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UNITED STATES DEPARTMENT OF LABOR
Frances Perkins, Secretary
B U R E A U OF L A B O R ST A T IS T IC S
Isador Lubin, Commissioner
+

Consumers’ Cooperation in the
U nited States, 1936
Prepared by
FLORENCE E. PARKER
Bureau o f Labor Statistics

B u lletin 7s£o. 659
August 1938
+

U N IT E D ST A T E S
G O V E R N M E N T P R IN T IN G OFFICE
W A S H IN G T O N : 1939

For sale by the Superintendent o f Documents, Washington, D . C.




Price 25 cents




CONTENTS
Page

Preface_________________________________________________________________________
C h ap ter 1.— General review of the movement in 1936_ _ _________________
Development in the United States_______________________________________
Forms of cooperative effort______________________________________________
Extent of the movement in 1936________________________________________
Trends in cooperative development______________________________
Scope and method of study______________________________________________
Definition of terms__________________________________________________
Basic principles of consumers’ cooperation_________________________
Coverage of study___________________________________________________
Summary data for sample reporting for 1936______________________
C hap ter 2.— Retail distributive associations________________________________
Summary__________________________________________________________________
Scope of study____________________________________________________________
General condition of cooperatives________________________________________
Sponsoring groups________________________________________________________
Year of formation_________________________________________________________
Fields of cooperative activity____________________________________________
Operating facilities________________________________________________________
Membership_______________________________________________________________
Composition of membership________________________________________
Limitations on membership_________________________________________
Amount of business, 1936________________________________________________
Business with nonmembers_________________________________________
Operating expenses_______________________________________________________
Net earnings__________________________ .._____ r __________________________
Patronage refunds____________________________________________________ __
Proportion of goods purchased from cooperative sources______________
Annual stock turn-over___________________________________________________
Production by local cooperatives________________________________________
Financial data_____________________________________________________________
Cooperatives in relation to population__ _______________________________
Farmers in the consumers’ cooperative m ovem ent____ ________________
C h ap ter 3.— Local service associations______________________________________
Summary__________________________________________________________________
Business operations_______________________________________________________
Fields of activity__________________________________________________________
Associations supplying meals and lodging__________________________
Laundry and dry-cleaning establishments_________________________
Medical-care cooperatives___________________________________________
Garages_______________________________________________________________
Printing and publishing associations_______________________________
Burial associations___________________________________________________
Housing associations_________________________________________________
Electricity associations______________________________________________




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IV

CONTENTS
Pag£

C hap ter 4.— Telephone associations_______________________________________
Scope and method of study___ _______________________________
Extent of cooperative telephone movement_______________________________
97
Types of associations________________________________________________________
99
Age of associations__________________________________________________________
100
Membership and subscribers served_______________________________________
101
Cooperative practice________________________________________________________
104
Operative and administrative procedure____________________________
107
Properties and equipment_____________________________________________
Cost of service__________________________________________________________
108
Employment in telephone associations______________________________
Finances_______________________________________________________________
Resources_________________________________________________________
Income and earnings___________________________________________________
113
C h ap ter 5.— Credit unions_______________________________________________
115
Summary____________________________________________________________________
Method of operation________________________________________________________
116
Fundamentals of cooperative credit_________________________________
Method and scope of study________________________________________________
117
Year of establishment_______________________________________________________
118
Membership,_________________________________________________________________
120
Loans made, 1936___________________________________________________________
123
Rates of interest charged on loans_________________________________________
126
______
127
Dividends paid______________________________________________________=
Financial data________________________________________________________
Losses from bad debts________________________________________________
C h ap ter 6.— Insurance associations____________________________________________
134
Insurance in the consumers’ cooperative m ovement________________
Scope of Bureau’s insurance survey_________________________________
Year of formation of reporting associations_______________________________
137
137
Membership, and insurance in force_______________________________________
Business done in 1936-------------------------------------------------------------Relation of amount of insurance to field of operations________________
142
Claims paid__________________________________________________________________
142
Dividends returned_________________________________________________________
143
C h a p te r 7.— Federations________________________________________________________
145
Wholesale associations______________________________________________________
145
Services and facilities__________________________________________________
146
Trading territory_______________________________________________________
149
Membership and resources____________________________________________
151
Business operations____________________________________________________
153
Business with nonmembers_______________________________________
155
Sources of supply_________________________________________________
155
Goods produced-----------------------------------------------------------------------------156
Operating expenses__________________________________ 1__________
156
Cooperative practice___________________________________________________
157
Employment in wholesales____________________________________________
159
Development of individual associations______________________________
160
Service federations__________________________________________________________
163
Noncommercial federations________________________________________________
163
Federations in the distributive m ovement___________________________
164
Federations in the credit-union movement___________________________
168




93

96

106

110
110
111
115

117

128
133
134
136

140

CO N T E N T S

V
Page

C h ap ter 8.— Education and recreation in the cooperative m ovem ent. _ . _
Education_________________________________________________________________
Recreation__________________________________________________________
C h a p te r 9.— Cooperative associations as employers________________________
Summary__________________________________________________________________
Personnel policies_________________________________________________________
Employment in distributive associations________________________________
Earnings of cooperative employees______________________________________
Average annual earnings____________________________________________
Average hourly earnings_____________________________________________
Comparative wages in cooperative and private employment____
Hours of labor____________________________________________________________
Cooperatives and organized labor_______________________________________
Cooperative Workers’ Union________________________________________
Collective bargaining________________________________________________
C h ap ter 10.— Legal status of cooperatives__________________________________
Medical-care associations____________
The insurance controversy__________________________________________
The issue of corporate practice of medicine________________________
Present legal status__________________________________________________
Electricity associations___________________________________________________
The question of State regulation___________________________________
Court cases__________________
Telephone associations___________________________________________________
Public regulation____________________________________________________




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PREFACE

The consumers’ cooperative movement in the United States is in
a continuous state of change. Weak associations are failing, new
associations in greater numbers are taking their places, and a solid
block of old, well-established associations remains year after year,
expanding operations and adding new services. The rate of change
is such that no general survey can possibly do more than present a
picture of the cooperative situation as of a specific date. This the
present report attempts to do, covering the 1936 operations of con­
sumers’ cooperatives of all types, and giving membership and financial
status as of December 31 of that year. During the interval that has
elapsed since the first questionnaires were sent out, early in the
spring of 1937, a number of the associations covered in this study
have gone out of existence. But later data indicate that the birth
rate of new associations was higher in 1937 than in any other previous
single year— even during the World War.
This report, covering the year 1936, presents the results of the
fifth survey of cooperative associations in the United States made by
the Bureau of Labor Statistics. The previous studies related to the
years 1920, 1925, 1929, and 1933. Like its predecessors, the 1936
survey does not cover all of the consumers’ cooperatives in the coun­
try, but its coverage is so extensive as to justify estimates being made
for the extent of the movement as a whole.
The Bureau wishes to express its appreciation of the assistance
rendered, during the whole course of the study, by Thomas Holland,
formerly Director of the Consumers’ Project of the Department of
Labor; of the aid given by the Farm Credit Administration and the
Rural Electrification Administration in obtaining information for
the Bureau in their respective fields; and of the conscientious efforts
of the interdepartmental committee (Donald Montgomery, Udo Rail,
Nathaniel Fairbank, and Thomas Holland) which assisted in the
formulation of the questionnaires and the instructions used in the
survey. Spot studies of certain areas, not reproduced here but upon
the findings of which the present report draws freely, were financed
and made by the Consumers’ Counsel Division of the Agricultural
Adjustment Administration and the Consumers’ Project of the
Department of Labor. The spot studies were as follows: Chicago,
by Sidney Gubin, Consumers’ Counsel Division; northern Wisconsin,
by Samuel Mermin, Consumers’ Project; southern California, by




yn

PREFACE

VIII

Elbridge Burnham; and Cleveland, by Ernestine Wilke, of the Bureau
of Labor Statistics.
The Bureau of Labor Statistics takes this opportunity to extend
its thanks to the cooperative associations which furnished information
in the survey and especially to those which have supplied data on
their operations year after year.
The survey was directed and the report prepared by Florence E.
Parker, under the general direction of Hugh S. Hanna, chief of the
Bureau’s Editorial and Research Division. The section on legal
status of medical-care cooperatives was prepared by Samuel Mermin.
The field work was done by the following, all of whom were on the
staff of the Bureau of Labor Statistics: Charlotte Abbott, John
Ball, Lloyd Barnard, Irene Bergmann, Emma Borchers, Grace
Felker, Pearl Ferrin, W. O. Futch, H. J. Hillebrandt, Nell Keyes,
Edward Knapp, Joseph Lethco, Morris Levine, Pauline Paro, Carl
Rittenhouse, Margaret Rupli, Lucy Scott, Helen Sexton, and Louise
Sigler. Valuable assistance in the compilation and preparation of
basic data was rendered by Elizabeth Black and Myrtle Selove of
the Bureau’s staff, and by Tessim Zorach, of the Consumers’ Project.
I

sador

L

u b in

,

C o m m is s io n e r o f L a b o r S ta tis tic s .

A

ugust

15, 1938.




Bulletin 7\[o. 659 of the
United States Bureau of Labor Statistics

C o n su m e r s’ C o o p era tio n

in

th e U n ite d

S ta t e s , 1 9 3 6
Chapter 1.— GENERAL REVIEW OF THE M OVEM ENT
IN 1936
During the past few years there has been a marked increase in
interest in the United States on the subject of consum ed cooperatives,
especially since President Roosevelt in 1936 appointed a commission
to study the working of the cooperative movement in various European
countries. At the time that that commission was carrying on its
foreign survey, the Bureau of Labor Statistics was beginning a survey
of the cooperative movement in the United States. This survey fol­
lowed the same general lines as the earlier studies on the same subject
made by the Bureau at various intervals, but was considerably
broader in scope, and, while lacking complete coverage, was sufficiently
comprehensive to give a fairly accurate picture of the extent and
character of all phases of consumers7 cooperation in this country.
As a result of this survey, dealing for the most part with conditions
as they were in 1936, it was found that the retail distribution and
service associations, which constitute the heart of the movement,
numbered about 4,100 with over 830, 000 members and were doing a
business of some $188,000,000 per year. Because the cooperative
movement in this country is largely restricted to certain geographical
areas, however, there is undoubtedly much misunderstanding as to
what consumers7 cooperation is and what it seeks to accomplish.
Any activity in which two or more people join can in a broad sense
be called a cooperative enterprise. However, the term “ cooperative
movement77 has come to apply to joint effort under certain welldefined principles. It all began in 1844—nearly 100 years ago— as a
sort of protest movement. In that year 28 poverty-stricken flannel
weavers in Rochdale, England, decided to take action against the
evils from which they suffered: namely, those resulting from unem­
ployment, underemployment, exorbitant prices, and adulteration of
goods. Their first step in this ambitious undertaking was a very
modest one. They formed the Rochdale Society of Equitable
Pioneers, each member subscribing 1 pound sterling to be paid in at
the rate of twopence per week. These small sums they invested in
small quantities of flour, sugar, butter, and oatmeal, and with these




1

2

CO NSUM ERS’

COOPERATION I N

THE

U N IT E D

STATES

commodities as their stock in trade they opened a store. As they
had to earn their living by labor in the textile mills during the day,
the store was open only a few hours on Monday and Saturday evenings.
The organization was successful from the first and in a few years
other societies sprang up in imitation, in England and then on the
Continent. Organizations patterned after the original are now found
practically all over the world. Thus the Rochdale association can
be said to be the parent of all the consumers’ cooperatives now in
existence. It may also be noted that the first cooperative organiza­
tion is still in successful operation and the original tiny shop in Toad
Lane, Rochdale, has been restored and is a mecca for all cooperative
travelers.
All truly cooperative associations follow the principles adopted by
the Pioneers: Membership is open to anyone who can make use of
the association’s services. The members themselves provide the
capital necessary, but no one has more than one vote regardless of
the size of his investment. The members decide what type of busi­
ness they shall carry on and they control all the policies. Whatever
activity they undertake is carried on in their interest as consumers,
to supply themselves with goods and services. The characteristic
which above all distinguishes the consumers’ cooperative business
from other business is that the net amount saved through the op­
eration of the business (i. e., what would in private operation be
termed the “ net profit” ) is returned to the members, not in propor­
tion to the amount of capital stock they hold, but in proportion to
their patronage of the business. Thus, in a store society the member
who has spent $500 at the store in the course of the year receives five
times as much as the member whose purchases totaled only $100.
The consumers’ cooperative movement, wherever found, is still
grounded upon these principles. The immediate objective is eco­
nomic— to make the pennies go farther, to eliminate the extra cost
entailed by extravagant advertising and by high-pressure salesman­
ship, to handle only commodities of known good quality, and to fill
an increasing number of human wants on a nonprofit basis. Like the
original Pioneers’ society, the present-day movement also has a farreaching social philosophy. Its final aim is to supply every need of
life, social and economic, without profit and by united effort.
Although the cooperative movement long ago reached the category
of “ big business” abroad, it remains, as it started, a distinctly workingclass movement, although other groups are evincing increasing interest
and participation.
So successful has this method of doing business proved that in
Great Britain it is estimated nearly half of the whole population is
served through the consumers’ cooperatives. The Scandinavian
countries are other examples of successful operation.




G ENERAL R E V IE W

OF T H E

MOVEM ENT

3

D evelopm en t in the U nited States

In this country the first known instance of consumers’ cooperation
occurred in 1845— only 1 year after its beginning in England—when
a tailor in Boston induced the members of his labor union to under­
take joint buying of their household supplies and distribute them at
the weekly meetings of the union. Another labor organization, the
Knights of Labor, actively fostered cooperatives as part of its economic
program during the early 1880’s. Of the movement that has persisted
to the present time, however, the farmers may be said to be the
earliest proponents. Some of the Grange stores formed by the
Patrons of Husbandry shortly after the Civil War still survive.
Since those early years consumers’ cooperation in this country has
developed in a series of up-and-down movements corresponding
roughly (but in reverse order) with prosperity and depression.
The movement has not yet attained the development in the United
States that it has achieved abroad, but it is growing steadily, though
slowly, in a number of directions. Not only is there an expanding
retail movement, but cooperative wholesaling is now firmly established,
and here and there productive activities are being undertaken. Local
study groups, city-wide or county-wide councils of local associations,
and regional leagues are doing various kinds of recreational and edu­
cational work— acting as channels for the exchange of ideas and
experience, issuing cooperative literature, furnishing speakers, spon­
soring social events, running summer camps for children, youths, and
adults, holding classes, and furthering in all possible ways the spread
of the cooperative philosophy. All of the educational work is headed
up in a national league which serves the movement on a Nation-wide
scale.
The movement is also developing its own machinery to supply such
centralized service as auditing, advice on merchandising methods,
store planning, etc., and the technical training of both managers and
clerks. Greater emphasis is being laid upon quality of goods and
purchase by specifications, making use not only of established con­
sumer services but to some extent of their own laboratory tests.
F orm s o f C ooperative E ffo rt

Probably the best-known form of consumers’ cooperation in this
country is the cooperative store handling groceries or general mer­
chandise. As a matter of fact the store associations do form the
largest group and account for the largest proportion of total coopera­
tive business. There are, however, many other lines of activity in
which cooperation has made at least a start, and there is probably
greater diversification in cooperative effort today than at any time
in the history of the movement in the United States.




4

CONSUMERS’ COOPERATION IN THE UNITED STATES

In various parts of this country cooperatives are supplying them­
selves with one or more of nearly all kinds of service. Thus, through
cooperative channels they obtain groceries, bakery goods, meats,
shoes, clothing, furniture, hardware, paints (made in some cases by
their own plant), all kinds of farm supplies, radios, refrigerators,
electricity and electrical appliances, gasoline, motor oil, tires, and
other automobile accessories. They can, in some sections, buy ice
cream made in their own plant, bread and pastries from their own
bakery, milk pasteurized in their own creamery, coffee roasted in
their own roasting plant, and sausage and smoked meats from their
own factory.
Cooperators in many places insure themselves against sickness,
death, fire, theft, hail, and accident, and insure their automobiles
against accidental collision through cooperative or mutual associa­
tions. When they fall into debt, they borrow from the credit union.
Medical service is an activity the possibilities of which are being
explored with more and more attention. In such associations the
physicians, services are engaged on a yearly basis and preventive
measures are stressed. If the patient needs hospitalization, he can,
in one place, go to the cooperative hospital. At death, cooperators
in certain Middle Western States can be laid to rest by the cooperative
burial association.
One group of farmers in the West operates its own coal mine from
which the fuel needs of the members are supplied. An association
in the East provides bus service for the members’ children to and
from school. Another runs a beauty parlor, and two associations
(both in Wisconsin) each have a beer tavern as one department of
the association’s activities. As an instance of the feasibility of
application of the cooperative principle to even the smallest processes
of every-day life may be cited the six families which combined in
the purchase of a lawn mower and the hiring of a part-time worker
to cut their lawns; another association for the same purpose is known
to have been started in 1938.
Other services cooperatively supplied include laundry service,
printing, and recreational facilities.
This is not to say that all or even a majority of these services are
commonly offered throughout the United States. But one or more
associations are rendering some of these services and in some districts
nearly a full complement has been attained. Such a district is rep­
resented in St. Louis County, Minn., where a special study made for the
Bureau revealed a high degree of cooperative infiltration. In that
sparsely settled area of some 7,000 square miles, with a population in
1930 of 204,596, the consumers’ cooperatives alone had a combined
membership of about 13,500; this number did not include the members
of the many cooperative associations marketing or processing farm




GENERAL REVIEW OF THE MOVEMENT

5

products, neither did it include the families of members of the con­
sumers’ societies.
In that area cooperative telephone service, credit, lodgings, recrea­
tional facilities, electric power, insurance, garage service, automobiles,
petroleum products, and automobile accessories, food, and practically
all articles of household and farm equipment are available through
cooperative channels. The cooperators produce their own butter and
sausage, in a federated association, and since September 1,1937, burial
service has been obtainable through a new department of the same
association. In some of the towns of that county, virtually every
family in the area belongs to the cooperative. This region presents one
of the best and most complete examples of cooperative development to
be found in this country— the result of many years’ patient building
and education.
At the other end of the scale are the communities where a credit
union or one small struggling store represents the sum of cooperative
activity. Between these two extremes are all degrees of development.
E xten t o f the M ovem en t in 1 9 3 6

Earlier studies by the Bureau included the store associations, hous­
ing, credit, and certain service associations such as burial, laundry, and
restaurant associations. In the 1936 survey, for the first time, attempt
was made to obtain general coverage for the telephone, electricity, and
insurance associations, and for farmers’ marketing associations doing
collective purchasing of consumers’ goods. In short, the purpose of
the study was to present as complete a picture of the consumers’
cooperative activities in the United States as the Bureau’s resources
would permit. The actual coverage obtained, based on the number
of associations known to have been in operation at the end of 1936,
ranged from about 43 percent for the telephone associations to over
86 percent for the credit unions.
Strictly speaking, all of the above classes of organizations were
carrying on consumer activities and filling consumer needs of one
kind or another. As generally considered, however, neither the credit
unions nor the telephone or insurance associations are regarded as
part of the consumers’ movement proper. As a matter of fact,
although a certain proportion of the telephone and insurance associ­
ations are organized as cooperatives and run as such, by far the larger
proportion of them are cooperative only because of their conformity
to the principles of mutuality, not because of their acceptance of the
Rochdale philosophy.
The very large sample of associations reporting in all these fields
enabled the Bureau to make, for the first time, detailed estimates of
the total extent of the movement in this country. On the basis of
the sample, it is estimated that there were at the end of 1936 some




6

CONSUMERS’ COOPERATION IN THE UNITED STATES

3,600 associations engaged in retail distribution, of which 2,400 were
stores and buying clubs and 1,150 were handling petroleum products
There were also some 500 service associations providing for their
members such services as medical care, housing, burial, and serving
of meals.
These local associations had gone into the wholesale field, also,
setting up wholesale organizations for that purpose. In these whole­
sales the retail associations, not individual persons, were the members.
About 1,900 local associations were estimated to have been affiliated
in the 20 regional wholesales doing business in one or more States.
Eighteen of the regional wholesales had, in turn, formed two “ super”
wholesales in order to obtain through them the advantages of the
large-scale buying thus made possible.
In some districts the retail associations had formed federations to
take over the distribution of certain commodities or to perform specific
services. The 9 such federations were owned by 81 local associations.
It is estimated that the telephone and insurance associations doing
business on a mutual or cooperative basis totaled 5,000 and 1,800
respectively, and the known credit unions reached a total of 5,440, at
the end of 1936.
T able 1.— E stim a ted N u m ber , M em bersh ip , and B u sin ess o f C onsum ers* C ooperatives ,

1936
T yp e o f association

Num ber of
associations

N um ber of
members

Am ount of
business

Local associations
Retail distributive associations............ ................................. .
Stores and buying clubs_____________________________
Petroleum associations........... ....................... ..................
Other distributive associations................................... .......

3,600
2,400
1,150
50

Individuals
677,750
330,500
325,000
22,250

Service associations............... — ....................... .......... ............
Associations providing rooms or meals or b oth _______
Medical-care associations...................................................
Burial associations...................................... ........................
Housing associations.................... ................................. —
Electricity associations______________________________
Miscellaneous....................... ...............................................

529
60
14
50
50
275
90

155,293
19,150
i 5,143
31,500
3,500
82,500
13,500

5,015,000
1,530,000
50,000
160,000
* 2,525,000

Telephone associations.......................................................... .
Credit unions_________ _______________________ _______ _
Insurance associations.................................................................

5,000
i 5,440
1,800

330,000
1,210,000
8 6,800,000

*5,485.000
4 112,135,000
•103,375,000

$182,685,000
107,250,000
69,985,000
5,450,000

09

750,000

Federations 7
Associations
Wholesale associations............. ................................... ..............
Interregional...................... ............ .......................................
Regional............................... .................................................
District___________________ __________________________

31
12
l 20
19

09

»18
1,900
181

43,328,099
i 468.067
42,000,000
i 860,032

1 Actual figure; not an estimate.
* Gross income.
* Insufficient data to warrant computation o f an estimate.
4 Amount of loans made.
8 Policyholders.
* Gross premium income.
* Does not include noncommercial federations, for which data were insufficient to warrant estimates.
8 Items cannot be totaled because subgroups are not m utually exclusive.




7

GENERAL REVIEW OF THE MOVEMENT

The combined membership of the local distributive and service
associations is estimated to have exceeded 800,000, of which about
155,000 were in the service associations, and most of the remainder
were about equally divided between the stores and the petroleum
associations. The estimated business done by the local associations
totaled some $187,700,000, of which nearly 60 percent was accounted
for by the store associations. The wholesale business by associations
handling consumers’ goods during 1936 was estimated at more than
$43,000,000.
In order to round out the picture, data are given in table 2 for
the labor banks, mutual savings banks, and the whole group of
mutual insurance associations, all of which have some cooperative
features.
T able 2.— Sem icooperative O rganizations in the U nited States in 1 9 3 6
N um ­
ber of
organi­
zations

T yp e of organization

Labor banks 7......... ........... ............. .
Building and loan associations4____
M utual savings b a n k s6------------------M utual insurance com panies7_____

Members

Amount of
business,
1936

Share
capital

Total assets

Net
worth

4
3 $21,747,423 $1,725,000 $24,368,310 $2,155,221
(2)
6,125,971
10,266
5,741,935,430
(2)
(2)
(2)
566 «13,165,045 » 10,059,951
18,587
5,113.633 1,716,097
1,279
» 276,015,960
515,582,733
<2)
(2)
(’ )

1

Data furnished b y Industrial Relations Section, Princeton University.
1 N o data.
* Deposits.
4 Data furnished b y United States Building and Loan League.
* From Annual Report of the Comptroller of the Currency for year ended October 31, 1936; data are for
June 30,1936.
6 Depositors.
7 From Directory of M utual Insurance Companies in the United States (fire and casualty), published
b y American M utual Alliance, Chicago, 111.; figures here given represent remainder after deduction of asso­
ciations included in Bureau of Labor Statistics study.
8Premiums on policies written.
G E O G R A P H IC A L D E V E L O P M E N T

There has been considerable variation in the development of dif­
ferent types of associations on a geographical basis. Store associa­
tions are now found in practically every State in the Union. They
still appear in largest numbers in the North Central States, though
smaller growth is found in New England, the Middle Atlantic States,
California, and Washington. The petroleum associations also have
reached their greatest development in the Mississippi Valley States,
with only a few in the Mountain States; the East is almost barren of
such organizations. The bakery societies on the other hand are all
in the States of Massachusetts, New York, and New Jersey, although
there are a few store associations in other parts of the country which
run a bakery as one department of the merchandising business.
Cooperative housing has been concentrated in one metropolitan
area—New York City. At the time the Bureau’s survey was made




8

CON SU M ERS’

C O O P E R A T IO N

IN

THE

U N IT E D

STATES

two associations had been formed in Wisconsin but had not progressed
to the point of actual construction.
A group of petroleum and fuel-oil associations has developed in
Texas. Aside from these, however, there was little cooperative
activity in the South until the advent of the electricity associations
formed under the rural electrification program. Of 28 States in which
such associations had been formed and had received Rural Electrifi­
cation Administration loans by the end of June 1937, 8 were Southern
States. Practically all other sections of the country also had asso­
ciations of this type except New England and California. Washing­
ton State, although not represented by associations under the Rural
Electrification Administration, had a number of cooperative power
associations which had been in existence for many years before that
program was inaugurated.
Telephone associations are found here and there in nearly every part
of the country, but the vast majority (80 percent) are in the North
Central States. No other geographic division has as many as 5
percent of the total.
Credit unions also have been started in every State in the Union.
Although New England was the birthplace of the cooperative credit
movement in this country, that section has yielded first place as
regards numbers of associations to the East North Central and West
North Central regions; these together accounted for more than twofifths of the credit cooperatives existing at the end of 1936. In this
connection it may be noted that although the South still has few
distributive and service cooperatives, some of the States there have
been very receptive to the idea of cooperative credit. Among these
may be cited Florida, North Carolina, Tennessee, and Texas, each of
which had more than 100 credit unions in operation at the end of 1936.
The expansion of the credit-union movement was greatly facilitated
by the passage of the Federal Credit Union Act, in June 1934. In the
year and a half between that time and the end of 1936 nearly 1,900
associations had been formed under that act, whereas State associations
(dating from as early as 1908) numbered only 3,575.
Much of the cooperative development is in rural sections. Most of
the telephone associations and a large proportion of the insurance
associations are in the country or in small towns. The electricity
associations are almost entirely rural. Analysis of the store associa­
tions and their members, in relation to population, indicated that of
1,668 associations in cities, towns, and villages, more than threefourths of the associations, over three-fourths of the membership, and
nearly three-fourths of the business done in 1936 was in places with a
population of 5,000 or less. For the whole group the cooperative
membership 1 formed 0.92 percent of the total population in places
’Members only; not counting their families.




GENERAL

R E V IE W

OE

THE

M OVEM ENT

9

where the associations were located. However, although the cooperators formed only 0.05 percent of the population in cities of a
million or over they formed about 11 percent in places of 1,000-5,000,
nearly 24 percent in places of 500-1,000, and 47 percent in places of
less than 500.
The bakeries, creameries, housing associations, restaurants, medicalcare associations, and credit unions were practically all in industrial
centers. As the above figures indicate, the large cities have proved to
be the most difficult locale in which to obtain a foothold for the store
societies. There are several reasons for this: The efficiency of private
retail distribution; the low prices in the chain stores, with which the
cooperative with its small purchasing power cannot compete on a
price basis, unless it has the advantage of a cooperative wholesale in
nearby territory; the difficulties of bringing city people together in
homogeneous groups and of contending with long-established buying
habits of the housewife.
That cities are not invulnerable to cooperative attack, however, is
attested by the growing number of American cities in which there are
associations of some size that are in apparently successful operation.
Even in Great Britain the city of London was long regarded as
impregnable. But in 1936 it had a city-wide society with 631,464
members— a number sufficient in itself to populate a large city— and
its sales exceeded 60 million dollars (two-fifths of the sales of all the
retail cooperatives in the United States combined) in that year.
In the United States the buying club is being utilized as the approach
to cooperative development in the cities. This method has the ad­
vantage of being very simple in operation, requires no financial invest­
ment and consequently involves no financial hazard, and offers a
means of obtaining experience in the technique of cooperation. Part
of the savings realized from the pooling of the members’ orders is
retained in the common treasury, to be used in starting a store when
the members feel that the time is ripe to do so.
AGE AND

S IZ E O F A S S O C IA T IO N S

Because they see small associations spring up here and there and
die out in a few months or a few years, many people are inclined to
regard the whole cooperative movement as an ephemeral one. It is
therefore of interest to note that of the associations reporting in 1936
there were 379 organizations that had been formed during the period
of high but largely uninformed enthusiasm of the period 1916-20 and
there were 229 others that had survived from even earlier periods.
Two associations had been in business 57 and 60 years, respectively.
Nearly 45 percent of the reporting associations, however, had been
formed since the beginning of the depression that started in 1929.
9 0 6 2 1 °— 39-------2




10

CON SU M ERS’

C O O P E R A T IO N

IN

THE

U N IT E D

STATES

On the average, the retail distributive associations in the United
States are small. In 1936 the average membership of the store asso­
ciations was 219, of the petroleum associations 335, and of all retail
distributive associations combined, 257. About 70 percent had fewer
than 250 members, and only 3.5 percent had attained what would in
Great Britain be considered a fair-sized association (1,000 members or
more).
Seven retail distributive associations (including three handling stu­
dents7supplies only) had sales in 1936 of over one million dollars each.
For all distributive associations combined, the average annual sales
per association were $81,058, and nearly half of the total had sales
falling within the range of $25,000-$100,000.
PATRONAGE REFUNDS

The level of charges, volume of business, operating margins, and
business efficiency all influence the amount of net savings made. As
already stated, the practice of the distributive associations is to charge
the regular current prices for the merchandise handled by them and
to return all or part of the net surplus remaining, after expenses and
reserves are covered, to their members in proportion to patronage.
This practice is not so common among the service associations, many
of which set their scale of charges only high enough to cover the over­
head; this was true also of the telephone associations. The insur­
ance associations operating on the assessment basis levied assessments
only sufficient to cover actual losses and expenses, and those collecting
advance premiums had set these at levels considerably below the
“ manual” rates.
Over 70 percent of all the retail distributive associations reporting
were able to make net savings on the 1936 operations, but slightly over
7 percent of the total sustained losses.
Possibly because of the relatively larger margins of profit and the
less involved type of business, the Bureau found that a larger propor­
tion of petroleum associations than of the store associations were able
to make net savings and their patronage refunds were at a higher
rate. In the store associations the most common rates of patronage
refunds were from 2-6 percent, whereas in the petroleum associations
the largest groups paid refunds of 5-6 and 10-11 percent; these rates,
it should be emphasized, represented percentages of sales, not of share
capital.
What these refunds meant to the individual member is indicated
by the fact that, for the associations reporting the amount returned
on 1936 patronage, the average received by each member in the store
associations of all kinds was $13.42 and for the petroleum associations
was $13.87. Individual members in some cases received patronage
refunds of as much as $150.




GENERAL

R E V IE W

OF

THE

M OVEM ENT

11

A larger proportion of petroleum associations than of store associa­
tions— 62.6 as compared with 38.4 percent— made patronage refunds.
For the whole group of retail distributive associations the proportion
returning patronage refunds was slightly over 48 percent. The failure
of the other associations which had net savings on the year’s business
to make refunds on patronage may have been due to a number of
causes, such as use of the surplus to make up deficits in previous years,
to provide additional working capital for the organization, to build up
reserves, to construct or purchase new buildings, new equipment, or
to expand into new lines of operation. In every case where such a
plan was adopted, it was, of course, on the members’ own vote.
Naturally the economic conditions during the .depression affected
adversely the ability of the associations to make patronage refunds.
Nevertheless some associations made such refunds throughout the
depression; and others could have done so but preferred to use the
surplus to strengthen the financial position of the association.
The rate of interest that credit unions may charge is limited by the
laws under which they operate. The most common maximum is 1
percent per month, calculated on the unpaid balance. Reports to
the Bureau indicated that some 60 percent were charging the maximum
rate of 1 percent per month and about 20 percent were charging %
percent per month. As the operating expense of credit unions are
very low, these rates yield a gain from which shareholders are re­
munerated. Credit-union practice differs from general cooperative
practice in that such returns are made on share capital and not on
patronage.
T rends in Cooperative D evelopm en t
DEVELOPM ENT

FROM

1933 TO

1936

The Bureau’s latest previous study of cooperatives was made in
1933— at the low point of the depression. In contrast, the year 1936
was a year of considerable recovery which was reflected in the status
of the cooperatives.
The depression had the usual effect of depressions upon the coopera­
tive movement. Cooperative associations are predominantly workingclass organizations and as such are peculiarly sensitive to conditions
affecting the employment and income of the workers. A substantial
number of associations were wiped out by the results of unemploy­
ment, bank failures, failures of employing firms, and the general hard
times which their resources were not sufficient to overcome. The
stable and well-established associations, though severely affected,
managed to survive and some were able, as well, to extend their opera­
tions. Also, there appeared the usual crop of new associations which
always follows in the wake of a depression, when people begin to cast
about for a means of eking out reduced incomes. The accessions




12

CON SU M ERS’

C O O P E R A T IO N

IN

THE

U N IT E D

STATES

resulting from the depression of 1929-34, however, exceeded by far
those in any period since the Bureau has been studying the movement.
Although the development of the distributive branch of the move­
ment has proceeded at an uneven pace in different parts of the country,
its momentum has greatly increased in the past few years. Distribu­
tive cooperatives at the end of 1936 represented not only a more ex­
tensive but also a sounder development than at any time since the
Bureau first began to follow the movement, in 1918.
It should be pointed out in this connection that there is in general
a considerable difference in the picture presented by the associations
which are affiliated to the organized movement and in that presented
by the large number of scattered associations that are either unaware
of the existence of cooperative wholesales and regional leagues or are
not yet persuaded of their value. Among the associations that are
members of cooperative educational or commercial federations, more
and more emphasis is being laid upon education of members and em­
ployees, upon better accounting systems, and greater operating
efficiency. Most of the larger and more stable organizations in the
United States are part of these organized groups. The Bureau’s field
studies, however, disclosed that the independent, isolated associa­
tions were in general far below the level of the federated associations
in business efficiency^ size, volume, financial stability and operating
results. A certain proportion of the movement disappears each year
through failure or voluntary dissolution, but among the increasingly
large number of associations which have realized the advantages of
federation and have utilized to the full the wholesaling, auditing, and
other facilities thus available, failures are becoming fewer and fewer.
The credit unions represent a fast-growing phase of cooperation.
Their growth during the past few years has been accelerated by the
passage of the Federal Credit Union Act. Possibly, also, their forma­
tion has been speeded by the depression, the increased need of the
small borrower for credit, and the losses from bank failures.
The telephone associations, on the other hand, are not an expanding
group. One of the older forms of cooperative activity, the telephone
association filled a real need in the early days when there were wide
rural areas without telephone communication. With increasing
density of population, the private companies have taken over more
and more of the service, cooperative associations have disbanded or
been bought by private interests, and each succeeding telephone
census has shown a decreased number of companies but an increase
in the proportion of telephones served by the larger operating units.
Duplication of telephone service is not favored by most public regula­
tory bodies. Undoubtedly, there are still areas in which expansion
or creation of cooperative telephone facilities is possible, but in the
very nature of things such opportunities cannot be great.




GENERAL

TREN D

S IN C E

THE

13

R E V IE W

OF

M OVEM ENT

1 9 3 4 , IN

I D E N T I C A L A S S O C IA T IO N S

Not only was the distributive movement expanded in 1935 and 1936
by reason of the formation of new associations, but there were also
increases in average membership and average sales. Of 1,475 retail
distributive associations reporting membership in both 1935 and 1936,
58.8 percent showed increases in number of members, 27.4 percent
showed no change, and only 13.8 percent had a loss. There were
1,238 associations reporting amount of business for both years; of
these 78.6 percent increased their sales and 21.4 percent suffered a
decrease.
The following table is based upon identical distributive associations,
i. e., those that furnished membership data for both 1935 and 1936
and those that reported on sales for all three years 1934 to 1936. As
the table shows, the combined membership of the retail distributive
associations increased 7.2 percent from 1935 to 1936. Sales increased
19.8 percent from 1934 to 1935 and 16.0 percent from 1935 to 1936—
a total rise of 39.0 percent during the 3-year period. All types of
retail distributive associations benefited by this increase but the
petroleum associations registered the greatest relative gain, both in
membership and in sales.
T able 3.— P ercen t o f In crea se in M em bersh ip and Sales o f Iden tica l D istribu tive
Cooperatives in Specified P eriods
Percent of increase in—

T ype of association

Sales
Mem ber­
ship, 1935
to 1936

1934 to
1935

1935 to
1936

1934 to
1936

Retail distributive associations........... ...............................
Store associations- ........................................................
Petroleum a s s o c ia tio n s .______ __________________
Distributive departments of marketing assodations.

7.2
7.3
7.9
3.8

19.8
18.8
26.1
13.5

16.0
16.5
20.1
7.6

39.0
38.3
51.4
22.2

Wkolesale associations. .......................................................
Interregional.....................................................................
Regional............................................................................
District________ _________ ______________ _________

8.3
80.0
7.9
12.2

50.9
11.5
51.2
48.6

23.7
12.0
23.5
37.3

85.9
24.9
83.4
104.2

The record of the identical retail distributive associations was
exceeded by that of the wholesales. They increased the number of
their member associations 8.3 percent and their sales 23.7 percent from
1935 to 1936; in the 3-year period 1934-36 their business rose 85.9
percent
D E V E L O P M E N T IN P E R I O D 1 9 2 0 T O

1936

Index numbers of aggregate sales, net earnings, and patronage re­
funds of store associations and petroleum associations are shown in
table 4. This shows in graphic fashion the effects of the depressions




14

CON SU M ERS’

C O O P E R A T IO N

IN

THE

U N IT E D

STATES

of 1920-21 and 1929-34 upon the business of the cooperative stores.
Beginning with 1922 the sales of the cooperative stores continued
steadily upward until 1929 and declined only slightly in 1930, from
which point they fell precipitately during the next 2 years but only
slightly from 1932 to 1933. Beginning with 1933 they improved
decidedly each year through 1936.
An interesting feature is that although net earnings fell in 1932 to
less than one-third of the 1929 level, even 1933 (at the trough of the
depression) showed an improvement over 1932.
The gasoline associations being a much newer type of cooperative
business, which began only in the early 1920% naturally showed a
much sharper upward swing in sales than did the stores, as the move­
ment gathered momentum. This momentum continued into 1930
and carried petroleum sales to nearly 15 percent above the 1929 level in
that year. It was only in 1931 that a decline began. *
Neither sales nor earnings declined in the petroleum associations to
as low a point as was true in the stores. Also, whereas the store
group as a whole had not regained in 1936 the 1929 level as regards
either volume of business or net earnings, the petroleum associations
not only had passed the 1929 level but had considerably surpassed
their peak year of 1930.
It should be noted that a number of individual store associations
reporting to the Bureau had sales in 1936 substantially above any
previous year in their history.
T able 4.— In d ex es 1 o f Sales9 N e t E a rn in gs , and P atronage R efu n ds o f S tore and P etroleum
C ooperatives , 1 9 2 0 -3 6
[1929=100.0]
Retail store associations
Year
Sales

N et
earnings

Patron­
age re­
funds

Petroleum associations

Sales

N et
earnings

Patron­
age re­
funds

1920 .
____
1921______ ___
________________________
1922...................................................................
1923...........................................__ ................
1924________ _______ _____ ___________
_

76.1
66.1
63.9
70. 7
75.1

1925___________________ ______________ _
1926........................... .................................. .
1927______________________________________
1928______________________________________
1929_____________________________________

82.3
88.3
93.0
98.1
100.0

84.0
90.2
89.9
94.5
100.0

88.1
82.6
91.5
97.3
100.0

38.6
54.0
62.9
79.4
100.0

34.5
51.3
62.0
51.7
100.0

30.3
54.8
51.0
57.4
100.0

1930_____________________________________
1931______________________________________
1932______________________________________
1933______________________________________
1934_________ ____________________________

97.4
76.7
59.7
55.5
64.2

97.4
65.6
30.2
34.3
54.0

93.1
82.7
83.3
58.1
81.8

114.6
103.5
95.0
93.4
114.9

145.2
111.7
79.2
74.5
86.2

146.6
120.4
101.3
101.6
122.1

1935_______ ______________________________
1936_____________________________________

75.2
87.5

60.8
87.6

92.5
129.8

142.9
168.8

94.7
115.7

142.7
173.9

i Indexes computed on the chain system, i. e., on reports from identical associations from one year to the
next,




GENERAL

R E V IE W

OF

THE

M OVEM ENT

15

Compared to the situation in 1920, when the Bureau of Labor
Statistics made its first study of the movement, the following may be
noted:
Today more associations are formed only after extended educational
work (issuance of pamphlets, holding of meetings, formation of study
groups, etc.) than was formerly the case. Reliance upon practical
facts has to a large extent supplanted the unthinking enthusiasm and
exaggerated claims that characterized the early period.
There is now greater realization of the advantages of federation both
for education and for business purposes. Fewer than 200 associations
were affiliated with the national body— the Cooperative League—in
1920, and almost none of these were in a position to pay dues for its
support. In 1936 the League had some 1,500 dues-paying member
associations, and there were about 1,900 associations which were
members of the various regional wholesales.
In 1921 cooperative wholesaling, which had seemed to be on the
upgrade a year or two before, was at very low ebb. There were still
several subjobbing organizations, and two farmers, wholesales (which
handled consumers’ goods) operating in one State each, but all but
one of the regional or State wholesales connected with the consumers’
movement proper had either already gone down in the crash of the
National Cooperative Wholesale or were so deeply involved financially
that their remaining period of existence was a matter of only a few
years at best. By 1936 cooperative wholesaling had revived in a most
spectacular manner and represented one of the most successful phases
of consumers’ cooperation.
Largely because of the continued efforts of both the educational fed­
erations and the wholesales, the business practices of local associations
have undergone a noteworthy change for the better. The Bureau’s
1920 report noted an almost incredible lack of knowledge of the most
elementary principles of accounting, which in some cases proved fatal
or nearly fatal to the organization. One of the more common of these
was the failure to include the share capital as a liability. Others
were simply mathematical errors. Thus, one association, through
such an error, showed on its balance sheet an apparent profit of $7,074;
as a matter of fact it had a loss of nearly $5,900. On the strength of
the report, however, the illusory “ profit” was distributed to the mem­
bers in patronage refunds. The association never recovered from
this misstep, but went into bankruptcy a few years later.
Such elementary mistakes were very few in number among the
financial reports received in 1936. There was still a certain propor­
tion of associations in which improvement in accounting methods was
badly needed. Thus, one of the Bureau’s investigators found that in
a small miners’ association visited in Pennsylvania no records of the
transactions had ever been kept; he found also that there had never




16

CONSUMERS’ COOPERATION IN THE UNITED STATES

been any net earnings. This association was started in 1929; it had
always been operated entirely with volunteer help. In 1936 it had 29
members and its business in that year amounted to approximately
$10,000 (as nearly as the secretary could estimate). The wonder is
that it had lasted for 7 years. Again, a farmers’ store formed in the
early 1920’s had never had its books audited and the investigator
reported that the “manager didn’t seem to know much about the
financial condition of the association.” Another had an audit in 1936
for the first time since it began business, in 1930. In a Wisconsin
association “the books were in very poor condition, so that it was
difficult to get exact figures; they carried a large amount of accounts
receivable, some of which were quite old.” In another organization
evidently very little check was kept on financial matters, for it was
reported that the secretary-treasurer had embezzled $3,024 in 2 years
and then committed suicide when about to be exposed.
These were extreme cases and few in number. Whereas in 1920
only 35 percent of the associations subjected their books to periodic
audit by an independent expert accountant, in 1936 this was true of
over 76 percent of the associations.
Operation on the hazardous cost-plus basis has decreased almost
to the vanishing point. Under this method, instead of operating at
current prices, the association sets its price level at cost plus a per­
centage estimated as sufficient to cover expenses. Cooperatives have
come to realize, however, that this method allows no margin for build­
ing up reserves for expansion or unexpected losses, and that it is almost
impossible to ascertain in advance what the cost of operation will be.
Increasing numbers of associations have demonstrated the feasi­
bility of abolition of credit sales, with the corrollary, surprisingly
enough, of increased sales in some cases. In certain places the return
to a strictly cash basis has been accomplished with the aid of a newly
formed credit union which fills the members’ need for credit.
In both 1925 and 1936 over 70 percent of the reporting distribu­
tive associations were able to make a net gain on the year’s operations,
but whereas only 40 percent returned patronage refunds in 1920, 48
percent did so in 1936.
The most common rate of stock turn in 1920 was between three
and four times. In 1936 it was between 10 and 13 times.
On the other hand there are still many ways in which individual
associations can make improvement: Some of the older associations
are inclined to rest upon their laurels, to discoimt the value of the con­
tinuous educational work that is necessary to bring in new members
and to make convinced cooperators of them, and to rely exclusively
upon financial benefits to keep the membership loyal. Certain as­
sociations, including several which have been outstandingly successful
in a business way, have allowed the responsibility and authority to




GENERAL REVIEW OE THE MOVEMENT

17

drift into the hands of the manager and have in fact become “ oneman” associations. Such organizations are not on a sound basis,
and face an uncertain future when the manager’s days are over.
The average capitalization is still too small, in many cases, to allow
the associations to realize their potential achievements. They
struggle along, in a hand-to-mouth existence, unable to take the dis­
counts earned by cash buying or to make advantageous purchases,
and without sufficient funds to make needed improvements or to ex­
pand into new fields. The wage earners who, by and large, are the
members of the cooperatives, ordinarily have very little funds to invest,
it is true. But it is also true that what money they have they feel must
be placed where it can be withdrawn in an emergency, and this has
not generally been the case with the share capital of cooperative associ­
ations.
Also, the working conditions, both hours and wages, will in many
cooperatives bear improvement.
The field work revealed a considerable number of associations which
need to improve their “ housekeeping,” bearing in mind that dingy,
unkempt, and carelessly displayed stocks attract neither members’ nor
nonmembers’ patronage. Many of the stores visited would be bene­
fited by increased attention to attractive windows, well-arranged goods,
and a general paint-up campaign. One of the most common observa­
tions made by the field workers was the crowding of too many com­
modities into cramped quarters, giving the whole store an untidy,
cluttered appearance. In some districts, on the other hand, the
cooperatives have adopted a distinctive sign, a uniform, attractive
color scheme, and up-to-date fixtures and store lay-out, with the result
that the cooperative store compares favorably with any of its com­
petitors.
S cop e and M eth od o f S tu d y
D E F I N I T IO N O F T E R M S

Cooperative associations may be divided broadly into two classes:
Consumer organizations and producer organizations.
(1) The consumer organizations are those operated for the benefit
of the members in their individual consumer capacity, i. e., providing
goods such as food, clothing, household supplies, fuel, or milk, or pro­
viding services such as shelter, automobile repair, credit, laundry
service, insurance, telephone service, medical care, burial, recreation,
etc. These may be provided singly, by an association specializing in
one line, or in combination, by a general-service association whose
aim is to fill the needs of the members in as many lines as it is
practicable to do so.
(2) The producer organizations are those operated for the benefit
of the members in their producer capacity. Their function may be




18

CONSUMERS’ COOPERATION IN THE UNITED STATES

either (a) the marketing or processing of goods produced individually
(as in the fishermen’s marketing associations; the farmers’ associa­
tions marketing grain, livestock, milk, etc.; or the associations mak­
ing butter, cheese, etc., from farm products received from farmer
members, to be sold on the open market) or (b) the marketing of
goods processed or produced collectively (as in the so-called workers’
productive associations operating shingle mills, clothing factories,
shoe factories, etc.).
In practice these classes may overlap. Thus, a farmers’ market­
ing association may also undertake to purchase for the members
groceries, or household supplies, or fuel to heat their houses. Pre­
cisely in the degree that it undertakes consumer activities it becomes
also a consumer organization. Or a consumer association may by
itself or jointly with other organizations undertake productive activ­
ities, such as the manufacture of sausage, bakery goods, etc., for
consumption by its members; in this case, however, although carry­
ing on this producer activity, the organization does not thereby
become a producer organization, for this is merely an extension of
activities for the further benefit of its members as consumers.
As individuals combine to furnish themselves with goods and serv­
ices through local cooperative associations, so the local associations
may in turn combine (1) for purchasing goods at wholesale, for the
processing or production of commodities, or for the undertaking of
any other kind of business, or (2) for the carrying on of noncommer­
cial activities, such as the fostering of new associations, education, or
recreation. Here again the classification of such an organization will
depend upon whether its activities are for the benefit of the members
as producers (as, for instance, in a cheese factory owned by local
cooperative creameries, manufacturing cheese for general sale) or as
consumers (as in a wholesale purchasing association, or a factory
manufacturing sausage for consumption by the members of the local
associations which own the establishment of the federation).
The present survey covers only associations, whether local associa­
tions or federations, carrying on activities for the benefit of the
members in their consumer capacity.2
BASIC PRINCIPLES OF CONSUMERS’ COOPERATION

Consumers’ cooperatives vary but little in their organization and
methods, from country to country. All are based upon the principles
established by the Rochdale Pioneers in 1844. These principles are
seven in number:
1. Open membership.
2. Democratic control (one vote only per member and no proxy
voting).

