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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
total crease 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
in crease crease 1941 1941 Loss crease crease
in
in
in
to
to
total in
in
both gain gain
1942 1942 loss gain 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:
Distributive, wholesale.......................... $2,407,020 $2,398898 $110,757 f 3>yy, 711 /$50,117
l <CQ 141
Q
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
< 236
0
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

1 78,419
0
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.
1 All earnings will eventually be returned to members; association in liquidation; functions taken over
1
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





Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102