6,228,796 149,503 124,781 122,646 Farmers Union Central Exchange........ 8,949,756 8,098,812 321,055 200,950 347,663 Minnesota Farm Bureau Service C o ... 1,181,000 72,600 33,112 836,828 72,700 Missouri: Consumers Cooperative Assn.: Distributive, wholesale.......................... 9,885,198 6,851,056 I Services: 161,346 7545,356 Auditing........................................... 10,401 7,541 \ 190,101 Trucking.......................................... 34,421 1 23,966 4 878,016 <655,753 Productive departments........................ (8) Distributive, retail................................. 12,306 383,450 Nebraska: Farmers Union State Exchange: /$50,117 Distributive, wholesale.......................... $2,407,020 $2,398898 $110,757 fl 3>yy, <CQQ 711 141 Services: Trucking................................ 90,024 99,470 13,750 l 0 Productive departments........................ <336,225 2,940 0 0 ( 3) 22,262 Distributive, retail................ .: ............. 879,970 748,742 2,276 0 New York: Eastern Cooperative Wholesale. 2,765,155 2,107,827 56,544 63,634 40,645 Ohio: Farm Bureau Cooperative Assn.: Distributive, wholesale.......................... 12,850,586 9,929,399 1 „ 101,017 Services: Trucking...... .......................... 50,185 } 359,607 248,370 168,735 Productive departments....................... <4,587,613 <877,006 f Pennsylvania: Pennsylvania Farm Bureau Cooperative Association....... ................ — 5,192,905 2,604,327 227,715 129,903 144,253 South Dakota: Farmers Union Cooperative Brokerage: Distributive, wholesale.......................... 174,040 595,762 Services: 3,834 <0236 0) Auditing........................................... 171 1,563 Trucking.......................................... 176 1,437 Texas: Consumers Cooperatives Associated. 1,420,601 969,762 59,300 25,133 24,856 Utah: Utah Cooperative Association_____ 216,568 285,082 18,490 0 0 See footnotes at end of table. 0 5,784 883,753 588,852 30,050 9.155 0 45,268 102,051 174,257 33,112 109,644 3.547 $45,041 0 0 0 105,932 76,502 7,860 17,565 8 CONSUMERS’ COOPERATIVES' IN 1942 T able 3 .— B usiness, N et Earnings, and Patronage Refunds o f Cooperative Wholesales, 1941 and 1942 — Continued Amount of business1 Net earnings Patronage refunds Association and State 1942 1941 1942 1941 1942 1941 Regional—Continued Virginia: Southern States Cooperative: Distributive, wholesale.......................... Services: Accounting and management......... Other................................................ Distributive, retail................................ Washington: Pacific Supply Cooperative: Distributive, wholesale.......................... Services: Trucking.......................................... Auto repair....................................... Finance............................................ Wisconsin: Central Cooperative Wholesale: Distributive, wholesale.......................... Services: Auditing................................. Productive departments........................ 19,700,580 18,080,714 1,186,938 61,258 527,965 9,017,282 J860,886 (3) 00 3,268,562 3,191,045 } 109,723 45,408 f 535,064 603,709 125,351 25,340 5,002,840 4,792,257 26,262 21,710 <1,652,772 <319,764 10 78,419 149,459 (3) 00 46,073 1 00 00 •228,645 255,918 200,000 147,801 999 | 144,113 00 123,219 125,757 10,368 6,257 5,922 C) 7,041 00 31,139 23,517 30,551 30,931 22,236 27,931 24,755 39,684 24,210 8,588 14,556 7,271 9,104 7,728 3,903 275,652 27,687 952 District California: Associated Cooperatives of Southern California................................... 80 217,849 190,431 Michigan: 6,258 Cooperative Services ,2. . . ...................... 155,925 149,581 Northland Cooperative Federation___ 105,842 is 96,750 4,073 Minnesota: Trico Cooperative Oil Association_____ 254,980 23,517 260,436 Range Cooperative Federation: 900,746 571,240 Distributive, wholesale................... Services: Trucking................................... 16,868 17,772 Auto repair................................ 36,440 40,243 • 24,600 16,396 15,031 Insurance................................... Mortuary................................... 25,208 24,513 Recreation.......... ................... 3,320 4,269 Productive departments................. <398,879 <261,180 Wisconsin: Fox River Valley Cooperative Whole 40,843 sale...................................................... 466,416 549,019 A & B Cooperative Association: Distributive, wholesale................... 108,974 } 121,473 f 7,492 } 11,228 Distributive, retail........................ l 12 Cooperative Services.............................. 197,666 172,145 15,954 1,437 2,197 1 Wholesale distributive business unless otherwise stated. 2 Business is that of pooling orders and making master contracts. 3 No data. <Included in wholesale distributive business also. * Total brokerage and trading income. 6 2.9 percent; amount not reported. 7 Includes refunds from earnings of productive subsidiary associations. 3 Included with retail. * Included with wholesale. Loss. 11 All earnings will eventually be returned to members; association in liquidation; functions taken over by Farmers Union Central Exchange, w Name formerly EI-O-B Cooperative Oil Association. » Includes business done by recreational facilities. Altogether, the reporting regional associations had a wholesale distributive and service business amounting to over 113 million dollars. Of this, services accounted for only 15 percent; the rest was distributive. The district associations reported sales of over 2% millions, of which 4.5 percent was for services. Net earnings amounted to $5,411,897 for the regional associations and $125,829 for the district associations— a total of $5,537,726. For regional associations reporting for both 1941 and 1942, the distribu tive business increased by 23.3 percent and the service business by 31.3 percent. Earnings increased 35.6 percent. COOPERATIVE. WHOLESALES 9 Patronage refunds.