2 For the basis of classification of the various types of associations and the basis upon which their inclusion
in this report rests, see separate sections in chapters dealing with specific types of associations.



GENERAL REVIEW OE THE MOVEMENT

19

3. Distribution of net surplus to the members in proportion to
their patronage of the association.
4. Limited interest on share capital.
5. Political and religious neutrality.
6. Business for cash only.
7. Promotion of education in cooperation.
In 1930, 86 years after the enunciation of these principles, the
International Cooperative Alliance, at its congress, appointed a
committee to examine anew these principles and their present validity.
After 7 years’ study the committee reported that “ nothing in the
modem developments of industry and commerce, or changes in
economic method, has diminished the integrity” of the Rochdale
principles. The committee, however, was of the opinion that, in
deciding the essential cooperative character of any organization,
stress should be laid particularly upon the observance of the first
four principles. The observance of the others, while of importance as
regards good practice, was not, in the opinion of the committee, of
sufficient weight to be imposed as a condition for membership in the
International Cooperative Alliance.
Generally speaking, acceptance of the “ cooperative philosophy”
and the recognition of cooperative activities as steps toward a new
social order are found only among the store associations and in certain
of the service associations. In the major service groups, however—
credit-union, telephone, and insurance associations—in general the
associations have not, with certain outstanding exceptions, regarded
themselves as part of the cooperative movement. In them the collec­
tive activity undertaken is regarded as an end in itself. Also, there
has been little contact among the various branches of the movement,
except where members of one kind of association were also members of
another. Continuance of the present tendency of the distributive
associations to undertake the formation of such other activities as
credit unions and cooperative insurance will in time undoubtedly
have its effect in making for closer relationships.
The so-called “ Rochdale principles” are consciously practiced in
their entirety only by the store associations. All of the others
deviate in certain respects. It happens that associations in either
the insurance or the telephone business which operate as pure mutuals
are in fact genuinely— though not consciously— cooperative and
conform to all of the cooperative principles and methods except
business at current prices and (consequently) the return of patronage
refunds. They have open membership and democratic control on
the one-vote plan and furnish service at cost. But this follows from
their adherence to principles of “ mutuality,” not from acceptance of
Rochdale philosophy. Mutual associations—insurance and tele­
phone— were, however, included in the tabulations if they were oper-




20

CONSUMERS’ COOPERATION IN THE UNITED STATES

ating on the recognized cooperative principles. All things considered,
a surprisingly high cooperative standard was found among them.
COVERAGE OF STUDY

The Bureau’s study was started in the summer of 1936 when a com­
mittee was formed, composed of representatives from those Govern­
ment agencies interested in various aspects of the cooperative move­
ment. This committee drew up the forms to be used and a set of
instructions for the field agents.
Early in 1937 these questionnaires were sent to every consumer co­
operative association, of whatever type, known to the Bureau. In
this phase of the work the Farm Credit Administration cooperated by
circularizing the farmers’ cooperatives known to be carrying on
collective purchasing of supplies for their members. The data for
those organizations which were purchasing some consumer goods were
then made available to this Bureau.
The returns from the questionnaire study were supplemented by
personal visits to nonreporting associations made by representatives of
the Bureau of Labor Statistics. This field work covered all or part of
the 13 States of California, Connecticut, Illinois, Indiana, Massachu­
setts, Michigan, Minnesota, Nebraska, New Hampshire, New York,
Ohio, Pennsylvania, and Wisconsin.
The credit unions, like the distributive associations, were all cir­
cularized. The information so obtained was supplemented, for asso­
ciations formed under State law, by data furnished by the State
officials having supervision of credit unions. Information regarding
the credit unions chartered under the Federal act was furnished by
the Credit Union Division of the Farm Credit Administration.
The data here given for the electricity associations were obtained
from the Rural Electrification Administration.
The rate of returns and the incidence of undiscovered and nonre­
porting associations were checked in various parts of the country by
“ spot” studies.3 Three of these studies were made by members of
the Bureau’s staff, and the other two were made by members of the
staff of the Consumers’ Project of the Department of Labor and of
the Consumers’ Counsel Division of the Agricultural Adjustment
Administration.
Although the Bureau had made a number of earlier surveys of
cooperative associations,4 this was the first time that an attempt
3 Summary data from three of these, covering Cleveland, Chicago, and northern Wisconsin, were pub­
lished in the M onthly Labor Review for September 1937 (p. 541), October 1937 (p. 816), and December 1937
(p. 1327). The findings of the other two, covering southern California and St. Louis County, M inn., are as
yet unpublished, but some of the data obtained have been utilized in the present report.
4 See U. S. Bureau of Labor Statistics Bulls. Nos. 313, 437, 531, and 612.




GENERAL REVIEW OF THE MOVEMENT

21

was made to obtain general coverage on telephone, electricity, and
insurance associations.
Altogether, usable reports were received for 9,880 local associations
and 57 federations.
SUMMARY DATA FOR SAMPLE REPORTING FOR 1936

The following table brings together data on the principal points of
operation for the various types of organizations which reported for
1936.
T ab le 5 .— Operations of All Types of Consumers' Cooperatives for Which Reports Were

Received for 1936

T ype of association

Associa­
tions fur­ Membership
nishing
at end of
usable
1936
reports 1

Amount of
business

Net earn­
ings

Local associations
Retail distributive_________
______________________
Store associations___ __
__ _
Buying clubs__________ _______________________
Petroleum a ss o cia tio n s .,___
....
___
Distributive departments o£ marketing associa­
tions_________ ________________ _ _ ___ __ _
Bakeries______________ _____ _________ _______
__ ______
___ .
Creameries_______ ____
Water-supply associations____
.. ___
___

1,939
911
98
769

Individuals
458, 812
185,860
6, 573
232, 417

145
7
4
5

23, 530
5, 307
4, 497
628

20,360, 534
595, 680
2,954,121
18, 352

1, 581, 571
2 16, 643
63, 526
5, 075

Service____ _ _
. . . ________ . . . __ _
Associations providing rooms or meals or both___
Laundries and cleaning establishments . _
Medical-care associations___ __ __ . __________
Garages. __ _______________________ ____________
Printing and publishing associations__ . . .
Burial associations______ . . . . _ _ _ _ _ _ _ _ _
Recreation associations. . . .
. . _
Housing associations_____ _
___
_ ... _
Electricity associations. _ _ _ _ _ ___
M iscellaneous5_______
_
_
_____

330
30
3
4
2
7
17
9
39
214
5

41, 641
10,151
875
5,143
96
4,916
15,006
914
2,323
(4)
2,217

2,498, 889
989, 306
33,150
1, 950
53, 229
69, 264
63,189
6,498
3 1, 281, 641
(4)
3 662

40, 261
14, 220
549
77
2 1, 718
2 2, 347
4, 432
200
24, 848
(4)

Telephone associations 6___ ___________ ____________
Credit unions. __ _ _ _ _ _ _ _
_ _
__
_ ___
Insurance associations 6___ _ ______________________

1, 614
4 663
1,334

110,981
1, 106,076
9 4, 774, 854

3 1,486, 761
7 88, 342,486
io 71,925,068

69,381
(4)
(4)

Federations
___ ___ ____________________

f7

Associations
(“ )

Distributive: Wholesales ___ _ _ _ ____ _ _ _ _ _ _
Interregional_______ __
_ _
_________
Regional___ _ _ ___
__
__ __ _____
District______ ___ _ _______ ______ ____ _____

30
2
19
9

(ii)

Service________
_ _ _
___ __
______________
Auditing___________________ ________________
Printing and publishing 12_
_________________
Other__________ _______ _ _ __________________

12
4
5
3

(n)

Educational _ _ _ _ _
National___ __
Regional. _ _ _ _ _ _ _ _
___
Other__________________ _______________________

15
1
2
12

All federations___ __

See footnotes at end of table.




$146, 309, 260 $7, 527,092
71, 052, 638 2, 298, 336
415, 991
9,311
50,911,944 3, 585,916

41, 677, 594

1,120, 339

41,402, 623
468, 067
40,074, 524
860,032

1,103, 412
5, 406
1, 045, 422
52, 584

469
388
74

254, 269
37, 364
216, 905
(4)

16,927
(4)
16,927
(4)

(n)
1, 500
396
259

3 17,974
3 2. 728

18
1,746
109

20, 702

22

CONSUMERS’ COOPERATION IN THE UNITED STATES

T able 5.— Operations of All Types of Consumers’ Cooperatives for Which Reports Were
Received for 1936— Continued
Paid-in
share
capital

Total assets

Net worth

Retail distributive____ ____
----- ---------- $4,920,880
1, 239, 575
Store associations___ _______________
________
5, 921
B uying clubs........................ _ _ _ _ _ _ _ _ _ _ _ _
Petroleum associations__________________________
2, 352, 290
Distributive departments of marketing associa1, 323, 094
tions__________________________________________
Bakeries__ ______ ______ _____________ _______
Creameries.
____ _____
__ ________ ___ _
W ater-supply associations_______________________

$23, 669, 613
9,634,138
19, 854
4,992, 205

$45, 752, 538
20,077, 206
35, 043
12,937, 282

$36,893, 273
16,127, 283
26, 362
10,026, 823

8, 059, 027
77,195
839, 486
47, 708

11,016, 487
322, 769
1, 287, 338
76, 413

9,479, 461
107, 067
1,049, 864
76,413

5, 497
3,425
650

4,438, 324
152, 234
8, 777
109, 900
13, 022
19, 398
31, 724
6, 550
4, 086, 569
(4)
10,150

1,057, 819
491, 842
14, 574
112, 689
143, 645
47, 572
62, 915
184, 432
(4)
(4)
150

770,828
377, 704
9, 331
109, 900
6, 250
36, 878
50,109
180, 506
(4)
(4)
150

2, 413,895
62, 592, 591
(4)

2, 719,155
82,139, 281
(4)

2, 446, 111
52,007, 044
(4)

T yp e of association

Patronage
refunds

Local associations

Service_____ ___ ______________________ _______
Associations providing rooms or meals or both___
Laundries and cleaning establishments.
______
Medical-care associations_____ _________ _ _ . _
Garages___ _________ _ ___ ______ ________ __
Printing and publishing associations____ _______
Burial associations.
_ _
_ _______ _
Recreation associations_____ ______________
___
Housing associations.. ___________ ________ ____
Electricity associations______________________ . . .
Miscellaneous 5_________________________________

1,422

(4)

7,168
Telephone associations 8_________________ ________
8 2, 068, 310
Credit u n io n s... __ . . . __
. . . ___ . . . . . . . .
2,155, 424
Insurance associations8 _______________ ______ _ .
Federations
A ll federations________ . . . ____ ________ _______ . . .

686, 211

2,069, 843

6,085,139

3, 671,296

Distributive: Wholesales_______
__________ . . .
Interregional._ ________ _______ _____
. ... ...
Regional_____ _____ . . . . . ______________
___
D istrict_____________ ___________________________

684,811

2,069, 843
127, 900
1, 889, 408
52, 535

6,085,139
197, 717
5, 697, 743
189, 679

3, 671, 296
180,127
3, 370, 807
120, 362

Service___________ ____
_ . . . ______ _
____
A u d itin g ______ ____________
_ ____ ___
Printing and publishing 12 _ _ . . . . . . ____ _
.. ...
Other_________________________________

1, 400
(4)
1,400
(4)

636, 873
47,938

(4)
(4)
(4)
(4)

(4)
(4)
(4)
(4)

(4)
(4)
(4)
(4)

1 N ot all of these associations reported on all points; for exact number reporting in each case, see sections
dealing w ith specific types of associations.
2 Loss.
3 Gross income.
* N o data.
6 This group includes local educational, lawn-mowing, and cold-storage associations.
6 Includes reporting “ mutual” associations operating on cooperative principles.
7 Loans made.
8 Dividends on share capital.
6 Number of policyholders.
10 Gross premium income.
11 Items cannot be totaled because most of member associations are in each case included also in the mem­
bership of the associations of wider scope, with resultant high degree of duplication.
12 Includes one federation serving local credit unions, printing credit-union forms and other supplies.

Production by cooperatives.— It is the general practice in the coopera­
tive movement that such production as is undertaken is carried on by
federations of local associations rather than by the local associations
themselves. This practice is based upon considerations of both
efficiency and economy. In the United States, however, cooperative
wholesaling has only recently developed to the point of undertaking
manufacture, and some of the older and larger local associations have
gone into this field themselves, producing for the most part com­
modities (such as bakery goods) requiring immediate sale or suitable




GENERAL REVIEW OE THE MOVEMENT

23

for local distribution or consumption. The articles produced by the
local associations reporting included bakery goods, butter, ice cream,
cheese, jams and jellies, canned goods, sirups, sausage and smoked
meats, cosmetics, men’s custom-made clothing, briquets, lumber,
and flour and feed, and the generation of electric power. The total
value of such commodities produced in 1936 was $1,192,997.
The wholesale associations had a combined production—of butter,
sausage, canned goods, coffee, bakery goods, lubricating oil, feed, and
fertilizer— valued at $1,009,039. One association has developed an
international business in lubricating oils, with cooperative whole­
sales in several other countries.




Chapter 2.— R E T A IL D IS T R IB U T IV E A S S O C IA T IO N S
S u m m a ry

The Bureau of Labor Statistics estimates that in 1936 there were
approximately 3,600 cooperative associations engaged in the retail
distribution of consumer goods of various kinds, including such asso­
ciations as stores, buying clubs, petroleum associations, bakeries, and
creameries. These are quite distinct from the associations (such as
housing, telephone, electricity, and burial associations) engaged in
rendering various services. The total membership of these 3,600 re­
tail distributive associations is estimated to have been about 677,750
at the end of 1936 and their total retail business done during the year
$182,685,000. The reports indicate that over 70 percent of the asso­
ciations were able to effect a net saving for their members on the year’s
operations and that of these some 48 percent returned patronage
refunds.
The above figures include many farmers’ organizations engaged in
the collective purchase of consumers’ goods.
It is recognized that there is considerable difference of opinion as
to whether the farmers’ organizations which do collective purchasing
for their members should be classed as consumers’ cooperatives. Even
the farm organizations themselves appear to be divided on this point.
Many farmers’ purchasing associations handle only farm supplies,
or producer commodities— goods used only in the productive business
of the farm. Whether such associations are consumers’ cooperatives
is a very moot point. However, insofar as they handle consumer
goods— food and other commodities consumed or used by the house-,
hold— they do unquestionably enter the consumer field. It was for
that reason that farmers’ organizations doing any consumer business
were included in the Bureau’s study.
S cop e o f S tu d y

Data were obtained for 1,939 of the 3,264 local distributive asso­
ciations known to be in existence at the end of 1936. The coverage
as to business done was considerably greater than that for number of
associations, as the returns include practically all of the larger asso­
ciations. In view of these facts, the data were felt to be sufficiently
inclusive to warrant computation of estimates for the whole coopera­
tive distributive movement.
24




RETAIL DISTRIBUTIVE ASSOCIATIONS

25

Allowance was made for undiscovered associations in the propor­
tions that these were revealed by the field work, and for the fact that
as most of the larger associations were known to be already covered,
the averages for the nonreporting associations would be considerably
under the averages for those reporting. On this basis the following
estimates were arrived at, as representative of retail distributive
cooperation in the United States at the end of 1936: 2,400 store
associations (including buying clubs),2 with 330,500 members and a
business of $107,250,000; 1,150 petroleum associations, with 325,000
members and a business of $69,985,000; and 50 other distributive
associations (creameries, bakeries, and water-supply associations,
etc.), with 22,250 members and a business of $5,450,000.
G eneral C ondition o f Cooperatives

The Bureau’s last previous survey covered the year 1933— at the
low point of the depression. In the interval since then, the coopera­
tive distributive movement has had both gains and set-backs. Many
associations have gone out of business, but a greater number of new
associations have been formed. In general the record is one of slow,
quiet expansion, of the strengthening of both local and wholesale
associations, and of increasing emphasis upon educational activities.
The data at hand indicate that the rate of progress has been very
uneven, being greatest where the sense of cohesion and of a definite
social and economic aim was liveliest and least among the scattered
associations operating on the “ go-it-alone” policy. The field work
done in the present survey discovered numbers of isolated associations
going their own way, making mistakes that could have been avoided
if they had been sufficiently in touch with the rest of the movement
and had been utilizing the improved methods and other helps avail­
able through the central associations.
It is recognized that some of the organizations have faced difficulties
beyond their control. Thus, the manager of a South Dakota asso­
ciation, in his annual report to the membership, made the following
comment:
The 16 years which mark the life of our store have been, in many ways, without
parallel in South Dakota history. They have brought deflation, poor crops,
low prices, insects, bank failures, dust storms, foreclosures, Government relief,
and changed the very fabric of our living.
Yet, despite these disheartening conditions, we have kept going. We are
enjoying a profitable trade. We owe no debts. Our store is controlled chiefly
by practical farmers. Its stockholders, with few exceptions, patronize the store
generously, and are directly interested in its principal purpose. All things con­
sidered, we have done exceptionally well.
2 It should be emphasized that this figure does not include farmers’ cooperative stores handling feed,
fertilizer, and other farm supplies, but no consumer goods. There are hundreds of such associations.

90621°— 39------3




26

CONSUMERS’ COOPERATION IN THE UNITED STATES

Two associations are known to have lost their stores by fire; both,
however, took immediate steps to acquire a new place of business.
The associations in the textile towns of New England were very
hard hit, with the closing (in some cases, permanently) of the factories
upon which the members depended for their livelihood. One organi­
zation, visited in the course of the study, which had been started by
German textile workers in 1915, had finally given up and was in
process of dissolution at the time of the agent’s visit in M ay 1937.
The miners’ associations, also, have been through some bitter ex­
periences caused by long-drawn-out strikes, by the depression, and
by the closing down of unprofitable or worked-out mines. Some
towns—notably in the copper district of Michigan and the coal-mining
districts of southern Illinois—now contain a virtually stranded popu­
lation. One of the oldest cooperatives in the country is located in
such a town. At its peak the organization did an annual business of
nearly $400,000 and claimed that it had the largest sales of any retail
store north of Milwaukee. During the period of its operation it has
returned to its members in patronage refunds about 1% million dollars.
After the war the prosperity which the town had enjoyed because of
the demand for copper ceased abruptly and the place became almost
overnight a “ ghost town.”
An Illinois coal miners’ association reports: “ This cooperative
almost went bankrupt extending credit to the miners during the
United Mine Workers and Progressive Miners’ Union troubles and
has lost money during the years 1932 to 1935.” Another miners’
association in the same region had adopted the practice of “ plowing
in” the net earnings, by crediting the patronage refunds to the mem­
bers’ individual accounts and using the money as “ loan capital” in
the business. This association, whose store was described by the
Bureau’s representative who visited it as “ the best I have seen thus
far,” operated at a loss in 1936 because the railroad mine upon which
most of the members depended failed to pay wages due; individuals
lost as high as $800 each, and were unable to pay their bills at the
cooperative. The Bureau’s representative commented: “ Right now
this town of 1,000 people is in a pathetic condition. The only mine
left is working 1 or 2 days a week and most of the people are on
relief or P. W. A. projects.”
Because of good management, sound financial judgment, and a
loyal membership many associations have been able to prosper in
spite of adverse conditions. Thus, in one Minnesota farming dis­
trict, in a community in which 13 private stores are reported to have
failed since 1915, both the cooperative store and the cooperative gaso­
line and oil association have flourished. Another cooperative, in
Michigan, celebrated its twentieth anniversary in 1937, Its hard-




De t a i l

d is t r ib u t iv e

a s s o c ia t io n s

27

won success has been achieved in the face of an unprecedented de­
pression which kept closed for 4 years the iron mines on which the
members depend for their living and which resulted in the closing of
all the private stores in the town, leaving the cooperative store in
1937 the sole avenue of trade. During the depression the cooperative
doubled its volume of sales.
The Bureau has record of a number of associations which were able
to pay patronage refunds every year in spite of the depression. Others
which could have done so used the money to strengthen the financial
position of the association.
Some gains and some losses have occurred in the legislative field.
The usual tendency has been toward gradual improvement of the
cooperative laws, in the fight of the needs of the cooperative move­
ment, as revealed by experience. However, in two States the coop­
erative statutes have been wiped off the books altogether within the
past few years. Thus, the Wyoming Legislature, although the State
constitution provides that “ the legislature shall provide by suitable
legislation for the organization of mutual and cooperative associa­
tions,” repealed the consumers’ cooperative act in 1931, leaving
prospective cooperatives no special law, either cooperative or nonprofit,
under which to incorporate. In the same year the California con­
sumers’ cooperative law was repealed and the cooperative associations
were specifically made subject to the terms of the general corporation
act of the State. In that State, the cooperatives have resorted to
various expedients in order to retain their distinctive character as
cooperative associations. Some are operating as unincorporated
associations (involving unlimited liability to members); others had
organized under the nonprofit act, thereby having to forego return of
patronage refunds not considered permissible under the act, and were
therefore operating on the cost-plus basis; and at least one was known
to have organized as a fraternal association and to be carrying on its
business activities through two separate subsidiary organizations.
On the favorable side of the ledger must be recorded three special
measures intended to further the spread of public understanding of
the cooperative philosophy. In August 1935 the Wisconsin Legisla­
ture passed a measure requiring the giving of courses in agricultural
and consumers’ cooperation throughout the public-school system of
Wisconsin, from the State University downward, and making at­
tendance at such courses a required part of matriculation in economics,
the social studies, and agriculture. In 1937 a special session of the
Minnesota Legislature appropriated $5,000 to be used in providing
educational material on cooperatives for schools and other groups
in the State, and in 1938 the Legislature of North Dakota passed a
measure requiring high schools to offer elective courses in cooperation.




28

C O N S U M E R S ’ COOPERATION

IN

THE

U N IT E D

STATES

S p on sorin g G roups

The groups which have formed the cooperatives now in existence
are varied. Among the first organizations to become interested in
cooperative purchasing was the Patrons of Husbandry, or the Grange,
as it is more commonly known. During the period 1866-79 the
Grange stores were found throughout the East and Middle West.
Though most of these stores failed during the depression of 1874-78
some of them survived and indeed a few are alive today.
Shortly after 1900, members of the new immigrant groups undertook
cooperative activities. Among these were the Lithuanians and the
Finns, whose favorite forms of cooperative enterprise at that time
appear to have been stores and bakeries. Although the Lithuanian
enterprises are not outstanding at present, the Finnish societies form
one of the strongest elements in the cooperative movement of this
country today. Italian associations have been started here and
there throughout the country; it must be said, however, that many of
the Italian associations studied by the Bureau of Labor Statistics
leave much to be desired as to cooperative philosophy and practice.
Other national groups which still have cooperative associations in
successful operation include the Slovenians, Czechoslovaks, and
Scandinavians. Few of the associations started early in the present
century in New England by English textile workers remain. These
have been gradually disappearing, one by one.
During the years of the World War, when prices wer§ rising faster
than wages, organized-labor groups became interested in the cooper­
ative movement and labor cooperatives began to be established in
many places. Especially active in fostering cooperatives were the
organized coal miners and railroad workers. Miners’ associations
were found in many localities in Illinois, Indiana, Ohio, and Pennsyl­
vania. Most of these went down in the general crash of the National
Cooperative Wholesale and the depression of 1920-21. A few of the
coal miners’ stores still remain, especially in Illinois and Pennsylvania,
but they have suffered from the recent depression and from the bad
conditions in the coal industry. However, one of the most successful
associations now existing in this country is a coal miners’ organization
in Ohio, which has had a record of continuous expansion and growth.
Other industrial groups with cooperatives in operation include the
ore miners (copper and iron) in Michigan and Minnesota; gold and
silver miners in Idaho; railroad workers in Kentucky, Michigan,
Minnesota, North Dakota, and South Carolina; textile workers in
Connecticut, Massachusetts, and North Carolina; and professional
and white-collar groups in New York, Illinois, Ohio, and elsewhere.
In the spot studies made for the Bureau of Labor Statistics in con­
nection with the present survey, it was noted that numbers of the new
urban associations are those of professional groups and of middle-




R ETA IL D ISTR IB U TIV E ASSOCIATIONS

29

class persons. Organized labor is taking a new interest in the possi­
bilities of cooperation and in the formation of cooperative enterprises.
Church groups are also manifesting a lively and growing interest in
cooperation.
Farmers, in their occupational capacity, have been interested in the
cooperative method for more than half a century. Although their
interest formerly was centered for the most part in the cooperative
marketing of their products, they have been taking an increasing
interest in the collective purchase of their farm supplies—feed, seed,
fertilizer, fencing, machinery, containers, binder twine, etc. From
this it has been an easy step, taken more and more generally during
the past few years, to the purchase of household supplies, groceries,
work clothing, fuel, etc.
In some of the subsistence-homesteads projects sponsored by the
Federal Government, the homesteaders have formed cooperative asso­
ciations to provide themselves with food, farm supplies, raw materials
for their productive enterprises, and associations for marketing their
products.
College students are turning to cooperation for the provision not
only of their textbooks but also, during the past few years, for the
provision of meals and lodging, laundry, and cleaning and pressing
service. It must be said, however, that many of the so-called stu­
dents’ cooperatives are not genuinely cooperative but include supply
organizations run by the school for the benefit of the students but not
controlled by them; dormitories owned by the school in which needy
students are enabled to work out part of their subsistence, etc. As
the students’ cooperatives are in operation only during the school year
and as the membership changes considerably from year to year as
upper classmen graduate and new students come in as freshmen, these
cooperatives in many cases lapse at the end of the year, a new asso­
ciation being formed, if desired, the next year.
A number of consumer cooperatives have evolved from self-help
associations,3 whose emphasis was on production, to full-fledged con­
sumers’ organizations in which the production is carried on as a sub­
sidiary activity.
There are a few cooperatives whose membership is composed entirely
or partly of Negroes. They vary considerably in their degree of
success, but have usually resulted from the leadership of one especially
gifted member or of a small group. As the colored workers are gen­
erally among the worst sufferers in time of depression and unem­
ployment, their associations have encountered extremely hard times
during the past few years. In at least one case the membership
includes a large proportion either on relief or engaged on W. P. A.
3 This term is used to designate associations formed among the unemployed, for the production and
barter of goods and exchange of services. Articles on these associations have appeared in m any issues of
the M onthly Labor Review; data for 1936 are shown in the July 1938 issue (pp. 1-17).




30

C O N S U M E R S ’ COOPERATION I N

THE

U N IT E D

STATES

jobs, and consequently with very low purchasing power. In fact, the
association grew out of a self-help organization formed among the
unemployed, which was given a small grant under the Federal Relief
Act of 1933.
Year o f F orm ation
More than 1,900 associations furnished data as to the year in which
they were started. Exactly one-fifth of these were started during the
wave of cooperative enthusiasm that occurred in the war and post-war
period of 1916 to 1920. Almost one-seventh were formed during
1926-29. Altogether nearly one-third dated from 1920 or earlier and
had therefore, at the end of 1936, been in operation 16 years or more.
Twenty-five associations reporting in the present study dated from
1900 or earlier. Two of these were 60 and 57 years old, respectively;
one was a Grange store started in 1876 and the other a consumers'
county-wide store association started in 1879. The effect of the
depression in turning the minds of workers to cooperation as a means
of stretching the purchasing power of the rapidly diminishing contents
of the pay envelope is seen in the fact that 24.9 percent were formed
in the years 1930-34. That this public interest has persisted is
shown by the fact that 184 and 183, respectively, of the reporting asso­
ciations (9.8 percent each) were formed in the years 1935 and 1936.
Reports for 1937 indicate that an even larger number were formed in
that year.
That the earliest associations were overwhelmingly store associ­
ations is also indicated in the following table, the period during and
immediately following the World War being especially productive of
this type of cooperative, as well as of the marketing association which
had added collective purchasing to its duties. Cooperative associ­
ations handling gasoline and motor oil did not begin to make their
appearance until the 1920's. Of 29 petroleum associations predating
that time, all had been started for the purpose of doing a general store
business; gasoline was later added and during the course of the years
had gradually assumed greater and greater importance and by the
end of 1936 had become the associations' major line. The develop­
ment of the service associations has followed about the same line as
that of petroleum associations. The buying clubs are relatively new
and have become increasingly popular during the past 2 or 3 years.
The oldest of those reporting were formed in the period 1921-25. It
should be stated in this connection that the life of the buying club,
in that form, is usually short. Being an informal organization
involving no capital investment and with nothing tangible to “ tie”
the member to the organization, the usual course is that the club
either fades out altogether in a few years or graduates into a fullfledged business enterprise operating some sort of an industrial estab-




R ETA IL D ISTR IBU TIVE

31

ASSOCIATIONS

lishment. A considerable number of the store and service associations
covered in the present report started as buying clubs.
T ab le 6. — Y ea r or P eriod o f Form ation o f D istribu tive Cooperatives
Total
Period

N um ­
ber re­
porting

Per­
cent

Store
associ­
ations

Distribu­
Petro­ tive depart­
Buying leum
ments of
clubs
associ­ marketing
ations
associ­
ations

- __

1,869

100.0

885

733

140

_ _ ___
1880 or earlier_____ _
1881-85 _____________________________
1886-90 _____________________________
1891-95
____
____
1896-1900
_ _ __
____
_________ _____
1901-5

2
5
2
9
7
22

.1
.3
.1
.5
.4
1.2

2
5
1
7
6
14

1

1
2
1
7

________
_
_______________
_ _ _________________
__________________________
___________________________
_ ______ _

53
129
379
166
263
112

2.8
6.9
20.3
8.9
14.1
6.0

37
89
308
113
57
17

4
6
18
41
195
92

12
32
46
8
9
3

1931 _ _____________________________
1932
_________
1933_________________________________
1934
______________________
1935_________________________________
1936
_
_ _ _ _ _ _ _ _ _

97
44
73
139
184
183

5.2
2.4
3.9
7.4
9.8
9.8

17
12
18
38
61
83

76
29
48
92
83
48

1
2
3
7
5
1

All periods__ _

1906-10
1911-15
1916-20
1921-25
1926-29
1930

_________

96

3
1
2
1
3
1
34
51

Other dis­
tributive
associ­
ations

15

2
7
1
1
1
i
l
l

F ield s o f Cooperative A c tiv ity

A wide variety of activities is being carried on by the local dis­
tributive associations. Although the store selling groceries or general
merchandise is still the most prevalent type of cooperative, the
associations handling petroleum products are increasing in numbers.
These two groups are increasingly overlapping in their functions. The
petroleum associations, in the early years of their development,
handled gasoline and motor oil only. Later they began to carry auto­
mobile tires and then various accessories such as batteries, tubes, etc.
Among the latest developments in this field are the addition of certain
electrical appliances, such as light bulbs, washing machines, toasters,
percolators, fans, and radios for cars and for homes; and now, finally,
an increasing number are putting into stock small supplies o f groceries.
Collective purchase of groceries was reported by the Bureau's agents
to be on the increase in farmers' creameries, also.
Some of the general-store associations handle a great variety of
goods, including groceries, meats, clothing (work clothing for men,
house dresses, limited lines of children's clothing), shoes, notions, dry
goods, fuel, hardware, gasoline and motor oil, tires, farm supplies of all
kinds, radios, electrical appliances, refrigerators, and washing ma­
chines. Although they do not generally carry furniture in stock,
usually they will order whatever the member desires. Large numbers
of these associations, in towns where there is no cooperative petroleum




32

CO NSUM ERS’

COOPERATION I N

THE

U N IT E D

STATES

association, also dispense gasoline and motor oil through curb pumps
or separate service stations.
Unusual forms of cooperative effort revealed by the survey include
one association which has no store but operates a trailer truck, taking
the goods directly to the members; two associations which run beer
taverns; and one which has a beauty parlor. One store association
operates a coal mine to supply its members with fuel. Two associa­
tions handle artists’ and teachers’ supplies.
Associations carrying on several lines of activity have been classi­
fied, in the present study, according to the principal activity. Thus
an association which reported that its main line of business was the
operation of a grocery store was considered as a “ store” society, even
though it may also have been operating a bakery, a creamery, or a
gasoline service station.
In order to avoid confusion it should be noted that the data on
creameries cover only those run for the benefit of the consumers of
dairy products; they do not include creameries whose function is the
processing or the marketing of the farmers’ milk products on the open
market. Also, the water-supply associations included here are purely
consumer organizations; there are hundreds of water-supply associa­
tions whose business is the supply of water for the irrigation of farm
lands, but these cannot be regarded as consumer associations. It
should also be emphasized that all of the farmers’ associations included
were handling some consumer goods.
Many cooperatives, especially the buying clubs, have arrangements
with local tradesmen by which services of various kinds (such as
cleaning and pressing, laundering, or automobile repair) are made
available to their members at an agreed discount. Organizations with
such arrangements are here classified according to the principal estab­
lishment operated by them or by their chief function (as buying club,
store, etc.).
B A K E R IE S

As far as the knowledge of the Bureau of Labor Statistics goes there
were at the end of 1936 only nine associations whose main enterprise
was a bakery; all of these were in the three States of Massachusetts,
New Jersey, and New York. There were, however, seven associations
in other businesses which were operating a bakery as one department
of their business.
The 7 bakery associations from which the Bureau received reports
had a combined membership of 5,307 and sales of $595,680.
All of these bakery associations have been in operation a long time.
Not one of those reporting was started later than 1920. Two were
formed in 1917, one in 1918, one in 1919, and three in 1920. The
average age for the group was slightly over 18 years.




R ETA IL DISTR IBU TIVE

ASSOCIATIONS

33

Although cooperative societies are not numerous among Jews in
this country, the bakery business is one branch of cooperation that
seems to have appealed to them. Several of the known bakery asso­
ciations are mainly of Jewish membership and specialize in Jewish
breads. In four others the predominant nationality is, respectively,
Polish, Lithuanian, Italian, and Finnish.
It is customary among the bakery associations to operate a retail
store in which the bakery products are sold. All of the associations
reporting in this survey have such stores and one of them has two.
One association also operates a dairy, with a number of milk routes
throughout the city.
All of the reporting associations operate on the Rochdale basis of
one vote, no proxy voting, and return of patronage refunds when
earned. In one of the associations, however, membership is open only
to persons of Polish descent. A considerable proportion of their
business is done with nonmembers, the proportion ranging in the
reporting associations from 25 percent to “ nearly all.” To some
extent this high proportion of nonmember business is due to the fact
that these organizations supply other cooperatives which have no
bakery of their own.

These bakery associations are predominantly working-class asso­
ciations, and their history is one of close association with labor move­
ments and with labor’s struggles to improve its condition. Their
employees are, almost without exception, unionists receiving union
rates or better. One association was started by bakers who were
striking against conditions in the private bakeries in which they were
employed.
It will be noted that, although it is generally their practice to return
patronage refunds, none of them did so in 1936. This was accounted
for by the fact that three of them operated at a loss that year, and
three had only small net earnings. It has often been true, however,
that the members have voted to use their earnings for social purposes.
In fact one association was reported to be in financial difficulties
because of its overgenerous assistance to workers involved in a strike.
Aid to strikers by cooperative bakeries has been a common occurrence.
Indeed, at the time of the visit of the Bureau’s agent, the manager of
one association was on the point of departure to a neighboring town,
where a strike was in progress, to arrange for the distribution of free
bread among the strikers; this association had also done much chari­
table work in assisting flood sufferers.

In general, the viewpoint of The bakery associations may be said to
be that of the worker-producer rather than that of the consumer.
(The same is true of one of the creamery associations.) Their worker,
rather than consumer, viewpoint is also indicated by the fact that
although they are all situated in a region where there is a cooperative




34

C O N S U M E R S'

COOPERATION I N

THE

U N IT E D

STATES

wholesale, all but one reported that they purchased none of their flour
and other materials from cooperative sources. The one exception, a
Finnish association, purchases about one-third of its supplies from
cooperatives.
All but two of the associations charge current prices for their
product. One association which sells below prevailing prices does so
in the belief that in this way it assists in keeping down the price of
bread in the locality, and thus “ has helped the working people much
more than patronage refunds would have done.”
CREA M E R IE S

Associations operating creameries as their principal line of business
are also few in number. Of the four associations of this group which
reported, three have their own dairies and one which does none of the
processing of the milk operates two milk trucks for its distribution.
In addition to the consumers’ creamery associations, 20 associations
in other lines of business were operating a creamery department.
The reporting creamery associations range in size from 99 to 3,925
members. These are younger associations than the bakeries. Of the
four included in this report, one was formed in 1921, one in 1927, one
in 1934, and one in 1935.
One of these associations, a much-publicized organization, was
formed by milk-wagon drivers on strike against the local milk dis­
tributors in 1921. Although organized in the form of a consumers’
cooperative, it has come to be, to all intents and purposes, a workers’
organization. Undoubtedly, doing as it does, a business amounting
to several million dollars each year, it has exerted considerable influ­
ence on local prices and quality. It sponsors many social events,
goes in for recreational and athletic events, and for a while ran a
clinic for undernourished children. Its main problem is to obtain
the participation of its general membership.
Two of the associations purchase none of their milk from cooperative
sources, but of the other two, one purchases 99 percent and the other
purchases all of its milk and most of its cream from farmers’ coopera­
tives. Here again, a very large proportion of the business is done
with nonmembers, ranging from 50 to 90 percent.
W A T E R -S U P P L Y ASSOCIATIONS

The water-supply associations, as indicated elsewhere, are entirely
consumers’ organizations. Their only plant is, in each case, the water
main or mains used to pipe the water to the homes of their members.
All but one of the five associations are in California and Washington;
the exception is in Wisconsin. One of the associations dates from
1913, one from 1915, one from 1931, and. one from 1933. Their
membership ranges from 12 to 350.




F ig u r e l . — G

e n e r a l s t o r e o f c o o p e r a t iv e

M e r c a n t il e

a s s o c ia t io n

,

BIW AB1K , MIN N .

F i g u r e 2 .— E l e c t r i c a l - A p p l i a n c e
B u r e a u C o o p e r a t iv e




departm ent
a s s o c ia t io n ,

o f D e l a w a r e C o u n t y Fa r m
D e l a w a r e , O h io .

F i g u r e 3 .— g a s o l i n

e

S e r v ic e S t a t io n o f C o o p e r a t iv e T
W a u k e g a n , III.

r a d in g

C o .,

This association also operates eight retail stores, a bakery, a dairy, and a warehouse.

F i g u r e 4 .— L o a d i n g C o a l a t F u e l Y a r d o f C o o p e r a t i v e S e r v i c e s ,
In d i a n a p o l i s , In d .




This association also operates two gasoline service stations.

R ETA IL DISTR IBU TIVE

35

ASSOCIATIONS

O perating F a cilities

Further indication of the variety of cooperative services and of the
expansion of individual associations is given in table 7. Operating
facilities were reported upon by 766 distributive store associations,
736 petroleum associations, and 17 “ other distributive” associations.
These 1,519 associations were running a total of 3,478 establishments
of various kinds, including 1,007 stores and 831 gasoline service sta­
tions; as will be noticed, many of the farmers’ associations carry on
their distributive business through warehouses.
T able

7 . — O perating F acilities o f R eportin g D istribu tive Cooperatives , 1 9 3 6

Facilities of specified
kind, operated as—
Facility
Principal
enterprise
Retail stores_____________ ___________
Warehouses____________ ____ ________
Gasoline and oil—
Service stations. ________________
Curb pum ps_____________________
Bulk stations..
___ . . .
_____
Tank trucks_______ _______ ____
Fuel yards____________________ ____
Garages____________ _ __ . _______
Bakeries.^_____ ______ __ _________
Creameries. ________________ ______
Restaurants and cafeterias____ _ _
Rooming houses.
___ _
C lu broom s... _ _. _______ . _______
Lum ber yards______________ ________
Feed mills______________ _ . _______
Water mains__ _____
_____ ________
Other__________________ ____ ________

Auxiliary
enterprise

863
143

144
272

666

166
196
96
115
155
7
7
i 20

648
82.1
1,119
56
7
i3

6
1
1
14

8
5

21

3 17

1 Does not include 1 association which operated milk routes but had no creamery of its own.
2 Huckster truck.
3 Includes 1 cheese factory, 1 sausage factory, 2 beer taverns, 2 huckster trucks, 1 soda fountain and lunch
counter, 4 bowling alleys, 1 beauty parlor, 1 stoker plant, 1 briquet plant, 1 shoe-repair shop, 1 coal mine,
and 1 electricity generating plant.

Analysis of the number of establishments operated by the store and
petroleum associations reveals the extent to which these two types of
associations overlap. Thus, the 766 store associations, besides their
863 stores, 232 warehouses, 155 fuel yards, 7 bakeries, and 19 creamer­
ies, were also operating 191 curb pumps at the stores, 154 separate
service stations, and 91 bulk stations, and had a total of 111 tank
trucks. The 736 petroleum associations had in operation, in addition
to their facilities for dispensing gasoline and oils, 139 stores, 183
warehouses, and 38 fuel yards.
M em bersh ip

The distributive associations which reported as to membership
included on their rolls nearly half a million persons at the end of 193 6
The greatest single group of cooperators was in the gasoline and oi
associations; these accounted for 50.6 percent of the whole number




C O N S U M E R S ’ COOPERATION I N

36

THE

U N IT E D

STATES

and the store associations followed next in order with 40.5 percent of
the total.
T able

8 . — M em bersh ip o f D istrib u tive C ooperatives , 1 9 3 6 , b y M a jo r L in e o f B u sin ess

M ajor business

N um ­
ber of
associ­ M em ­
ations
bers
report­
ing

A ll associations_____ ______

1, 782 458,812

257

851 185,860
256 40,757
200 40, 624
10 18,081‘
57
8,923
313 72, 249
5,226
15

219
159
203
1,808
157
231
348

Store associations.______ __
Groceries 1________ ____
General merchandise___
S tu d e n ts * s u p p lie s

Fuel___________________
Farm supplies_________
Miscellaneous 2_____ _

Aver­
age
per
asso­
cia­
tion

N um ­
A ver­
ber of
age
associ­ M em ­
per
ations
asso­
bers
cia­
report­
ing
tion

M ajor business

Buying clubs______________
Petroleum associations_____
Distributive departments of
marketing associations___
Bakeries______ ____________
Creameries________________
W ater-supply associations. _

94
6,573
693 232,417
131
5
3
5

23,530
5,307
4, 497
628

70
335
180
1,061
1,124
126

1 Includes those handling meat also.
2 This group includes mail-order, artists' supplies, clothing, and “ other household supplies" associations.

What may be termed the typical American consumers’ cooperative,
from the point of view of membership, has from 100 to 250 members;
36.9 percent of all the distributive associations reporting fell in this
group. Altogether, 88.7 percent of the total reporting had fewer than
500 members. There were, however, 62 cooperatives (3.5 percent)
with 1,000 or more members each.
T a b l e 9 . — D istribu tion o f D istribu tive C ooperatives , b y N u m ber o f M em bers at E n d o f 1 9 3 6

N um ber of associations with classified membership
Major business

Total
re­
port­
ing

U n­
der
50

50
100
250
500
750
1,000 2,000
and
and
and
and
and
and
and
under under under under under under under
250
100
500
1,000 2,000 3,000
750

3,000
and
over

All associations___________ __ 1,782

245

350

658

328

93

46

50

7

5

851
94
693

146
59
28

192
23
101

321
8
259

128
3
176

33

9

16

4

2

58

37

30

2

2

131
5
3
5

9

33

69

16
3

Store associations___________
Buying clubs. _ ______
Petroleum associations._ . .
Distributive departments of
marketing associations
Bakeries_____ ____ _________
Creameries . . . ______
Water-supply associations___

1
3

1

1
1

2

1

2

1

1
1

The associations handling petroleum products are found almost
wholly in the Mississippi Valley States, with only a few in the Middle
Atlantic and Mountain States; there are only scattered associations of
this type elsewhere throughout the country. In the Mississippi
Valley States the farmers (who use large quantities of gasoline in their
farm work) have taken the lead in the formation of these associations.
The absence of development in the Eastern States may perhaps be due
to lack of nearby, available sources of supply, and the large numbers
of members in the low-paid occupations (and consequently without
automobiles).




37

R ETA IL D ISTR IBU TIVE ASSO CIATIO NS

Buying clubs are playing an important part in the present develop­
ment of the cooperative movement, especially in urban areas. Pre­
senting, as it does, a simple mechanism requiring almost no capital,
the buying club is ideal in training persons how to work together. For
small groups without sufficient funds, at the beginning, to operate a
store or other enterprise requiring plant and equipment, it offers op­
portunities for savings without financial hazard. Most of the clubs
reporting in the present survey were located in large cities. In num­
bers, New York, California, and Illinois led the way; most of the clubs
in those States were in New York City, Los Angeles, and Chicago.
The stores are especially numerous in Minnesota, Wisconsin, and
Illinois, as table 10, covering those reporting, indicates.
T able

10.—

M em bersh ip o f R eportin g D istribu tive Cooperatives, b y T yp es and b y States,
1 93 6

Total
State

United States______________
Alabama___________________
Arkansas__ _____ ______ ___
California__________________
Colorado_____________ _ . Connecticut- ______________
Delaware
_
______
District of Columbia _
Florida __________________
Idaho_________ _ ______
Illinois____ ________________
Indiana____________________
Iow a---------- ------------------------Kansas. _____ _______
___
Kentucky
____ ____
__
Maine
. __ ______ ___
Maryland _____ _______
Massachusetts
_ _______
Michigan________ ________
Minnesota___ ________ ____
Missouri___________________
Montana ____________ ____
Nebraska— __________ —
New Hampshire______ ___
New Jersey
_ _
New Mexico
__________
New Y ork___ _________ ____
North Carolina. ____________
North Dakota______________
Ohio_______________________
Oklahoma__________________
Oregon. __________________
Pennsylvania--------------------Rhode Island
____ _____
South Dakota______ _____ __
Tennessee
.
__
Texas____________ ________
Utah_____ ____ ____________
Verm ont................................. _
Virginia. ___ _______ _____
Washington............... ..............
West Virginia______ ____ _
Wisconsin_________ _____ _
W yom ing________________ _




N um ­
ber
report­
ing

M em ­
bers

Store associations

Num ­
ber
report­
ing

M em ­
bers

Petroleum asso­
ciations
N um ­
ber
report­
ing

M em ­
bers

Other

N um ­
ber
report­
ing

M em ­
bers

1,782

458,812

851

185,860

693

232,417

238

40, 535

3
2
45
16
14
1
3
2
17
149
75
84
151
3
9
5
33
87
224
48
49
123
4
10
2
65
1
63
76
13
20
31
1
34
6
32
4
3
4
55
8
200
7

1,235
134
6, 518
4,104
4,430
100
702
73
7, 611
66, 296
33, 838
21, 740
21,451
388
2,046
853
17,445
15,950
64, 827
8,281
5, 632
25, 623
1,494
2,436
852
14,953
79
10,141
17,460
3,044
7, 265
4,142
131
9,498
2,423
6,926
250
871
2,799
11,088
1, 502
51,115
1, 066

3
2
30
5
11

1,235
134
4,123
328
4,332

1
9

80
3,499

2
5
72
42
23
57
3
9
5
25
71
104
33
5
50
4
9

73
814
12, 754
18, 215
2,812
8, 291
388
2,046
853
16,141
13,886
23,037
5,454
1,081
7,467
1,494
2, 351

2,315
277
98
100
506

28
1
7
45
7
7
28
1
14
4
7
3
3
3
27
8
86
2

6, 791
79
530
9, 781
2,119
3,986
3, 759
131
1, 779
799
625
185
871
2, 565
5,703
1, 502
17,100
246

1

196

14
2
3
1
2

12
58
29
55
47

6,797
51,900
13, 330
17, 720
6,376

19
4
6
47

1,642
2,293
1,208
6, 784

3
105
5
40
59

657
35,917
1, 334
4,091
16, 723

8
13
15
10
4
r4

1,304
1, 407
5,873
1,493
460
1,433

1

85

2
4

852
1,921

33

6, 241

51
22
5
11
1

8,729
6, 478
823
2,746
312

5
9
1
2
2

882
1, 201
102
533
71

16

7,237

20
1

5,900
65

4
2
5

482
1,624
401

1
24

234
4,897

4

488

106
5

32, 783
820

8

1,232

38

CONSUMERS’ COOPERATION IN THE UNITED STATES
C O M P O S IT IO N

OF

M E M B E R S H IP

Although the Bureau did not ask specifically for data on the occu­
pational or other composition of the membership, such information
was obtained in the spot studies made in five different localities and
is at hand for a considerable number of other associations.
Among these, farmers’ organizations outnumber by far the other
occupational groups. Miners’ associations rank next. The reporting
associations include four coal miners’ organizations in Illinois, one in
Ohio, and three in Pennsylvania; three cooperatives of iron-ore miners
in Minnesota (these also have many farmers in their membership); and
two associations of copper miners in Michigan. Associations of textile
workers reporting included two in Massachusetts, one in Connecticut,
and one in North Carolina. The majority of the members in one
association in Michigan are employees of a local power company; in
another (Wisconsin), employees of a local cooperative dairy; in a third
(Illinois), unskilled employees of the International Harvester Co.; and
in a fourth (Wisconsin), the members are all district managers and
carriers of a city newspaper. In an association situated in a suburb
of Detroit the organization was started and is officered by school
teachers. Associations of railroad workers include one in Minnesota,
one in North Dakota, and two in Michigan. In two cooperatives in
Illinois the membership consists largely of skilled laborers and un­
skilled laborers, respectively. Professional and white-collar people
form the majority of the members in three other Illinois organizations.
One Illinois association which made an analysis of its membership
from the point of view of occupation reported its make-up as follows:
Teachers, students, and ministers, 164; other professions, 43; business
people, 54; and unclassified, 29.
L I M I T A T I O N S O N M E M B E R S H IP

One of the tenets of Rochdale cooperation is that of open member­
ship. Associations conforming to this principle accept any person
18 years of age or over who can make use of the services rendered by
the association. Generally the only restrictive requirements are that
the prospective member must not be engaged in a business competing
with the cooperative or have other interests hostile to those of the
association.
Of more than 1,900 distributive associations reporting in the present
survey, only 326 imposed any limitation on membership. That such
limitations are far more general among the farmers’ than among the
other consumers’ associations is shown by the fact that only some
6 percent of the latter as against 24 percent of the former were in
this class.




RETAIL DISTRIBUTIVE ASSOCIATIONS

39

The various farm organizations 4 have fostered in greater or less
degree the formation of all types of cooperatives for their members.
However, their tendency has been to make the cooperative activity
only an adjunct of the farm organization’s program, and to keep the
cooperative and its policies under the direction of the sponsoring
organization.
Only farmers were accepted into membership in 263 associations
reporting to the Bureau of Labor Statistics (48 of these also required
membership in a particular farm organization) and 3 additional
associations specified that the new member must have some “ agri­
cultural interest or connection.” Some of these defined what they
meant by “ farmers.” Two associations based their definition on
income (i. e., as having their “ main income” or at least 5 percent of
their total income from the farm), and 11 others on the total acreage
worked. Of the latter group, eight regarded as a farmer a person
owning or farming 3 acres or more and three associations a person
with 5 acres or more. In one association the applicant for member­
ship must be a “ dirt” farmer. Nineteen associations accepted either
landowners or renters, but an additional association accepted owners
only.
Of the farmers’ associations which admitted nonfarmers, three
specified that their proportion in the total membership should not
exceed 10 percent, and four others did not allow them to vote. This
meant, of course, that although the nonfarmer members contributed
to the success of the store through their patronage and may even
have shared in the patronage refund, they had no voice in determining
the association’s policies.
Besides restricting the field of operations of the society, the inter­
locking relationship between the cooperative association and the
parent farm body has frequently resulted in multiplication of coopera­
tives, each serving its own group. Among the reports received in the
present study are three from one little town of 600 population, which
has two farmers’ stores sponsored by competing farm organizations
and a third composed of residents of the town. If people simply
cannot get along together, it may be desirable to form separate asso­
ciations. It is safe to say, however, that schisms are not so apt to
occur over honest differences of opinion on cooperative policy as over
extraneous matters not connected with cooperation at all.5 In the
town in question, instead of three small associations struggling along
with indifferent success, given the combined purchasing power of all
4 These include the National Grange, Farmers’ Cooperative and Educational Union, National Farm
Bureau, and Farmers’ E qu ity Union.
8 A n example in point is the division in the cooperative movement, about 1930, on the question of com­
munism.




40

CONSUMERS’ COOPERATION IN THE UNITED STATES

three memberships it should be possible to build one large, successful
association.6
Among the other consumers’ associations which restricted their
membership one stated that its rolls were closed “ for the present” ;
five others had a limit on the total number of members. Thirteen
limited the membership to the students and faculty of a specified
college or university, one to the residents of a single apartment house,
one to the members of a specified cooperative association, three to
residents of the locality where the cooperative was situated, and one
to participants in a specified homestead project. Three limited their
membership to persons of the white race. Eight had nationality
requirements, accepting only Czechs (one association), French (one
association), Italians (two associations), Lithuanians (one associa­
tion), or Polish (three associations). One organization limited its
membership to persons who were members of a specified fraternal
association (which in turn accepted only persons coming from Lom­
bardy, Italy).
One association barred bankers and lawyers and two excluded
business men.
A m o u n t o f B u sin ess , 1 9 3 6

The associations reporting to the Bureau had retail sales 7 in 1936
aggregating $146,309,260. In sales as well as in membership (as
already seen) the petroleum associations were outstanding, doing
well over one-third (34.7 percent) of the total business.
The tables here given do not present a complete picture of local
distribution of petroleum products on the cooperative plan. In some
States— notably in Minnesota, Michigan, and Wisconsin— there are a
number of associations, intermediate in character between the retail
petroleum associations and the wholesale associations dealing in petro­
leum products. They are owned by the local store associations
throughout a certain district (but less than State-wide in scope) and
distribute the gasoline and oil throughout that district. In the
present study these have been regarded as federated rather than
local associations and have been included with the wholesales.8
• On the question of amalgamation of associations, it might be pointed out that there is a very definite
tendency toward the formation of larger units. N ot only are mergers of small associations within urban
areas taking place, but in numerous instances small associations have become branches of successful organ­
izations in some nearby town, with resultant increase of purchasing power and reduction of overhead
expense.
* Some of the retail associations have a small amount of wholesale sales—i. e., sales of members' produce, or
wood products or handicraft articles, sales to other cooperatives or to local dealers (as of milk, bakery goods,
etc.). This wholesale business is not included in these figures. There were 139 associations which reported
some wholesale sales; these totaled $8,924,536 for the year 1936. It should be emphasized that these whole­
sale sales do not include marketing business of farmers’ marketing associations, the distributive depart­
ments of which are included in this survey; the data here given for such distributive departments are for
retail sales of consumer goods and farm supplies only.
s The 9 associations in this class were owned b y 81 local retail associations and did a combined business in
1936 of $958,815.




RETAIL DISTRIBUTIVE ASSOCIATIONS

T able 11.—

Sales o f R eportin g D istribu tive Cooperatives ,

All associations______ _

1936, b y M a jo r L in e o f B u sin ess

Number
of associa­
tions re­
porting

M ajor business

__

__

_

41

Amount of
sales

Average per
association

_ _

1,805

$146,309, 260

$81,058

Store associations______ _____
____ _
___ _________
_
Groceries 1_______ __________
General merchandise
___ _ _ _ _ _
_
__
Students’ supplies____ ______
___ _
Fuel______________________________________________
_ _ _ _ _ _________
_ _. _ _
Farm supplies____ __
Miscellaneous 2 ________ _
_ _ ___ _
Buying clubs___________ __________ __ ______ __ ___ __ _
Petroleum associations___________________ _______ __ ___ _
Distributive departments of marketing associations _ _ __
Bakeries __ ________ __________ ____ _____ _____ _
Creameries______________ _________ ___ _ _ _
Water-supply associations __________ ____

858
259
194
12
56
322
15
79
722
132
6
4
3

71,052, 638
11,612,935
15, 726,165
1,884, 310
5,515,885
35,441, 276
872,067
415,991
50,911, 944
20,360, 534
595,680
2,954,121
18,352

82, 716
44, 838
80,647
157, 026
98,498
110,066
58,138
5,266
70,515
154, 246
99,280
738,530
6,117

1 Includes those handling meat, also.
2 This group includes mail-order, artists’ supplies, clothing, and “ other household supplies” associations.

Of the whole group of distributive associations, 48 percent fell in
the sales range of $25,000 to $100,000, as the following table shows.
Table 12.—

D istribu tion o f D istribu tive Cooperatives b y A m ou n t o f B u sin ess in 1 9 3 6
Total Number of associations doing
num ­
ber
re­ Under $10,000 $25,000 $50,000
and
and
and
port­ $10,000 under
under under
ing
$25,000 $50,000 $100,000

M ajor business

A ll associations___

_______ 1,805

Store associations___________
Buying clubs_____ _________
Petroleum associations___ __
Distributive departments of
marketing associations.. _
Bakeries____ _ _________ __
Creameries- ____ ___ ___
Water-supply associations__

classified amount of business in 1936
$100,000 $250,000 $500,000
and
and
and
$1,000,000
under under
under
and over
$250,000 $500,000 $1,000,000

249

279

449

422

334

55

10

7

859
79
722

114
74
49

137
3
117

209

189

32

5

5

208

198

168
2
128

19

3

132
6
4
3

10

19
1
1
1

29
2
1

33
1
1

35
1

3
1

2

2

1
1

Leading distributive associations, in point of sales in 1936 (omit­
ting three students’ associations which had sales of over a million
dollars each) were: The Franklin Cooperative Creamery Association,
Minneapolis, Minn., with sales of $2,827,560; the Cloquet Coopera­
tive Society, Cloquet, Minn., with sales of $1,125,714; the Cooperative
Trading Co., Waukegan, 111., with sales of $709,736; and the New
Cooperative Co., Dillonvale, Ohio, with sales of $639,476.
The greatest amount of cooperative business is still concentrated
in the North Central States, more than 70 percent of the total in 1936
having been done there.

90621°— 39-




4

42

CONSUMERS’ COOPERATION IN THE UNITED STATES

Table 13—

Sales o f R eportin g D istrib u tive C ooperatives , b y T yp es and b y States, 1 9 3 6

Total associations
State

N um ­
ber
report­
ing

Sales

United States ............. ......... 1,805 $146,309, 260

Store asso­
ciations

N um ­
ber

859 $71,052,638

3
2
61
17
12

92, 900
1,652, 481
12; 046, 218
1,156, 030
1,150, 535

3
2
28
5
10

Idaho
Illinois.......... ..........................

1
2
1
17
157

1,829
7,000
6, 921
1,151, 257
15,562,150

1
5
71

Indiana
______________
Iow a___________
________
.Kansas_______ _
____
K en tu cky.
_____ __ _
M aine_____________________

81
90
147
4
11

9,925, 374
6,889, 262
8,452, 962
182, 576
728, 670

M aryland
_ _
M assachusetts... .
M ichigan________ _______
M innesota_____ _ _
____
Missouri ________________

5
31
84
240
50

M ontana__________________
N eb ra sk a _________ ______
N ew H am p shire_________
N ew Jersey..
N ew M exico. __

Arkansas __
__
__ _
California_______ ________
Colorado______
____ . _

Sales

92, 900
1, 652, 481
2,057, 081
101, 288
1,001, 267

Petroleum asso­
ciations

N um ­
ber

Sales

722 $50,911,944

Other asso­
ciations

N um ­
ber

Sales

224 $24,344,678

12
2
2

9,141,873
60,209
149, 268

1,500

1
1

1,829
5,500

12
67

735,170
9, 763, 569

19

790,863

31
59
46
1

3,640, 581
4,604, 366
1,655, 399
63, 278

5
7
43

465,936
842,461
3,878,454

3
114
6

315, 096
7,455,135
276, 504

5
12
19
10

143, 451
300,932
4,806,158
365, 338

39
62

1, 265, 549
3, 682, 787

' 4
17

154,829
1,178,013

2

913, 796

21
10

847, 264
994, 533

1
6,921
416,087
5,007, 718

45
24
58
3
11

5,818, 857
1,442, 435
2,919,109
119, 298
728, 670

297, 979
4, 714, 590
5,844, 885
19, 541, 440
2,987,434

5
26
69
107
34

297, 979
4,571,139
5,228, 857
7, 280,147
2, 345, 592

47
132
2
9
2

1, 956, 338
9,002,015
171, 693
1, 591, 662
913, 796

4
53
2
9

535,960
4,141, 215
171, 693
1, 591,662

N ew York
_ . . . ____
North Carolina
. ___ _
North Dakota. _ _ _______
O hio_____________ ________
Oklahoma_________________

61
2
61
84
13

2,986, 355
53, 500
3, 226, 936
7,807, 706
1,119, 542

28
2
7
50
7

2,132,652
53, 500
281, 377
5, 265, 762
892, 204

Oregon___________________
Pennsylvania _ __________
Rhode Island.
_________
South Dakota. __________
Tennessee. . ___________ __

20
29
1
35
4

1,177, 580
1, 532, 676
43, 654
2,154, 585
231, 218

8
27
1
15
3

Texas ___________ _____
U tah______________________
V e rm o n t... _ ___________
Virginia. _ . . .
_________
Washington_______________

30
5
1
5
31

1,274, 996
18,467
392, 640
1,355,899
1, 710,370

West Virginia_____________
W isconsin_________________
W yom ing. . . . _.
______

8
200
7

229,073
14, 529, 934
436,132

4

191, 565

29

662,138

51
25
5

2, 595, 462
2,348, 711
190,338

3
9
1

350,097
193,233
37,000

844, 782
1, 507, 679
43, 654
681, 576
228,633

10
1

251,941
24,402

2
1

80,857
595

16

1,350,215

4
1

122,794
2,585

7
3
1
4
26

169,902
13, 650
392,640
1, 271,101
1, 591,571

19
2

1,034,495
4,817

4

70,599

1
2

84, 798
90,589

3

28,210

8
86
1

229,073
7,899, 526
25,000

106
6

6,118, 952
411,132

8

511,456

BUSINESS WITH NONMEMBERS

That a considerable proportion of business is done with nonmembers
is indicated by table 14. More than a quarter of the 1,729 associa­
tions reporting on this point did from 25 to 50 percent of their business
with nonmembers. Less than 10 percent restricted their business
dealings entirely to members.




43

RETAIL DISTRIBUTIVE ASSOCIATIONS

T able 14.— P ercen t o f D istribu tive A ssocia tion s D oin g C lassified P rop ortion o f B u sin ess
W ith N onm em bers in 1 93 6

Percent of business done with
nonmembers

Store
associ­
ations

Total

Buying
clubs

Distrib­
utive
Petro­
Other
leum as­ depart­ distribu­
ments
of tive asso­
socia­
market­
tions
ing asso­ ciations
ciations

All associations:
Number reporting________ _ _
Percent..
__ -----------------------

1, 729
100.0

826
100.0

87
100.0

669
100.0

135
100.0

12
100.0

N on e________________ ____ ______________
Under 10 percent__________________ _ __
10 and under 15 percent__________________
15 and under 20 percent.____ __ .
_ 20 and under 25 percent______ _ _ _ _
25 and under 50 p ercen t---- _______ _____
50 and under 75 percent.---------- ---------- 75 percent and over_________ __________

8.7
12. 5
11.9
6.1
6.4
28.7
18.7
7.0

4.8
8.0
8.2
4. 6
6. 3
29.9
28.0
10.2

55. 2
14. 9
18.4
2. 3
2. 3
2.3
3.4
1.2

8.0
18. 4
16.7
8. 2
6. 7
29.0
9.4
3.6

5.2
11.1
5.9
7. 6
8.9
38.0
16.3
7.0

16.7
8.3
16.7
41.7
16.7

O perating E xp en ses

Usable data on expenses of operation were obtained for 278 asso­
ciations— 43 handling general merchandise, 39 selling groceries or
groceries and meats, 53 handling other commodities, and 143 handling
petroleum products. The sales of these associations in 1936 aggre­
gated $22,403,336 and their operating expenses were $2,771,917, or
12.37 percent of sales. Details are shown in table 15.
T able 15.— O perating E xp en ses o f R eta il D istribu tive C ooperatives, 1 9 3 6
Percent (in terms of total sales) spent for specified items
Store associations
Item of expense

All asso­
ciations
(278)

Total
(135)

General
mer­
chan­
dise
(43)

Grocer­
ies (39)

Other
(53)

Petro­
leum as­
socia­
tions
(143)

Wages, salaries, and com m issions.-. . ______
Advertising----------- ---------------------------------- ------W rappings___________________ _________ _ _

7.199
.214
. 100

5.981
.232
. 136

6.190
.253
.272

7.845
.353
.228

5. 040
. 165
0)

9.163
.186
2 ..041

Total sales expense_______________________

7. 513

6. 349

6. 716

8. 427

5.206

9. 391

Miscellaneous delivery expense (except wages) __
R ent___________________________________________
Light, heat, power, water, ice__________________
Insurance, taxes, license, and bonds___ ____ __
Interest on borrowed m oney___________________
Office supplies, postage________________________
Telephone and telegraph____ . --------------------Repairs___ ______________________ ________ _ __
Depreciation_________________ _________ _____
Bad debts_______ _____________________________
Inventory, auditing, and legal expense ________
Warehouse and plant expenses_________________
Traveling and fieldmen’s expenses_____________
Directors’ fees and expenses____________________
Collection expenses. __________________ ____
__
Education, promotion, publication____________
Membership dues, meetings, and subscriptionsMiscellaneous........................................................ .

.758
.264
.430
.856
. 197
. 194
. 119
. 197
.773
.119
. 120
.305
.034
. 134
.028
.043
.020
.269

.603
.242
.470
.804
.190
. 156
. 106
.232
.656
.146
.097
.221
.034
.073
.025
.046
.014
.222

.495
.062
.494
.881
.136
.127
.096
.208
.797
. 120
. 136
. 117
.025
.078
.006
.080
.021
.257

.551
.612
.741
.847
.231
.134
.096
.360
.657
.141
.112
.298
.032
.082
.034
.051
.014
.312

.702
.210
.338
.733
.210
.186
.118
.193
.557
.166
.064
.261
.042
.065
.034
.020
.009
. 159

1.008
.300
.366
.938
.208
.255
.139
.142
.962
.075
. 156
.441
.034
.232
.033
.037
.030
.344

12.373

10. 687

10.854

13. 732

9.273

15.091

All expenses..______ ____________________
iLess than Kooo of 1 percent.




2 Includes drum expense.

44

CONSUMERS’ COOPERATION IN THE UNITED STATES

The stores handling groceries had higher expenses than either the
general merchandise or miscellaneous groups, but this may have been
due, in part at least, to the fact that more of the grocery stores than of
the general stores were in urban areas where wages were higher. It
will be noted that the larger part of the excess in their expenses was in
the wage item, though their rent also was higher.
The gasoline associations’ rate of overhead was considerably above
the store expenses. Here again, most of the difference was in the
wage item.
A substantially lower cost of operation in the cooperative than in
private stores is indicated by the following comparison:
Private general
stores, 1935 1

10.
1.
.
3.

Cooperative general
stores, 1936

3
5
7
1

6. 2
. 1
2. 9
3 .7

Total_______________________________________________ 1 5 .6

1 0 .9

Wages cost____
Rent___________
Taxes__________
All other items.

1 Data are from Dun & Bradstreet’s review for 1935.
2 Includes insurance.

The main point of difference here is in the wage item, though rent
also is noticeably lower in the cooperative stores. Probably the large
amount of volunteer labor characteristic of cooperatives, especially in
their early period of operation, is a factor to be taken into account in
considering the differences in wage cost. The wage level and policies
of the cooperative associations are discussed at length in a later section
of this report (p. 174).
N e t E arn in gs

A loss on the year’s operations was sustained by 139 associations
in the sum of $117,597 and 1,392 associations made a saving of $7,644,689. For the whole group, therefore, there were net earnings of
$7,527,092.
Almost 48 percent— $3,585,916— of the total net earnings were
made by the petroleum associations. They have shown remarkable
savings, as a group, since the cooperatives entered this field, although
the margins have narrowed considerably in the past few years. The
store associations accounted for net savings of $2,298,336.




RETAIL DISTRIBUTIVE ASSOCIATIONS

T able 16.— N e t

G ains and L osses o f R ep ortin g D istribu tive C ooperatives, 193 6
Total associations

M ajor business

All associations........ ..........

45

Net gain

N um ­
ber re­
port­
ing

_

_ ___

Store associations________________ — ______
Groceries 1_________________ ____________
General merchandise_____________________
Students' supplies____________ _________
Fuel_____ _______________________________
Farm supplies___________________________
M iscellaneous2---------------------------------------Buying c lu b s .. _____________________________
Petroleum associations______________________
Distributive departments of marketing asso­
ciations ___ _______ . . . . . . ____ - Bakeries___________ _
. . . ______________
Creameries________________ __ _____________
Water-supply associations____ ___________
_

Associations having-

Amount
of net
earnings

1, 531 $7,527,092

N um ­
ber

Net loss

Amount

N um ­
ber

1,392 $7,644,689

Amount

139

$117,597

712
198
175
8
47
270
14
55
634

2,298, 336
336, 981
447,162
103,935
165,916
1, 214,193
30,149
9, 311
3, 585, 916

620
163
137
7
42
259
12
53
606

2,372,274
358, 315
485, 533
103,989
167,422
1, 221, 745
35, 270
9, 575
3, 607,969

92
35
38
1
5
11
2
2
28

73,938
21, 334
38,371
54
1,506
7,552
5,121
264
22,053

119

1, 581, 571
2 16,643
63, 526
5,075

106
3

1, 584, 265
1,813
63,718
5,075

13
3

2, 694
18, 456
192

6
2
3

1

3

1

1 Includes associations handling meats.
2 Includes associations handling art supplies, clothing, mail-order goods, and “ other household” goods.
3 Loss.

Outstanding savings for their members were made in 1936 by the
petroleum associations of Illinois, the “ other distributive” associa­
tions in California, and both store and petroleum associations in
Minnesota, as the following table indicates.
Table 17.— N et E arnings

o f R eportin g D istribu tive C ooperatives, b y T yp es and b y States,
1936

Total associations Store associations

State

United States__________________

N um ­
N um ­
Net earn­ ber
ber
re­
Amount
report­
ings
port­
ing
ing
1, 531 $7, 527,092

712 $2, 298, 336

Alabama_____________ ___ _____
Arkansas_____________ _________
California_____________ _______
Colorado_______________________
Connecticut_________________ __

1
1
34
12
11

1, 247
736
1, 252, 577
18,839
30,198

1
1
26
4
9

1, 247
736
122, 854
753
29, 682

Delaware_______________________
District of Columbia__ _______
Florida_______ _________________
Idaho_________
______________
I llin o is ..-________ _____________

1
2
1
15
135

507
581
807
78, 951
1, 453, 820

1
4
59

807
20, 223
207, 297

Indiana_____________ __________
Iowa___________________________
Kansas______________ _____ ____
K entucky__________ __________
M aine______ _______ ___________

72

545, 092
206, 949
372, 051
6, 397
374

38

233, 049
22,164
112, 293
4, 956
374

M aryland_______ ____ _________
Massachusetts . ______ ____
Michigan_______________________
Minnesota_____________________
Missouri...........................................




76
122
4
7
4
22

79
211
37

6, 718
189,087
183,106
953, 786
56,129

20
44

3
7
4

19
64
92
22

6, 718
187, 742
160, 493
302,936
28, 612

Petroleum asso­
ciations

Other associa­
tions

N um ­
ber
re­
Amount
port­
ing

N um ­
ber
re­
Amount
port­
ing

634 $3, 585, 916

185 $1, 642, 840

8
2
2

1,129, 723
1,119
516

250

1
1

507
331

11
61

58,728
1, 213, 723

15

32,800

30
i 50
i 39

269,128
173, 523
87,821
1, 441

4
6

39

42,915
11, 262
171,937

6, 493
506,740
13,580

3
12
18
11

1,345
16,120
144,110
13, 937

6

16,967

1

1

3
101
4

46

CONSUMERS’ COOPERATION IN TTlE UNITED STATES

T able 17.— N e t E arn in gs

o f R ep ortin g D istribu tive C ooperatives , b y T yp es and b y States ,
1 9 3 6 —Continued
Total associations Store associations Petroleum asso­
ciations

State

N um ­
N um ­
Net earn­ ber
ber
re­
Amount
report­
ings
port­
ing
ing

N um ­
ber
re­
Amount
port­
ing

M ontana_______________________
Nebraska_______________________
N ew H am pshire...________ ____
N ew Jersey _ . . . ______ _ __
N ew M exico_____________ _____

41
109
3
9
2

$152,415
413,893
13,162
36,915
61,110

3
40
3
9

$22, 240
130,877
13,162
36,915

35
54

$117,910
247,876

2

61,110

N ew Y ork____________ ________
North Carolina . _________ ___
North Dakota_____ __________
Ohio
.
__________________
Oklahoma______________________

51
1
54
66
10

42, 244
62
171,177
249, 762
30, 661

27
1
6
40
5

48,822
62
8,561
173, 460
24, 589

2
45
22
5

O regon..
__________ ________
Pennsylvania__________________
Rhode Island______ _________. . .
South Dakota__________________
Tennessee. ___________________

17
27
1

23, 659

7

3

25
1
10
3

1

689
141, 956
2 5,838

9, 435
81,119
689
9,814
2 5, 838

9

86, 764

Texas---------------------- -----------------U tah___________________________
Verm ont_____________ . ______
Virginia______ ____ __ ______
Washington____________________

21
3
2
3
39

51, 584
140
6,138
4, 941
89,859

3
1
2
2

2,614
200
6,138
2,182
44, 810

West Virginia__________________
Wisconsin______________________
____ ____________
W yom ing

8

7, 459
554,978
35,410

28

179
7

19
8
77

2

7,459
235,053
3,037

Other associa­
tions
N um ­
ber
re­
Amount
port­
ing
3
15

$12, 265
35,140

6,504

22

2 13,082

144, 772
70,996
6,072

3
4

17,844
5, 306

14, 416
5,611

1
1

2 192
34

16

129,002

2

3,140

i 14
2

48,200
2 60

4

770

1
18

2,759
41, 695

2

3, 354

i 96
5

308, 286
32, 373

6

11, 639

1 N ot including 1 association having a loss, amount not reported.
2 Loss.

Patronage R efu n ds

Slightly over 48 percent (940) of the whole number of distributive
associations reporting in the survey returned patronage refunds for
1936. The 853 associations which reported the amount of refund
returned $4,920,880; 85 others returned dividends ranging from 1%
to 17 percent but did not state the amount so returned, and 2 others
reported varying rates on different commodities.
A larger proportion of the petroleum associations than of the store
associations made patronage refunds— 62.6 as compared with 38.4
percent. The petroleum associations accounted for 47.8 percent of
the total amount returned.
None of the water-supply associations, bakeries, or creameries
made any refunds on patronage. The price level of the first group,
however, is set so low as to yield no surplus.
Table 18 shows, for the various types of associations, the number of
associations which returned dividends on purchases and the amount
so returned on the 1936 business.




47

R ETA IL D ISTR IBU TIVE ASSOCIATIONS

T able 18.—

P atronage R efu n ds o f R eportin g D istribu tive C ooperatives, 1 9 3 6
Number
of asso­
ciations
reporting

M ajor business

Amount of
patronage
refund

Average per
association

All distributive associations._____ _________ ___ ___________

853

$4,920,880

$5,769

Store associations____ _________________ _______ ___________
Groceries___ _________ ______ ______ ___ ______________
General merchandise. __________ ____ ________ _____
Students’ supplies_______________ ____________________
Fuel___________ ______ _______ ____ _________ _______ _
Farm supplies__ _______ __ ________________________ . .
Miscellaneous1__ ____________________________ ________
Buying clubs___ ___ ___________________ ________________ .
Petroleum associations___________ __ _____________ _____
Distributive departments of marketing associations _ _____

318
93
62
5
12
139
7
38
442
55

1, 239, 575
149, 869
261, 245
99, 558
30, 589
684, 755
13, 559
5,921
2, 352, 290
1,323,094

3, 903
1, 611
4,210
19, 912
2, 549
4,926
1, 937
156
5, 321
24,056

1

Includes mail-order, artists’ supplies, clothing, and “ other household supplies’ ’ associations.

The rates of patronage refund for the 644 associations reporting on
this point are shown in table 19. The most common rates for the
store associations were from 2 to 6 percent, whereas those for the
petroleum associations were 5 to 6 and 10 to 11 percent.
Table 19.—

R ates

1o f

P atronage R efu n ds b y D istribu tive Cooperatives on 1 9 3 6 B u sin ess
Number

Percent

Total
associ­
ations

Store
associ­
ations

B uy­
ing
clubs

Petro­
leum
associ­
ations

All ra tes................................... ..........

644

267

23

354

Under 1 percent__________________
1 and under 2 percent______________
2 and under 3 percent______________
3 and under 4 p ercen t______________
4 and under 5 percent--------------- ------5 and under 6 percent_______ ______
6 and under 7 percent_______________
7and under 8 percent............... ..........
8 and under 9 percent______________
9 and under 10 percent______________
10 and under 11 percent____________
11 and under 12 percent- . ________
12 and under 13 percent____________
13 and under 14 percent____________
14 and under 15 percent____________
15 percent and over_______ __ . . . _

3
28
64
80
62
110
66
46
48
15
61
6
12
6
6
31

1
19
47
43
33
42
19
17
20
4
13
1

Percent of patronage refund 1

8

1
6
2
3
5
3
1
1
1

2
9
16
31
27
65
42
29
25
11
47
4
11
6
6
23 v

Total
associ­
ations

Store
associ­
ations

B uy­
ing
clubs

100.0

100.0

100.0

.5
4.5
9.9
12.4
9.6
17.1
10.2
7.1
7.5
2.3
9.5
.9
1.9
.9
.9
4.8

.4
7.1
17.6
16.1
12.4
15. 7
7.1
6.4
7.5
1.5
4.9
.4

Petro­
leum
associ­
ations
100.0

4.4
26.1
8.7
13.0
21.7
13.0
4.4
4.4
4.4

3. 0

.6
2. 5
4.5
8.8
7.6
18.4
11.9
8 2
7.1
3.1
13.2
1.1
3.1
1. 7
1.7
6. 5

1 Percentages are in terms of annual business (sales).

Taking only those associations that reported as to both patronage
refunds and membership, it was found that the average saving per
member for the store associations of all kinds was $13.42, and for the
petroleum associations $13.87. The average for the various organiza­
tions was as follows:
Store associations handling—
Groceries_________________
General merchandise____
Students7 supplies_______
Fuel______________________
Farm supplies___________
Miscellaneous____________
Petroleum associations_______




Average patronage
refund per member

— _ $ 8 .9 4
___ 18. 13
___

6 .2 9
1 2 .5 6

___

17. 89
19. 71

—

1 3 .8 7

48

CON SU M ERS’

C O O P E R A T IO N

IN

THE

U N IT E D

STATES

Cooperative associations are quite generally undercapitalized and
in many places have voted to pay the patronage refunds either partly
or wholly in shares credited to the individual member. Others are
increasing the capital requirements per member. One association has
raised the share requirements from one to five shares; the 4-percent
patronage refund for 1936 was paid in merchandise orders to all
owning the required five shares, and the others received 2 percent
applied to the purchase of shares and 2 percent in merchandise orders.
Although the margins in the grocery business are small, some of
these local associations have an enviable record of savings to their
members. A number of those for which reports for 1936 were received
had returned patronage refunds through all the years of the depression.
One store association in Wisconsin returned $15,809 in dividends for
the years 1933-36; its sales in 1936 were $116,570. One Nebraska
association has returned refunds every year since its organization
in 1916, amounting to $108,398. An outstanding Ohio organiza­
tion established in 1908 has had sales totaling $7,645,224, on which
patronage refunds aggregating $259,334 have been returned ; and this
in spite of the fact that it is located in the coal fields where unemploy­
ment and general economic disorganization have been rife.
The records of the petroleum associations are even more striking, and
the rate of refund in this line of business has been higher than in the
merchandising business, as the margins are greater there.
As regards patronage refunds, the nonmembers are on the same
footing as members in 393 associations. Of these, 36 specified that
they paid the refund to nonmembers in cash, 270 that it was applied
on the purchase of one or more shares of stock required for membership
in the association, and 6 that it was paid in merchandise or shares.
One farmers’ association specified that the nonmember patron received
the full rate of refund only if he was a producer. Refunds at half the
members’ rates were reported by 19 associations, payable in 3 cases
in shares; 1 association paid 2 percent less than to members and 1
paid “ a little less.”
Replying as to patronage refunds to nonmembers, 259 associations
said they make no returns whatever to them. Six associations stated
that the surplus accruing from nonmembers’ patronage was placed in
the educational fund, nine that it was placed in the reserve fund, one
that it was used as working capital, and one that “ it all goes to the
members.” Such practices by cooperative associations are open to
serious criticism and put the associations in the position of making a
profit on nonmembers’ trade, especially where such trade constitutes
any considerable proportion of the total business.
P rop ortion o f G oods P urchased F rom Cooperative Sources

The proportion of supplies purchased by local cooperative associ­
ations from cooperative sources is indicated in table 20. As it shows,




R E T A IL

D IS T R IB U T IV E

49

A S S O C IA T IO N S

nearly one-four fch of all associations reporting purchased none of their
stock of goods from other cooperatives. At the other end of the scale
are nearly one-third of the associations which obtained 90 percent or
more of their inventory from cooperative wholesales and other coop­
eratives. To some extent, of course, this table is an indication of
the extent to which cooperative goods may be available. Not all
parts of the United States have cooperative wholesales. Also, even
in territories with such facilities, not all of the goods handled by the
local cooperative associations can be obtained in this way.
Table 20.—

D istribu tion o f A ssocia tion s A ccord in g to P rop ortion o f Goods P urchased
F rom C ooperative Sources
Percent

Percent of goods purchased from coop­
erative sources

Total
reporting

Store
associ­
ations

Buying
clubs

Petrole­
um asso­
ciations

Distrib­
utive
depart­
ments of
market­
ing asso­
ciations

Other
associa­
tions

A ll associations:
Number reporting___________________
Percent______________________________

1, 605
100.0

716
100.0

85
100.0

662
100.0

129
100.0

13
100.0

N one____ ___________________ ______ Under 10 percent________________________
10 and under 25 percent__________________
25 and under 50 percent__________________
50 and under 75 percent
_ __ _____
75 and under 90 percent__________________
90 and under 100 percent. _______________
100 percent_______ . . . ______________ ..