— Member associations received in patronage refunds from the wholesales, on the 1942 business, a total of $4,538,789— $105,343 from the interregional associations, $4,325,712 from the regional organizations, and $107,734 from the district wholesales. A considerable proportion of the refunds on patronage was paid, not in cash, but in the form of shares credited to the member associations. This was done in order to improve the capitalization of the central associations, many of which have always been inadequately financed. At the end of 1942 the 17 regional reporting associations had a com bined share capital amounting to $7,771,471. In practically all cases, most of the capital had been built up from earnings, rather than by additional investment by the member associations. The Farmers7Union Central Exchange, started in 1927 with a share capital of $525, had in the period 1931-42 returned patronage refunds amounting to $519,739. Pacific Supply Cooperative had a capital of $1,500 in 1934, when it started; it has made earnings of $1,126,038 and in the 4-year period, 1939-42, returned $671,183 on patronage. Consumers Cooperative Association started with $3,000 share capital in 1929; since that time it has earned $1,172,502 and has returned over $1,000,000 in refunds on patronage. Midland Cooperative Wholesale, established as a joint purchasing agency in 1926 without a cent of share capital, has earned the sum of $833,396 out of which its members have received $602,506. During the last 6 years, 1937-42, 14 regional wholesales for which data are available (these include some of the smaller and less successful associations) returned the sum of $11,077,914 to their members on patronage. The financial advantages of cooperative wholesaling are evident from these figures; they lead one to wonder what could have been done under adequate capitalization. The annual meetings of the associations have been recognizing more and more the necessity for stronger financing and, on the recommenda tions of the boards of directors, have been voting increasingly to pay at least part of the patronage refunds in the form of shares or to put them into revolving funds payable 3 to 5 years hence. This latter practice has been in vogue for only about 5 years and the deferred refunds of those earlier years are now being paid, in cash. In order to strengthen the organization for the post-war period, several of the wholesales have also set aside special reserves. The Pennsylvania Farm Bureau Cooperative Association set aside $13,896, approximately 12 percent of the wholesale inventory, as a special reserve to cover the probable post-war decline in inventory values. The Ohio Farm Bureau Cooperative Association earmarked $75,000 for a similar purpose. At the end of its 1942 fiscal year, Southern States Cooperative had an inventoiy reserve of $325,758, of which $200,000 was added from the 1941-42 earnings. Productive operations.— Profitable as the wholesale distributive op erations have been, those associations that have gone into production have found that in the latter lie even greater possibilities of savings for their members. For this reason, as well as because of the factors of safety in supplies and of future development, the cooperative wholesales have been intensifying their drive into production. In Ohio, at least 70 percent of the 1942 savings were made on the produc tive activities. Consumers Cooperative Association (the wholesale which was the pioneer and has made the greatest strides in production) reported combined earnhigs of $668,062 in 1942, of which $477,961 10 CONSUMERS' COOPERATIVES IN 1942 (or nearly 72 percent) came from its oil wells, pipe line, refinery, and other productive activities, and only 28 percent from wholesale distri bution. Table 5 shows for individual associations the value of output of the wholesales' productive departments in 1942. The data do not include the products of separate subsidiaries for production; they were not circularized in 1942. As the statement indicates, the productive de partments of wholesales (not including subsidiaries) produced goods valued at $12,502,816. As compared with identical associations for 1941, this represented an increase of 132 percent. Probably twice as much more was produced by separately incorporated subsidiaries of individual wholesales and by productive enterprises owned jointly by several associations. Thus, Consumers Cooperative Association re ported that its total production in 1942 amounted to $2,783,371. all but $878,016 of which represented products of subsidiary associations. T able 5.— Output o f W holesales9 Productive Departments, 1942 Value of product Association and product Value of product Association and product Regional—Continued Regional Indiana Farm Bureau Coop. Association $4,233,097 2,248,733 Gasoline and kerosene, refined__ 145,768 Chicks and eggs_________________ Fertilizer_________________ ______ 1,815,845 Printing__________________ _____ _ 22,751 416,214 Michigan Farm Bureau Services: Seed— Consumers Cooperative Association 878,016 474,934 Lubricating oil__________________ 214,619 Grease.............. ................... ............ P aint--....... .................................... 115,715 33,283 Canned goods_______________ __ . Printing................ ............................ 39,465 Nebraska Farmers Union State Ex 336,225 change______________________ _____ Food and sped 132,774 203,451 Produce_________ _ ____ ______ Ohio Farm Bureau Cooperative Asso ciation____________ ____ _______ ___ Feed and seed............... ................... Fertilizer.................. ..................... . Central Cooperative Wholesale_______ Bakery products.............................. Feed and flour_______________ _ $4,587,613 3,612,712 974,901 1,652,772 157,407 1,495,365 District Range Cooperative Federation_______ B u tter............................................ Cheese__________________________ Sausage.......................................... 398,879 117,547 199,885 81,447 Total products....... .............. ........ 12,502,816 EMPLOYMENT AND WAGES Over 2,700 persons were employed in wholesale cooperatives in 1942, and the pay roll amounted to $4,214,109. As table 6 indicates, a sub stantial increase in annual earnings of cooperative employees took place in both the regional and district associations. In some cases, bonuses to employees were also paid, at the end of the year. T able 6.— Em ploym ent, P a y Roll, and Average Annual Earnings o f Em ployees o f Cooperative Wholesales, 1942 Type of association Total Number of asso number of em ciations reporting ployees Total wages paid, 1942 Average annual earnings per employee in— 1942 1941 All typ es.................................- ................................. 24 2,767 $4,214,109 $1,523 $1,355 Interregional associations.......................................... Regional associations.— —..................................... . District associations............ ...... ........- ____ _______ 2 14 8 116 2,568 83 139,295 3,930,015 144,799 1,201 1,530 1,746 1,645 1,385 1,453
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