23.2
6.0
9.7
8.2
10.8
9.7
18.3
14.4

27.8
7.8
13.0
11.9
14.8
11.2
9.8
3.8

22.4
2.4
14.1
11.8
7.0
5.9
9.4
27.0

16.3
3.5
5.1
3.5
5.9
8.5
30.7
26.6

29.4
10.1
12.4
9.3
17.0
10.1
8.5
3.1

61.5
15.4
7.7
7.7
7.7

A n n u a l Stock T u rn -O ver

The associations which reported as to number of times the mer­
chandise is turned over in the course of a year are shown in table 21.
Table 21.—

A n n u a l Stock T u rn -O ver in Specified T yp es o f D istribu tive Cooperatives , 1 93 6
Percent of associations with specified number of stock turn-overs

N um ber of stock turn-overs

Less than 3___________________
3 and under 4_________________
4 and under 5 - . . _____________
5 and under 6___________ _____
6 and under 7_________ _____ 7 and under 8 ______________
8 and under 9..............__ __
9 and under 10. _ ________ ____
10 and under 11_______________
11 and under 12
12 and under 13........................
13 and under 14 _____________
14 and under 15 ........... ..........
15 and under 16
______ __ __
16 and under 17__ ____ _______
17 and under 18_______________
18 and under 19
_____
19 and under 20
__ ________
20 and over___
______ _____
T otal__________________




All
types of
associa­ Groceries
tions
4.3
2.7
6.6
4.6
8.0
3.6
7.2
3. 0
13.0
1. 7
13.4
1.9
3. 7
4.6
1.9
1.4
2.2
.7
15.7
100.0

2.2
3.0
6.0
6.0
6.0
4.5
9. 7
3. 7
9.0
14.9
1.5
.7
6.0
1.5
1.5
3.7
1.5
18.7
100.0

Store associations handling—
General
merchan­ Students’
supplies
dise
3.2
4.3
14.0
10.8
15.1
7.5
5.4
6.5
9.6
1.0
10.8
2. 2
2.2
1.0

16.7
33.3
16.7
16.7
16.7

Fuel
6.7
6.7
6.7
6.7
13.3
10.0
10.0
6. 7
13.3
13.3
3.3

1.0
1.0
4.3
100.0

100.0

3.3
100.0

Farm
supplies
6.0
1.5
6.7
1.5
6.0
1.5
4.5
2.2
17.9
2. 2
13.4
.7
3.0
3. 7
1.5
3.7
2.2
.7
20.9
100.0

Petro­
leum as­
sociations
4.4
1.1
3.1
2.1
6. 3
1.1

8.0

1.1
14.4
3.1
14.4
3.1
7.4
7.0
3. 7
2.6
17.9
100.0

CONSUMERS’ COOPERATION IN THE UNITED STATES

50

Production by Local Cooperatives
Generally cooperative associations carry on most of their productive
activities through federations owned by the local associations. This
combination of effort permits manufacture or performance of service
on a scale larger than the average local association can finance and also
avoids duplication of productive plant. Cooperative production is
still in its infancy in this country, but promising beginnings have been
made by some of the wholesales and by separate productive federa­
tions formed for the purpose.9
A few of the local associations have also undertaken certain pro­
ductive activities— generally of commodities (such as bakery goods)
requiring immediate sale or suitable for local distribution or consump­
tion. Quite a wide variety of goods was manufactured by the asso­
ciations in 1936, as is evident from the following table.
Altogether, 74 local associations carried on some productive activity
in 1936. The 45 associations which reported the value of their product
had an output in that year valued at $1,192,997.
It should be emphasized that the figures for bakery products
shown in this table do not include the value of bakery goods produced
by the bakery associations (which have already been included in the
sales figures for those associations). They cover only the output of
bakeries carried on as auxiliary departments of distributive or service
associations.
T ab le

22 .—

V alue o f G oods M an u fa ctu red b y R eportin g D istribu tive A sso cia tion s

Com m odity produced

Value of
products

All products_______ ___________ _________________

45

$1,192,997

Bakery products_________________ _____ __________
Dairy products (butter, ice cream, cottage cheese,
etc.)- _ ___________
______________ - ___ ____
Jams, jellies, and cosmetics.
.
______________
____ _
Canned g ood s..
_____________________ . . . ______
Syrups . . . _ __________ _________________________
Meat products:
Sausage___________________ ____________________
Smoked meat________________
_ __________
Meat slaughtered and processed________________
Clothing, custom _____________________ ___________
Fuel: Briquets and fuel stokers-------------------------------Lum ber________________ _ ___________ __________
Electric power (generated)_________________________
Flour ________ ______ _ __ ___ . . ____________
Grinding of corn, etc., for m eal___________ _________
Feed______________ _______. . . ____ ______ _________

i4

201,858

22
1
1
i 1

144,121
1,500

1
2
3
4
9

Number of
associations
reporting

37
0

)
1
1
1
1
1
12
2
4 20

100

734
50, 549
)
35,495
24,000
500

0

1 2 ,0 0 0

22, 753
9,853
1 0 0 ,0 0 0

589, 534

N ot including 1 association which did not report value of goods produced.
N ot including 3 associations which did not report value of goods produced.
N ot including 2 associations which did not report value of goods produced.
N ot including 2 0 associations which did not report value of goods produced.

The federations and their productive activities are covered in chapter 7,




,

1936

51

RETAIL DISTRIBUTIVE ASSOCIATIONS

Financial Data
SHARE

C A P IT A L

Share capital aggregating $23,669,613 was reported by 1,603 asso­
ciations— an average of $14,766 per association. Details for the
various types of associations are shown in table 23.
T

able

2 3 .— Share C apital o f R ep ortin g D istribu tive C ooperatives at E n d o f *1936
Number of
associations
reporting

Major business

All associations. _ _ ____ ________ ____________________ _____

Amount of
share capital

Average per
association

1 1,603

$23,669, 613

$14,766

752
218
190
4
54
275

9, 634,138
1, 593, 540
2, 679,494
13, 589
882, 074
4, 389, 467
75, 974
19, 854
4,992, 205
8,059, 027
77,195
839, 486
47, 708

12 , 811
7, 310
14,103
3, 397
16, 335
15, 962
6,907
451
7, 473
63,960

Stores . _ ____
__
______ __ ____________________
Groceries______________________________________________
General merchandise___ ___ ___________ ___________ _
Students’ supplies________________________ ____ _______
Fuel___________________________________________________
Farm supplies___ _________________ ____ ____________
M iscellaneous2. . __________ ________ ____ ____________
____ _______________________________
Buying clubs_ __
Petroleum associations______ _____ _________ ______________
Distributive departments of marketing associations________
Bakeries_____
__________
___ _____ _________________ _
Creameries_____
________________________________________
Water-supply associations _______________________________

11

44
668

126
6

4
3

1 2 ,8 6 6

209, 872
15, 903

1 N ot including 32 nonstock associations distributed as to type as follows: 18 store associations, 7 buying
clubs, 5 petroleum associations, and 2 distributive departments of marketing associations.
2 This group includes mail-order associations, clothing associations, ‘ ‘other household supplies” associa­
tions, and art-supply associations.
T

able

,

2 4 .— Share C apital o f R eportin g D istribu tive Cooperatives b y T yp es and

,

b y States 1 93 6

Total associations
State

United States

N um ­
ber re­
porting
______ _

Arkansas__ _ ________
California__ __________
Colorado________ ______
Connecticut___
____
Delaware_______ __
District of Colum bia___
Florida_________________
Idaho_________________
Illinois____ ____________
Indiana....................... .......
Iow a___________________
Kansas_______________
K entucky. ____________
Maine ______________
M aryland_____ ________
Massachusetts_____ ____
M ichigan______ ______
Minnesota______________
Missouri- _____________
Montana _______ ___

Share
capital

1,603 $23, 669, 613
2

31
13
10
1
2
1

16
135
62
81
143
3
7
5

25
81
222

42
46

515,910
6,159, 507
69,136
67, 755
109
1,640
800
94,052
2,145, 714
933,035
704,280
1, 515,119
14, 379
53,154
23, 598
162, 8 7o
986, 809
2,977, 228
282, 318
331,118

1 N ot including 24 nonstock associations.
2 N ot including 10 nonstock associations,
s N ot including 8 nonstock associations.




Store associations

N um ­
ber re­
porting

Share
capital

i 752 $9, 634,138
2
22

4
8

515, 910
146, 645
18, 560
66,648

Petroleum asso­
ciations
N um ­
ber re­
porting

3
62
34
20

51
3

7
5
21
66

97
28
4

800
56, 382
908, 971
533,297
295,594
492, 770
14, 379
53,154
23, 598
136,496
848, 909
1,061, 364
198,200
120, 640

N um ­
ber re­
porting

Share
capital

3 183 $9,043, 270

2 668

$4, 992,205

9

6 , 0 1 2 , 862

7

38,197

2
2
1

12, 379
1,107
109

•
1

Share
capital

Other

1

1,390

1

250

13
60
25

37, 670
1,084,114
291, 673

13

152,629
108, 065

54
47

301,531
268,958

45

3

16, 663
887, 490
37, 325
185, 678

17
9

3
7

4
108
5

39

12

3

107,155
753,391

26, 379
121, 237
1,028, 374
46, 793
24,800

CONSUMERS’ COOPERATION IN THE UNITED STATES

52
T a b le

24 .— Share

b y States, 1 9 3 6

State
N um ­
ber re­
porting

North C a r o lin a ..-_____
North Dakota___ ____
Ohio____
____________
O k la h om a .______ _____
Oregon_________________

122
2

7
2

39
2

61
72
12

17

Pennsylvania___________
Rhode I sla n d ________ _
South Dakota__________
Tennessee
Texas_________________

28

U tah___________________
Verm ont______ ________
Virginia___________ ____
Washington____________
West Virginia__________

4

W isco n sin _____________
W yom ing ___________

1

35
4
21

$1, 810, 368
252,350
254,104
73, 628
297,039

1, 601, 795
19,932

Petroleum asso­
ciations
N um ­
ber re­
porting

Share
capital

$301, 622

12

59, 720

4
7

82,963
24, 434
3, 775
18, 820

73, 628
9, 570

2

28,181
96, 625
421, 502
38, 660
35, 604

50
21
6
11

343, 013
69, 739
37, 905
30, 720

1

6

3
2
1
22
8

81
1

179, 356
6 , 800
172,079
17, 650
51, 798
2,706
5, 530
2, 325
179,095
89, 990
938, 663
9,002

Share
capital

14

2
2

14
3

N um ­
ber re­
porting

$376,694

227, 749

26

Other

58

25
7
44
5
4

185,046
6,800
375,399
18, 648
141,086

189
4

Share
capital

50 $1,132,052
2
252, 350
7
254,104

28,181
522, 601
515, 675
80, 340
85,144

8

41

N um ­
ber re­
porting

Share
capital

3, 489
5, 530
6,129
257, 803
89,990

2
2

— Continued

Store associations

Total associations

•
Nebraska______________
N ew Hampshire________
N ew J e r s e y ...____ __ _
N ew Mexico __ _ __ _
N ew Y ork_____________

,

C ap ital o f R ep ortin g D istrib u tive C ooperatives b y T yp es and

1
2

1

5,540

1

150

18

169,985

3
1

15

33, 335
998

89, 288

3

46,806

7

75,117

1

783

1

3, 804
31,902

16
101

3

588,015
10,930

TO T AL ASSETS

Assets aggregating nearly 46 million dollars were reported, of which
the store associations alone had more than 20 million, but nearly 13
million were attributable to the petroleum associations. Regarding
the distributive departments of the marketing associations it should
be pointed out that their assets represent mainly the resources accu­
mulated in the course of a marketing business.
T able

25 .— A ssets o f R eportin g D istribu tive Cooperatives at E n d o f 1 9 3 6
Number of
associations
reporting

M ajor business

All associations.. ________________ _________________ ____ __
Store associations. _________ _________________
_______ _ .
Groceries 1_______ _______ _ _______________ ______
General merchandise. __________ _______ ___________ ___
Students’ supplies._ _. __________________ ____ _______
Fuel. . . ________ __________________ ____________ _____
Farm supplies_____ _________ ________________ . . . ____
Miscellaneous2_.
...
_
____ _
_____ .
Buying clubs _____
_ ____ ________ _ ___________
Petroleum a ssocia tion s..__ _____________ _____ ___________ _
Distributive departments of marketing associations_____ _
B a k e rie s.______ _______________ ________ ______________
_
C ream eries___ ___________________ _____ . . . ________
_ ...
Water-supply associations
_______
______ ____________
1 Includes also those handling meats.
2 This group includes clothing, art supplies,




Am ount of
assets

Average per
association

1,534

$45, 752, 538

$29,826

723
2C9
178

20,077, 206
3,102, 083
5, 894, 325
902, 932
904, 758
9,052,090
2 2 1 , 018
35,043
12,937, 282
11,016,487
322, 769
1,287, 338
76,413

27,769
14, 842
33,114
90, 293
24,453
32, 797
17,001
746
20, 342
94, 970
53, 795
429,113
25,471

10

37
276
13
47
636
116
6

3
3

mail-order goods, and “ other household” goods.

RETAIL DISTRIBUTIVE ASSOCIATIONS

53

The amount of assets, on a geographic basis, is shown in table 26.
T able

26 .— D istribu tion o f A ssets o f C onsum er C ooperatives, b y T yp es and b y States, 1 93 6

State

United States___________
A labam a.. ____________
Arkansas_________ _____
California . _________
___ _ .
C olorado.. . .
Connecticut_____________

Total associations

Store associations

N um ­
ber
re­
port­
ing

N um ­
ber
re­
port­
ing

Amount

1,534 $45, 752, 538
2
2

38
11
10

Amount

723 $20,077, 206

6,806
712,992
7,868,526
133,916
217,115

2
2

29
3
8

6,806
712,992
672,824
10,881
214,661

100

780
1,823
1,577
286,557
3,554,779

42

1, 577
66,752
904,579

Indiana_________________
Iow a_____________ . . . ..
Kansas__________________
Kentucky
_ __ _
Maine . . . _____ _____

71
76
132
4
9

2,252,025
1,609,896
2, 644,667
53, 297
255,924

37
19
44
3
9

1,183,630
347,315
597, 634
41,693
255,924

M a ry la n d ..___ _________
Massachusetts
Michigan_______________
Minnesota_______________
Missouri________________

5
25
73

102,626
1,419,430
1, 944,034
6 , 730,177
472, 261

5
61
90
25

102,626
1, 322,159
1,665,997
2,448,319
322,452

Delaware
________
District of Columbia____
Florida . . . ___ ___
Idaho_______
. .. ...
Illinois__________________

M ontana------------------------Nebraska____ _________
New Hampshire ________
New Jersey _____ _____
New Mexico .
_______
New Y ork_______________
North Carolina
_ ____
North D a k o t a .___ _____
Ohio___ _____ _ . -. .
Oklahoma. . ___________
Oregon____ _____________
Pennsylvania
Rhode Island
South Dakota_____ _____
Tennessee

1

o

1

14

210

37
45
110

3
8
2

45
1

58
72
12
21

24
1

30
4

22

547, 609
2, 978, 702
474, 741
442,050
184, 731

4
47
3

862,121
26,385
1,046,656
1,538, 611
181,938

27

8

1

5
46
5

317,904
440,481
15, 749
677, 272
594,863

7
23

6
1
1

Texas______ ______ _____
U tah____________________
Vermont ___
Virginia
W ashington. ............. .......

29
3
4
46

575,194
5,848
47,045
36,748
869,951

West Virginia _ _ ___
W isconsin_______________
W yom ing__ _________ _.

7
181
4

118,918
3,413, 595
8 6 , 218

1

1
2

NET

1

14
3

3
26
7
80
1

Petroleum asso­
ciations
N um ­
ber
re­
port­
ing

Amount

636 $12,937, 282

Other associa­
tions
N um ­
ber
re­
port­
ing

175 $12, 738,050

9
1
2

7,195,702
23, 745
2,454

1 ,6 8 8

1
1

780
135

219,805
2,478,987

12

171, 213

3
5
43

151, 701
118, 500
1, 503,450

7

99, 290

1
12

46

1

916,694
1,144,081
543, 583
11,604

3
104
3

79,659
2,504,649
43,347

3
9
16
9

97, 271
198,378
1, 777, 209
106,462

142,471
1,681, 649
474, 741
442,050

38
50

304, 736
905,718

3
13

100,402
391,335

2

184, 731

579,240
26,385
150,195
1,164,552
82,752

3

40,344

15

242, 537

49

4

20
6

717,464
310,156
84,867

6
1

178, 997
63, 903
14, 319

12
1

75,013
23,002

2

43, 676

14

347,975

2
1

26, 242
2, 203

18

425,800
4,448

5

33,146

2

73,698

7

220,592

199, 215
417,479
15, 749
303,055
592,660
116,248
1,400
47,045
26, 244
660,620
118,918
1,940,449
15, 268

31
52
45

Amount

2

18

10,504
135,633

94
3

1, 252, 554
70,950

1

W ORTH

A net worth of nearly 37 million dollars was reported, of which
somewhat under one-half was that of the store associations.




54

CONSUMERS’ COOPERATION IN TH E UNITED STATES
T a b le 2 7 .—

N e t W o r th o f R e p o r t in g D is t r i b u t i v e C o o p e r a tiv e s a t E n d o f 1 9 3 6

Number of
of net
associations Amount
worth
reporting

Major business

Average per
association

All associations_________________________________ _ ________

1,529

$36,893,273

$24,129

Store associations_________________________________________ __
Groceries 1_______________ ________ ______________________
General merchandise—........................................ _ _____ . . .
Students ’ supplies_____ _________ ____________ _________
Fuel______________ _________ ____________________________
Farm supplies. ______________ ____ _______ _____ _______
4 ______ _____ ___________
M iscellaneous
____ _
________
Buying clubs___ __________ _____________________________ .
Petroleum associations___________________ _____ _____________
Distributive departments of marketing associations__________
Bakeries_______________ _______ ________________________ ____
Creameries. __ ______________________________ __________
W ater-supply associations____ ____ _________ ______ ___ ____

726
2 208
3 173

16,127, 283
2,329,921
4,569,420
760,304
1,296,427
6 , 989,519
181,692
26,362
10,026,823
9,479, 461
107,067
1,049,864
76,413

22,214

10

46
277
12

51
«628
8 115
M
82

3

1 Includes associations handling meat.
2 N ot including 5 associations with combined deficit of $6,787.
3 N ot including 5 associations with combined deficit of $26,777.
4 Includes associations handling art supplies, clothing, mail-order

1 1 ,2 0 2

26,413
76,030
28,183
25, 233
15,141
517
15,966
82,430
26, 767
524,932
25,471

goods, and “ other household” goods.

6 Not including 5 associations with combined deficit of $3,956.

N ot including 1 association with deficit of $14,687.
7 N ot including 2 associations with combined deficit of $25,741.
8 N ot including 1 association with deficit of $7,235.

8

That the majority of the cooperative associations are still small,
from the point of view of net worth, is shown in table 28. Just 45
percent had a net worth of less than $10,000, and another 30.2 percent
had a net worth of from $10,000 to $25,000. Altogether 93.1 percent
had a valuation of less than $50,000. At the other end of the scale
were six associations worth half a million or more. There were 19
associations which had lost all of their capital and were “ in the red,”
but in the case of 8 of these the deficit was less than $1,000 each.
T

able

2 8 .— D istribu tion o f D istribu tive Cooperatives b y N et W orth at E n d o f 1 9 3 6

T yp e of association

Net worth of—
Total
asso­
cia­
tions
$1 0 ,000 $25,000 $50,000 $100,0 0 0 $250,000 $500,000
$1 ,0 0 0 ,0 0 0
and
re­ Under and
and
and
and
and
and
port­ $1 0,000 under under under under under
under
over
ing
$25,000 $50,000 $1 0 0,000 $250,000 $500,000 $1 ,0 0 0 ,0 0 0

A ll associations_____________ 1,529

690

462

272

83

14

2

3

726
51
628

319
51
296

202

149

44

7

2

3

216

83

30

3

115
4

22

40
3

39
1

8

4

Store associations 1__________
Buying clubs_______________
Petroleum associations 2____
Distributive departments of
marketing associations 3___
Bakeries 4 _ _ _ ___________
Creameries 3 ______________
Water-supply associations.. .

1

2

3

2

1

3

2

1

1 N ot including 10 associations with deficits, as follows: 4 with deficit of less than $1 ,0 0 0 ; 4 with deficit
of $1,000 and under $5,000; and 2 with deficit of $5,000 or over.
2 N ot including 5 associations with deficits as follows: 4 of less than $1,000 and 1 of $1,000 and under $5,000.
3 N ot including 1 association with deficit of $5,000 or over.
4 N ot including 2 associations with deficits of $5,000 or over.

The geographic distribution of consumer cooperatives reporting as
to their net worth is given in table 29.




55

RETAIL DISTRIBUTIVE ASSOCIATIONS
T able

29 .— N e t

W orth o f R eportin g D istribu tive C ooperatives, b y T yp es and b y States

,

1936

Total associations
State

United States.......... ..........
Alabama__ ____ ________
Arkansas...... ......................
California_______ _____
Colorado________________
Connecticut_____________
Delaware___ ____________
District of Columbia____
Florida__________________
Id a h o.................. ................
Illinois_______ __________
Indiana.____ ___________
Iow a________ ___________
Kansas__________________
Kentucky__________ ____
M aine___________________
M aryland. _____________
Massachusetts___________
Michigan________________
Minnesota______________
M is sou ri.._____ ________
M on ta n a ............................
Nebraska_____________
New Hampshire. ______
N ew Jersey______________
N ew M exico____________

N um ­
Num ­
ber re­ Net worth ber re­
port­
port­
ing
ing
1,529 $36,893,273
1 1 "-'r _ .
: : r
2
8 , 651
2
516,414
37
6,871, 298
11
81,284
11
188,028
1
1
1

Amount

726 $16,127,283
■
' -- —1 1—t ;
2
8,651
2
516, 414
442,109
28
3
7, 734
9
185,585

14
134

4
61

1,245
1<49,971
1,368,313

69
71
125
4
7

1,794, 266
1,153,541
2,079,535
38, 033
159,901

336
4 17
8 42
3
87

993, 257
346, 590
545,250
32,048
159,901

5

63,976
991,930
1,370,068
5,128,819
414,426

5
®2 0
ii 58
91
27

63,976
949,355
1,136, 598
1,913,249
271,171

406, 978
2,387, 559
368,087
208, 801
152,028

3
44
3
9

34,472
1,343, 253
368,087
208,801

440,186
10,496
932,168
1,023,523
169,592

24

353,325
10,496
147,463
815,919
119,769

215,846
365, 640
15,565
653, 767
572,835

7
23

22

71
211

40
40
102

3
9
2

44

Oregon______ ___________
Pennsylvania_________
Rhode Island____________
South Dakota___________
Tennessee...................... .

21

Texas_______ ___________
U tah________ ______ _____
Verm ont________________
Virginia__________ _____ _
Washington...................... .

24
3

2

58
76
13
24
1

31
3

1

2
6

47
7

1

13
14 2
15 4
16 1

3
46

373,230
1,883
42,549
15,274
615,604

7
175

113,465
2, 748, 975

1

6 ,0 0 0

7
77
(19)

2

Petroleum asso­
ciations
N um ­
ber reporting

1

Amount

Other associa­
tions 1
Num ­
ber re­
port­
ing

2
2

26

133,986
353,361
15,565
262,060
571, 837

9
6

59,652

1

1 , 688

10

60

128,871
2, 332,086

3 30
6 50
43

650,344
704,889
420,209
5, 985

1

2
2

6,429,189
13,898
2,443

1

804

13

210,074

3
4
7 40

150,665
102,062
1,114,076

io 2

42,575
159,895
1,445,762
81,818

73, 575
1, 769,808
61,437

18
9

1247

304,039
738,174

11

2

152,028

3
102

4
34

10

3

68,467
306,132

3

11, 771

is 17

75,090

48

4

5

620,928
167,378
43,591

8
1

163, 777
40, 226
6 , 232

12
1

62,921
12, 279

2

18,939

15

341, 754

3
1

49,953
998

4

17, 397

21

49,938
800
42,549
4, 770
455, 907

16

18

10, 504
85, 999

2

73,698

113,465
1,630, 043

17 92

953,935

18 6

164, 997

1

6 ,0 0 0

2
1

305,895
1,083

1 Buying clubs, distributive departments of marketing associations, and miscellaneous.
3 N ot including 1 association with a deficit of $1 0 .
s N ot including 1 association with a deficit of $713.
* N ot including 1 association with a deficit of $15,349.
®N ot including 1 association with a deficit of $1,138.
6 N ot including 1 association with a deficit of $106.
7 N ot including 1 association with a deficit of $14,687.
8 N ot including 1 association with a deficit of $7,211.
®N ot including 1 association with a deficit of $810.
N ot including 1 association with a deficit of $6,171.
ii N ot including 1 association with a deficit of $2,197.
13 N ot including 1 association with a deficit of $476.
is N ot including 1 association with a deficit of $19,570.
ii N ot including 1 association with a deficit of $4,861.
ifi N ot including 1 association with a deficit of $1,464.
i® N ot including 1 association with a deficit of $1,000.
17 N ot including 2 associations with a deficit of $1,629.
58 N ot including 1 association with a deficit of $7,235.
i 0 N ot including 1 association with a deficit of $556,




Amount

628 $10,026,823
175 $10,739,167
■
- . i^
^ ■■■ ■ —; -- ------ ;--------

804
1 ,6 8 8

I! 245
278,842
3,910,473

New Y ork _______________
North Carolina__________
North Dakota___ _______
Ohio____ _______________
Oklahoma_______________

West Virginia....................
Wisconsin_______________
W yom ing...................... .

Store associations

56

CONSUMERS’ COOPERATION IN THE UNITED STATES
Cooperatives in Relation to Population

A tabulation of some 1,900 distributive cooperative associations re­
porting to the Bureau for 1936 is given, in relation to the population,
in table 30.
Although based upon only about 60 percent of the number of such
associations known to have been in operation in that year, it is believed
to be representative of the general cooperative picture.
In making this table many adjustments were necessary. For in­
stance, many associations have branches in various towns, in addition
to the headquarters establishment. In such cases, a proportionate
part of the total membership and of the sales of the association was
assigned to each of the towns in which a branch was located. An
association with three branches in separate towns would therefore ap­
pear in the data in four places, although in the majority of cases the
data cover organizations all of whose activities are in a single locality.
As regards the membership figures shown in the table, two things
which tend to offset each other should be borne in mind: (1) The data
represent only persons who are paid-up members of reporting coopera­
tive associations, and take no account either of the members of their
families or of persons with membership partially paid; were these in­
cluded, the proportion of population would, of course, be greater than
the table indicates; (2) in the smaller places, many of the members
may live outside the town in which the store is located, and if the asso­
ciation’s whole trading area is considered, the population would be
considerably greater than that of the headquarters town which was
here taken as the basis for comparison.
Some of the associations operate on a county-wide basis. This is
true of the Farm Bureau cooperative associations and of a number of
petroleum associations. The 315 such associations reporting to the
Bureau of Labor Statistics have been here treated in a separate group,
and to have compared their membership with the population of the
headquarters town would obviously have been extremely misleading.
For such associations, therefore, the population of the entire county
was used; in the case of the farmers7associations, however, the popula­
tion of the cities of 25,000 or over was subtracted, because they do little
or no business in the cities.




RETAIL DISTRIBUTIVE ASSOCIATIONS
T able

57

30.— M em bersh ip , Sales, and N et E arnings o f D istribu tive C ooperatives in R elation
to P opu la tion
Distributive
associations

Population class
N um ­ Per­
ber
cent

All population classes- . . _ _
Under 500__________________
500 and under 1,000_________
1,000 and under 5,000 _______
5,000 and under 10,000_______
10,000 and under 25,000______
25,000 and under 50,000______
50,000 and under 100,000_____
100.000 and under 500,000____
500.000 and under 1,000,000___
1,000,000 and over. _______ _

Members, 1936
Popu­
lation,
1930

N um ­ Percent
of popu­
ber
lation

1,668 100.0 32,984, 657 304,258
547
311
431
99
68
42
31
59
19
61

32.8
18. 7
25.8
5.9
4.1
2.5
1.9
3.5
1.1
3.7

138, 586
209, 678
850, 319
613, 409
937, 367
1, 229, 719
1, 861, 582
7,851, 751
4, 386,037
14,906,209

60,866
47,900
89, 346
30,803
17,180
10,906
6,766
30,294
2,604
7,593

Sales, 1936

Amount

Per­
cent
of
total

Net earnings,
1936

Amount

Per­
cent
of
total

0.92 $94,232,349 100.0 $4,125,058 100.0
47.40
23.85
11.16
5.42
1.92
.94
.36
.40
.06
.05

22, 272,728
17, 743,598
28, 384,659
11,297,163
4, 400,606
2,873, 616
975,074
5,206,926
332, 760
745, 219

23.6
889, 382
18.8
725,110
30.1 1,437,167
505,492
12.0
4.7
124,563
3.0
133,441
1.0
31,177
5.5
260,973
.4
3,441
.8
14, 312

21.6
17.6
34.8
12.3
3.0
3.2
.8
6.3
.1
.3

County-wide associations

All population classes____ _

315 100.0 9,975,660 137,700

Under 10,000________________
10,000 and under 25,000______
25,000 and under 50,000_ _ __50,000 and under 100,000_____
100,000 and over_____________

26
141
108
34
6

8.3
44.8
34.3
10.8
1.9

207,002
2,440,038
3,620,903
2, 251,810
1, 455,907

6,992
55,851
52,656
20, 789
1,412

1.53 36,000,587 100.0 1,961,148 100.0
3.60 1,345, 331
2.53 12, 558, 504
1.58 15,382,117
1.04 5,047,420
.11 1,667,215

3.7
34.9
42.7
14.0
4.6

90,004
614, 614
910,675
326,360
19,495

4.6
31.3
46.4
16.6
1.0

It will be noted that more than three-fourths of the 1,668 coopera­
tive establishments included in the first group in the table were in
places of less than 5,000, and that from that point they declined
abruptly both absolutely and in relation to population. These asso­
ciations had a combined membership of 304,258. Although ranging,
in the various population groups, from only 0.05 percent of the popu­
lation in places of 1 million or over to over 47 percent of population
in places of less than 500, for the whole number of associations the
membership formed less than 1 percent of the combined population of
the places in which they were located.
Some 72 percent of the total cooperative business was done, and 74
percent of the total net earnings were made, by associations located in
places of less than 5,000. The data for the population class of
100,000-500,000 are distorted by one unusually large association.
Much less variation in development is shown in the county-wide
associations. Altogether their members formed 1.53 percent of the
population in the localities where they were operating.
Farmers in the Consumers9 Cooperative Movement
The consumer activities of farmers’ associations vary widely in
different associations in their importance in relation to the total busi­
ness. As shown in table 32, 73 farmers’ associations reporting were
entirely consumer organizations; they performed no farm market­
ing or processing functions and handled no producer supplies of any
9 0 6 2 1 ° — 3 9 --------5




58

CONSUMERS’ COOPERATION IN THE UNITED STATES

kind. The majority of the farmers’ associations included in this
report, however, were those handling mainly supplies used in the busi­
ness of the farm, but also handling sizable proportions of consumer
goods. One group included associations whose major business was the
marketing of farm products, but which had also set up departments for
the collective purchase of farm products and household supplies. In
this connection it is interesting to note that there was a small number
of associations which had been organized for the purpose of marketing
or processing farm products and whose names still indicated that this
was their function (elevator, livestock association, creamery, etc.); in
the course of time, however, their character had gradually changed
and in 1936 they reported that their chief business was the purchase
of supplies, not the marketing of farm crops or livestock.
The farmers’ associations, classified by major line of business, are
shown in table 31.
T a b l e 31.—

O p e r a tio n s , i n 1 9 3 6 , o f R e p o r t in g F a r m e r s ’ C o o p e r a tiv e A s s o c ia t io n s
H a n d lin g C o n s u m e r G o o d s , b y M a j o r L i n e o f B u s i n e s s

Membership

Sales

N et earnings

Net worth

N um ­
ber of
asso­
cia­
tions
re­
port­
ing

M em ­
bers

_____

1,173

303,899

Store associations___ _____ __
Groceries-__ . _____ General merchandise___
Fuel____________________
Farm supplies--. -------M iscellaneous.. _______
Buying clubs. _____ _____
Petroleum associations_____
Distributive departments of
marketing associations____

567
83
113
52
313
6
1
474

117, 340
16,635
18,435
8, 382
72, 249
1, 639
80
162,949

584
92
114
49
322
7
1
498

54,613,053
5,164,062
8,072,048
5, 303,272
35,441,276
632,395
3,000
37,022, 054

482
64
101
42
270
5
1
441

1,712,872
128, 286
178, 376
164, 533
1,214,193
27,484
90
2, 745,900

495
73
98
41
277
6
429

7, 294,838

131

23,530

132

20, 360, 534

119

1, 581, 571

115

9,479,461

M ajor business

AH associations—_ __

N um ­
ber of
asso­
cia­
tions
re­
port­
ing

Amount

1,215 $111,998, 641

N um ­
ber of
asso­
cia­
tions
re­
port­
ing

Amount

1,043 $6,040,433

N um ­
ber of
asso­
cia­
tions
re­
port­
ing

Amount

1,039 $28,427,078
11,652, 779
1,039,088
2, 206, 579
1,253, 387
6,989, 519
164, 206

The farmers’ store associations had an average volume of business
generally considerably exceeding that of the other consumers’ asso­
ciations. Probably this was due in substantial degree to the much
more extensive lines of commodities dealt in. Whereas in the other
consumers’ associations the largest group (29.8 percent) had sales of
less than $10,000 per year and about 70 percent of the total did a
business of less than $50,000 annually, among the farmers’ associations
about equal proportions fell in the groups doing an annual business of
$25,000-$50,000 (24.5 percent), $50,000-$100,000 (25.7 percent), and
$100,000-$250,000 (23.3 percent). Somewhat the same situation was
shown among the associations handling petroleum products. There
the largest group of the other consumers’ associations was that doing




RETAIL DISTRIBUTIVE ASSOCIATIONS

59

an annual business of $25,000-$50,000, as compared with $50,000$100,000 among the farmers’ organizations.
Comparative average sales of the farmers’ and the other consumers’
associations in 1936 are shown in the following statement:
Other
consum ers’
associations

Farm ers’
associations

Store associations (ail types)_____
Buying clubs____________________
Petroleum associations__________
Associations providing meals only
Laundries_______________________
Printing and publishing_________
Burial___________________________

$93,
3,
74,
2,
23,
13,

510
000
342
474
150
121
938

$59,
5,
61,
75,
10,
10,
66,

907
295
978
226
000
756
568

There were 73 associations, with a combined membership of 8,520
and an annual business of $2,578,271, which were handling only con­
sumers’ goods in 1936. Data for these associations, by States, are
shown in table 32.
T able 32.—

O p e r a tio n s o f R e p o r t in g F a r m e r s ' C o o p e r a tiv e A s s o c ia t io n s D o i n g
C o n su m e r B u s in e s s O n ly ,

1936,

b y S ta te s

Amount of—
State

N um ­
N um ­
ber of
ber of
asso­ m
em ­
cia­
tions bers

A ll States--------

73

Colorado_____
Illinois________
Indiana______
Iowa___ __ ____
Kansas_______
M aine________
M a ry la n d ____
M innesota. _ _
M issouri. _ __
M on ta n a ... . . .
Nebraska_____
N ew Y ork ____
North D akota..
Oklahoma____
Pennsylvania..
South D akota..
W ashington___
W isconsin_____

272
3
2
210
64
1
5
627
21 83,144
2
2 30
1
67
11 1,163
1
87
1
75
5
476
1
110
5
465
241
3
112
1
4
560
4
695
2
122

Amount
of busi­
ness

8,520 $2,578,271
29, 351
29, 700
22,164
4 122, 611
8 574,069
230,294
15, 539
365, 477
15,943
26,934
182, 531
20,000
216,427
197, 597
19, 249
273, 392
147,741
89, 252

Gains

Losses

Total
net
earn­
ings

Pa­
tron­
age
re­
funds

Share
capital

$42,663 $19, 558 $23,105 $13, 292 $569,534 $852,297
1,104
160
978
5 1,645
8 5,087
2

14

3 843
160
978
2 6 , 328 6 4,683
10 7, 391 11 2,304
2 261

OQQ
299
10,029 3 1, 743 is 8 , 286
8

7,416

5 7, 546
3 2,430
216
s 1, 524
5 3,646
2 583

474
3 2,131
500
3 485
2

69

176

1,104

149
3 5,100

17 4 74

5, 285

2

2,149

17 500

7,061
2,430
216
1,455
s 3, 646
407

3

2

2

2 1, 568
3 1,829
2 800

a 364
2 229

3 3,280 3 10,701
25,000
1,925
5,987
4 78,600 4 61,461
12119,096 13129,102
2 7,180
2 6 , 680
7,670
1,740
16 69,308 16117,579
8,700
10,800
17,807
45, 795
6 8 , 767
10,400
8,000
63,625 150,195
3 11,850 3 19, 527
1,274
46,020
75, 561
53, 665 108, 566
61,020
14,950

1 N ot including 1 society which reported a deficit of $15,349.
3 1 association.
3 2 associations.
4 4 associations.
5 3 associations.
6 Loss; 4 associations.
3 3 associations; not including 1 reporting deficit of $15,349.
8 20 associations.
9 7 associations.
4012 associations.
ii Loss; 19 associations.
I2 19 associations,
is 18 associations.
14 6 associations.
15 8 associations; not including 1 which reported loss but did not state amount,
is 10 associations.

17Loss.




Assets

Net
worth

1 $690,096

3 7,554
2 9,500
5,541
7 67,982
12 69, 556
2 171
5,170
98, 579
13,818
64,135
10, 240
129, 313
17,936
3, 656
55, 483
70, 442
61,020

60

CONSUMERS* COOPERATION IN THE UNITED STATES

The farmers’ associations accounted for $818,279 of the total value
of goods produced (shown in table 22). Their manufactures were in a
much more restricted field than were those of the other consumers’
associations. One association manufactured dairy products (to the
value of $113,543), 1 manufactured sausage ($5,349), 1 manufactured
flour ($9,853), 2 ground corn for meal ($100,000), and 20 made feed
($589,534).




Chapter 3.— LOCAL SERVICE ASSOCIATIONS
Summary
The service associations present as varied a field of activities as do
the distributive associations. They provide such services as housing
(in the form of apartments or furnished rooms), electricity, meals,
laundry work, automobile repair, recreational facilities, burial, lawn­
mowing, and cold-storage facilities. They present also a most varied
aspect from the point of view of financial success, as this group con­
tains some of the most rapidly expanding as well as the most laggard
types of associations.
As regards money value of business, they range from the milliondollar operations of the housing associations to the very small turn­
over of the recreation and publishing associations which perform
services that are important but which do not bulk large in terms of
dollars and cents.
At the end of 1936 the service associations were operating as
principal enterprises 31 rooming houses, 31 restaurants, cafeterias,
and dining rooms, 7 printing plants, 5 clubhouses or clubrooms,
4 laundries, 2 halls, 2 cooperative parks, 2 garages, a hospital, and a
cold-storage plant. Auxiliary enterprises operated by this group
included 5 retail stores, 2 bakeries, a warehouse, a laundry, a shoerepair shop, a gasoline service station, an automobile sales agency,
a restaurant, and a rooming house. Data were not available for the
electricity associations.
Business Operations
Summary data on the operations of the various service associations
in 1936 and their financial status at the end of the year are given in
table 33.
61




CONSUMERS’ COOPERATION IN THE UNITED STATES

62

T able 33 .— Summary of Operations of Local Service Cooperatives, 1936
Business done

Membership
T yp e of association

Associ­
ations
report­
ing

A ll types.
Associations providing—
Meals only________________________
Rooms on ly________________________
Meals and room s__________________
Laundries and cleaning establishments. _
Medical-care associations______________
Garages_______________________________
Printing and publishing associations----Burial associations_____________________
Recreation associations________________
Housing associations___________________
Electricity associations_________________
Miscellaneous 4________________________

I ll

41, 641

15
3

6,809
576
2, 766
875
5,143
96
4,916
15,006
914
2,323

12
3
4
2
7
17
9
34

_____

Associations providing—
Meals on ly . _ . . . ______
Rooms on ly ___ __ __ ________
M eals and rooms _____ _____
Laundries and cleaning estab­
lishments.
. . _. _____
Medical-care associations. ____ _
__________
Garages__ ______ __
Printing and publishing associ­
________________ ____
ations
Burial associations___ _____ _____
Recreation associations____ _____
Housing associations______ _____
Electricity associations________ _
M iscellaneous4__________________

11
3
10
2
2
2
6
12
2
33

2,217

3

Share capital

Asso­
Asso­
cia­
cia­
tions Amount tions
re­
re­
port­
port­
ing
ing

T yp e of association

Associ­
ations
report­
ing

(3 )

5

Patronage
refunds

All t y p e s __ ___________

Members

Amount

N et earnings
Associ­
ations
report­
ing

Am ount

$2,498,889

70

$40, 261

754, 738
9, 552
225,016
33,150
1,950
53,229
69, 264
63,189
6, 498
1, 281, 641
(3)
662

12
2
5
2
2
2
6
10
1
28

14,388
234
i 402
549
77
i 1, 718
i 2, 347
4,432
200
24, 848
(3)

Total assets

Asso­
cia­
tions
re­
port­
ing

Net worth

Amount

Asso­
cia­
tions
re­
port­
ing

81 $4,438,324

54 $1,057,819

42

$770,828

Amount

Amount

8

$5,497

5

3,425

11
2
8

125, 559
3, 680
22, 995

13
2
7

441, 597
7, 714
42,531

9
1
6

358», 921
4,048
14, 735

1

650

1
1
2

8, 777
109, 900
13,022

2
2
2

14, 574
112,689
143, 645

2
1
1

9,331
109,900
6, 250

2

1,422

6
12
4
32

19,398
31, 724
6,550
4,086,569
(3)
10,150

6
12
7

47,572
62,915
184,432
(3)
(3)
150

6
11
4

36, 878
50,109
180, 506
(3)
(3)
150

2

1

1

1 Loss.

2Gross revenue.

3 N o data.
4 This group includes local educational, lawn-mowing, and cold-storage associations.

Combined data, by States, for the service associations (except the
housing associations) are shown in table 34.




LOCAL

S E R V IC E

63

A S S O C IA T IO N S

T able 34.— Operating Statistics of Local Service Cooperatives, 1936
[Data do not include housing associations, for which see p. 80]
M em ber­
ship
Asso­
cia­
tions M em ­
bers
re­
port­
ing

State

Business

Asso­
cia­
tions
re­
port­
ing

Total

T otal_______

73 37,106

51 $1,216, 722

California___
Connecticut .
Florida_____
Illinois______
Indiana..- _
Iowa________
M ichigan___
Minnesota. __
Missouri____
Nebraska___
New Jersey. .
N ew Y o r k ...
N . D a k ota .._
Ohio________
Oklahoma__
Oregon..........
Pennsylvania
S. Dakota__
Texas______
W ashington.
W isconsin.

2
1
1
6
2
5
7
19
1
1
1
8
1
2
1
1
2
1
1
2
8

1
1
1
3
2
1
7
16
1
1
1
5

2,958
5
44
4,488
103
2,075
826
7,265
90
60
499
9,368
380
760
2,485
35
23
3, 530
700
340
1,072

1

69,487
136
9,500
171,159
37, 662
4,170
111, 789
117, 660
1,223
928
12,807
489,175
(3)
10,000

N et earn­
ings

Asso­
Asso­
cia­
cia­
tions Total tions
re­
re­
port­
port­
ing
ing
l 42 $15,413
2 663

1
1

4
2
1
5
13
1
1
1
6

4,464
616
73
5,430
712
61
1,023
264
747
(6)

4
1
2
7
15

2
1

561
196

1
1
2
1

1
3

193
2,064

1
4

(6 )

(3)
14,891
3,920
40,000
56, 215
66,000

Total

49 $351,710

1

(3)

2
1
1
1
5

Share capital

1
1
5
1

560
150
(3)
13,881
5,000
8,634
7,400
41,816
(3)
1,055
21,264
109,107
3,800
(3)
109,900
750
1,329
3, 530
(3)
7,490
16,044

Assets

Asso­
cia­
tions
re­
port­
ing

Net worth

Asso­
cia­
tions
re­
port­
ing

Total

54 $1,057,819
1
1
1
4
1
2
7
14
1
1
1
7
1
1
1
1
2
1
1
5

14,483
150
2,000
5, 746
5,000
14,674
52, 855
69, 588
200
1,145
32,564
670, 462
15,000
380
112,489
1,200
6,657
5,440
(3)
20, 538
27,248

Total

42 $770,828
1
1
1
42
1
2
5
3 11
1
1
6
1
1
1

961
150
2,000
770
5,000
12, 705
25, 727
47,481
(3)
1,055
21, 378
494,479
15, 945
271
109,900
(3 )

2
1
1
3

4, 354
5,440
(3)
7,314
15,898

1 2 associations had losses aggregating $727 and 40 associations gains aggregating $16,140; does not include
1 association with a loss, whose amount was not reported.
2 Loss.
3 N o data.
4 N ot including 1 association which had a deficit of $848.
5 N ot including 1 association which had a deficit of $1,797.
6 1 association had a loss, amount not reported.
B U S IN E S S W IT H N O N M E M B E R S

No information was available as to the proportion of nonmember
patronage in the electricity associations. The income of the housing
associations was from their own members. For the other service
cooperatives the proportion of nonmember business reported was as
follows:
N um ber o f asso­
ciations

None_______________________________________________________________
Less than 10 percent______________________________________________
10 and under 15 percent__________________________________________
15 and under 20 percent__________________________________________
20 and under 25 percent__________________________________________
25 and under 50 percent__________________________________________
50 and under 75 percent__________________________________________
75 and under 90 percent_________________________________________
90 percent and over_______________________________________________




7
4
4
1
2
1
7
7
2

64

CONSUMERS’ COOPERATION IN THE UNITED STATES
IN T E R E S T O N S H A R E C A P IT A L

Very few of the service associations paid interest on share capital.
In the housing associations the share capital paid in represented the
member-tenant’s equity in his apartment. Of the rates paid by the
54 other service associations reporting, only 5 paid interest on share
capital— 2 at 5 percent, 1 at 6 percent, and 2 at 8 percent.
SUPPLIES FROM C O O PE R A TIV E SOURCES

Of 33 service cooperatives reporting as to the proportion of all
supplies that was purchased from cooperative sources, the distri­
bution was as follows:
Num ber of asso­
ciations

None_______________________________________________________________
Less than 10 percent______________________________________________
10 and under 25 percent__________________________________________
25 and under 50 percent__________________________________________
50 and under 75 percent__________________________________________
75 and under 90 percent__________________________________________
90 and under 100 percent_________________________________________
100 percent________________________________________________________

17
4
5
2
1
2
1
1

F ield s o f A c tiv ity
A SSO C IA T IO N S SU P P L Y IN G M EA L S A N D L O D G IN G

At the end of 1936 there were known to be in operation some 41
associations or groups supplying meals, lodgings, or both. Data were
obtained for 31 associations in this class, of which 16 furnished meals
only, 3 rooms only, and 12 both meals and rooms.
Although definite restrictions on membership were not common,
almost all of these represented homogeneous memberships, bound by
ties of occupation or race. Thus, 14 were associations of students
or faculty members of specified colleges or universities, 10 were asso­
ciations whose membership was overwhelmingly of a specific nation­
ality (i. e., 7 Finnish, 1 Russian, 1 Scandinavian, and 1 Ukranian), 3
catered to a definitely working-class membership (steel workers, auto­
mobile workers, etc.) and another to office and white-collar workers,
1 was restricted to the employees of a particular company, and 1 to
office employees of a farm organization.
A large proportion of these associations have been in operation
a long time. Of the 30 whose year of establishment is known, 2 date
from 1912, 2 were started in 1913, 2 in 1917, 1 in 1918, 3 in 1919,
1 each in 1920, 1922, 1923, 1924, 1926, 1931, 5 in 1932, 3 in 1933, 2 in
1935, and 4 in 1936. Their average age was 11 years.
At the end of 1936 these associations were operating 16 restaurants,
13 cafeterias, 4 rooming houses, 28 boarding houses, 4 stores, a meat
market, a warehouse, a bakery, a laundry, and a central kitchen




LOCAL SERVICE ASSOCIATIONS

65

serving a number of boarding houses. In addition, two eating clubs
occupied donated quarters and another association provided laundry
service for its members through a contract with a local laundry.
A combined membership of 10,151 was reported, and an annual
business of $989,306. Although the students’ organizations do most
of their business with their members, a very high proportion of non­
member business was reported by the others, being as high as 90
percent in one association and upward of 66% percent in seven others.
In some of the older associations this was due to the moving away of
the original members, though still retaining their shares, and to a lack
of zeal in interesting patrons in joining.
Besides the associations described above, whose main business is
that of furnishing meals and lodging, five associations in other lines of
activity were also operating restaurants and cafeterias, and one was
running a clubhouse and one a rooming house.
L A U N D R Y A N D D R Y -C L E A N IN G E ST A B L ISH M E N T S

The Bureau of Labor Statistics had record of the existence of only
seven associations operating laundries or dry-cleaning plants as their
main activity at the end of 1936. Four of these furnished reports of
their operations in that year. One reporting society was in New
York, one was in Ohio, and two were in Wisconsin. Three were urban
consumers’ associations and the fourth a farmers’ association, which,
however, was doing most of its business with residents in town. The
farmers’ association dated from 1914, but all of the others were started
in 1935.
Three of the associations operated one laundry each, the fourth
having a dry-cleaning business. One also had a store in which cloth­
ing was sold and another had a shoe-repair department.
A large propbrtion of nonmember patronage was reported. One
association did only 10 percent of its business with nonmembers in
1936. The other three, however, reported 50, 70, and 80 percent,
respectively. It would appear that if the customers in the community
liked the cooperative service well enough to give the organization a
large part of their patronage, here would be a good potential field of
expansion, by direct persuasion or by crediting of patronage refunds.
Only one association made sufficient net earnings in 1936 to be able to
return a patronage dividend, and this was the association only 10
percent of whose business was with nonmembers: it returned patron­
age refunds to members only.
M E D IC A L -C A R E CO O PE R A TIV ES

Cooperative medical care is a type of service in which there is great
public interest. This has grown out of the present system of the
provision of medical attention. In spite of the enormous sums spent




66

CONSUMERS’ COOPERATION IN THE UNITED STATES

annually in this country for physician’s services and hospitalization,
yet a large group of our population cannot afford adequate medical
care.
Cooperators declare that this situation can be remedied, for individ­
ual groups, by adoption of the cooperative plan of medical care.
This cooperative plan is characterized by payment for medical services
on a periodic prepayment basis (via membership dues in the associa­
tion) ; furnishing of the services of physicians who are closely associated
in what is known as “ group practice,” and are under contract to
render specified medical services to members of the association for a
consideration (usually annual) from the association; democratic
control of the association on a nonprofit, one-vote basis.
Such a plan, its supporters declare, (1) relieves the burdensome
and sometimes catastrophic costs of unforeseen illnesses, by enabling
the patient to budget the costs in advance, in the form of small periodic
payments; (2) makes possible the sharing, among the physicians in
the group, of the high cost of equipment, thus enabling them to offer
service at a lower cost to the patient; (3) gives the physicians more
time for actual practice by liberating them from the mechanics of
“ building up” a practice and from the worries of financial and admin­
istrative details; and (4) gives the physicians, including the specialists,
more time to continue research and keep up with the continuing ad­
vances in medical science.
A number of “ group medicine” plans were in effect or in the plan­
ning stage at the end of 1936, but the Bureau of Labor Statistics has
knowledge of only four such plans which were entirely cooperative—
initiated and operated by the members (prospective patients) them­
selves. Reports were received from all of these— one in California,
one in Indiana, one in Missouri, and one in Oklahoma.
The Oklahoma association was the oldest cooperative medical
organization in the United States, having been started in 1929. It
was also the only farmers’ organization of the group, the members
of the others being mainly town or city dwellers. One of the town
associations was formed in 1933 and the other two in 1936.
The farmers’ organization started with the idea of making hospitali­
zation its primary service. The others began with general medical
care, with hospitalization secondary. In all except the farmers’
organization, the cooperative association furnished the services
through a contract arrangement with local physicians and hospitals,
using their facilities. The farmers’ association had its own hospital
and equipment and full-time medical staff.

Each of the four associations, and the basis on which it operates,
is described in the following pages. Generally the data are as of the
end of 1936, but important developments in 1937 are also noted.




LOCAL SERVICE ASSOCIATIONS

67

During 1937 the subject of cooperative medical care received much
publicity and many groups declared their favorable interest in the
subject. The establishment of medical plans is known to be under
consideration in various sections of the country. Early in 1937 groups
in northern Wisconsin, already operating cooperative business enter­
prises, formed a health association to provide medical care by contract
with local physicians and hospitals. Farm groups in western Wis­
consin held several meetings, with a view to establishing their own
hospital. In a number of the Farm Security projects the settlers
have started health associations with the assistance of the Federal
Farm Security Administration. Among these are two known to have
been formed in the San Gabriel and San Fernando Valley projects in
California; others are reported to have been started in eastern Idaho
and in New Mexico. The residents of Greenbelt, Md., a low-cost housing project just outside of Washington, D. C., formed such an organi­
zation early in 1938.
The Home Owners’ Loan Corporation, in order to reduce the time
lost through sickness by its employees in Washington, D. C., took the
initiative in the formation of the Group Health Association, a medicalcare association on a cooperative basis. For this purpose it advanced
$40,000. Although started primarily to care for employees of the
H. O. L. C., the organization later opened its membership to employees
of other Government departments and a number of them affiliated
with it. It began operations November 1, 1937, and by February 1,
1938, had a membership of about 2,300. This organization provides
general and specialized medical and hospital care, charging $2.20
per month for individuals and rates ranging from $4 upward (accord­
ing to number of dependents) for families.
These cooperative medical associations have been under fire, since
their inception, by local and national doctors’ organizations. In
Oklahoma, in the fall of 1937 an initiative petition, seeking a State­
wide vote on a measure which would definitely legalize cooperative
medicine, was filed by the Farmers’ Union with the secretary of state
of Oklahoma. That official, after hearings, overruled petitions attack­
ing the sufficiency of the petition and declared it sufficient. From
this ruling appeal was taken to the State supreme court which, in
December 1938, had not rendered a decision. In the meantime a
branch of another farm organization, the Farmers’ Equity Union, in
another part of the State was reported to be taking steps to establish
a cooperative hospital for its members.
A bill to legalize consumers’ and producers’ cooperative medical
groups and exempt them from the provisions of the State insurance
laws was introduced in the 1937 session of the Wisconsin Assembly
but was defeated.1
1 For a discussion of the legal status of cooperative m edicine, see p. 189.




68

CONSUMERS’ COOPERATION IN THE UNITED STATES
F a rm ers9 U n io n C o o p era tiv e H o s p ita l A s s o c ia tio n

The farmers’ association— The Farmers’ Union Cooperative Hos­
pital Association, at Elk City, Okla. (see fig. 5, facing p. 80)— was the
only one of the medical group operating its own hospital. In the
others, hospital care was arranged for on contract.
As of December 31, 1936, it had 2,485 members, an increase of 285
over the same date of the previous year. Because of limited facili­
ties membership was restricted to 2,500 members. Up to this limit
membership was open to anyone living in the district served by the
association, upon subscription for one or more $50 shares. This
constituted a family membership covering all members of the family
living in the immediate household.
The medical and hospital service was provided on the basis of
annual dues ranging from $12 for one person to $18 for two persons,
$22 for three persons, and $25 2 per family of four or more; these
dues were payable quarterly or semiannually. This fee entitled
every member of the family to the following services: Consultations,
prescriptions, physical examinations (including laboratory analyses
of blood, urine, sputum, etc.), and necessary medical treatment.
For cases requiring hospitalization, the association furnished room,
board, general nursing service, and the services of a special nurse,
without additional charge; a charge of $1 per day was made to cover
cost of laundry, medicine, serums, etc. Surgical operations were
without additional charge, the only charge being for the cost of the
anesthetics and other surgical supplies used in the operating room;
this charge averaged from about $3.50 for minor operations to some
$18 for major operations. Every mother, in addition to prenatal
and postnatal care, was entitled to hospitalization during confine­
ment, upon payment of the regular laundry, etc., fee of $1 per day.
Limited dental care, including examination, X-rays, and extrac­
tions, was also being provided for the membership.
For medical attention at the members’ home a flat charge of $1.50
was made, plus 25 cents per mile of travel one way. For ambulance
service the charge was $1, plus 10 cents per mile one way. Extra
charges ranging from 50 cents to $3 were made for special services
such as electric baths, violet-ray treatments, medical X-rays, etc.
In 1937 the hospital added a special plan for members living in
outlying sections who will receive treatment only when they require
hospital care. Dues under this plan range from $6 per year for one
person to $12 per year for families of four or more.
In all of its work stress has been laid upon preventive measures,
such as a periodical physical examination. It is felt that in this way
serious illnesses have been prevented and the general level of health
among the members has been raised.
a Reduced in 1937 to $24.




LOCAL SERVICE ASSOCIATIONS

69

The organization grew out of the efforts of a single physician who
conceived the idea of a medical cooperative and was successful in
enlisting the interest of some local cooperators. The organization
was formed in 1929 and the first unit of the hospital was built in
1930. Later he interested the officials of the Oklahoma Farmers7
Union, whose members were already carrying on various cooperative
business enterprises, and the farm organization became the official
sponsor for the cooperative hospital.
•Additions have been made to the original building and facilities,
from time to time. At the end of 1936 the association owned a
3-story hospital building with 75 beds; it provided facilities for X-rays
and physiotherapy, an analytical laboratory, a general clinic, and
special clinics for dental, surgical, eye and ear, nose and throat, and
gynecological service. It had on its staff three full-time physicians
and one full-time dentist.
The staff performed 141 surgical operations in 1932, 286 in 1933,
458 in 1934, 741 in 1935, and some 1,200 in the first 9 months of 1936.
Because of the fact that the membership was scattered throughout
a region of some 40 miles7 radius from Elk City, the bylaws provided
for regional members7meetings and for regional representation on the
board of directors. The board consisted of five persons elected an­
nually by the members. A business manager, hired by the directors,
attended to the business affairs, and a medical director (the physician
who was prime mover in the association) had supervision over the
professional matters.
Although the bylaws of the association provide that patronage
refunds shall be made, if earned, this has not as yet been put into
practice. The charges have been so low that there is little surplus,
and that which has accrued has been used to provide more service or
better hospital facilities.
S a n D ie g o B e n e fic ia l S o c ie ty

The next of the four reporting organizations to be formed was the
Beneficial Society, San Diego, Calif. Because of Statutory restrictions,
this organization was incorporated as a fraternal organization, oper­
ating two auxiliary enterprises— a benefit association (for rendering
of hospital benefits) and a medical cooperative association (for pur­
chasing medical services).
Formed in 1933, its membership rose from about 2,000 at the end
of 1935 to 2,500 at the close of 1936, and about 2,800 in June 1937.
The beneficial society was a nonstock association, having a repre­
sentative form of government, and was governed by a board of
directors of nine. There was no proxy voting and each member was
allowed one vote. This association held regular meetings of its
members for social and educational purposes. The membership was




70

CONSUMERS’ COOPERATION IN THE UNITED STATES

divided into local councils of not more than 500 members in each;
these councils also held regular monthly meetings.
A mutual benefit association was formed, composed exclusively of
members of the fraternal order, for the purpose of rendering dis­
ability benefits (hospital benefits). Under the plan the association
paid not to exceed $7 a day while the member was confined to any
hospital in the United States. In order to obtain the hospital bene­
fits the member paid monthly dues of $1 for the first member of the
family, $1 for the second member, and 50 cents for each additional
member. The hospital association was governed by a board of
trustees of three, elected by the members once each year.
In addition to the above hospital benefits, the member was entitled
to the medical services offered by the medical association (a cooper­
ative purchasing association), at a cost of $1 per month per person.
However, one membership in a family entitled the rest of the family
to a low schedule of fees, some of which were as follows:
Office consultation and treatments____________________________________________ $0.
Residence or hospital calls, day_______________________________________________
1.
Residence or hospital calls, night. _ __________________________________________
2.
Minor surgical operations, including local anesthetic, not to exceed_________ 12.
M ajor surgical operations_______________________________________________________ 25.
Delivery in confinement cases__________________________________________________ 20.

75
50
50
50
00
00

Services for the member included complete medical and X-ray
examinations, laboratory tests, dressings, splints, and supplies; and
a preventive medical service of two complete physical examinations,
including laboratory tests, each year. Services were rendered at the
physician’s office, the hospital, or at the residence of the member,
within 10 miles of the medical doctor’s office. All of the above were
covered by the monthly or annual fees. Additional charges were
made for such special services as ambulance service, dental care,
dental X-ray, X-ray therapy, special nursing, and general anesthetic.
All medical services were supplied through a contract by the
association with a copartnership of four physicians, who in turn
employed other physicians, surgeons, and specialists. The coopera­
tive association had no hospital of its own, but permitted the member
to choose any hospital in the United States, the association paying
the bill, not to exceed $7 per day.
The medical cooperative association was governed by a board of
trustees of three, who were elected at the annual membership meeting,
at which each member had one vote only and no proxy voting was
allowed. There was an entrance fee of $3.
The representative of the Bureau of Labor Statistics who visited
this association found that one of the association’s problems was to
induce the members to attend the monthly social and educational
meetings. Also, the organization was handicapped in that it could




LOCAL

S E R V IC E

A S S O C IA T IO N S

71

not solicit for members because of the ethics of the medical profession.
Therefore, its growth had only been through the recommendation of
its members to their friends. Every applicant must ask to become
a member and no paid employee was allowed to solicit for member­
ships.
The members were largely office workers of the local telephone,
gas, and light companies, the board of education, and the Y. M. C. A .;
city employees; State college faculty; and the small storekeepers.
Economy Mutual Health Association

The Economy Mutual Health Association was an organization
serving the village of Economy, Ind., and the surrounding farming
community. According to the prime mover of the plan, this com­
munity of some 300 families had been without physician’s services,
because “ the depressed conditions of agriculture after the war caused
the doctors to move to larger towns and cities” and those who did
start to practice in the locality stayed only a short time. “ During
the last 10 years we have had at least four different doctors in Econ­
omy.”
In August 1935 an interested group drew up a notice outlining a
cooperative health plan, and circulated 200 copies throughout the
community. Because the idea was new, sentiment developed slowly
and it was not until the winter of that year that the plan took shape.
The organization was formed early in 1936 and went into operation
in March, with 69 members signed up. There has been little varia­
tion in the membership since organization.
This was an unincorporated, nonstock association, membership in
which was open to residents of the village and its vicinity within a
7-mile radius. Individuals were admitted to membership, but in
general the memberships were on a family basis. Dues were $3.90
per quarter, in advance, and covered all dependent members of the
cooperator’s immediate family. Individuals paid at the rate of $1.85
per quarter.
These dues entitled the members to medical treatment at home
and at the doctor’s office, to physical examinations, and to ordinary
drugs and medicines. Unusual or expensive medicine must be paid
for by the patient, at actual cost. Obstetrical service was charged
for at the rate of $10 per case. Hospitalization was not covered by
the plan.
Of the dues, all but 5 cents (used for administrative expenses) was
paid over to the physician. The report for 1936 showed receipts of
$727.36, of which $666.21 was paid to the physician.
Because this plan insured a certain yearly income, besides leaving
the physician free to practice outside the cooperative membership,
it had resulted in attracting to residence in the community a quali-




72

CONSUMERS’ COOPERATION IN THE UNITED STATES

fied doctor, and thus had benefited not only the cooperative member­
ship but the nonmembers who lived in and around the village.
W a g e E a r n e r s ’ H ea lth A s s o c ia tio n

This nonstock organization, located in St. Louis, Mo., was formed
in April 1936, by a group of social workers. Starting with 30 mem­
bers, it had increased to 90 at the end of the year, to 280 by June
1937, and to 379 on February 1, 1938.
Membership was open only to employed persons (either singly or
in groups) earning not more than $300 per month. Each new mem­
ber paid an initial fee of $1. Memberships were of three classes, with
varying rates of dues, as follows: (1) Single memberships, fees for
which were $1.25 per month; (2) group memberships— i. e., 15 or
more persons (members of an organization, church, or club, em­
ployees of a single employer, etc.) who joined in a body, paying dues
of $1 per person per month; and (3) family memberships, open to
dependent members of the cooperator’s family (wife and minor
children) at the same rate paid by him, subject to the provision that
the combined rate should not exceed $5 per month per family whose
head had an individual membership and $3 per month per family
whose head was a member of a group holding group membership.
Members holding class 1 memberships automatically transferred to
class 2 (with lower dues) when the number in their organization
group exceeded 15; and those in class 2 transferred into class 1 when
their organization number fell below 15.
These dues entitled the members to a complete physical examina­
tion when they joined and regular examinations annually thereafter
or whenever deemed necessary by the medical staff. These examina­
tions included urinalysis, blood count, Wassermann test, examination
of heart, lungs, blood pressure, etc. Other services included medical
service at home when necessary, at the doctor’s office, or in a hospital
whenever needed, as well as the services of specialists; all routine
laboratory examinations; complete annual dental diagnosis; complete
obstetrical care, provided the member had been enrolled for 12 months
or more prior to the confinement.
They did not include: (1) Services in accidents covered by the
workmen’s compensation law; (2) services in accidents covered by
policies and paid by a third party—not by the member; (3) institutional
care for mental diseases after diagnosis; (4) institutional care for
tuberculosis after diagnosis; (5) institutional care for alcoholism and
drug addiction; (6) examination of eyes for glasses; (7) X-ray diag­
nosis or treatment; (8) physiotherapy treatment (quartz lamp,
diathermy, infrared rays, etc.); (9) basal metabolism test; (10) elec­
trocardiogram; or (11) drugs, surgical, and medical appliances
(material for surgical dressings, etc.) not supplied at present.




LOCAL SERVICE ASSOCIATIONS

73

An unusual feature of the plan was that it covered chronic dis­
eases. In such cases the member was entitled to continuous medi­
cal care as long as he was employed, and for varying periods when
unemployed because of disability. These periods varied according
to the time during which the member had paid dues, as follows: 1
year, care for 3 months; 2 years, care for 6 months; 3 years, care for
9 months; 4 years, care for 1 year; and 5 years, care for 2 years. In
each case the period of care was computed from the time the em­
ployment terminated.
During the year ending in March 1937 the association rendered the
following services: 172 physical examinations, 967 office visits, 14
home visits, 36 hospital cases. These services included 142 confine­
ment cases, 253 ear, nose, and throat cases, and 46 surgical operations.
This association, like the others described, aimed at prevention of
disease, and to further this purpose on January 1, 1937, began the
publication of a regular monthly bulletin distributed to the members.
The organization had no hospital or medical facilities of its own.
All of the services mentioned above were furnished on contract with
physicians carefully selected who devoted only part of their time to
the work of the association. They were paid directly by the associa­
tion, except for special care not covered by the regular dues, in which
case the member was responsible directly to the attending physician.
The staff included specialists in internal medicine, surgery, diseases
of the ears, nose, and throat, gynecology and obstetrics, genitourinary
diseases, and pediatrics.
An advisory committee of leading St. Louis physicians and surgeons
was being assembled, in order that the association might have the
benefit of their advice regarding ethics and the physician-patient
relationship.

An analysis made by the association of its activities during the
period from April 1, 1936, to December 31, 1937, revealed that in that
time 500 persons had been examined for membership. The medical
department had handled 6,423 calls— an average of 12.8 per member—
half of which were for preventive medicine. In addition, 36 operations
had been performed.
G A R A G ES

There were in 1936 only two associations known to the Bureau
whose principal activity was the storage and repair of automobiles;
one of these was in Minnesota and one was in New York.
One was started in 1928 and the other in 1935. The older associa­
tion increased its volume of business by 12 percent from 1934 to 1936,
and in the latter year made a small net saving. The new association
sustained a loss.
9 0 6 2 1 ° — 3 9 ------- 6




74

CO NSUM ERS’

COOPERATION I N

THE

U N IT E D

STATES

One of these associations also had the agency for a well-known
make of automobile in the middle-price class and the other ran a
gasoline service station in connection with the automobile-repair
business. There were also seven local associations which operated a
garage as one department of a general mercantile or petroleum busi­
ness.3 The undertaking of repair service showed further gains in
1937. At the end of the year such service was being offered by at
least three additional store associations,4but in all cases as a subsidiary
service only. A number of the buying clubs, which, of course, did
not operate garages themselves, had contracted for auto-repair service
from local repair companies, at an agreed discount.
PRINTING AND PUBLISHING ASSOCIATIONS

The Bureau’s list included 14 local associations in the printing and
publishing field at the end of 1936. Data were obtained for 7, of which
4 were consumer groups and 3 were farmer groups. They were
located as follows: 2 in Minnesota, 2 in New York, 1 in North Dakota,
1 in Pennsylvania, and 1 in Wisconsin. One of them dated from
1901, and 1 each from 1916, 1917, 1918, 1931, 1933, and 1936.
These were individual-membership associations having in their
ranks a total of 4,916 persons, but in one a labor organization was also
a shareholder and another had as members 9 consumers’ cooperative
associations as well as 310 individuals. Although these associations
had an unusually large average membership— some 700— and for the
most part reported that they did business at prevailing prices, all but
three operated at a loss in 1936.
One association published a daily paper, 6 issued weeklies, and 2
monthlies. Two also did book work and 6 did job work.
BURIAL ASSOCIATIONS

The provision of burial service on a cooperative basis is compara­
tively new and has as yet been little developed. Hard times and the
high cost of living cause the formation of cooperative associations
whose main purpose is the supply of food and other household supplies
without profit. The high cost of dying and what seemed exorbitant
charges for funeral service were the motives for the formation of the
cooperative burial associations now in existence.
Coal mining is a hazardous occupation and funeral expenses form
an item of considerable importance in mining regions. It is not sur­
prising, therefore, that the first burial association of which the Bureau
of Labor Statistics has record was started in 1915 by a group of coal
3 The store associations with auto-repair departments were at Fitchburg, Mass., Cloquet and Floodwood,
M inn., and M aple, W is. The petroleum associations were at Charleston, 111., Blue Earth, M inn., and
Williston, N . Dak.
< R ock, M ich ., Menahga, M inn., and Superior, Wis.




LOCAL

SERVICE ASSOCIATIONS

75

miners organized in a local union in Illinois. At least four other labor
groups— composed largely of coal miners— formed similar associations
in the same State within the* next few years. These organizations,
though cooperative in the sense of being nonprofit, have in other
respects more of the character of union than of cooperative enterprises.
In the late 1920’s the farmers in Iowa and Minnesota became inter­
ested in the provision of funerals at more moderate prices and, with
local townspeople, established burial associations at a number of
places. Recently some of the farm journals have expressed their
favorable interest in the formation of these associations, and in
Nebraska local Farmers’ Union groups started two associations, each
of which was county-wide in scope.6
The early organizations usually confined their activities to a single
town and its immediate vicinity. Most of the later associations have
been authorized to do business over one or several counties. For
obvious reasons, a large membership is desirable in a burial associa­
tion if it is to be successful.6 This is one line of activity entirely
dependent upon conditions outside the control of the organization.
The volume of business being dependent upon the death rate, no
amount of advertising or sales campaigns will increase it. Only a
large membership will insure a sufficiently large number of funerals to
make operation worth while. The tendency, therefore, has been
toward a greater and greater coverage of membership and territory
served.
Organized cooperators entered this field several years ago, when a
group of cooperative associations operating stores and creameries
throughout the Mesabi Range district in Minnesota obtained a charter
for the Range Cooperative Burial Association. Shortly afterwards
another group of associations in Aitkin, Carlton, Pine, and St. Louis
Counties applied for a charter for the Northland Cooperative Burial
Association. Opposition to the formation of this association was
manifested by the private undertakers’ association in the State, which
brought suit questioning whether such a cooperative association was
legal under the Minnesota law, on the ground that cooperative associ­
ations which were members of the burial association were not the “ ulti­
mate consumers” of the service. After a long period of controversy
the case was decided in favor of the cooperatives. A charter was
granted and the Northland Cooperative Burial Association began opera­
tions January 1, 1937. Pending settlement of this case, no attempt
had been made to go ahead with the plans for the Range Association.
In July 1937, it amalgamated with the Range Cooperative Federation,
8 One of these discontinued operations in 1938, because of an insufficient volume of business.
8 It was estimated, on the basis of the Iowa associations’ experience, that a burial association, to be success­
ful from the beginning, should start with at least 500 members and capital of at least $5,000 (Consumers’
Guide, Washington, July 26, 1937).




76

C O N S U M E R S ’ COOPERATION I N

THE

U N IT E D

STATES

becoming a department of that federation. Burial service was
inaugurated on September 1, 1937.
This federated type of association makes burial service available
over a wide territory. For the local associations reporting in the
Bureau’s survey, the average membership in 1936 was 883, whereas
the two federated associations each represented a combined individual
membership of from 5,500 to 6,000.
In the local type of association, the individual becomes a member
through the payment of a membership fee. This fee represents a
nontransferable family membership and is valid even after the death
of the parents, as long as there are minor children. As each child
becomes of age, his right to service under the family membership
lapses.
In the federated associations the individual members of the local
associations which own the burial association are entitled to utilize
the burial services of the association by virtue of their affiliation with
the local cooperative association, upon payment of a small fee. In
the Northland Association this fee is 50 cents per year.
The local associations in Iowa and Minnesota both have a central
federation— the Iowa State Federation of Burial Associations and the
Northwestern Cooperative Burial Association. The former was re­
ported to have in membership all 10 Iowa local associations, and the
latter had 8 member associations. These federations carry on no
business activities. Their duties are to protect the interests of the
local associations, be on the watch for legislation detrimental to
cooperatives, provide speakers, do organizational and educational
work, and serve as a clearing house of experience among the members.
On the basis of reports to the Bureau of Labor Statistics it is cal­
culated that the 42 associations known to have been in existence at
the end of 1936 had an estimated membership of about 27,000 and
did a business in that year estimated to have been about $170,000.
These associations were all in the North Central States— Illinois, Iowa,
Minnesota, Nebraska, and South Dakota.
As already noted, the first association of record was started in 1915.
Of 33 other associations for which the date of organization is known,
1 was started in 1915, 3 in 1921, 2 in 1924, 2 in 1927, 3 in 1928, 5 in
1929, 4 in 1930, 4 in 1931, 5 in 1932, 3 in 1934, and 1 in 1935. Their
average age was slightly over 8 years.
C ooperative P ractice

The reporting associations, without exception, operated on the basis
of one vote per member. Generally there was no limitation on member­
ship, any family in the vicinity being eligible for membership on pay­
ment of the required fee. One association, however, reported that it
desired no new members at present because of its limited operating




LOCAL

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77

A S S O C IA T IO N S

facilities. Two others limited their total membership to 1,000 and 2,000
respectively, but this limit was far from having been reached in either
association.
These associations depart from the Rochdale practice of “ business
at prevailing prices.” All of those furnishing returns made charges
below those current in the community. For that reason, the “ net
earnings” reported were lower than would have been the case had
they followed Rochdale practice.
Only one association reported returning a patronage refund. The
amount so returned was not stated, but the rate of return was 10 per­
cent. Mainly because the margin between actual cost and the charge
to the patron is small, the practice of return of patronage refunds is
not common among the burial associations; the member has already
had the equivalent of the refund, in the form of lower prices.
M em bersh ip

Of 42 associations known to have been in existence at the end of
1936, usable reports were received for 19.
A combined membership of 15,006 was reported, an average of 883
per association. The individual associations ranged in size from 50
to 4,000 members; they were distributed as follows:
Number of
associations

Less than 100 members___________________________________________
100 and under 250 members____________________________________
250 and under 500 members_____________________________________
500 and under 750 members_____________________________________
750 and under 1,000 members___________________________________
1.000 and under 2,000 members__________________________________
2.000 and under 3,000 members__________________________________
3.000 members and over__________________________________________

2
1
5
5
2
1
0
%

The associations for which membership data were available for a
period of years showed an almost unbroken record of expansion. One
association which started with 10 members in 1930 had increased to
800 by the next year, to 1,030 in 1933, to 1,050 in 1935, and to 1,260
in 1936. Another rose from 400 members in 1931 to 3,530 in 1936.
The associations reporting for both 1935 and 1936 had an increase of
672 members, or 5.7 percent; not one had had a loss in membership.
Statistics o f O peration

The reporting associations conducted 595 funerals during the year,
or an average of 35 each. Two of the smaller associations handled
only 6 funerals each. The largest number (91) was handled by a
6-year-old association with some 1,200 members.
An aggregate income of $63,189 was reported by 12 associations,
of which $4,432 represented net savings.




78

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THE

U N IT E D

STATES

The following table summarizes, by States, the 1936 operations of
the associations reporting. Bills and accounts payable, not shown
in the table, aggregated $5,455—reported by 12 associations. Six
associations reported that they had no outstanding obligations.
Most of these were nonstock associations operating on a membership
basis. The cost of membership was generally $5 or $10, but in two
associations reporting the membership fee was only $1. Generally
this was the only regular charge, but one organization (with a $10
membership fee) also charged dues of 25 cents per month; it stated,
however, that these dues were “ not compulsory.”
A number of the associations provide that upon the lapsing of a
family membership, the membership fee shall be transferred to the
“ free burial fund.” This fund is commonly maintained by members’
annual contributions of 25 cents each, and is used to assist in paying
burial expenses for needy members.
T able

35.—

Statistics o f 1 9 3 6 O perations o f C ooperative B u ria l A sso cia tion s , b y StcUes
All
States

Item

Total known associations. __________ _______ _
Total number of reporting associations_________
Membership:
Num ber of associations r e p o r tin g _________
N um ber of members— _____ ______________
Average per association__________ _ _ _ _ _ _
N um ber of funerals:
N um ber of associations reporting__________
Total funerals__________________
________
Business done:
N um ber of associations reporting _ ____ _
Amount
____________________ ___ ____
N et earnings:
Num ber of associations reporting__________
A m ount_______________________ ____ _ _
Share capital:1
Nuiflber of associations reporting__________
Amount
________________________________
T otal resources:
Num ber of associations reporting__________
A m ount______________ _____ __ _ ________
Net worth:
Num ber of associations reporting__________
A m ount___ ___ ___________________________

42
19

Illinois

4

1
1

M inne­ Nebras­ South
sota
ka
Dakota

Iowa

10
3

20
12

2
2

3
1,935
645

11

1

1

5,481
498

60
60

3, 530
3, 530
30

6
1

17
15,006
883

4,000
4,000

17
595

1

2

11

75

41

427

2
22

12

1

1

$4,170

9
$54,171

1

$63,189

$928

$3,920

1

10

1

1

$73

7
$3,140

1

$4, 432

$1,023

$196

12

2

1

$8,634

g
$18, 505

1

$31, 724

$1,055

$3,530

12

2

8

1

1

$62,915

$14,674

$41,656

$1,145

$5,440

11

2

1

$12,705

7
$30,909

1

$50,109

$1,055

$5,440

1Includes paid memberships, in nonstock associations, where amount was known.
Services , O perating F a cilities , and Charges

The provision of caskets and hearse service is practically universal
among these associations, and undertaking service is also common.
Other, less usual, services are the furnishing- of tombstones, cemetery
plots, burial vaults, and ambulance. Of 16 associations reporting, all
provided caskets, 14 provided hearse, and 12 embalming, 4 dealt in
tombstones, 3 in burial vaults, 3 had an ambulance, and 1 owned a
cemetery.
Of 14 associations reporting as to operating facilities, 13 operated
a funeral parlor and the same number had their own hearse; 1 asso-




79

LOCAL SERVICE ASSOCIATIONS

ciation rented the hearse each time it was needed. (For illustration
of funeral establishment, see fig. 6, facing p. 80.)
It is a common provision in the bylaws of the burial associations
that business shall be done “ at the lowest practicable cost” consist­
ent with the safety of the business. One organization set the cost
of funerals thus: “ The cost of the funeral shall consist of the cost of
casket and other supplies, plus the funeral director’s charges and use
of hearse, plus a surcharge sufficient to meet the current operating
expenses of the association and other essential costs including the
reserves required by law.”
Charges.— For the associations reporting, the average cost per
funeral to the patron was $175. Classified by average cost the dis­
tribution was as follows:
Number of
associations

Less than $100_____________________________________________________
$100 and under $150_____________________________________________
$150 and under $200_____________________________________________
$200 and under $250_____________________________________________
Over $250__________________________________________________________

3
3
5
3
1

The foregoing were the prices charged to members. The practice
as regards nonmembers varied. Three associations stated that they
did no business with nonmembers. Two allowed nonmembers to
utilize their services but required from them at the time of the burial
the regular membership fee, thus admitting them to membership.
One association extended its facilities to nonmembers at the same prices
as charged to members. The remaining associations, however,
charged higher rates— 10 percent higher in one case and 20 percent
in another.
Each association was asked to estimate the amount the patron
saved per funeral, by utilizing the services of the cooperative. The
replies ranged from $15 to $400; the average was $160. One associa­
tion pointed out that its estimate of saving was based upon prices
prevailing before the establishment of the cooperative association.
The 14 associations reporting employed in 1936 some 25 persons, and
expended $15,472 in wages. All of these employed an undertaker
but only 2 were on a full-time basis; in 12 cases the undertaker was
employed on contract. In 7 cases he also acted as manager of the
association; in 6 associations a manager was employed in addition.
Sources of supply.— The early associations experienced some diffi­
culty in obtaining supplies— embalming fluid, caskets, etc. This was
known, in a few cases, to be due to pressure from private undertakers.
Several years ago arrangements were made with a small independent
casket factory, and many of the burial associations, notably in Minne­
sota, now obtain their supplies through that company.




80

CONSUM ERS'

COOPERATION I N

THE

U N IT E D

STATES

Of the associations reporting, seven said that none of their supplies
were obtained from cooperative sources. Seven purchased at least
part of their supplies from cooperatives; of these one purchased in this
way 75 percent, one 80 percent, one 90 percent, and two 100 percent.
HOUSING ASSOCIATIONS

The development of cooperative housing in the United States
has been thus far almost entirely in the apartment-house field in
greater New York and has been restricted by the large amount of
capital necessary. In the opinion of one housing expert, a project
cannot be made successful in New York City unless it covers at least a
city block.7 With the very large sums involved in such projects and
total investments per member ranging up to $700 or more per room, it
is evident that comparatively few wage-earner groups would be able to
finance such enterprises unaided. Nevertheless several housing
associations have been started and have provided accommodations
for more than 2,200 families.
It was found that since the Bureau’s last previous survey of coopera­
tive housing, in 1933, six associations had lost their properties and had
gone out of existence, one had lost its cooperative features, and in
two instances two associations had consolidated into one. Six
additional associations were reported to the Bureau of Labor Statistics,
but it was not possible to check as to the cooperative features of these.
Of 48 known housing associations, data were obtained for 39, of
which 35 were actually operating housing properties, and in 4 others
the organization had been formed and plans were well advanced.
Of the 35 completed projects, 12 were in Manhattan and the Bronx
and the remaining 23 were in Brooklyn. Of the four projects still
under way, two were in New York and the other two were in Wisconsin.
The earliest of the groups (2) for which the Bureau has information
dates from 1916. In the following 2 years no new projects were
started among the groups that responded to the Bureau’s request
for information, but beginning in 1919 two projects were undertaken,
in 1920 there were six more, four each in 1921, 1922, and 1923, one in
1924, three in 1925, two in 1926, three in 1927, one in 1928, and two
in 1930. Thereafter, cooperative activity in the line of new coopera­
tive housing ceased until 1936 when the four new groups were formed.
A number of the early cooperative housing associations drew their
membership largely from the building-trades workers. A series of
several apartment buildings has been built by needle-trades workers,
with the financial assistance of their labor organization. (See figs. 7
and 8, facing p. 81.) In several other groups the members were
“ white-collar” or professional people, and in still another the members
7 A. E. Kazan’s address at 1936 Congress of the Cooperative League.




Figure 5.—Farmers’

Figure 6.—Funeral




union

Cooperative

hospital .

Elk Cit y , O kla .

County Cooperative
ASSOCIATION, LUVERNE, MINN.

establishment of rock

burial

Figure 7.—A malgamated Cooperative

apartments , new

Y ork Cit y .

Only 47 percent of the ground is occupied b y the buildings; the remainder is in garden and playgrounds.

Figure 8.— Kindergarten




at Amalgamated cooperative apartments ,
new Y ork Cit y .

LOCAL SERVICE ASSOCIATIONS

81

were drawn from the membership of a cooperative association which
operates a chain of cafeterias.
Of the projects still in the planning stage at the time of the Bureau’s
survey, one will limit its membership to civil-service employees earn­
ing less than $4,000 a year and persons recommended by them who
are in the same salary class. Another will be composed of professional
persons and State employees.
C ooperative P ra ctice and C ontrol

The genuinely cooperative housing enterprise is characterized by the
following:
(a) Each member has one vote, regardless of the number of shares
held.
(ib) The building is either erected or bought already constructed, by
the association (i. e., by the members as a whole), not by individuals
who later form an association. This excludes so-called cooperative
apartment buildings built by private contractors on a profit basis, the
apartments in which are sold outright to individual purchasers.
(c) The member does not receive title to any individual apartment
or dwelling. He merely owns shares in the association to the value of
the dwelling he occupies. His evidence of ownership consists of a
certificate of shares and a permanent lease on his dwelling. Legal
ownership is held by the association as a whole.
It was found in the present study that all but 3 of the 35 associations,
which were actually operating properties, followed accepted coopera­
tive practice whereby each member was allowed only 1 vote on
administrative decisions. One of the associations in which voting
was based on stock ownership was in Manhattan and the remaining
two were in Brooklyn. Twenty of the 33 cooperatives which furnished
information on proxies stated that such voting is permissible; in the
remaining 13 associations— 4 in Manhattan and Bronx and 9 in Brook­
lyn— members must vote in person. Voting membership in 11 of the
12 groups in Manhattan and Bronx totaled 1,746 in 1936. For
Brooklyn the voting membership of the 23 groups was 577.
All of the 12 Manhattan and Bronx associations and the 23 Brooklyn
projects retain title to the cooperative apartments. As an evidence
of ownership, purchasers of dwelling units are furnished with various
kinds of papers, such as a contract, membership or stock certificate,
pass or rent book, or lease.
In 10 cases in Manhattan and Bronx and 22 in Brooklyn subletting
by owners was permitted, but the remaining 3 associations forbade this
practice. Where subletting is allowed the association usually specifies
that approval of the entire group or the board of directors must first
be obtained. In some associations the member may set his own rate,




82

C O N S U M E R S ’ COOPERATION I N

THE

U N IT E D

STATES

but in the majority the board fixes the amount of rental, or places
restrictions on the rates at which the apartment may be sublet.
Similarly, while members are permitted to sell apartments under
the original contracts of purchase, the associations exercise control
over the terms of sale by requiring that the group or the board shall
approve sales, that the price shall not include a profit, or that the
apartment must be offered to the association first. In Manhattan
three groups provided for the repurchase of the equity of an individual
apartment owner and in Brooklyn seven follow this practice if
permission to sell is refused. Six groups in Manhattan and Bronx and
12 in Brooklyn stated that the associations do not obligate themselves
to take apartments back and reimburse the owners.
The importance attached to choice of resident managers in the
associations’ houses is evidenced by the careful methods by which
such employees are selected. In Manhattan and Bronx the board
makes the choice in 8 cases, the members in 2, and both in 2; in Brook­
lyn the board chooses managers for 4 projects and the total member­
ship for 19.
T yp es o f B u ild in gs P rovided

Altogether the 30 housing associations for which information was
obtained on this point provided quarters for 2,248 families. The
apartment projects ranged in size from a single building with 8
apartments to a group of several buildings containing 724 dwelling
units. The size of the housing properties owned by the various
cooperative groups is indicated in the following statement:
t-,

.. . .

...

ivumuer oj

■o . . . .

...

jyumoer oj

Buildings W ith —
associations
Buildings With—
associations
35 apartments_________________
1
8 apartments__________________
2
2
40 apartments_________________
4
12 apartments_________________
16 apartments_________________
44 apartments_________________
8
1
67 apartments_________________
1
19 apartments_________________
1
121 apartments________________
1
20 apartments_________________
1
24 apartments_________________
3
724 apartments........................
1
32 apartments_____________ l __
4

Buildings of four stories predominated. In Brooklyn 22 associations
out of 23 reported buildings of this height. Of the 12 associations in
Manhattan and the Bronx supplying data on this point 1 had a 3-story
building, 4 had 5-story buildings, another 5- and 6-story buildings, 4
were of the 6-story type, 1 was 6% stories, and another had a building
of 12 stories and penthouse. In Manhattan and the Bronx 6 of the
12 apartments in the buildings of 6 or more stories had elevators.
All 23 apartments in Brooklyn were of the walk-up type.
The buildings for which information was supplied concerning number
and size of suites had more three- and four-room units than any other
size. Of the 1,709 separate apartments furnished in Manhattan and
the Bronx 56 were of 1 room, 223 were of 2 rooms, 786 were of 3




LOCAL SERVICE ASSOCIATIONS

83

rooms, 488 were of 4 rooms, and 156 had more than 4 rooms. Brook­
lyn had 539 units ranging in size from 6 two-room suites, to 118 of 3
rooms, 235 of 4 rooms, and 180 of over 4 rooms. Thus in Brooklyn,
where only one-third as many units were being occupied cooperatively
as in Manhattan and the Bronx, there were 10 percent more large
apartments (of over four rooms) than in New York City.
In only one case was a bathroom rated as a room in establishing
apartment size, but it was fairly common to include a kitchen as a
room. In 9 apartments in Manhattan and the Bronx and 20 in
Brooklyn this practice was followed. In two additional cases in Man­
hattan a kitchenette figured as a half room and in another as a full
room. In two Brooklyn associations the number of rooms was calcu­
lated on a space basis, regardless of the use to which the room might
be put.
One association in New York City had houses in addition to apart­
ments. The report of its activities showed that the property included
a garden house and three other separate dwellings. Otherwise the
dwellings were of the multiple-dwelling type in every instance.
Of the two new Wisconsin groups—neither of which had progressed
to the point of actual provision of living quarters for its members—
one was in Madison and the other in Milwaukee.
The Madison association was organized in September 1936, and by
the spring of 1937 had over a hundred members, composed almost
entirely of university people and State employees. It owned 75 acres
of land, with an option on an additional 75 acres, about 5 miles from
the capitol. Its plans were drawn and it was expected that ground
would be broken during 1937. Only about half of the land was to be
used for building, the rest being left as communal wooded ground.
Both apartments and individual houses were planned. The fourfamily apartments were expected to cost approximately $3,000 per
family and the houses about $10,000 each.
It was the announced purpose of the Milwaukee group to establish,
not only one cooperative enterprise, but a complete cooperative com­
munity. This might be termed a combination housing and self-help
group. It began during the depression under the leadership of a
professor of economics who gathered together a number of workers of
different skills, most of whom were unemployed at the time. They
worked together with the idea of building themselves a cooperative
community, whose members would, however, hold jobs in Milwaukee,
except for such persons as the gas-station attendant, the gardener,
etc., who would be needed to maintain the community services. This
group had completed the building of a house in the suburbs which is
worth about $10,000. It was to be traded for land on which the village
could be built. Pending the construction of the village, this self-help
group exchanged services among its members. Instead of money it




84

CONSUMERS’ COOPERATION IN THE UNITED STATES

used a system of credits, an hour’s work being exchanged for an
hour’s work. Any credits earned but not spent were counted toward
ownership in the house which had been constructed.
Value o f Properties

The paid-in share capital for 32 of the 35 projects amounted to
over 4 million dollars at the end of 1936, or approximately one-third
of the original cost of land and buildings. The appraised value of
the properties was slightly over 10 million dollars. The ratio of
paid-in share capital to original cost was higher for Brooklyn than
for Manhattan and the Bronx. The cost of the Brooklyn apartments
was considerably lower than of those in Manhattan and the Bronx,
ranging from $23,000 to $230,000 as compared with a range of $49,500
to $3,682,750. In Brooklyn most of the apartment buildings were
small, as shown in the membership statistics already given, while in
Manhattan and the Bronx the individual buildings housed larger
numbers of families, thus accounting to a large extent for the higher
cost of buildings and land.
Financial statistics covering the value of share capital, original
cost of land and buildings, and the appraised value of the properties
are shown in table 36.
T a b l e 36 .— Investm ent in Cooperative H ousing Associations, 1936

Original cost (land
and buildings)

Present appraised
value (land and
buildings)

N um ­
ber of
associ­
ations

N um ­
ber of
associ­
ations

Paid-in share
capital
Location of housing project

N um ­
ber of
associ­
ations

Amount

...

11
21

$2, 875,063
1,211, 506

T o ta l.. ________ _ _______________

32

4,086, 569

Manhattan and the B ronx.. _____ _
Brooklyn_______________

Amount

Amount

12 $10,062,317
23
2,905, 759

11
23

$8, 386, 287
1,907, 500

35

34

10, 293, 787

12, 968, 076

Operating Statistics

The gross income for 10 apartment houses in Manhattan and the
Bronx amounted to $1,035,500 in 1936,8 and for the 23 Brooklyn
projects, $246,141. All but two of the reporting associations in
Manhattan and the Bronx either made a profit or broke even after
deducting expenses from gross income in that year. In Brooklyn
seven associations showed neither profit nor loss, six had a profit,
and five reported a loss on the year’s operations. Table 37 shows the
surplus or deficit resulting from operations of the cooperative housing
assocations in 1934, 1935, and 1936.
s M ost of the associations operate on a calendar-year basis, but in some cases fiscal years have been adopted
ending in different months. This must be considered in using the financial statistics furnished.




85

LOCAL SERVICE ASSOCIATIONS

T able 37.— Surplus or D eficit in Operations o f Cooperative H ousing Associations, 1934
to 1936
Associations hav­ Associations hav­ Associ­
ing net loss
ing net gain
ations
with
neither
gain
N um ­ Amount N um ­ Amount
nor
ber
ber
of gain
of loss
loss

Year and location

All associations
reporting

N um ­
ber

Amount
of net
gain

1931,
Manhattan and the Bronx____ __ _
Brooklyn_____________________________

4
4

$21,056
999

2
7

$7, 779
9,866

3
6

9
17

$13,277
i 8,867

T otal___________________________

8

22,055

9

17,645

9

26

4,410

5
6

21,285
3,751

3
6

5,931
7,286

2
7

10
19

15,354
i 3,535

11

25,036

9

13,217

9

29

11,819

Manhattan and the Bronx _ _ _ ----------Brooklyn ___----------------- ------------- -------

6
6

28,360
4,801

2
5

3,338
4, 975

2
7

10
18

25,022
i 174

T otal_____________________ _____

12

33,161

7

8,313

9

28

24,848

1935
Manhattan and the B r o n x _____ __ _
B rooklyn, _ . ----------------- ------------- _
T otal___________________________
1936

1 Loss.

One association which was organized shortly after the onset of the
depression went along with its project in spite of the growing hard
times. Notwithstanding the peculiarly difficult situation it had
achieved a remarkable record. In 1931 it rebated to the members
on their rentals the sum of $3,234. In 1933 and again in 1937 it
made a general reduction in monthly rental rates. In only 1 year
was a loss sustained on the operations.
The financial position of the housing associations in Manhattan
and the Bronx was relatively more favorable in all 3 years covered
by table 2 than was that of the organizations in Brooklyn. Only
two projects showed a loss in each of the 3 years 1934 to 1936, in
Manhattan and the Bronx, and the balance for all reporting projects
was favorable. In contrast, more associations in Brooklyn showed a
loss than a profit at the end of 1934. A substantial group operated
without a loss or profit in all 3 years. For all reporting associations
as a group in Brooklyn the total losses exceeded profits in the 3 years
covered, but the annual loss decreased considerably in each successive
year and was only $174 at the close of 1936.
Cost to Tenant M em ber

When the individual becomes a member of a housing society he
subscribes for a certain amount of capital stock in the association
estimated as covering the cost of the apartment or dwelling he will
occupy. This total cost is arrived at after consideration of a number
of factors; the total cost of land, building, and other expenses there-




86

CONSUMERS’ COOPERATION IN THE UNITED STATES

with are taken as a basis, and the cost of each dwelling is determined
according to the number of rooms, floor space, location, and other
points of advantage or disadvantage. The cost figure so arrived at
for each individual apartment is the price which the prospective tenant
must pay and the amount for which he must subscribe stock in the
association. This stock must be paid for either as a whole or in
installments, according to the requirements of the bylaws.
The following tabular statement shows the average total cost per
room to members in the societies that reported on this point:
Number of
societies

Number of
societies

$7 5 and under $ 1 0 0 __________________

3

$ 3 50 and under $ 4 0 0 ________________

4

$ 1 0 0 and under $ 1 2 5 ________________

3

$ 1 2 5 an d under $ 1 5 0 ________________

1 $ 4 00 and under $ 5 0 0 ________________
3 $ 5 0 0 and under $ 6 0 0 ________________

$ 1 5 0 and under $ 2 0 0 ________________

1 $ 7 0 0 and over_________________________

1

$ 2 0 0 and under $ 2 5 0 ________________

4

$ 2 5 0 and under $ 3 0 0 ________________

2

$ 3 0 0 and under $ 3 5 0 ________________

6

T o ta l___________________________

3

31

Over half the groups showed per-room costs of $200 to $400. Of the
eight apartments with lower charges, two were in Manhattan and the
Bronx and six in Brooklyn. Of the higher-priced apartments, one
between $400 and $500 and three at $500 per room were in Manhattan
and the Bronx, and the remaining three were in Brooklyn and ranged
in cost from $400 to $787 per room.
Of the 10 Manhattan and Bronx associations that furnished infor­
mation on the maximum term allowed for full payment of the sales
price of apartments, 5 specified cash, 1 allowed 8 years, and 2 each
provided terms of 10 and 12 years, respectively. In Brooklyn, for
17 associations, immediate payment in full was required in 12 apart­
ments, the term was 1 year in 3, 2 years in 1, and 10 years in 1 project.
The initial payments are shown in the following statement:
Number of
associations

$ 5 0 .0 6 per share------ --------------------------

1 $ 9 0 0 _____________
$ 9 0 0 to $ 1 ,5 0 0 _ .

Number of
associations
_____
2

$ 1 0 0 ____________________________________

3

_____

1

$ 2 5 0 ____________________________________

3

$ 1 , 0 0 0 ____________

____

3

$ 3 0 0 ____________________________________

1 $ 1 ,0 0 0 to $ 1 ,2 0 0

_____

1

$ 3 0 0 and u p ___________________________

1 $ 1 , 1 0 0 ____________

_____

1

$ 3 0 0 per r o o m ________________________

1 $ 1 . 2 0 0 ____________
1 $ 1 ,2 0 0 to $ 1 ,6 0 0

_____

1

_____

1

_____

1

$ 5 0 0 ____________________________________

1 $ 1 ,2 0 0 to $ 2 ,0 0 0
2 $ 1 ,2 5 0 to $ 2 ,0 0 0

_____

1

$ 6 0 0 ____________________________________
$ 6 0 0 to $ 1 ,0 0 0 ________________________

1 $ 1 ,3 0 0 to $ 2 ,2 0 0
1 $ 2 , 0 0 0 ____________

_____

1

_____

1

$ 6 3 6 ____________________________________

1

$ 3 7 5 ____________________________________
$4 0 0 per r o o m ________________________

Monthly 'payments.— After the member takes possession of his
dwelling he pays as “ rent” each month a certain amount which is
calculated to cover his proportionate share of such items as taxes,




87

LOCAL SERVICE ASSOCIATIONS

insurance, the general upkeep of the building (repairs, improvements,
janitor service), fuel, payments on the mortgage or mortgages, etc.
In some cases the members adopt the policy of making these monthly
payments large enough to cover unexpected expenses, building up a
little surplus for this and other purposes. In others such expenses are
met as they arise, through a pro rata assessment on all the tenant
members.
Average monthly rental rates per room range, in the associations
studied, from $4 to $22.12, as shown in table 38. As the rentals were
in most cases lower in Brooklyn than in Manhattan and the Bronx,
the figures are given separately for the two localities.
T able 38.— Average M onthly Rental p er Room to M em bers o f Cooperative H ousing
Associations
Number of associations
M onthly rental per room

$4 _
$5 _ _ ____
_____
$6.__ __________________
$6.18
$6.30
$ 6 . 5 0 ____________
...
$6.80____________________
$ 7 .0 0

$7.15____________________

M an­
hattan Brook­
lyn
and the
Bronx
3
1
3
1
1
3
1

1
1

Number of associations
M onthly rental per room

Total

3
1
3
1
1
3
1
1
1

M an­
hattan Brook­
and the lyn
Bronx

$8___ ______ ___________
$9_______________________
$10______________________
$10.50_____ ______ ____
$11_________________ . . .
$12_________________ . .
$22.12.____ _____________

1
1
2
3
1

T otal_____________

10

Total

1
1
3
1
1
2

1
1
4
2
3
5
1

22

32

For the group as a whole 41 percent of the projects had a rent scale
of under $7 per room per month; 44 percent had rents of $10 to $12;
and 12 percent from $7 to $9. In Manhattan and the Bronx 80 per­
cent were in the class charging $10 per room per month and over, as
compared with 32 percent of the total in Brooklyn. Half of the
Brooklyn apartments rented for less than $7 per room per month.
Supplementary Activities

The concentration of families entailed by the very nature of life in
a modem apartment building makes possible cooperative activities
along other lines as well. Thus, the residents may form their own
credit union, undertake the collective purchase of such commodities
as ice, milk, electric power, and staple groceries, and the provision of
such services as lectures, class-room instruction, cleaning and pressing,
etc.9 Of the cooperative housing associations from which data were
obtained, seven associations—six in Manhattan and the Bronx and
one in Brooklyn—had other features and activities in addition to
9 For a description of the cooperative activities of a group of apartment-house dwellers, see M onthly
Labor Review, August 1937 (p. 312).




88

CONSUMERS’ COOPERATION IN TH E UNITED STATES

providing housing. Thus one cooperative provided assembly rooms
and playrooms for the children; it also had classes on various subjects.
Another had an auditorium, playroom, a kindergarten, library, and
sports club, conducted classes in English, and had social functions.
A gymnasium, auditorium, classrooms, social rooms, and a library
were features of another organization. One project provided an as­
sembly room, another a garden, and a third a cafeteria and roof garden.
Communal facilities in another apartment project included an assem­
bly room, playrooms, and classes. There were also cooperative gro­
cery, fruit, and meat stores, organized as a separate association.
Dental and medical service was available at low cost. Further savings
were made from the joint purchase of milk, ice, electricity, and laundry
service. During the depression each tenant contributed $1 a month
toward a relief fund from which needy members could be supplied
medical care. Prior to the depression this group of some 600 families
spent about $10,000 a year for community activities alone.
E L E C T R IC IT Y A SSO C IA TIO N S 10

At the end of June 1937 there were in existence at least 259 cooper­
ative associations for the supply of electric current to the homes of
consumers. Of these, 214 had been formed since the inauguration of
the Federal Government’s rural-electrification program and had
received loans under it, and 45 were in existence before the program
was started. While the R. E. A. associations date only from 1935 or
later, some of the early associations were started as far back as 1914,
and practically all before 1930.
The membership of the early associations for which there is informa­
tion ranged from 8 to nearly 1,000 persons. Membership data for
the R. E. A. cooperative associations are not available, but the number
of customers served ranged from 53 to 5,500; in fact 8 associations had
more than 2,000 patrons each.
The early associations were mainly in the States of Idaho, Iowa,
Minnesota, Washington, and Wisconsin, with one or two in each of the
States of Illinois, Indiana, Missouri, North Carolina, Virginia, and
Wyoming. The formation of the associations in these States was
undoubtedly furthered by the existence of State cooperative or non­
profit statutes and also (especially in Washington State) by the
proximity of municipal power plants from which current could be
obtained at favorable rates. The swift march of the rural-electric
movement under the impetus of Federal assistance, on the other hand,
is shown by the fact that by June 30, 1937 (only 2 years after the
All data in this section relating to R. E. A. cooperatives were obtained directly from the Rural Electrifi­
cation Administration or from its publications.




LOCAL SERVICE ASSOCIATIONS

89

inauguration of the program), cooperative associations which had had
allotments of Federal funds were found in 28 States.11
These associations have been formed among the prospective users
of electric power in rural districts. These people cooperate in the
erection of the poles, the stretching of the wires, the bargaining for
and purchase of current, and the maintenance and repair of lines.
The current is obtained from a municipally owned power plant, if
there is one nearby, or from a private power company. Several asso­
ciations, unable to obtain current from either of these sources have,
with Federal aid, constructed their own generating plants.
The association that is the largest of the pre-R. E. A. organizations
is an excellent example of cooperation unaided by financial assistance
from outside the cooperative group. Started in 1925, and serving
members only, in 1936 it had 950 members, operated some 225 miles
of line, and had built up total assets (after depreciation) of more than
$100,000. Current was obtained from a municipally owned electric
plant in a neighboring city.
It is interesting to note that one organization which benefited by a
loan under the Federal program was that formed to serve the Amana
Community. This community was a religious cooperative colony
which was started in Germany as early as 1714, but because of religious
persecution came to this country in 1842, establishing itself first in
New York and then removing to Iowa in 1854. Until 1932 the colony
was run on strictly communal principles, all possessions being held
by the community as a whole and all members working for the com­
munity. In that year the principle of individual ownership of per­
sonal property was adopted and the industrial enterprises run by the
community were reorganized on a stock-company basis. Modern
electric appliances and labor-saving machinery are now made available
to the homes in the community through the new electricity-supply
organization.
Cooperative Practice

°

The electricity-supply associations have been formed under various
types of laws— cooperative, nonprofit, rural electrification, and general
corporation acts. For the most part, however, they operate on cooper­
ative principles. Open membership and one vote per member are
quite general, regardless of the legal basis of the organization.
A number of the early organizations operate as mutual associations
and practically all of the R. E. A. associations are nonstock.
11
The 20 States not at that time represented in the R . E. A . program b y loans made or earmarked for
cooperative associations were Arizona, California, Connecticut, Delaware, Florida, Maine, Massachusetts,
Nebraska, Nevada, N ew Hampshire, N ew Jersey, N ew York, Rhode Island, South Carolina, South D a­
kota, Utah, Vermont, Washington, W est Virginia, and W yom ing. In the interval between July 1 and
Novem ber 10,1937, loans were approved for cooperative associations in California and Washington (R . E . A .
News, December 1937).
° See also section on legal status of electricity associations (p. 195).
90621°— 39---------7




90

CONSUMERS’ COOPERATION IN TH E UNITED STATES

One of the Rochdale principles is sale at the current retail price and
the return of the overcharge, above cost, to the member on the basis of
his patronage. How general the return of such patronage refunds will
be, in the electricity field, it is too early to judge. The theory under­
lying the “ current price’ ’ procedure of the cooperative grocery associ­
ations is that by charging the current price the association avoids price
cutting against the private dealer and the consequent arousing of his
enmity; it ensures a margin wide enough for safe operation of the
business and for expansion into new lines; and it makes possible the
return of patronage refunds which are the tangible evidence of the
advantage of cooperative activity. In the field served by the electricity-supply associations, however, there has generally been no prior
service available, no competitors, and therefore no current price. It
has thus far been their general policy to set rates high enough only to
cover expenses of operation plus such necessary charges as depreciation,
reserves, amortization of loans, etc. In this way the same principle
attained by the patronage refund is also achieved— that of service
without profit. The bylaws, however, generally provide for the
return of patronage refunds, should a surplus remain after making
provision for the items mentioned above.
Cooperatives Under R ural Electrification Program

Because of the overwhelming preponderance of R. E. A.-assisted
associations, any report on the electricity-supply cooperatives must
largely deal with that group.
This program is being carried out by the Rural Electrification
Administration created by Executive order on May 11, 1935, but not
established by law until M ay 20, 1936 (Public, No. 605, 74th Cong.).
In November 1935 it was announced that 11 loan contracts aggre­
gating $2,399,612 had been signed, for the construction of a total of
1,940 miles of line which would carry electricity to 8,286 rural homes.
The current was turned on in the first R. E. A.-financed project
(in Iowa) on December 15, 1935.
During 1936, according to the first annual report of the R. E. A.,
more than 25,000 miles of line were erected and “ over 110,000 farms
received electric service for the first time.” As of the end of the year,
218 allotments had been approved, 109 loan contracts had been exe­
cuted (on 94 projects, plans for which had been approved), construc­
tion was under way or had been completed, and 28 projects had been
energized in whole or in part. These involved Federal loans to a total
of $43,737,779. In addition two loan contracts for a total of $55,000
had been executed to finance the wiring of rural premises.
Loans to cooperative associations.— It has been the practice of the
R. E. A. from the first to give preference to public, cooperative, and
nonprofit organizations. This policy was continued by the act of




LOCAL SERVICE ASSOCIATIONS

91

1936, which authorized tne Administrator “ to make loans to persons,
corporations, States, Territories, and subdivisions and agencies thereof,
municipalities, people’s utility districts, and cooperative, nonprofit,
or limited-dividend associations organized under the laws of any State
or Territory of the United States, for the purpose of financing the
construction and operation of generating plants, electric transmission
and distribution lines or systems for the furnishing of electric energy
to persons in rural areas who are not receiving central-station service,”
and directed him to give preference to public, cooperative, nonprofit,
and similar bodies in the granting of loans.
This preference has stimulated greatly the growth of cooperative ac­
tion in the electrical field and many new societies have been organized for
the purpose of obtaining R. E. A. loans. Of the first 11 projects author­
ized, 5 were obtained by county electric cooperatives and 1 other,
although organized under corporation law, was in effect a cooperative.
As table 39 shows, 76.8 percent of the total projects for which loans
had been made or funds earmarked (up to June 30, 1937) had been
for cooperative associations.
T

able

39.—R .

E . A . Projects A p p ro ved up to J u n e 3 0 , 1 9 3 7 , b y T y p e o f Organization
Num ber of
projects

Loans granted

Customers

Miles of line

T ype of borrowing organization
N um ­
ber
Cooperative projects____________
Private nonprofit corporations____
State corporations________________
M unicipal corporations_____ ___
Power and irrigation districts_____
Private utility companies_________

i 239
33
1
5
17
16

Total_______________________

311

Per­
cent

Per­
cent

N um ­
ber

Per­
cent

N um ­
ber

76.8 $47, 856,968
10.6
5, 670, 200
542, 328
.3
546, 058
1.6
5.5
5, 244, 750
5.2
1, 251, 767

78.3
9.3
.9
.9
8.6
2.0

161,037
16,901
2,128
2,073
13, 228
5, 564

80.1
8.4
1.1
1.0
6.6
2.8

44, 950.4
4, 741. 2
511.0
520.2
4, 689. 7
1, 280. 7

79.3
8.4
.9
.9
8.3
2.2

61,112, 071

100.0

200, 931

100.0

56, 693. 2

100.0

100.0

Amount

Per­
cent

i 214 associations with 239 projects.

Table 40 shows the geographical distribution of the R. E. A.
cooperatives and loans, by States, as of June 30, 1937.
T

able

40.—

Federal

L oa n s,

Length

o f L in e ,

Customers

o f Electricity A ssocia tion s,

J u n e 3 0 , 1 9 3 7 , b y State

State

A la b a m a _____
Arkansas______
Colorado______
Georgia_______
Idaho.................
Illinois________
Indiana_______
Iowa________ _
Kansas..... ........
K en tu cky.........
Louisiana_____
M aryland____
M ichigan_____
Minnesota____
M ississippi-.__

N um ­
Amount Miles of N um ­
ber of of
ber of
Federal
line
associ­ loans
custom­
ations
ers
5 $1,053,000 1,063.0
4
617,000
575.0
2
390,000
387.0
16 2, 294, 375 2, 263.4
2
478.5
883, 750
574, 000
3
531.0
15 4,644, 926 4,469.2
24 3, 751, 712 i 3,060. 5
4
614, 651
573.0
8 1,120, 000 1,083.0
3
905, 000
961.0
1
165, 000
165.0
5 2, 845, 000 2, 432.1
23 4, 515, 954 4, 435. 5
6
758, 200
755. 5

1 22 associations.




4,102
2,512
1,282
10,839
1,665
2,030
15, 716
i 9,648
1, 716
4,008
3,639
600
8, 717
13,198
3, 312

2 8 associations.

State

N um ­
N um ­
ber of ofAmount
Federal Miles of ber of
associ­
line
custom­
loans
ations
ers

Missouri______
M ontana______
N ew M exico__
N orth Carolina.
N orth D akota..
Ohio__________
Oklahoma_____
Oregon________
Pennsylvania-_
Tennessee_____
T e x a s .____ _
Virginia----------Wisconsin____
Total___
3 14 associations.

9 $1, 605,000 2 1,560.0 2 5,225
7
715, 600
674.8
2,381
1
164,000
60.0
100
7 1,044,000
908.9
4, 664
2
456.5
500, 000
1,545
18 5,756, 200 5, 371. 5 19, 430
7 1, 701, 000 1, 784.0
5, 348
3
302, 000
261.0
1, 273
6 1,950, 000 1,808.0
6,146
6 1, 363, 200 1, 316.0
6, Oil
7 1,955, 000 2, 015.0
7,190
5 1, 427, 800 1, 290.0
5, 341
15 4,440, 600 3 4, 212.0 3 13, 399
214 47,856, 968 444, 950.4 4161,037
4 210 associations.

92

CONSUMERS’ COOPERATION IN THE UNITED STATES

Most of these loans were for the purpose of financing the construc­
tion of power lines. However, 11 projects in 8 States,12 where power
either could not be procured at all or could not be obtained at a
reasonable price, were allotted funds for the construction of plants in
which to generate their own current. Loans for wiring purposes were
extended to 8 projects in 7 States.13
Conditions for recei/pt and repayment of Federal loans.— The con­
trolling objective of the R. E. A. has been “ to take electricity to as
many farms as possible in the shortest possible time, and to have it
used in quantities sufficient to affect rural life.” To this end it has
granted loans for self-liquidating projects for the extension of distri­
bution lines into rural areas to carry fight and power to farm homes
and other farm buildings, and also for the wiring of such homes and
buildings. The Rural Electrification Act of 1936 also authorized loans
for the purchase and installation of electrical and plumbing appliances
and equipment.14 If necessary to protect the loans, the Adminis­
trator was authorized, in the event of foreclosure, to bid for and pur­
chase property pledged or mortgaged as security, and to operate or
lease such property for not over 5 years, or to sell it.
Under the procedure as first established, loans could be made for
the entire cost of the project; they were normally for 20 years, with
interest usually at 3 percent, and were secured by mortgages on the
property. An Executive order of August 7, 1935, provided that not
less than 25 percent of the loan was to be spent for labor, and at
least 90 percent of all persons working on the project should be taken
from the public relief rolls. The act of 1936 provided that loans
were to be self-liquidating within a period of not over 25 years and
were to bear interest at a rate equal to the average rate of interest
on United States obligations (with a maturity of 10 years or over)
issued during the preceding fiscal year.
In order to obtain a loan for a rural electrification project a coop­
erative association must represent a sufficient number of homes in
the area to make the project economically feasible, must have ac­
quired all possible easements,15 and have a contracted source of
wholesale power.

12Idaho, Iowa, Michigan, N ew M exico, Oregon, Pennsylvania, Virginia, and Wisconsin.
13Georgia, Illinois, Iowa, Minnesota, Missouri, Montana, and Wisconsin.
i* Prior to that act funds for installation of electric pumps and the purchase of electric appliances and
equipment were obtainable from the Electric Home and Farm Authority, and loans for pressure water
systems, including modern kitchens and inside bathrooms, could be secured from the Federal Housing
Administration.
is A n “ easement” is a grant of right to construct, maintain, and operate electric transmission lines across
or alongside any specified property.




Chapter 4.— T E L E P H O N E A SS O C IA T IO N S
Cooperative telephone associations represent one of the older forms
of cooperative enterprise. It was found that for the group as a whole
the average age was more than a quarter of a century. The oldest
association reporting dated from 1893. The period from 1900 to
1919 was the most fruitful; nearly 88 percent of those making returns
were formed in this 20-year interval.
It appears, however, that almost no new associations are being
formed in this field. This is probably due to conditions in this branch
of business. Today the entire country is fairly well covered by the
telephone network and there appears to be comparatively little
territory into which to expand.
At the time the early associations were formed, there were few tele­
phones in the rural districts. The telephone had been known only for
about two decades and had not yet spread much beyond the cities and
towns. In the country the sparse, widely scattered population made
the installation of service by private companies unprofitable, and the
farmers in many localities were entirely isolated and cut off from com­
munication not only with each other but with the outside world. It
was to remedy this situation that the telephone associations began to
be started.
These early associations were generally the product of mutual
effort. The poles were cut from nearby timberland or purchased
collectively, and were erected by the members all working together.
Sometimes the wires were even strung along the fences. Wire,
insulators, batteries, and instruments were bought collectively and the
cost was apportioned among the members. If there was a switchboard
in a nearby village, the association would bargain for connection and
service there; if not, a small switchboard of their own would be
installed, perhaps in some conveniently located farmhouse. The costs
of operation were very small, as any repairs necessary were generally
made by the cooperators themselves.
The service in these early organizations usually afforded communi­
cation either within the cooperative group only or within the imme­
diate locality. The next step would be to obtain connection with
nearby towns and villages and then with long distance. As this
extension took place and as new lines came into existence, some over­
lapping of territory and service became inevitable. This led to mutual
agreements between lines and eventually to consolidation of several
lines within given territories, to form larger associations. This process
of consolidation was undoubtedly hastened by the gradual spread of
State regulation of telephone companies of all types.




93

Q4

CONSUMERS’ COOPERATION IN THE UNITED STATES

Whereas the original organizations were largely informal, unin­
corporated associations, as they grew larger and extended their field
of operations, more and more of them took corporate form. Some
of the local associations which had no switchboard of their own
formed federated associations for the purchase and operation of a
switchboard which would handle the calls of all of them.
All of these stages of development were represented in the associa­
tions which reported to the Bureau of Labor Statistics. With some
minor variation they fell into three main classes, as follows:
(1) The so-called “ service line” — the local association, formed
among the subscribers on one or more party lines, which has no
switchboard of its own but connects with other local lines and the
outside world through the switchboard of another company, either
cooperative or private. In these associations the cooperative enter­
prise is one of common ownership and maintenance of the telephone
facilities and of bargaining for switchboard service.
(2) The local association, also composed of individual telephone
users, having its own switchboard.
(3) The switchboard association of the federated type, whose mem­
bership is composed of local service-line associations.
Extreme variation was found in size of societies. Those reporting
varied from the associations which consisted of only one party line
and some half dozen members to a large organization with a member­
ship of 4,025, serving 6,606 families throughout a whole county. Most
of them, however, were small organizations operating in small towns
or rural districts. Nearly 68 percent of those reporting had fewer
than 50 members each, and of the whole number only 19 associations
had 500 members or more.
On the basis of the findings in the Bureau’s study it may be said
that the typical telephone association is a small organization of 60 to
70 members, serving on an average about 90 subscribers (including
members). The association is more likely than not to be incor­
porated, and quite likely to be operating its own switchboard. Gen­
erally the association owns the poles and wire along the right-of-way,
but the wire and poles necessary to carry the service to the member’s
home must usually be furnished by the member. It is also common
to find that the member must furnish his telephone instrument in the
smaller associations, though in the larger organizations these are
generally owned by the company.
The construction may be either of the single-wire (grounded) type
or double-wire (metallic) type; in the former the ground completes
the circuit, whereas in the latter the entire circuit is carried by wire.
The grounded type is less expensive to maintain but is also said to be




TELEPHONE ASSOCIATIONS

95

less satisfactory as to clearness of reception and general service.
The existing associations appear to be about evenly divided between
the grounded and metallic types.
Local service for 24 hours a day is quite general and toll connection
is also usually available.
The typical association operates on an assessment basis; about twice
as many associations make assessments as charge flat rates. The cost
of service to the member is very moderate, averaging $7.77 a year in
the assessment associations, and in those charging flat rates 87 cents
a month for rural service and 92 cents a month for service within the
village or town limits.
The financial data obtained in the survey were not entirely satis­
factory, owing to lost records, inadequate records, and lack of knowl­
edge of business methods on the part of a considerable number of the
reporting associations. On the basis of the returns, however, it
appears that the average gross revenue per association in 1936 was
only $968. This average probably understates the actual amount.
Many of the service-line associations handle almost no cash in the
course of the year. Even the fee paid per telephone to the. switch­
board company for making switchboard connections may not pass
through the local association but may be paid by the individual
members directly to that company; in such cases, however, where the
amount of the switching fee could be obtained the total amount paid
in such fees was credited as income to the service-line association.
Many of the associations have no employees and make little or no
cash expenditures. If repairs are needed, the members as a whole
either make them themselves (purchasing only the necessary materials)
or hire from a local company the services of a lineman at a fixed
hourly rate.
Taking into consideration the fact that many of the associations
were formed before the passage of cooperative laws, that they are
operating under corporation acts whose requirements are in many
cases in direct contravention of cooperative practice, and that as
public utilities they are in a number of States subject to public regula­
tion by State utility commissions, a surprisingly high degree of
conformity with cooperative principle was found among them. It
may be said, however, that few of them have any conception of
themselves as a part of a general cooperative movement. They have
been content with their avowed purpose of furnishing telephone service
in territories which would ordinarily be without such service if they did
not exist. This service they are furnishing through democratic
channels and at extremely low cost.




96

CONSUMERS’ COOPERATION IN THE UNITED STATES

S cop e and M eth od o f S tu d y

From various sources the Bureau assembled a list including not
only associations operating as cooperatives but also those operating as
mutuals. One or more associations of these types were found in 44
States. All of these were circularized one or more times.
Examination of the replies showed that a substantial number of
the so-called “ cooperative associations,” while they may have been
cooperative in their early years, were no longer so. A very large
proportion of the “ mutuals/’ however, although making no pretensions
to being cooperative, nevertheless were conforming to all of the
cooperative principles except possibly that of return of patronage
dividends; and in most instances the same purpose— service without
profit— was being achieved through the medium of rates only high
enough to cover expenses.
In order to be included in the Bureau’s tabulation an association
had to be at least semicooperative. For purposes of this study an
association was regarded as entirely cooperative which conformed to
the principles of open membership, a single vote per member, no
proxy voting, limited return on share capital, and service at cost
(either through the patronage refund or through service rates so low
as to yield no profit). An association was regarded as semicooperative
which allowed voting by shares but limited to a small number the
shares held by any one person, or which allowed proxy voting but only
one vote per member; no association was included in the tabulations
in which both voting by proxy and voting by shares was allowed or in
which the nonmember subscribers outnumbered the members, unless
the organization was clearly a nonprofit association. In evaluating
the cooperative features, consideration was given to requirements of
State cooperative and other laws and to public-utility regulations.
Altogether there were 1,614 associations which furnished usable
reports and which were cooperative on a sufficient number of points
to warrant their inclusion.
The geographic distribution of the known and reporting associations
is given in table 41. As is there shown, more than 80 percent of all
the known associations are in the North Central States.




97

TELEPHONE ASSOCIATIONS

T able 41 .— Number of Known and Reporting Cooperative Telephone Associations, by
Geographic Division and State
Total known
associations
Geographic division and
State

N um ­
ber

Per­
cent

N um ­
ber
fur­
nish­
ing
usable
reports

3,728 100.00

1,614

34
19
5
9
1

.91
.51
.13
.24
.03

15
7
2
6

M iddle A tla n tic..- .............
New Y ork -. _________
New J e rs e y _________ Pennsylvania______ __

70
22
1
47

1.88
.59
.03
1.26

36
18

East North Central________
Ohio_____ _____________
Indiana________________
Illinois________ _______
Michigan______________
Wisconsin____________

493
70
135
170
53
65

13.23
1.88
3.62
4. 56
1. 42
1.74

223
46
52
69
24
32

West N orth Central_______
Minnesota_____________
Iowa___________________
Missouri______________
North Dakota_________
South Dakota_________
Nebraska- _ __________
Kansas________________

2, 535
1,653
272
90
162
143
38
177

68.00
44.34
7.30
2. 41
4. 35
3.83
1. 02
4. 75

1,178
765
137
30
81
65
15
85

South Atlantic________
M aryland_____________
Virginia_______ _______
West Virginia________ _

152
8
64
27

4.08
.22
1. 72
.70

41
3
24
5

United States_____________
New England ____________
M aine_________________
New Hampshire_____ .
Vermont____________ __
Massachusetts_________

T otal known
associations
Geographic division and
State

N um ­
ber

N um ­
ber
fur­
nish­
Per­
ing
cent usable
reports

South Atlantic—Con.
N orth Carolina________
South Carolina_______
Georgia________________
Florida__________ _____

18
13
19
3

0. 48
.35
.51
. 10

2

East South Central _ _
K entucky_____________
Tennessee____________
Alabama_______________
Mississippi . -_ - ____

44
17
16
9
2

1.18
.46
.43
.24
.05

8
4
3
1

West South Central_______
A r k a n s a s ...__________
Louisiana._ _______
Oklahom a._ . .
Texas__________________

149
21
4
56
68

4.00
.56
.11
1.50
1.82

20
2

M ountain. ______________
M ontana______________
Idaho__________________
W yom ing______________
Colorado______________
N ew M e x ic o ______ _
U tah__________________
Nevada_______________

96
39
11
16
20
4
4
2

2.58
1.05
.30
.43
.54
.11
.11
.05

32
14
4
6
7

Pacific___ _________________
W ashington. _
Oregon. ______________
California______________

155
31
114
10

4.16
.83
3.06
.27

61
20
40
1

7

18

8
10

1

E xten t o f Cooperative T elephone M ovem en t

The Bureau of the Census every 5 years makes a count of the num­
ber of telephone companies and telephones in use in the United States.
Its reports classify the companies into two groups— those with annual
gross incomes of $10,000 and over and those whose income is less than
that amount.
Its latest report covered the year 1932. In that year it found that
there were 44,828 telephone systems in the United States, of which
918 (or less than 2% percent) had incomes of $10,000 or over. But the
network of that 2% percent was serving about 93% percent of the nearly
17% million telephones in use that year. This was an average of
slightly more than 17,700 telephones for each of the larger systems,
whereas the small companies were averaging only about 26 telephones
each.




98

CONSUMERS’ COOPERATION IN TH E UNITED STATES
T able 42 .— Development of Large and Small Telephone Companies Since 1922 1
Companies with annual gross incomes of—
$10,000 or over

Under $10,000

Year
Num ber of
telephones
in use

1922____________________________________
1927____________________________________
1932____________________________________
i Source: U. S. Bureau of the Census.
Washington, 1934.

12, 295,234
16, 712,495
16,284, 231

Average
number per
com pany

9,293
12,217
17, 739

Number of
telephones
in use

2,052,161
1,810, 272
1,140,175

Average
number
per com ­
pany
37
31
26

Num ber
of tele­
phones
per 10,000
popu­
lation

130
155
139

Census of Electrical Industries, 1932—Telephones and Telegraphs.

The returns in the Bureau of Labor Statistics study indicate that
most of the mutual and cooperative companies would fall within the
small-company classification/ but it cannot be assumed that all of the
small systems are either mutual or cooperative. The reports to the
Bureau show that a substantial proportion of these smaller systems
are owned either by single individuals or by stock companies operat­
ing for profit. A further percentage, although calling themselves
mutual or cooperative, are actually not now operating along mutual
or cooperative lines, whatever they may have done in the beginning.
It is not known how many telephone systems there are in the United
States which are functioning cooperatively. A Federal law makes
the individual returns and the mailing lists of the Bureau of the Census
confidential even as regards other Federal offices, and it is therefore
not possible to examine the census files in order to obtain a complete
list of companies which might be cooperative.
In the absence of these data the Bureau of Labor Statistics was able
to build up a list of some 4,400 associations, but nearly 400 of these
proved to have gone out of business and over 300 had to be discarded
because they could not qualify under the Bureau’s definition of
cooperative or semicooperative. That left some 3,700, of which
nearly 45 percent were in Minnesota alone.
It is known that, with two exceptions, this is not a complete list
of associations. The exceptions are Minnesota and North Dakota,
where State-wide cooperative censuses, made as “ white-collar” projects
under the W. P. A., resulted in finding almost all if not quite all of the
associations. It is believed, however, that the list does cover at least
70 percent of the total number of the really cooperative or mutualcooperative associations in telephone operation in the United States.
The list is weak mainly in its coverage of the unincorporated service
lines, but many of these are included in the returns from the federated
switchboard associations.
i Only 5 of the associations included in the present study had gross incomes of $10,000 or over in 1936.




TELEPHONE

99

A S S O C IA T IO N S

Assuming a total of 5,000 associations functioning either entirely
cooperatively or semicooperatively, then on the basis of returns to the
Bureau of Labor Statistics it may be estimated that their total mem­
bership in 1936 was in the neighborhood of 330,000 and that some
460,000 persons were served by them in that year.
T yp es o f A ssocia tion s

Of 1,614 reporting associations, over three-fifths were of the serv­
ice-line type, about a third were local associations with their own
switchboard service, and less than 4 percent were federations of local
associations. In the States from which 25 or more associations
reported, service lines were in the majority in Minnesota, North
Dakota, Oregon, South Dakota, and Wisconsin, whereas in Illinois,
Indiana, Iowa, Kansas, Missouri, and Ohio it was more common for
the telephone associations to own their own switchboards.
The distribution of the associations by type and by State is shown
in table 43.
T able 43 .— Geographic Distribution of Reporting Cooperative Telephone Associations,
by Type, 1936

Geographic division and State
Total

United States______________________

Number

Percent

Locals

Locals

Federa­
tions
W ith­
with
Total
W ith
switch­
out
switch­ switch­
board
board
board

1,614

554

999

100.0

34.3

61.9

N ew England_____
_ „
M aine___ _ _ _ ______ _ _
N ew H am pshire... ___
Verm ont____________ ____ ____

15
7
2
6

4
3

100. 0
100. 0
100.0
100.0

26. 7
42. 9

1

11
4
2
5

16. 7

73. 3
57.1
100.0
83.3

M iddle Atlantic____ _
.
....
N ew Y ork ________ . . .
_ .
Pennsylvania. _____
. ...

36
18
18

10
5
5

26
13
13

100.0
100. 0
100.0

27.8
27.8
27.8

72. 2
72. 2
72. 2

East North C e n tr a l______ .. . _
Ohio................. . . .
Indiana____ ___________________
Illinois______ __________________
M ichigan______________________
W isconsin________ _ . . . .
_

223
46
52
69
24
32

154
42
42
45
13
12

55
4
7
15
9
20

14

100.0
100. 0
100.0
100.0
100.0
100.0

69.0
91.3
80.8
65.2
54.2
37.5

24.7
8. 7
13.5
21.7
37.5
62. 5

West N orth Central____ __________
Minnesota_____________________
Iow a________ _ ______________
M issouri____ _ . . . ____ _. .
North Dakota_______ . . . . .
South Dakota__________________
Nebraska______________________
K ansas.____ ___________________

1,178
765
137
30
81
65
15
85

307
78
91
25
26
11
9
67

831
681
27
2
55
52
5
9

40
6
19
3

100. 0
100.0
100.0
100.0
100.0
100.0
100.0
100.0

26.1
10.2
66.4
83.3
32.1
16.9
60.0
78.8

70.5
89.0
19.7
6.7
67.9
80.0
33.3
10,6

South A tlantic_____________________
M aryland_____ _ ______
. ...
Virginia________________________
W est Virginia . _ ______ _ . . .
North Carolina..
_ .
Georgia________________________

41
3
24
5
7
2

22
1
17
3

100.0
100.0
100.0
100.0
100.0
100.0

53.7
33.3
70.8
60.0

43.9
66.7
25.0
40.0
100.0
50.0




1

61

Federa­
tions
W ith­
with
W ith
switch­
out
switch­
switch­ board
board
board

3
9
2

2
1
9

18
1
2
6
1
2
7
1 __ „ ___

50.6

3.8

6.3
5.7
13.0
8.3
3.4
.8
13.9
10.0
3.1
6.7
10. 6
2.4
4.2

100

CONSUMERS’ COOPERATION IN TH E UNITED STATES

T able 43.— Geographic Distribution of Reporting Cooperative Telephone Associations,
by Type , 1936— Continued

Geographic division and State
Total

Number

Percent

Locals

Locals

Federa­
tions
with
Total
W
ith­
W ith
switch­
out
Switch­ switch­
board
board
board

East South Central________________
Kentucky _ _
_ _ _ _
T e n n ess ee.__
___________
Alabama _ ________ _______ _

8
4
3
1

7
3
3
1

1
1

West South Central______ _ _
Arkansas . . .
___ __
... _ _
Oklahoma____ _
Texas_____ ___ _______________

20
2
8
10

15
1
5
9

2
1
1

Mountain
____ _ _ . . . __
M ontana__________
. _______
Idaho________
_
_
_ _ __
W yom ing_______
Colorado. ___ _ ______ _ __
N evada______

32
14
4
6
7
1

12
5
3

20
9
1
6
3
1

Pacific____________ ___ _ _____ _
California_______ _________
_
Washington ._ ________
Oregon___________
__
___

61
1
20
40

23
1
10
12

4

3
2
1

35

3

9
26

1
2

Federa­
tions
with
W
ith­
W ith
switch­
out
switch­
switch­
board
board
board

100.0
100.0
100.0
100.0

87.5
75.0
100.0
100.0

12.5
25.0

100.0
100.0
100.0
100.0

75.0
50.0
62.5
90.0

10.0
50.0
12.5

100.0
100.0
100.0
100.0
100.0
100.0

37.5
35.7
75.0

62.5
64.3
25.0
100.0
42.9
100.0

100.0
100.0
100.0
100.0

37.7
100.0
50.0
30.0

57.1

15.0
25.0
10.0

57.4

4.9

45.0
65.0

5.0
5.0

A g e o f A ssocia tion s

The reports received from the telephone associations show that
these associations are one of the older forms of cooperative effort
in the United States. The average age for all associations reporting
on this point was 26 years. The following statement shows the
distribution of associations, by length of time in operation:
Number of
associations

Less than 1 year____________________________________________________

2

1 and under 3 years_______________________________________________

10

3 and under 5 years________________________________________________

9

5 and under 10 years_______________________________________________

48

10 and under 15 years_____________________________________________

45

15 and under 2 0 years_____________________________________________

147

20 and under 25 years_____________________________________________

321

25 and under 3 0 years_____________________________________________
30 years and over___________________________________________________

400
492

T o ta l_________________________________________________________

1 ,4 7 4

The largest groups had been formed in the periods 1900 to 1909
(49.5 percent) and 1910 to 1919 (38.0 percent), but 1.3 percent had
been in operation since before 1900. The oldest association reporting
was started in 1893. Table 44 shows, by States, the distribution of
the associations according to the year in which they were formed.




101

TELEPHONE ASSOCIATIONS

T able 44 .— Distribution of Cooperative Telephone Associations, by Period in Which
Established

State

Total
number of
associxepui ling

All associations..

1,474

Alabama________
Arkansas___ - California-- _
Colorado___ _
Georgia_______

1
1
1
7
2

Idaho___________
Illinois. ________
In d ia n a ..- _ ___
I o w a . . ____ ____
Kansas............

4
61
46
122
81

K entucky.. _
M aine.
___
Maryland_____
Michigan_____ _
Minnesota _____

4
7
2
18
700

Missouri______ .
Montana______
Nebraska
__
Nevada __
New Hampshire

25
14
14
1
2

New Y o r k ____
North C arolin a..
North Dakota___
O h io _____ ___
Oklahoma______

18
6
78
44
7

Oregon.. _ __ _
Pennsylvania___
South Dakota___
Tennessee. _ _ _
T e x a s ____ _ _

37
17
58
3
9

Vermont
Virginia, _ _ _
W ashington
West Virginia.___
Wisconsin
W yoming

4
22
18
5
30
5

Number of associations organized in specified period
1890
to
1899

1900
to
1909

1910
to
1919

1920
to
1924

1925
to
1929

1930

1931

1932

1933

1934

1935

19

730

560

78

50

10

6

7

2

7

3

1

i2
2

1936

2

1
1

3
1

1
11
1

1

1

2

1
5
1

1

2
44
37
76
59

2
9
7
22
15

3
1
7
3

8

2

1

32

1
14

1
2
5
1
3
14
309 2 326

2
1

L

5
9
4
1
1

12
1
16
34
4

3
3
50
6
3

4

9
12
22

3
1
3

3

11
4
31
2
3

4
9
6
1
17
1

10
8
2
6
3

2

18
2
9

1

3

2

2
4
1

1
3
1

1

1

2

2

1

'
1

1

1

2

1
1

1
6

7

1
1
2
2

1
1
1

1
1
1

2

1

1

1

4
2

1

1 1 reorganized; no information on date first established.
2 1 established in 1911; reorganized in 1936.

M em b ersh ip and Subscribers Served

The telephone associations ranged in size up to 4,025 but were
generally small. Of the whole group, 48.5 percent had fewer than
25 members each and 67.8 percent had fewer than 50 members each.
Less than one-fifth had more than 100 members and only 1.2 percent
had 500 members or more. (Table 45.)




102

CONSUMERS’ COOPERATION IN TH E UNITED STATES

T able 45 .— Distribution of Cooperative Telephone Associations by Number of Members,
1936
Operating switch­
boards

N ot operating
switchboards

Both types of
associations

Classified membership

Fewer than 10 members_________________
10 and under 25 members_________
____
25 and under 50 members________________
50 and under 100 members_______________
100 and under 250 members__ ___________
250 and under 500 members__ ___________
500 and under 1,000 m e m b e rs .________ __ _
1,000 members and over
_
Total_______ ____ _________________

Number

Percent

Number

Percent

Number

7
35
92
123
201
55
10
8

1.5
6.6
17.3
23.2
37.9
10.4
1.9
1.5

166
530
201
64
26
3
1

16.8
53.5
20.3
6.5
2.6
.3
.1

173
565
293
187
227
58
11
8

11.4
37.1
19.3
12.3
14.9
3.8
.7
.5

531

100.0

991

100.0

1,522

100.0

Percent

As would be expected, the service-line associations were the smaller
of the two types of associations shown in table 45. Seventy percent
of these had fewer than 25 members and 90 percent fewer than 50
members. As table 46 indicates, they averaged only 27 members
each, as compared with 161 members in the associations having their
own switchboards. The central, or federated associations, had in
membership an average of 24 local associations each.
The 1,522 local associations reporting as to membership had a com­
bined total of 110,981 members at the end of 1936, or an average of
66 persons each. More than three-fourths of these were members
of local associations operating their own switchboards.
Not all of these members were also subscribers at the end of the
year. In some cases shareholders had moved out of the territory
served by the association, and though retaining their stock in the
organization were no longer using its facilities. Reports from other
associations indicated that, low as the rates or assessments were, there
nevertheless were members whose financial condition was such that
they could no longer afford the service. The number of inactive
members was more than counterbalanced by the nonmember patrons,
however, so that the number of active subscribers of the local associa­
tions at the end of 1936 exceeded the number of shareholders by 25,185.
T able 46 .— Membership and Subscribers of Cooperative Telephone Associations, 1936, by
Type of Association
Membership
T ype of association

Local associations— ___ ____ ___________ _______
Operating switchboards______________________
N ot operating switchboards__________________
Federated or central associations operating switchooards-------------------- -----------------------------------------i Num ber of member associations.




Subscribers

Number
Number
of associ­ Members Aver­ of associ­
Members A ver­
ations
age
ations
age
reporting
reporting
1,522
529
993

110,981
85,041
25,940

66
161
27

1,542
549
993

136,166
109,274
26,892

88
199
27

50

i 1,198

i 24

56

11,641

208

103

TELEPHONE ASSOCIATIONS

Fifty-six associations, composed of 1,198 member associations of the
service-line type, reported a total of 11,641 subscribers. Although
there was a small amount of duplication, in number of subscribers
reported, as between the local service-line associations and the feder­
ated central associations, it is safe to say that the reporting associations
were serving over 147,000 families at the end of 1936.
The total and average membership and subscribers are shown, by
geographic divisions and States, in table 47. It is evident from this
table that 87 percent of the local associations reporting and 81 percent
of the membership were in the North Central States. The largest
associations were in the State of Washington where the average
membership was 339, followed by Idaho with 296. In Minnesota,
which had the largest number of associations, the average member­
ship was only 37 but this was because of the unusually large proportion
of the small service lines.
A considerable margin between average membership and average
number of subscribers was shown in some States, notably Iowa,
Nebraska, Oklahoma, and Washington. Undoubtedly this was due
to some extent to requirements by State commissions making it
compulsory upon the associations to serve all applicants (whether
members or not) in the area in which they have license to operate.
T able 47 .— Membership and Subscribers, 1936, by Division and State
Membership
Geographic division
State

and

T ype of asso­
ciation

Associ­
ations
reporting

M em ­
bers

Subscribers
Average
Associ­
per asso­
ations
ciation reporting

M em ­
bers

Average
per asso­
ciation

United States_____ _______

Local.......... .
Central____

1,522
50

110,981
i 1,198

66
i 24

1,542
56

136,166
11,641

88
208

New England........................
M a in e ..
. _
_ _
N ew Hampshire______
Vermont
M iddle A tla n tic..
N ew Y ork ___
_ _
Pennsylvania. _______
East North Central
. .

Local______
___ d o ___ _
____ d o ______
____ d o.
___ d o ______
____ d o ______
____ d o ______
____ d o _____
Central____
Local___ . .
____ d o.
Central____
Local______
Central____
Local____ __
Central____
Local______
___ do.
Central____
Local____ _
Central. __ .
Local___ __
Central____
Local___ . .
Central____
L o ca l..
___ do . .
Central____
Local. . __
Central........
Local.
Central____

14
7
2
5
36
18
18
204
13
45
49
2
59
9
19
2
32
1,115
32
743
5
114
14
26
3
80
63
2
14
1
75
7

1,774
1, 554
58
162
1, 298
747
551
22,011
i 282
5, 542
5,151
i 37
7,152
1208
1,976
1 37
2,190
67,416
i 801
27, 744
* 120
16, 674
i 438
3, 608
i 71
3, 839
1,938
i 16
2,530
i6
11, 083
1 150

127
222
29
32
36
42
31
108
122
123
105
i 19
121
i 23
104
i 19
68
60
i 25
37
124
146
i 31
139
124
48
31
i8
181
i6
148
121

14
7
2
5
36
18
18
207
13
46
49
3
59
8
21
2
32
1,131
36
756
5
115
18
27
3
81
63
1
14
1
75

1, 534
1,316
56
162
1, 683
1,062
621
26, 365
2,803
6,482
6,251
364
9,050
1, 889
2,040
550
2, 542
82, 399
7,845
32, 753
594
21, 803
4, 358
4, 376
760
3,854
2, 386
70
3,734
275
13,493
1,788

110
188
28
32
47
59
35
127
216
141
128
121
153
236
97
275
79
75
218
43
119
190
242
162
253
48
38
70
267
275
180
224

Ohio__________________
Indiana. . . .
Illinois_____________ ._
M ichigan___ __________
W isconsin.—
_______
West North Central.. __
Minnesota___________
Iowa_____ _______ _____
Missouri____ _________
North D akota_________
South Dakota____ _____
N ebraska._____ ______
Kansas................ .......... .

1Number of member assocnations.




8

104

CONSUMERS’ COOPERATION IN TH E UNITED STATES

T able 47.— Membership and Subscribers, 1936, by Division and State— Continued
Membership
Geographic

division
State

and

T yp e of asso­
ciation

South A t la n t ic .___ _______

Local___ __
Central____
Maryland_____________ Local___ _
Virginia........... ............... ____ d o ______
Central____
West Virginia. _ _ ._
Local _
North Carolina_______ ____ d o ______
Georgia.. ___________ ____ d o ______
East South Central_____
____ d o______
K entucky. _
____ d o . . . .
Tennessee_____________ ____ d o______
Alabama________ _____ ____ d o ______
__ do.
West South Central
Central _
Arkansas____
...
Local _ _
Oklahoma_____________ . . . d o ..
Central____
Local. ___
T e x a s ............... ..........
Central____
M ountain________________
Local ____
Montana________ . . . . . . . d o_____
Idaho. _____________ _ ____ d o .. _.
W yom ing____ ________ ____ d o ______
Colorado________ . . . . . . . d o. _ _
N evada_________ _____ ____ d o ______
Pacific________ ___________ . . . .d o ___
C entral.. .
C aliforn ia_______ ____ Local _____
____ do _
W ashington.. _______
Central____
O r e g o n ..____________
L ocal.
Central___

Associ­
ations
reporting
40
1
3
23
1
5
7
2
8
4
3
1
16
3
2
6
2
8
1
32
14
4
6
7
1
57
1
1
18
1
38

M em ­
bers

5, 725
i 30
277
4,952
i 30
312
149
35
689
185
490
14
1,605
i 81
43
722
i 74
840
i7
2,215
635
1,182
100
288
10
8, 248
14
33
6,110
i4
2,105

Subscribers
Average
Associ­
per asso­
ations
ciation reporting
143
i 30
92
215
i 30
62
21
18
86
46
163
14
100
127
22
120
137
105
17
69
45
296
17
41
10
145
14
33
339
i4
55

40
1
3
23
1
5
7
2
8
4
3
1
16
3
2
6
2
8
1
32
14
4
6
7
1
58
3
1
19
1
38
2

M em ­
bers

5,934
210
352
5,003
210
385
154
40
726
209
498
19
2,448
195
43
1, 592
155
813
40
2,136
464
1,195
84
383
10
12,941
588
33
10,643
20
2,265
568

Average
per asso­
ciation
148
210
117
218
210
77
22
20
91
52
166
19
153
65
22
265
78
102
40
67
33
299
14
55
10
223
196
33
560
20
60
284

1 Number of member associations.

The associations appear to have been losing ground as regards
membership. Of 1,305 societies which reported number of members
for both 1935 and 1936, the membership in the latter year showed an
increase in 184, a decrease in 218, and remained unchanged in 903.
Some relation between period of operation and membership was
indicated, in the reporting associations. Thus, of 62 associations
which had been in existence for less than 10 years, all but 17 had fewer
than 50 members. On the other hand, no associations less than 15
years of age had attained a membership of 500 or more, and the only
associations with 1,000 or more members were 5 which had all been
operating for 20 years or longer (3 of these, for 30 years or longer).
Cooperative P ra c tic e 2

In general the practice of open membership is followed by the
telephone associations. Limitation, where found, was generally that
imposed by the capacity of the facilities owned. Thus several asso­
ciations reported that membership was limited to 15, 18, or 20— the
load limit of the party line owned by the association. A few associa­
tions required that the prospective member must live in the territory
* See also section on legal status (p. 197) for legislative provisions affecting operating practice.




TELEPHONE ASSOCIATIONS

105

served by the association and thus be in a position to utilize the
telephone facilities. Only four associations were found which im­
posed any other restriction. In two of these, membership was open
only to farmers, and in one farmers were specifically excluded. The
fourth association (located in Texas) barred Negroes from membership.
Voting.— Roughly, 80 percent of the reporting associations allowed
only one vote per member, and about 75 percent prohibited voting
by proxy. In the federations, member associations had one vote
each. In one case, however, a number of party lines, all in rural
districts, had federated and bought their own switchboard which
was set up in a village centrally located. At the same time, service
was extended to villagers. The rural service was still operated on the
assessment basis, and the members continued to provide and maintain
their own telephones and lines, but the village subscribers were renters
and were charged a flat rate. In this association each of the local
member associations (i. e., the party lines) had one vote in the affairs
of the association and the villagers were given one vote for every 10
subscribers.
Share capital.— In the associations with capital stock one of the
conditions of membership was the purchase of at least one share.
The pure mutuals and some of the cooperative associations were
membership organizations without capital stock. In the pure mutuals
the usual practice, at the time the lines were built, had been for the
members to divide the total cost equally among themselves, the pro
rata share being regarded as the cost of “ membership.” In at least
one case, the association later issued shares, the par value of which
was based upon the amount of contribution of the original members.
Generally when a member wishes to withdraw from the organiza­
tion, he must find a purchaser for his share, but some associations
purchase his share at par value or net worth, whichever is lower.
Analysis of the policies of the associations indicates that less than
5 percent make a practice of paying interest on share capital. In
these associations, therefore, although they are organized as capitalstock associations, the share may be regarded as only a membership
certificate. Of 33 associations which make a practice of paying interest
on share capital, 14 limit the rate of return— one to 4 percent, five to
5 percent, three to 6 percent, one to 7 percent, three to 8 percent, and
one to 10 percent. Only 23 made any return on shares in 1936, the
rates ranging from 2 to 8 percent.
Patronage refunds.— The return of surpluses earned on the year’s
operations, in proportion to patronage, is not common among the tele­
phone associations. The main reason for this is that there is generally
no surplus to return. About three-fourths of the associations operate
on the assessment basis. The assessment may be levied upon all
90621°— 39-------- 8




106

C O N S U M E R S ’ COOPERATION

IN

THE

U N IT E D

STATES

members alike, or may be in proportion either to the amount of shares
held or to the telephones in use. Whatever the basis, the total
amount is set only high enough to cover operating expenses. Those
associations which do operate on a predetermined monthly rate usually
aim to fix that rate only high enough to cover the actual cost of service.
In the grocery trade and retail gasoline business there is a “ current
price” which is easily known, and which provides for a margin suffi­
cient to cover operating expenses plus a profit to the dealer. In other
words, the member of a grocery cooperative voluntarily advances to
his association this difference between actual cost and the current price.
It is from this “ overcharge” that he receives his patronage refund at
the end of the operating period. Most of the telephone associations,
however, are operating in a business field and in districts where there
has been no current rate, and their low rates afford little or no surplus.
Among the associations covered by the present study only 29
reported that they had returned a patronage refund for 1936. They
had rebated the sum of $7,168, which was an average of $3.23 for each
of their members. The practice of one additional association was to
divide any surplus equally among the members— a purely mutual
procedure— and it was the custom of another to give free service until
the surplus was exhausted.
O perative and A d m in istra tive P rocedure

The larger switchboard associations operate like any other tele­
phone company, with directors, officers, manager, linemen, and opera­
tors. The directors, however, are generally either unpaid or receive
only a small fee for attendance at meetings. Full-time officers and
all employees are on a salary status.
There is little formal procedure in the operation of the service lines.
Generally most of the actual work is carried on by a secretary, elected
from the membership, who may contribute his services or may receive
a small annual amount for his work. In some of the very small
associations the secretary is the only officer and there are no paid
employees.
The associations which have no switchboard of their own naturally
need no operators. In the smaller associations which give switch­
board service, it was found that service may be provided for in one of
several different ways: (1) One or more operators may be hired at a
flat monthly or yearly rate, the association being responsible for the
payment of the salary; (2) the operator may be guaranteed a certain
sum per year, each member being directly responsible to the operator
for his share; (3) the operator may be hired on a contingent or com­
mission basis, receiving either a specified commission on the total
business (calls made) or a flat rate per call; (4) the switchboard may
be placed in the home of one of the members and operated by the




TELEPHONE

A S S O C IA T IO N S

107

family, either gratuitously or for a small yearly amount. A fifth
method had been resorted to in a few instances, mainly in territories
where the economic situation of the association and its members was
desperate; there the procedure was to turn over the switchboard
(though still retaining ownership) to some person or family willing to
take over its operation for the small amounts receivable in annual
switchboard fees or for a small amount per call; generally such arrange­
ments were undertaken by a local family simply to obtain some small
supplementary income.
PROPERTIES AND EQUIPMENT

Data as to miles of lines owned by the associations were available
for only 239 organizations. These had a total of 7,139.8 miles, an
average of 29.9 miles each. If this average can be regarded as repre­
sentative of the whole group, then the associations covered in this
report own and operate about 45,000 miles of line.
As already indicated, the associations usually own the poles and
wire along the main right of way. The wire and poles necessary to
carry the service from the highway to the members' homes, however,
must be furnished by the member in over three-fifths of the service
lines, and in nearly two-fifths of the local associations operating their
own switchboards. In over three-fourths of the service lines, and
three-fifths of the local switchboard associations, the member must
also supply his own telephone instrument. Many of the associations
furnish service only to members; if nonmember subscribers are served,
instruments are furnished by the association, either (1) at a specified
monthly rental for the instrument but with switching service at the
same rate as for members, or (2) at a higher flat service rate than for
members, the difference being in consideration of furnishing instru­
ment and maintenance of line.
The larger companies, particularly those which charge a stipulated
monthly rate, utilize part of their revenues for the maintenance and
repair of lines and equipment. In the smaller companies it is the
general practice that a considerable amount of the repair and mainte­
nance work on the association’s lines is done by the members them­
selves. Of the 1,224 companies reporting on this point, in 692 (57
percent) the members are responsible for the repair of their instru­
ments, the replacement of batteries, and the upkeep of their wire as
far as the main line.
In some associations, when repairs on the main lines are needed,
either the members all contribute the necessary services or a lineman
(who may be a professional from one of the private companies or
simply one of the cooperative members) is hired. Some associations
permit certain members to pay all or part of their assessment in
services. In at least one association one member is elected as lineman
each year and receives a small sum for his services.




108

CON SU M ERS’

C O O P E R A T IO N

IN

THE

U N IT E D

STATES

Sometimes the association holds a “bee.” Thus one society reports:
“Every fall the members go out 1 day, in a body, all over the line,
reset poles and insulators and do everything possible to keep expenses
down to a minimum.”
COST OF SERVICE

Service charges.— It was found that about three times as many
associations were operating on the assessment basis as were charging
flat monthly rates. Of those in the former class many were service
lines paying a specified annual switching fee per phone to some
private company. In such cases the procedure varied. In some the
total expenses— switching fees plus cost of repairs, replacements, etc.—
were divided equally by the number of active members, and the
resultant sum was levied as an assessment, for each quarter, half year,
or year. In others, the switching fee was paid separately; either the
individual subscriber paid his fee directly to the company or the
secretary of the association collected the fees and paid them to the
company in a lump sum.
The associations which had their own switchboards usually charged
flat monthly rates, but even in this class some made flat rates only to
renters (nonmember subscribers); members bore their pro rata share
(in the form of assessments) of the total expenses of the association.
Of those charging flat rates, the average charge for a rural telephone
was 87 cents a month, and for a residence telephone in town 92 cents
a month. Yearly assessments of service-line associations averaged
$7.77 per member; the yearly rate charged to nonmembers in these
associations averaged $11.79.
Although nonmembers were usually charged a higher rate than the
members, in a few cases the cost to the member in 1936 was higher
than to nonmembers. This could generally be attributed to unusually
large repair expenditures necessitated by storms, etc.
Several of the associations in a section swept by a forest fire many
years ago reported that they made unusually small assessments in
1936 because, having just received part of the indemnity from the
Federal Government,3 that sum took care of the expenses. Another
association had returned to the members the first half of the Federal
indemnity; this was later found to have been a mistake, for later
losses which could have been met comfortably from this sum had to
be covered by individual assessments. The second half of the indem­
nity, received during 1936, was used for line improvements and repairs
on the building housing the telephone exchange.
The average cost per subscriber per month, for the 1,150 associations
reporting the amount of their charges, is shown in table 48.
3
The fire was attributed to a spark from a railroad locom otive.
control of railroads.




This was during the period of Federal

TELEPHONE

109

A S S O C IA T IO N S

T able 48.— C ost p e r Subscriber p e r M on th , in T elep hone A ssocia tion s
Rate per month
Num ber
of associ­
Range of
ations re­
charges of
porting Average Median associations
reporting

Item

Associations with switchboard, operating on—
M onthly rate:
Residence service__ ______________________ ________
Commercial service__ __ _____ __
____ ____ ______
Rural service________ ________ _______ _ ____ __ __ __
Yearly assessment:
M em bers______ __________________________ _ ____ Nonm embers_____ _____________ _____ __
. ______
Service lines having no switchboard:
M em bers________ __________ _____
. . _ ____________
Nonmembers____ ________ __ ______________ _______ _

1.00
1.00
.83

$0.04-$3.06
. 08- 4.58
. 08- 3. 75

.67
1.19

.58
1.04

. 17- 2.00
. 75- 2.00

.64
.98

.58
.89

. 06- 2.25
.1 7 - 2.00

415
360
414

$0.92
1.19
.87

54
681
67

6

$

Switching jees.— For switching service purchased by service lines
from private companies, the most common yearly switching fees per
telephone were $4.20 (35 cents per month) and $6 (50 cents per
month). Of 808 service-line associations for which the amount of the
switching fee was reported, 521 paid yearly rates of less than $5 (234
of these paid $4.20), 33 paid $5, 225 paid $6, and the remainder paid
more than $6. The statement following shows the distribution by
amount of switching fee per telephone per year:
Number of
associations
reporting

Number of
associations
reporting

$ 2 .0 0 ________________________________
15
$ 2 .50________________________________
17
$ 3 .0 0 ________________________________
93
$ 3 .20________________________________
3
$ 3 .6 0 ________________________________
69
$4 .00________________________________
46
$4 .20__________________________________ 234
$4 .50________________________________
10

34
$4.80__________
$5 .00________________________________
33
$6 .00__________________________________ 225
$6 .75________________________________
2
$7.20________________________________
9
$7.60________________________________
13
$9 .00_________________________________
5

In most States the switching fees were fairly uniform throughout
the State. Thus, in Illinois, Kansas, Michigan, North Dakota,
Oregon, Pennsylvania, Virginia, Washington, and Wyoming, the
common rate was $6, in South Dakota $3, and in Wisconsin $7. In
Minnesota a great variety of fees was charged; the 593 associations
for which information was obtained were distributed as follows:
Number of
associations
reporting
$ 2 . 0 0 ______________________________________

6

$ 2 .40________________________________
$ 2 .5 0 ________________________________
$ 3 .0 0 ________________________________
$3 .20_________________________________
$3 .60_________________________________
$4 .00________________________________

7
9
49
2
68
41




Number of
associations
reporting

$4.20__________________________________ 234
$4.50________________________________
6
$4 .80________________________________
26
$5 .00________________________________
15
$6 .00________________________________ 123
$7 .20________________________________
4
$9.00________________________________
3

110

CON SU M ERS’

C O O P E R A T IO N

IN

THE

U N IT E D

STATES

There appeared to be no relation between size of association (i. e.
number of telephones served) and the rate of switching fee charged.
Employment in Telephone Associations
As pointed out elsewhere, most of the service lines have no regular
employees, the necessary work of repair and upkeep being done by
the members themselves or by a repairman hired when necessary.
The associations having their own switchboards have the usual em­
ployees— managers, switchboard operators, linemen, etc. As shown
in table 49, over 2,100 persons were employed by the 911 telephone
associations which reported having any expenditures for labor in
1936; these figures, however, include much part-time employment.
T able 49.— E m p loyees and W ages in C ooperative T elephone A sso cia tion s , 1 9 3 6
Salaries, 1936
Number
of associ­
ations
reporting

T yp e of association

Number
of em­
ployees

Total
amount

Average
per em ­
ployee 1

_________

2 911

2,131

$773, 657

$379

Locals operating switchboards__ _____________________
Locals without switchboards__________________________
Federated switchboard associations___________________

508
349
54

1,506
3 499
126

680, 501
29, 922
63, 234

464
3 60
514

All associations___________________________

1 Computed on basis of associations reporting both number of employees and amount of salaries.
2 Not including 1 association paying a daily rate of $1.50 for any work done; and 9 associations paying
hourly rates of 20 cents, 25 cents, 30 cents, 35 cents, 45 cents, or 50 cents.
3 M ainly part-time employees.

Finances
The associations were asked to supply data on gross and net income,
paid-in share capital, net worth, bills and accounts payable, and total
assets.
The financial data thus obtained were far from complete and not
altogether satisfactory. Most of the switchboard associations (espe­
cially the larger ones) had good accounting and bookkeeping. A
large proportion of the service-line associations, however, operate
on an informal basis, and many of them keep few accounts. It was
found that the determination of the associations’ net worth, for
instance, was impossible in many cases. It will be noted, in table
51, that the number of organizations reporting varies widely from
point to point. Sometimes early records had been lost. Often no
record had been kept of the value of original installations, equipment,
or replacements. Some reported “ no net worth,” even though size­
able sums had been invested, the plant was still in good operating con­
dition, and there were few or no debts outstanding against the or­
ganization. It is more than likely therefore that the aggregate net
worth, even of associations reporting, is considerably greater than that
shown in table 51.




TELEPHONE ASSOCIATIONS

111

RESOURCES

Of 505 associations which reported as to amount of assets, 42 per­
cent had total resources of less than $1,000, about 36 percent had
resources of from $1,000 to $5,000, and only a little over 11 percent
had assets of $10,000 or over (table 50). The assets of the service­
line associations were small; in about 42 percent they were less than
$500 and in 65 percent were under $1,000.
T

able

50.—

D istrib u tion o f C ooperative A sso cia tion s b y A m o u n t o f A ssets at E n d o f
1 93 6
Number of associations with assets of—

State

All associations. _ _________
Locals operating switchboard____ ___________
Locals not operating
switchboard_________
Federations operating
switchboard________
Alabama___________________
California__________________
Colorado___________ ______
I d a h o . _________________
Illinois._____ ____ _________
Indiana.._____ ___________
Iowa_______________________
Kansas__ __
.
__ ____
Kentucky___
_____ ___
M aine...... ...
........... .........
M aryland................. ............ .
Michigan
Minnesota_______ ________
M issouri.. __ _ __ ________
Montana . .
....................
Nebraska
New Hampshire.... .......... .....
N ew York
North Carolina
North Dakota
.. _
Ohio_____ _________________
Oklahoma__
__ __ __
Oregon. _
Pennsylvania.. ___________
South Dakota............... . . .
Tennessee_____ _______ ____
Texas.. _____ _____________
Virginia___________________
Washington_______________
West Virginia....... ..................
Wisconsin__ __________ ___
W yom ing________________ _

Total
num­
ber
report­
ing

Under
$500

$500
and
under
$

$
and
under
$

$
and
under
$5,000

505

125

87

81

99

56

38

14

5

261

29

29

37

67

45

36

13

5

227

95

53

40

30

7

1

17

1

5

4

1
1
1
1
1

1
2

1
1
3
2

1,000 2,000

1
2
7

24
32
42

3

1
8
1
1

4
4

3
65

43

25

12
5
14
7

20
2
4
7
15
3

11
1

1
1
2
3

2
6
1
10
2
I

2
1
1

2

$5,000
and
under
$

10,000

4

1

3

4

2,000

$

10,000

$25,000
$50,000
and
and
and
under under
$25,000 $50,000 over'

1

24

1
2
1
11
202
7
10
11
1
2
2

1,000

2

2
1

2
2
8
12
3
25
3

1
1

5

4

10
6

8

9

3
28

2
3

5

5
5

2
2
3

6
2
1
4
2
2

16

1
1
1

2
2
1
1

1

2

2
1
2
1
1

1

2

4

1
1
1

3

2
1
1
2

4

3

1

6

1

2

1

7

1

7

3

1
1

16

3

4

2
1

1
1

1
7

4
3

For the 505 associations reporting, total assets amounted to $2,719,155. A combined net worth of $2,446,111 was reported by 422 asso­
ciations and a paid-in share capital of $2,413,895 by 750 associations
(table 51).




112

CONSUMERS’ COOPERATION IN TH E UNITED STATES

T able 51.—R esou rces, and B ills P a ya b le, o f C ooperative T elephone A sso cia tion s, at E n d
o f 1936

Total assets

T y p e of society

All associations._ ________ _.
Locals operating switchboard__________________
L o c a ls n o t o p e r a t in g
switchboard___________
F e d e ra tio n s o p e ra tin g
switchboard___________

Net worth

N um ­
N um ­
ber
ber
Amount
re­
re­
port­
port­
ing
ing

Amount

N um ­
ber
Amount
re­
port­
ing

N um ­
ber of N um ­
non­ ber
stock re­ Amount
asso­ port­
cia­
ing
tions

505 $2, 719,155

l 422 i $2,446, 111

750 $2,413,895

230

261 2, 379,385

i 227 i 1,970,912

343 1, 781, 641

87

130

170,689

545, 780

119

91

17, 567

86,474

24

7

3, 514

2
2

460
460

227

288,252

176

240,960

17

51, 518

19

234,239

3

4

15,852
15,177
275
400

N ew England....... ................... .
M aine. __________________
N ew Hampshire_____ ___
Verm ont_________________

2
1

17,448
17,198
250

M iddle Atlantic_____________
N ew Y o r k . . _______ __
Pennsylvania____________

9

23, 585
15, 617
7,968

East North Central__________
Ohio— _____ ________ . . .
Indiana.................................
Illinois. _______ __________
Michigan________________
W isconsin................... .........

82

West North Central_________
Minnesota_______ _______
Iowa_____________________
Missouri___
______ . . .
N orth D akota__________
South D a k ota ........... .........
Nebraska_________ __
Kansas_____________ ____

202

South A t l a n t i c .............. _ _
M aryland___ _______ __
Virginia___________ _____
W est Virginia — _______
North C arolina._ ______

13

East South Central _ ______
K entucky__________ __ __
Tennessee___ _________
Alabama_________________

4

1
2
1

1,949
400
517
1,032

W est South Central_________
Arkansas_____________
_
Oklahoma_______________
T e x a s ..._____ ___________

9

22,270

5
4

19,720
2, 550

3
3

M ountain_______________
M ontana________________
Idaho_________ _ ._ __ __
W yom ing___ ____________
Colorado_________________
Nevada_________________

16

Pacific___________________
California__________ _ . . .
W ashington_____________
Oregon____ _____________

2
7

2
1
1
6
3
3

346, Oil
50,037
98.609
120, 683
18,087
58, 595

73
9
19

339 1, 724,120
1,023, 381
32
194, 770
7
14,200
25
84,992
30,109
221,826
154,842
42

288
i 143
46
7
26
18

24,101
10,306
10,910
2,650
235

9

12

24
24

11
11

20
11

22
8
15

10

38

13,448
11,008
2,440
310,994
32,172
79,067
101,300
29,164
69.291
1,621,915
i 697, 623
426,125
10, 500
100,487
33,887
214, 692
138, 601

396

11
6
3

20,307
16, 333

3

3,974

12
4
8

14, 725
, 625

2
1
1

377, 353
91, 378
68,041
112,877
23,827
81,230

46
15

48

15
3
3

7
9

519 1, 691, 617
304
730, 599
70
360, 330
7
16, 503
46
212,145
34
78, 287
13
86,104
45
207, 649

159
85
28
9
9
9

118

21

25
37

11

24

4

10

19

1
5
2
1
1
1

400

1

7

10, 707
50
8,369
, 288

2
2
1
6

17,380

3
3

11,800
5, 580

10
2
1

118,348
46,479
65,284
1,527
5,058

13

8
2
1
2

87,806
31,029
49,414
1,577
5,786

18

10
4
2
2

114,928
28, 777
63, 399
12, 755
9,997

4

30

441, 323
50
424,139
17,134

21

362,356

46

125,828

7

9

329, 733
32, 623

17
29

88,154
37, 674

1

2

3

1

15
14

12

400

2

7

4

20
1

7
3

228 $191,770

6
8,100

22, 633
7,173
13, 235
2,050
175

1N ot including 1society which reported a deficit of $6,438.




Bills and ac­
counts payable

Paid-in share capital

14
3

2
5

44, 513
4, 300
34,853
4, 710
650

2
2

7, 244
1,409
4, 540
1,295

2
5

12
8
12

3,233
2, 300
933
23, 264
5, 240
2, 645
6,123
3,706
5, 550

88, 305
68 22, 610
16
25,435
2
695
22 14,598
12 4,220
5
5, 634
12 15,113

137

7
4

1
2

3,113
2, 482
561
70

3

1,112

2
1

1,037
75

6
2

4

1

2
1
1
1
5

9

2

3
I
3

738
84
261
168
225

15

71, 545

9

70, 232
1,313

6

TELEPHONE ASSOCIATIONS

113

For the associations reporting both amount of share capital and
membership, the average member’s investment (in share capital)
was $36.33.
Bills and accounts payable at the end of 1936 were reported by
228 associations, in an aggregate amount of $191,770. An additional
642 associations stated that they had no debts.
IN C O M E

AND

E A R N IN G S

The figures for revenues, given in table 52, can be regarded as only
approximate. In many cases no exact records of income and expenses
are kept. Often the only expense in the service-line associations is
the monthly switching charge and even this may be paid by each
subscriber directly to the company which provides switchboard serv­
ice, so that this money may not pass through the hands of the local
treasurer. If repairs are needed for which labor must be hired or
materials bought, each member is assessed his pro rata share. In
the figures of revenues here given, however, the association has been
credited with the total amount of switching fees paid, where this
was known; no estimate could be made of value of repairs.
The 1,536 associations reporting gross revenue in 1936 had an aggre­
gate of $1,486,761, of which over three-fourths was reported by the
local associations giving switchboard service, about one-seventh by the
service lines, and the remainder by the federations. There were 495
associations which made a net gain during the year; for the 494
which reported the amount the combined total was $90,030. On
the other hand 163 associations had a loss; in the 153 which reported
the amount this totaled $20,649. Altogether the whole number of
associations furnishing returns on this point had combined net earnings
of $69,381. This small net can be attributed mainly to the pre­
ponderance of associations operating on the assessment basis. These
collect only enough revenue to cover expenses. In the words of one
association: “ Our profit is service at cost.”




114
T able

CONSUMERS’ COOPERATION IN THE UNITED STATES
52.—

In com e and E a rn in gs o f C ooperative T elep hone A ssocia tion s , 1 9 3 6 , b y States

C ross revenue
State
N um ­
ber re­
porting

Amount

Net gain

Net earnings,
all societies 1

Net loss

N um ­
N um ­
N um ­
ber re­ Amount ber re­ Amount ber re­ Amount
porting
porting
porting

1,536 $1,486, 761

2 495

$90,030

3 163

$20,649

4 658

$69, 381

539

1,164, 263

2 222

71,929

5 84

17, 016

8 306

54,913

941

211,971

252

9,945

7 68

2, 720

7 320

7,225

56

110,527

21

8,156

8 11

913

832

7,243

890
3, 709
96
26, 507
108,435

1

114

1
1

9 114
137

Georgia____________________ Idaho _______ __________ __
Illinois______________________

1
6
1
4
61

Indiana_____________________
Iow a_____ _______ _____ ____
Kansas______________________
Kentucky
M aine ______________________

51
127
84
3
7

Maryland ______________ ___
M ichigan____________________
Minnesota________________ .
Missouri____________________
M ontana----- -------------------------

All associations______________
Locals operating switchhoard__________________
L o c a ls n o t o p e r a t in g
switchboard...... ..........
F e d e ra tio n s o p e ra tin g
switchboards...................
Alabama

.

__ _________

1

137

3
20

762
6,332

4

95

3
24

762
6,237

70, 573
289,551
142,937
1,400
17,857

2 22
49
36

3,635
17,185
5, 691

86
li 17
8 20

529
1,911
3,108

io 28
11 66
8 56

3,106
15, 274
2,583

3

766

3

766

2
24
741
30
14

3,998
38,304
276,146
35,341
4,430

1
16
232
6
4

367
8,625
20,879
2, 581
100

367
8, 575
15,678
2,331
46

Nebraska .............. ........... .....
Nevada
_____ ___________
N ew Hampshire_____________
N ew Y ork _________________
North Carolina______________

15
1
2
6
7

56,826
84
582
6,858
885

North Dakota_______________
Ohio_______ - _____
Oklahoma_______ ________
Oregon______________________
Pennsylvania_____________ _

78
44
7
40
18

South D akota______________
Tennessee___________________
Texas________ ___________ -Vermont ___________________
V ir g in ia .-__________________
Washington_________________
W est Virginia______ ______
W isconsin_______ _____ _____
W yoming
_____ _________

1268
3
1

50
5, 201
250
54

1
17
12 300
9
5

9

5, 265

9

9 5,265

1

2

94

1

377

3

9 283

45, 237
69, 770
15,520
26, 604
6, 252

18
19
3
10
7

3,838
3,912
129
2,823
436

86
6

776
1,159

2
3

91
219

8 24
25
3
12
10

3,062
2, 753
129
2, 732
217

62
3
9
5
23

26,463
5,010
5,743
3,055
27,428

19

955

4

355

23

600

3

10

2
1

4

442

191
127

5
1
4

9 181
9 127
442

20
4
30
6

133,013

6

8,166
190
1,975

2,210

34,435
612

2

9

li

4

33

4

744

ii

10
2
13

8,133
190
1,231

1 N ot including 320 associations which reported^no net earnings” for the year.

2Includes 1 association reporting small gain, amount not stated.

3 Includes 10 associations which did not report amount of loss.
* Includes 10 associations reporting loss and 1 reporting gain, amount not stated.
Includes 5 associations which did not report amount of loss.
6 Includes 1 association reporting gain, and 5 reporting loss, amount not stated.
7 Includes 4 associations which did not report amount of loss,
s Includes 1 association which did not report amount of loss.
9 Loss.
10 Includes 1 association reporting gain and 1 reporting loss, amount not stated,
n Includes 2 associations which did not report amount of loss.
I2 Includes 3 associations which did not report amount of loss.

Only five of the associations included in the present study had gross
revenues in 1936 amounting to $10,000 or over. The revenues of these
ranged from $11,205 to $67,000.




Chapter 5.— CREDIT UNIONS
S u m m a ry

On the basis of reports to the Bureau of Labor Statistics, repre­
senting 86 percent of the 5,440 credit unions in operation at the end
of 1936, it is estimated that they had a membership of 1,210,000
persons, and that they made available to more than a million bor­
rowers credit in the total sum of $112,135,000. These organizations
not only furnished loans at moderate rates but also returned to the
members on the year’s operations more than $2,000,000 in dividends
on share capital.
Credit unions, as their name implies, are cooperative associations
whose function is the supplying of credit. Generally they serve small
borrowers who can offer little or no security except their own personal
integrity. When it is remembered that a very large percentage of all
credit-union loans are Character loans” , i. e., loans made without
any security except the personal note of the borrower, it becomes
evident how important the personal factor is.
As various analyses have shown, remedial loans, for such purposes
as the payment of cost of sickness or death or accumulated debts,
form a very large proportion of the total loans made. This is espe­
cially true of the early experience of nearly all credit unions. Later,
as the organizations accumulate funds and the early cases of need are
taken care of, they expand their lending to such other constructive
purposes as tuition for educational courses, house repairs and improve­
ments, payment of insurance premiums, taxes, etc.
Credit-union funds come in the main from the share capital pro­
vided by the membership. Obviously, not all of the members can
be borrowers, and indeed a certain percentage of the members of all
credit unions never avail themselves of the credit facilities of the
organization but join because of their desire to support the cause.
The principle of open membership is one of the main tenets of
Rochdale cooperation. By the very nature of credit-union operation,
however, this principle has to be modified somewhat in credit coop­
eratives. In order to insure the safety of loans made, it is essential
that the members know one another and thus be able to judge the
trustworthiness of those who apply for loans. For this reason it is
usually required by the statutes under which credit unions operate
that the organizations shall be formed among persons having some
common bond of employment, religious faith, association, etc., and
that the membership shall be limited to persons within that group.
Within this field, membership is open to all trustworthy persons.




115

116

CONSUMERS’ COOPERATION IN THE UNITED STATES

One of the questions asked of credit associations by the Bureau of
Labor Statistics in its survey was whether there was any limitation
on membership and if so what the limitation was. Slightly over
4,000 associations reported on this point. These had a combined
membership of over 865,000 and made loans in 1936 aggregating
nearly $73,000,000.
Some 61 percent of these associations had been formed among em­
ployees of industrial businesses, and not quite one-fourth were organi­
zations whose membership was restricted to public employees. The
earliest credit unions to be formed among public employees, it may be
noted, were those of postal employees; the first of these was started
in 1923.
The largest groups of credit unions were reported in the manufac­
turing industries, the public utilities, and among Federal employees.
There were nearly 200 associations among railroad employees, and
slightly more than that number among employees of petroleum
companies.
There were 78 credit unions formed from among the employees
and members of other cooperative associations. Consumers’ coopera­
tives are becoming increasingly interested in cooperative credit.
Credit unions are especially valuable in connection with store asso­
ciations operating on a strictly cash basis. Store members who are
unable to pay for the groceries and other necessaries obtainable at
the store can borrow from the credit union. One cooperative leader
who is strongly in favor of credit unions for cooperators points out
that to expect the store association to extend credit is to expect it to
act as banker— a function which it was not intended to perform.
Method of Operation
As in all truly cooperative associations, each credit-union member
has one vote only. At the annual meeting the members elect a board
of directors to carry on the affairs of the association. The directors,
in turn, elect from their own number the usual officers— president,
vice president, secretary, and treasurer. In a credit union the
treasurer is really the manager of the affairs of the association, hav­
ing charge not only of the funds but also of making the loans to the
borrowers. It is the treasurer who reports upon the status of the
organization.
The treasurer is assisted by a credit committee of varying numbers;
whose function is to pass upon applications for loans. T o this com­
mittee are submitted all applications for loans. Practically all creditunion laws provide that in passing upon applications for loans a
majority of the committee must be present and the vote must be
unanimous. The personal integrity of the applicants, as well as
their record as regards payment of debts—in other words, their credit




CREDIT UNIONS

117

rating—is investigated by the credit committee. This committee
also takes into consideration the purpose for which the loan is applied
for. As practically all of the credit-union acts provide that loans
shall be made only for provident purposes and purposes which
promise to be of benefit to the borrower, the credit committee has the
authority to refuse any loans which it regards as not constructive or
as being for a purpose which would not aid the would-be borrower.
A second committee very important in the functioning of the credit
union is the supervisory committee. Generally composed of 3 mem­
bers, this committee has oversight of all of the operations of the organ­
ization. It is specifically charged with examining into the records
and into the manner in which all of the officers, directors, and other
committees are carrying out their functions, and it may, for reasons
which seem sufficient to it, suspend them and carry the whole matter
to a vote of the members assembled in general meeting.
Fundamentals of Cooperative Credit
In brief, the following are the principles upon which credit unions
operate:
1. Membership open to persons of good character who have a
community of interest with the credit-union group.
2. Low membership fees, and shares of low denomination which
may be paid for in installments.
3. Democracy in government, with directors and committees
elected by and responsible to the members.
4. One vote per member, irrespective of the number of shares held.
No voting by proxy.
5. Loans to members only.
6. Loans to directors, officers, and committee members prohibited,
except in amounts held in shares by them.
7. Loans made only for productive purposes and urgent needs.
8. Loans at low rates of interest, and interest generally payable
only on unpaid balances.
9. Net earnings returned, as dividends on all fully paid shares of
stock.
Scope and Method of Study
Questionnaires were sent to every credit union known to the
Bureau as having been chartered under the law of any State, In
addition, data were requested from State officials having oversight
of the credit unions in their jurisdiction. The information received
from State officials was in the form of a combined statement covering
the total number of associations in the State; analysis of the individual
organizations therefore had to be confined to those from which
direct reports were received. This explains the fact that the number
of associations covered in the tables classifying the associations by




118

CON SU M ERS’

C O O P E R A T IO N

IN

THE

U N IT E D

STATES

number of members, amount of loans made, etc., is considerably
less than that covered in the tables giving total figures for member­
ship, loans, etc.; the latter, of course, include the combined figures
from the State officials.
The information presented for the credit unions formed under the
Federal Credit Union Act was supplied by the Credit Union Division
of the Farm Credit Administration, although the computations and
analyses were made by the Bureau of Labor Statistics.
Year of Establishment
Although organizations closely resembling credit unions are known
to have been in operation in this country (in spite of the lack of legal
authorization) as early as 1892, the first credit union formed under
statutory authority was started in Manchester, N. H., in December
1908. This credit union, La Caisse Populaire Ste. Marie, was organ­
ized under a special charter. In May 1909 the Massachusetts
Legislature passed a general credit-union act. This was the first
such law to be enacted and was the only one on the books until 1913,
when three other States— New York, Texas, and Wisconsin— passed
similar legislation. With this early start Massachusetts took the
lead in credit-union matters, a position which it held until 1936,
when Illinois exceeded it in number of associations. The Massachu­
setts organizations, however, being older and larger, were still leading
as regards amount of business done.
Formation of new associations was facilitated by the passage of
the Federal Credit Union Act in 1934. Not only does that law per­
mit groups in any State without a credit-union act to incorporate
under it, but it offers those in States where the State law is not
entirely satisfactory a choice of incorporation under the State or
under the Federal act.
The oldest associations reporting in the present study date from
1910, as the following statement shows. The increasing popularity
of these organizations is also indicated in the figures for 1934-36.
State associations

Associations formed in—
1910 ___________________________
19 1 1 -2 0 _____________________
1 9 2 1 -2 5 _________ _______
_
1 9 2 6 -2 9 _____________________ _ ________ __ ___
1930_________________________
1931_________________________
1932 _ ____________________________ _
_
1933_________________________
1934 ___________________________ __________________
1935_________________________ __________________
1936_________________________ __________________
T o ta l




__________ __

3
55
82
316
102
125
202
286
453
431
364

__________________ 2 ,4 1 9

Federal associations

42
702
931
1, 675

C R E D IT

119

U N IO N S

The distribution of the credit unions reporting as to field of member­
ship, by year in which they were formed, is shown in table 53. Of the
118 which were started before 1926, 2 were formed in 1906-10, 17 in
1911-15, 23 in 1916-20, and 76 in 1921-25.
T

able

53.—

D istribu tion o f C redit U nions o f S pecified M em bersh ip b y Y ear o f F orm ation
Number of credit unions according to year or period in
which operations started

Field of membership

All fields of membership____________

Total
num­
ber of 1925
credit
or
unions ear­ 1926-29 1930
lier
4,018

Employees of specified com pany------- 2,444
1
Coal mining___________ ________
Public utilities________ _______
525
Telephone and telegraph __ __
99
Electric light and power,
water, and gas____________
172
Steam railroads_____________
195
Street railways and buses___
36
Other____ _____________ ____
23
Trade—wholesale and r e t a il____
195
Manufacturing__________________
726
Automobiles___ ___________
22
Food products______________
146
Machinery__________________
80
Metals and metal products—_
163
Paper and paper products___
47
Rubber and rubber products.
12
Shoes_______________ ______
22
Textiles and textile products.
57
Miscellaneous. __________ . . .
177
Hotels________ _ _ _________ .
30
Laundries and dyeing and clean­
ing_______ _________________ _
16
4
Banks____________ ______ __ . .
1
Brokerage_____________________ .
Insurance_______________________
43
Building construction. _ ______ _
21
Loan companies . . . ___________
2
Printing and publishing __
126
Slaughtering and meat p acking..
144
Gas and oil.. __ _ _ _ _ _ _ _ _ _
234
Cooperative associations 1_______
77
Industrial company, not specified.
80
Miscellaneous________
_______
219
Employees of specified organizations.
146
_____________
C lu b s .____ ____
16
Colleges or universities________
16
Farm organizations_____________
37
Fraternal orders____ _______ _
71
Hospitals or sanitariums________
6
Public employees___________________
989
545
Federal_____________________ . . .
State..
____
__ ______
55
County or municipal____________
389
F irem en _______ __
_
__
28
Police______ _______ ______
18
Teachers and other school___
215
Other. ____________________
128
Specified occu p ation ______ ________
7
Members of specified labor organiza­
tion ________ _______ ________ ___
66
Specified nationality___ _______ ___
16
Resident of specified locality___ ____
129
Resident of specified locality and
member of specified religious sect
or church_________________________
91
No restrictions_________ __________
124
Professional and other self-employed:
2
Dentists___ ____________ _ ___
4
Meat dealers__ ____________

1Q32

1933

1934

1935

1936

118

303

96

127

195

277

488 1,126

1,288

46

114

38

52

110

170

290

869

10
3

62
7

15
4

14
2

17

32
5

52
5

755
1
157
43

1
4
1
1
4
6

5
45
3
2
7
21

1
7
1
2
2
10

6
4
2

4
12
1

16
8
3

30
16

3
12

5
36

1
1
1
1

3
2
5
1
1

2
1
2
2

3
1
1

10
3
5
7

6
35
1
8
4
6
4

3
6
1

1
2

1
2
4

6

2

53
54
18
11
94
293
14
45
37
69
12
7
6
32
71
21

1

5
1

1

1
5
6
2

7
6
27
1

56
45
7
6
62
218
7
51
20
62
11
4
1
8
54
4

1

1
2

6
1

1
12
95
23
11
12
9

166
30

1

1

1

1

2

3
1

12
9

6
1
1
21
H

8

4

5
8

2
1
20
5
2
1

2
2
9
6
2
1

1
5
1

1
3
4
8

11
42
4
3
7
25
15

1

1
7

13
36
24
4
16
30
20
7

2

3

9
10
2
7
6
16
13
1
2
8
2

26
22
1
3

130
no

45
38
113
18
15
56
32
1
3
3
23
2
255
154
11
90
1
2

31
10
91
39
30
54
46
3
5
3
33
2
281
113
30
138
6
3

1
2

3

4

34
29

50
30
1
19
3
3

54
27
3
24
7
2

2

7

3

6
1

7
8

i

19
3
2

5

7
7

1

3
5
5
2
58
23
4
31
5
1
18
7
2

4

4

5

2

2
2

17

11

3

2

4

1
14

5

9
3

6
3

3

9

18

7

11

14

6

10
3
101
37
4
60
3
5
35
17
1

56

83

31
1

46
1

5

7

7

1
5

27

1
31

17
1
29

12
28

21
22

25
18

1

1

2

l

1 Includes organizations open to members as well as employees.




1931

1

1

120

CONSUMERS’ COOPERATION IN THE UNITED STATES
M em b ersh ip

Some 4,600 associations reported their membership at the end of
1936. These had an aggregate of 1,100,000 persons. Data as to
membership, by States and geographic divisions, are shown in table 54.
On the basis of the reports to the Bureau, which covered some 86
percent of the total, estimates of the total membership of all known
credit unions were prepared and are presented in a parallel column.
As the table indicates, New England, which was the birthplace of the
credit-union movement in this country and which long held the lead
in all respects, has been surpassed by the East North Central States
(including Ohio, Indiana, Illinois, Michigan, and Wisconsin).
T able 54.— Reported and Estimated Total Membership o f Credit Unions at End o f 1936
Membership

Geographic division and State

Total
number of
known
credit
unions 1

Association s reporting
to B. L. S.
Number

Members

Estimated
total mem
bers, all
associa­
tions

5,440
3,575
1,865

4,663
2,989
1,674

1,106,076
803,079
302, 997

1,209,902
893,932
315,970

N ew England_________________________________________
M aine____________________ _____ ___________ _____
N ew Hampshire______ ___________________________
V erm on t... _ _________
-- - --- ______________
M assachusetts.-. _________________ _____________
Rhode Island----- ---------------------- -------------------------Connecticut_______________________________________

541
21
8
4
384
24
100

522
20
7
3
379
23
90

187,315
4,028
5,778
150
147,098
12,164
18,097

188, 599
3 4,060
» 6, 291
200
3 147,418
s 12,211
318,419

M iddle Atlantic_________________________ ________ ___
N ew Y o r k . . . -------- --- ---------------------------------------New Jersey__________ - ------------- ----------------------------------- ---------------------- --Pennsylvania-.-

785
366
123
296

718
339
117
262

198,899
103, 311
27, 236
68,352

205,435
3 104,880
3 27,555
73,000

East North Central____________________________ ______
Ohio______________________________________________
Indiana_________________________________________ _
Illinois.-- __________ ____ ___________ __________ M ichigan--------------------------------------------------------------Wisconsin________________________________________

1, 468
272
207
382
151
456

1,314
193
136
380
149
456

320, 491
45,894
28, 981
137, 047
28, 267
80,302

346,346
56,600
3 43,918
3 137,208
3 28,318
* 80,302

West North Central____________________________ _____
Minnesota_____ *_------------ ------- -----------------------------Iowa
______ _________________________ ________
Missouri__________________________________________
N orth Dakota __ ------------- --------------------------------South Dakota________________ .....................................
N eb ra sk a ... ----------- --------------------------------------------Kansas_________________________________________ —

889
230
174
192
28
14
188
63

779
229
173
88
26
13
187
63

130, 577
42, 574
26,125
23, 209
2,097
1,734
24, 527
10,311

155,294
* 42, 574
3 26,235
47, 750
4 2,097
1,800
4 24, 527
* 10,311

South Atlantic------------------------------------------- ------- ---------Delaware--------------------------------------- -----------------------M aryland---------------------------------------------------------District o f Columbia .............. ...................................
Virginia______________________________ _____ ______
W est Virginia-------------- ------- ------------------- ------------- N orth C arolina--------------------------------------------------- -South Carolina___________________________________
G e o r g ia ..______________________________ ________ _
Florida------------------------------------------------------------------

573
5
38
86
76
42
102
19
96
109

457
5
36
71
54
37
58
15
95
86

98,667
262
11,425
24, 520
12, 538
7,239
7,668
1, 939
20, 217
12. 859

11$, 583
4 262
4 11, 425
29,500
16, 450
7,586
11,300
2,143
4 20, 217
14, 700

United States_________________________________________
State associations---------------------_ _______
Federal associations------------------------------------------------

See footnotes on p. 121.




2

C R E D IT
T a b l e 5 4 . — Reported

U N IO N S

121

and Estimated Total Membership o f Credit Unions at End o f 1936—
C on tin u ed
Membership

Geographic division and State

Total
number of
known
credit
unions 1

Associations reporting
to B. L. S.
Number

Members

Estimated
total m em­
bers, all
associa­
tions

East South Central________________________________
K entucky.. --------------------------------------------------------Tennessee_________________________________________
A labam a..---------------------------------------- ------------------Mississippi-------------------------------------------------------------

.248
67
109
55
17

160
41
74
32
13

36,625
11,613
17,026
5,786
2,200

51,097
20,385
21,000
3 7,162
2, 550

West South Central____________________________ _____
Arkansas_______________________ _________________
Louisiana_________________ . _____ _____ _______
Oklahoma_____________________ __________________
Texas___________ . . . . . . . .
___________________

336
30
61
53
192

261
20
53
35
153

47,459
1,890
11,139
5,363
29,067

55,100
3,500
12,000
6, 600
33,000

M ountain--------------- ------- --------------------------------------------Montana_____________ _ _______________ _ _ _ ___
Idaho_____________________________________________
W y o m in g .._______ _ . . . ----------------------------Colorado______ _______ ___________ ______ _______
New M ex ico.. ____________ _____________________
Arizona___________________________________________
Utah_______________ ________ ___________ . . . ___
Nevada________________________ _________________

158
14
20
14
46
11
8
42
3

123
10
17
11
34
7
7
34
3

16,337
795
890
729
8,035
598
521
4, 649
120

18, 750
3 1,219
960
825
3 9, 522
3 758
3 553
3 4, 793
4 120

Pacific. _ ------------------------------------------------------------------Washington___ . . . - - - - - - _____ _____ _________
Oregon-------------- --------------------------------------------------C aliforn ia____ _ ___________________ . ________

423
110
38
275

314
70
28
216

68, 308
8,816
5,384
54,108

74, 300
4,900
6, 400
63,000

19

15

1, 398

4 1, 398

Hawaii____________ ________ ___________ _____ ____ _

1 Figures in this column represent in most cases total number of credit unions in existence.
2 Includes 77 credit unions chartered but not yet in operation at end of year.
3 Only partly estimated, i. e., complete coverage either for State or for Federal associations.
4 Actual figure—i. e., complete coverage—for all associations in operation at end of year.

90621°— 39---------9




122

CON SU M ERS’

C O O P E R A T IO N

IN

THE

U N IT E D

STATES

The number of associations reporting as to their field of membership
and the number of members in each industrial or other group are
shown in the following table:
T able 55.— Distribution o f Members o f Credit Unions,

Total
number of
credit
Associations
unions
reporting
reporting

Field of membership

A ll fields of m e m b e r s h ip --------------------------------

-----

Employees of specified com pany------------------------------- Coal m in in g ---------- ------------- ------------------- ---------Public utilities___________________________ ______
Telephone and telegraph______________________
Electric light and power, water, and gas---------Steam railroads___________________________ -Street railways and buses . . .
---------------------Other-------------- --------------------------------------------Trade—wholesale and retail--------------------------M anufacturing________ ________________ _______
Automobiles__________________________________
Food products---------------------------------------- ----M achinery----------------- ---------------------------------Metals and metal products------------------------------Paper and paper products-------------------------------E ubber and rubber products------------ ----------Shoes___ ___________________________________
Textiles and textile products_______ _________.
M iscellaneous______________
_____ _______
Hotels ________________________ _____ _______
Laundries and dyeing and cleaning -------------------Banks____________________
_______ ___________
Brokerage------------ ------- --------------------------------------Insurance_________________________________________
Building construction_____________________________
Loan companies_______________- ------- . . ------------ Printing and publishing______ _________ ___ _
Slaughtering and meat packing ---------- ------------Petroleum products_______________________________
Cooperative a s s o c i a t i o n s ___ ______ ______ . . .
Industrial com pany, not specified... _____________
Miscellaneous ___ _. _______ ___ __ . . . ___
Employees o f specified organizations----- ------- -------Clubs_______
_
___ . . . ________________
Colleges or universities________________ ___ ___
Farm organizations_______ _______________________
Fraternal orders ____________ __________________
Hospitals or sanitariums_ _ . . . _ .. _. _____ _____
Public employees______ _ __________________ ______
Federal______________
____________ _________
S ta te ___________ _
________ _________ __ ___
County or m unicipal.. ____ __
________________
Firemen______________
_______________
P o lic e ___ ____ _ _______
____ __________
Teachers and other school
_. ____________ _.
Other_________________________________________
Specified occupation__________________________________
Members of specified labor organization_______________
Specified nationality___________________ _______ . . . ._
Eesidents of specified locality_________________________
Eesidents of specified locality and members of specified
religious sect or church_____________________ ______
Professional and other self-employed:
Dentists_____ ____ ________ _____ __ . ---------------M eat dealers_________________________________ . . .
N o restrictions o f any kind-------------------------------------------

Membership

Members

Average
per asso­
ciation

4,034

3,921

865,172

221

2,453
1
526
99
172
196
36
23
195
729
22
148
80
163
48
12
22
57
177
31
16
4
1
43
21
2
126
144
234
78
81
221
147
16
16
37
72
6
991
546
55
390
28
18
216
128
7
66
16
130

2,390
1
506
94
163
192
34
23
192
712
20
144
79
160
47
12
22
55
173
31
16
4
1
43
21
2
125
141
229
77
75
214
139
15
16
32
72
4
970
534
55
381
27
17
211
126
6
63
16
126

578,849
281
126, 228
28,266
41,404
40,995
8,525
7,038
49,956
212,003
5,191
29,896
37,901
53,056
8,159
2,087
4,800
18,199
52, 714
3,494
1, 859
272
69
6, 604
3,657
600
19, 221
43, 246
47, 661
6,464
16, 338
40,896
16, 205
2,426
1, 787
2,981
8,517
494
190, 948
111, 565
11,644
67, 739
3, 712
3,389
30,110
30,528
2,193
11, 343
4,179
27, 738

242
281
249
301
254
214
251
306
260
298
260
207
480
332
173
174
218
331
305
112
116
68
69
154
174
300
154
307
208
84
218
191
117
162
112
93
118
124
197
207
212
178
139
199
143
242
365
180
261
220

94

89

10,115

114

2
4
124

2
4
116

124
•984
22,494

62
246
194

1 Includes organizations open to members as well as employees.




by Field o f Membership, 1936

CREDIT UNIONS

123

The largest associations, in point of average number of members,
were those in the machinery, telephone and telegraph, metal, textile,
loan, and slaughtering and meat-packing industries, and in the credit
unions restricting membership to a specified occupation. All of these
groups had average memberships of 300 or more per association.
A combined membership of over 50,000 was reported by each of
the following groups: Metal products, Federal employees’, and
municipal employees’ credit unions.
The following statement shows, for the associations formed under
State acts and for those formed under the Federal Credit Union Act,
the distribution of associations according to their membership at the
end of 1936. As the statement indicates, nearly one-third of the
State credit unions fall in the group having from 100-250 members.
The extremely rapid development of credit unions under the Federal
act is shown by the fact that two-fifths of the young Federal credit
unions already fall in this group.
State
associations

Under 25 members_________________________________
25 and under 50 members_________________________
50 and under 100 members________________________
100 and under 250 members______________________
250 and under 500 members______________________
500 and under 750 members______________________
750 and under 1,000 members_____________________
1.000 and under 2,000 members__________________
2.000 members and over___________________________
Total_____________________________________________

Federal
associations

90
315
558
725
341
125
51
87
37

36
194
503
630
202
61
26
20
2

2 ,3 2 9

1,6 7 4

Loans Made, 1936
The business of credit unions, as already indicated, is to make loans
to the members. Over 3,900 associations reported to the Bureau of
Labor Statistics as to the number of loans made during 1936 and the
amount so loaned. On the basis of these reports, it is estimated that
the 5,400 associations in operation at the end of 1936 served about
1,035,000 borrowers, lending them a total of more than $112,000,000
during the year. The data for associations reporting and the esti­
mates for the total number of associations, based on these reports, are
shown in table 56.




124

CO N SU M ERS’

C O O P E R A T IO N

IN

THE

U N IT E D

STATES

T able 56.— Reported and Estimated Total Number o f Loans Made and Amounts Loaned

by Credit Unions in 1936

Geographic division
and State

N um ber of loans
Total
num­
ber of
Associations re­
known porting to B. L. S. Estimated
total, all
credit
associa­
unions1 N um ­
tions
Borrowers
ber

5,440
United States----------------------State associations------------ 3, 575
Federal associations------- 21,865

3,988
2,417
1,571

814,188
595,479
218, 709

1,035,176
806,021
229,155

N ew England----------------------M aine__________________
N ew Hampshire________
Verm ont________________
Massachusetts__________
Rhode Island___________
Connecticut—........... ........
M iddle Atlantic_____________
N ew Y ork— .....................
N ew Jersey_________ __
Pennsylvania__________
East North C e n t r a l--........—
Ohio____________________
Indiana_________________
Illinois 5________________
M ichigan_______________
Wisconsin--------------------West North Central— -------Minnesota______________
I o w a «__________________
Missouri________________
North Dakota---------------South Dakota----------------Nebraska_______________
Kansas_________________
South Atlantic.
—
Delaware________ ______
M aryland— ----------------District of C o lu m b ia ----Virginia______________ —
W est Virginia----------------North Carolina_______ __
South Carolina__________
Georgia_________________
Florida_________________
East South Central_________
K entucky----------- -------Tennessee__________
Alabama___________ —
Mississippi....... .......... —
West South Central-------------Arkansas______________ .
Louisiana__________ ___
Oklahoma_______________
Texas................. .................
M ountain_________________
M ontana_______________
Idaho___________________
W yom ing_______________
Colorado________ _____
N ew M e x i c o . . ___ __
.
Arizona_________________
Utah____________________
Nevada____ ____________
Pacific__________ _________
Washington_____________
Oregon__________________
California_____________ _

541
21
8
4
384
24
100
785
366
123
296
1,468
272
207
382
151
456
889
230
174
192
28
14
188
63
573
5
38
86
76
42
102
19
96
109
248
67
109
55
17
336
30
61
53
192

325
17
6
3
196
16
87
689
321
116
252
1,094
184
128
223
146
413
673
228
173
82
25
13
89
63
385
4
33
68
46
25
53
13
61
82
151
43
66
31
11
245
20
47
36
142

99,304
3,914
910
109
72,026
5,627
16, 718
142, 548
69,452
24,110
48,986
209,171
32,185
20, 763
93, 534
14, 646
48,043
110, 617
38, 958
21,616
20,456
1,954
1,519
15,940
10,174
89,918
110
7,918
22, 548
14,638
5,027
8,270
2 1,889
316, 748
12, 770
49,126
17,017
22,828
7, 519
1,762
48,757
1,825
11, 297
5, 655
29,980

124, 378
3 4,162
3 1,110
125
94,700
7,200
3 17,081
150,074
72,300
3 24, 274
53, 500
313,403
41,100
32, 300
168,900
20,100
3 51,003

158
14
20
14
46
11
8
42
3
423
110
38
275

116
10
17
10
31
6
7
33
2
302
67
25
210

Hawaii______________ _______

19

8

Am ount of loans
Associations re­
porting to B. L. S.
N um ­
ber

Amount

Estimated
total, all
associa­
tions

3,923 $88,342,486 $112,134,577
2,308 73, 235, 326
96,476, 517
1,615 15,107,160
15, 658,060

13,490
721
697
457
6,686
530
376
3,977
46
51,117
7,104
5,175
38,838

137, 760
3 39,021
3 21, 640
39,150
31,978
1,550
3 24, 247
4 10,174
112, 653
120
8,150
26, 300
21,950
7,500
10, 300
2,149
20,984
15, 200
60,943
20,300
28, 200
3 10,293
2,150
57,110
2, 360
12,500
7,300
34,950
16,605
3 983
740
500
3 8, 519
775
3 423
4, 600
65
61,950
9,800
6,850
45, 3Q0

356
18
7
3
218
22
88
706
333
117
256
832
193
134
234
146
125
774
228
173
84
26
13
187
63
404
4
36
66
51
30
54
14
65
84
161
44
71
33
13
254
20
50
36
148
119
10
17
10
31
7
7
35
2
308
66
27
215

14,365, 241
346,996
248,242
3,766
11, 688,488
1,069,694
1,008,055
17, 578,741
12, 282, 762
1,495,865
3,800,114
20, 359,404
3,189,407
1,872,846
9,405, 317
3,183,815
2, 708,019
11,850, 289
4, 234,743
31,816, 785
2, 524,824
127,975
100, 384
2, 378,148
667, 430
7,871,106
2,851
739, 521
1,798,128
1,183, 319
462, 509
757, 361
129,374
1,822, 206
975,837
4, 643, 623
2,127, 608
1,831,852
540,387
143, 776
4, 371, 622
128, 855
1, 274, 676
494,804
2,473,287
1, 552,361
59,020
40,311
31,673
905,088
33, 672
46,177
434,455
1, 965
5, 741, 286
661, 361
476, 703
4, 603, 222

18,047,148
3 12,321, 701
3 1, 510, 447
4, 215,000
29,127,944
4,600,000
2, 565,000
12,850,000
3 3,192,869
3 5,920,075
13,986,244
3 4, 238,019
3 1,817, 687
4, 652,000
3 129,960
103,000
4 2, 378,148
4 667,430
10, 604,881
3,000
4 739, 521
2,100,000
1, 627,000
591,000
1, 980,000
3139,188
3 2,275,172
1,150,000
5, 837,013
2, 549,000
2,340,000
3 788,013
160,000
4,909,250
171, 750
h 395,000
515,000
2,827, 500
1,779,832
3 56,888
42, 200
35,000
3 1,059, 425
3 58, 672
3 47,947
477, 500
2,200
6, 755,000
885,000
565,000
5,305,000

140

300

9

8, 813

10, 600

21,076, 665
2 355,178
3 278, 325
4,500
18, 330,000
1,073,838
3 1,034,824

1 Figures in this column represent in most cases the total number of credit unions in existence.
2 Includes 77 credit unions chartered but not yet in operation at end of year.
3 Only partly estimated; i. e., complete coverage either for State or for Federal associations.
4 Actual figure—i. e., complete coverage—for all associations in operation at end of year.
Revised figures.




C R E D IT

125

U N IO N S

The business operations of the various types of associations in 1936
by field of membership, are shown in table 57:
T able 57.— Business Operations o f Credit Unions o f Specified Field o f Membership, 1936
Number of loans Loans made during Loans outstanding
made
year
at end of year
Field of membership

Associ­
ations
report­
ing

Loans

Associ­
ations
report­
ing

Amount

Associ­
ations
report­
ing

Amount

All fields of membership______________________

3,681 704,032

3,568 $72,866,792

3,872 $42,101,688

Employees of specified company ____________
C oalm ining_______ _________________
Public utilities___________________________
Telephone and telegraph______________
Electric light and power, water, and
gas--------------- ---------- ------------------------Steam railroads----------------------------------Street railways and buses_____________
Other_________________________________
Trade—wholesale and retail----------------------Manufacturing___________________________
Automobiles__________________________
Food p ro d u c ts -----------------------------------M achinery___________________________
Metals and metal products___________
Paper and paper products____________
Rubber and rubber products_________
Shoes.____ _________ ____ ________ . .
Textiles and textile products__________
Miscellaneous________________________
Hotels____________________________________
Laundries and dyeing and cleaning_______
Banks____________ _______________________
Brokerage________________________________
Insurance________________ ____ ___________
Building construction_____________________
Loan companies__________________________
Printing and publishing__________________
Slaughtering and meat p acking.. ________
Petroleum p ro d u c ts ________ ____ _______
Cooperative associations 1_________________
Industrial company, not specified________
Miscellaneous__________. . . __ . . ________
Employees of specified organizations_________
Clubs____________________________________
Colleges or universities__________________
Farm organizations- . . _______________ _
Fraternal orders__________________________
Hospitals or sanitariums _______ _____ _
Public employees_____________________________
Federal___ __________________ _. ________
State___________________________________ .
C ounty or m unicipal_____________________
Firem en______________________________
Police____ ______________ ___________
Teachers and other school____________
Other_________________________________
Specified occupation____ __________ _________
Members of specified labor organization______
Specified nationality__________________ ______
Residents of specified locality_________________
Residents of specified locality and members of
specified religious sect or church____________
Professional and other self-employed:
Dentists______________ . .
_____ ______
Meat dealers______________________________
N o restrictions________ ______________________

2, 271 489,833
1
500
488 103,442
89 20,861

2,130
1
478
91

42, 595,218
45,000
9,608, 693
2, 309,045

2,386
1
515
97

22, 597,695
13,000
5,711,858
1,507, 765

160 32,071
185 37, 393
32
7,665
22
5, 452
184 42,631
681 181,966
21
4, 308
140 28,429
76 28,106
156 46,798
45
7,440
12
1,342
20
3,765
47 16, 281
164 45,497
29
3,373
14
1,456
4
482
12
1
41
5,147
19
2, 738
2
644
116 22,019
137 44,151
222 33,124
70
2, 559
67 13,873
195 31,716
121
7, 604
13
1,359
804
15
1,404
27
62
3, 630
4
407
916 153,052
516 103, 264
53
9,068
347 40, 720
2, 389
23
4,097
17
194 14,802
113 19, 432
7
1,206
59
8, 502
12
1,941
104 18,182

158
175
32
22
184
663
21
140
70
155
33
12
15
47
170
30
15
4
1
41
20
2
113
136
224
54
54
110
129
15
13
29
67
5
922
520
52
350
24
16
197
113
62
13
114

2, 593,958
3, 745,840
575,205
384,645
3,160,057
15,004, 515
286,939
2, 682, 210
2, 239,885
4,058,926
541, 435
75,455
219,889
1, 215, 672
3, 684,104
173,900
99,092
24,136
545
493,828
136,018
68,842
1,976,176
3,880,872
2,884, 660
350,845
876, 606
3,811, 433
1, 305, 547
340, 767
94,930
204,466
638, 093
27, 291
20,585,671
12,677, 219
860, 235
7,048, 217
425,473
823,178
2,904,363
2,895, 203
137,403
1,063,261
705, 572
3,158,141

170
191
35
22
191
709
21
146
80
161
47
12
22
48
172
31
14
4
1
42
21
2
125
142
229
71
77
211
131
16
13
30
67
5
957
534
54
369
27
18
201
123
7
64
14
114

1, 515,923
2,221,836
306, 275
160,059
1,405, 586
7, 208,055
117,491
1,400,406
1,130, 394
1,956,784
285,924
32, 229
174, 536
547,498
1, 562, 793
62,079
41,366
10,096
797
257,068
63,146
30, 494
946,699
2,191, 722
1, 502, 376
227,864
563, 999
2, 361, 490
744, 570
184,892
79, 693
118,329
349,118
12, 538
13, 556,215
8, 317, 304
452,008
4,786,903
304,522
423, 715
2,026,663
2,032,003
94,885
634,067
411, 523
2,169, 391

79

3, 535

71

620, 203

84

472, 763

2

77
1, 297
18,803

2
3
117

13, 371
125, 213
2, 557,192

2
3
110

7, 210
55,956
1, 357, 413

3
107

i Includes organizations open to members as well as employees.




5

126

CONSUMERS’ COOPERATION IN TH E UNITED STATES

A distribution of the State and Federal associations according to
total amount of loans made during 1936 is shown below:
State
associations

Federal
associa­
tions

Under $1,000_______________________________________
$1,000 and under $5,000___________________________
$5,000 and under $10,000_________________________
$10,000 and under $25,000________________________
$25,000 and under $50,000________________________
$50,000 and under $100,000_______________________
$100,000 and under $500,000______________________
$500,000 and under $1,000,000____________________
$1,000,000 and over________________________________

170
476
353
445
279
155
143
10
2

310
590
301
261
92
35
10
_____
_____

T otal________________________________________

2 ,0 3 3

1 ,5 9 9

The 4,213 associations that reported as to amount of loans out­
standing at the end of the year had on the books $54,631,773 in loans
unpaid; of this the 2,597 State associations accounted for $47,364,482
and the 1,616 Federal associations for $7,267,291.
Rates of Interest Charged on Loans
About 2,000 associations furnished information as to the rate of
interest charged to borrowers on loans. The two largest groups were
those charging, respectively, 6 and 12 percent a year (0.5 and 1 percent
a month). The latter is the maximum rate set by most of the creditunion acts. This interest is computed, at the time of each payment
on the principal, on the amount of loan still remaining unpaid.
The distribution of associations reporting was as follows:
t

,

,

j .v

umuer uj

Rate per year:
associations
3 and under 4 percent____________________________________
1
4 and under 5 pereent____________________________________
8
5 and under 6 percent____________________________________
89
6 and under 7 percent____________________________________
399
7 and under 8 percent____________________________________
44
8 and under 9 percent____________________________________
103
9 and under 10 percent____________________________________
66
10 and under 11 percent__________________________________
38
11 and under 12 percent__________________________________
8
12 and under 13 percent__________________________________ 1, 259
13 percent and over_______________________________________
6
T otal_____________________________________________________ 2 ,0 21




C R E D IT

127

U N IO N S

Dividends Paid
Credit unions practice the return of dividends, not on patronage
(i. e., on amounts paid in interest by borrowers) but on share capital.
More than $2,000,000 in dividends was returned by the nearly 3,000
associations for which information on this point was available. Of
this amount, $1,890,646 was returned by 2,134 State associations and
$177,664 by the 837 Federal associations reporting. The geographic
distribution is shown in table 68.
T able 58.—

D ividen d s R etu rn ed b y C redit U nions in 1 9 3 6 , b y G eographic D ivisio n and
State

Geographic division and State

Asso­
ciation
report­
ing

United States________________
State associations________
Federal associations _____

2,971
2,134
837

$2,068,310
1,890,646
177, 664

N ew England________________
Maine____________________
N ew Hampshire--------------Verm ont_________________
Massachusetts____________
Rhode Island................ Connecticut-------- -------------

260
13
6
1
183
19
39

320,113
2, 500
8,060
42
260,470
36,431
12,610

M iddle Atlantic______________
N ew Y ork_______ ____ ___
N ew Jersey_______________
Pennsylvania_____________

489
254
77
158

414,868
322,288
40,014
52,566

East North C entral._ _______
Ohio_____________________
Indiana__________________
Illinois____________ _____
Michigan_________________
Wisconsin________________

753
115
85
366
67
120

518, 731
53,129
38,267
288,745
71, 626
66,964

West North Central__________
Minnesota_____________ . .
Iow a________________
M is s o u r i________________
N orth Dakota_______ ____
South Dakota - _________
Nebraska_________________
Kansas-------- ---------------------

569
227
171
76
13
8
39
35

266,100
102,657
41,901
87,344
1,344
1,535
14, 604
16,715




Amount

Geographic division and State

Asso­
ciation
report­
ing

Amount

South A tla n tic______________
M aryland______________ _
District of C olum bia. _ __.
Virginia__________________
West Virginia___ ________
North Carolina—- ___ - _
South Carolina----------------Georgia___________________
Florida........................ ..........

296
31
53
38
18
35
7
50
64

$179,800
12,457
30,160
29, 795
15, 551
11,328
1,966
58,658
19,885

East South Central___________
K en tu cky________________
Tennessee.----------------------Alabama_________________
Mississippi-----------------------

124
38
51
24
11

122, 235
58,193
44,656
16,978
2,408

West South C entral._________
Arkansas_________________
Louisiana. __________
Oklahoma________________
Texas........ - ------- ---------------

204
12
37
26
129

82, 240
2,739
23,715
8,616
47,170

M ountain____ ______
____
M ontana-------------------------Idaho____________________
W yom ing. ______________
Colorado________________
N ew M exico_____________
Arizona__________________
U tah_____________________

69
3
4
4
23
3
4
28

35,970
1,684
286
288
21,116
241
1, 524
10,831

Pacific------- - -------------------- .
Washington______________
Oregon_________________
California________________

207
51
8
148

128, 253
11, 570
14,487
102,196

128

CON SU M ERS’

C O O P E R A T IO N

IN

THE

U N IT E D

STATES

The amounts returned in dividends in 1936 by the associations
formed among various employee and other membership groups are
shown in table 59.
T able 59.—

D ividen ds R eturned b y C redit U nions o f Specified M em bersh ip , 1 9 3 6

Field of membership

Asso­
cia­
tions
report­
ing

Amount

Field of membership

All fields of membership_______

2,489

$1,595,745

Employees of specified company. 1,470
1
Coal m in in g ____________ _
Public utilities
_ _•
378
Telephone and tele*
73
graph--------------------- —
Electric
light
and
power, water, and gas.
142
Steam railroads________
128
Street railways and
b u s e s ________ ______
18
Other
____ _________
17
Trade—wholesale and re­
tail______________________
119
Manufacturing___ ______
411
Automobiles___________
13
Food products_________
98
M achinery___ ________
39
Metals and metal prod­
ucts. _ ____________ .
98
Paper and paper prod­
ucts_____ ___________
20
Rubber and rubber
products_____________
6
11
Shoes______ ___________
Textiles and textile
products___ _ _____
21
Miscellaneous___ __ _
105
Hotels_____ _____ ______ _
12
Laundries and dyeing and
cleaning. _______________
8
Banks______ ____________
3
Brokerage
_
__ . . . .
27
Insurance. _______________
14
Building construction _____
2
Loan companies. ___ ____
Printing and publishing___
80

812,202
244
245,276

Employees of specified com ­
pany—Continued.
Slaughtering and meat
packing_________________
Gas and oil_______ ____
.
Cooperative associations L .
Industrial com pany, not
specified_________________
Miscellaneous___________ _
Employees of specified organi­
zations______________________
Clubs____________________
Colleges or universities____
Farm organizations________
Fraternal orders. _____ . . .
Hospitals or sanitariums___
Public em ployees................... . .
Federal____________________
State____ ______________ . .
C ounty or m unicipal______
Firemen_____________ _
Police. ............. .......... . .
Teachers and other
school________ _____
Other_____________ . .
Specified occupation____ ______
Members of specified labor
organization__ . . _ _
Specified nationality
_ _
Residents of specified locality.._
Residents of specified locality
and members of specified re­
ligious sect or church
Professional and other selfem ployed:
Dentists.. _________ ______
M eat dealers_______ _______
N o restriction s____ __________

47,503
62,751
119,242
9,569
6, 211
43,824
239, 656
3,519
48, 734
30,612
75,571
10,102
1,559
6, 307
10,459
52,793
1,909
1,165
316
8,780
1,359
1,174
40,173

Asso­
cia­
tions
Amount
report­
ing

118
156
24

$79,196
44,494
5,102

33
84

18,644
80,890

81
14
8
21
34
4
692
420
38
234
22
14

24,572
4,083
1, 558
7,082
11, 564
285
587,909
396,117
14,971
176,821
15, 310
22,870

121
77
5

73, 337
65,304
2,600

43
12
59

21,111
16,585
64,442

44

14, 236

1
3
79

204
3,399
48,485

1 Includes organizations open to members as well as employees.

Financial Data
A sse ts .— On the basis of reports for nearly 4,700 associations, it is
estimated that all of the credit unions in operation at the end of
1936 had total assets amounting to more than $88,000,000. The
geographic distribution of the reporting associations and of the total
number of associations based on these reports, is shown in the table
following.




129

CREDIT UNIONS
T able

60.—

R eported and E stim a ted T otal A sse ts o f C redit U nions at E n d o f 193 6

Geographic division and State

Total assets*
Total num­
ber of
Estimated
Associations reporting
known
total
to B . L. S.
credit
amount,
unions 1
all associa­
Number
Amount
tions

United States________ ___________________
_______
State associations_________________________________
Federal associations.____ _________________________

5,440
3,575
2 1, 865

N ew E ngland.____ ___________________________________
M aine_____ _
___________________ __ . _____ _
N ew Hampshire__________________________________
Verm ont__________________________________________
Massachusetts____________________________________
R hode Island_______________________
___________
Connecticut______________________________________

541
21
8
4
384
24
100

521
20
7
3
378
23
90

21, 785,089
312,194
1,658,344
2,173
16,641,834
2,576,496
594,048

22,019,189
3 314,156
3 1,860,462
2, 600
3 16,654, 605
3 2, 578,479
3 608, 887

M iddle Atlantic______________________________________
N ew Y ork ________________________________________
N ew Jersey____ ______________ : __________________
Pennsylvania____ ________________________________

785
366
123
296

713
337
117
259

14,082,209
10,627,049
1,164,695
2,290,465

14,401,042
3 10,675,088
1,173, 954
2, 552,000

East N orth Central___________________________________
Ohio________ _____________________________________
Indiana____ _____________
______________________
Illinois 6_____ _____________________________________
M ichigan_________________________________________
W isconsin_____________________________ __________

1,468
272
207
382
151
456

1,309
189
135
380
149
456

19,466,361
1,916,609
1, 585, 546
8,883,166
2,498,363
4, 582,677

20,837,050
2, 568,000
2 2, 297,948
3 8,887,919
3 2, 500, 506
4 4, 582, 677

West N orth Central__________________________________
M innesota________________________________________
I o w a 5____ ________________________________________
Missouri__________________________________________
North Dakota____________________________________
South Dakota_____ ________________ _______ _____
Nebraska_______ _________________ _______ ____
Kansas____________ ____ _________________________

889
230
174
192
28
14
188
63

774
229
173
84
25
13
187
63

9,998,558
3,487,092
1,372,736
1,938.916
57,204
58,049
2, 548,681
535,880

11, 569,392
4 3,487,092
3 1,373,742
3, 506,000
3 57,997
60,000
4 2, 548,681
3 535,880

South Atlantic________________________________________
Delaware_________________________________ ______
M aryland________________________________________
District of Columbia______________________________
Virginia. _______ __________________________________
W est Virginia___________ ________________________
N orth Carolina___________________________________
South Carolina__________ __ ___________ ____ _ .
Georgia___________________________________________
Florida____________________ ______________________

573
5
38
86
76
42
102
19
96
109

450
5
36
68
54
37
57
14
95
84

5,445,238
1,921
467,714
1,007,034
808,438
377,632
524,816
65,133
1, 634,206
558,344

6,409,044
1,921
3 467,714
1,157,000
1,170,000
3 381, 949
848, 000
3 68,254
4 1, 634, 206
680,000

East South C entral.. . _______________________________
K entucky______ ______ ______ ______ ___________
Tennessee_________________________________________
Alabama___________________________ ____________
Mississippi_______________________________________

248
67
109
17

161
43
74
31
13

2,771, 464
1,136,087
1,179,262
369,924
86,191

3, 434,700
1,357,700
1,490,000
484, 500
102, 500

West South Central_________________ _______________
Arkansas_________________________________________
Louisiana_______________________________________ .
Oklahoma____ __________ ____ ___________________
Texas_______ ______ _____ _____________ ______ ___

336
30
61
53
192

290
21
52
37
180

2,880, 375
77, 336
577, 529
310,073
1,915,437

3,048,248
95, 500
635,000
370,300
3 1,947, 448

M ountain____ ____ ___________________________________
M ontana_________________________________________
Idaho_____________________________________________
W yom ing___________ _______ _______________ . . .
Colorado___________________________________ ______
N ew M e x i c o . . ___ ____________ _________________
A rizon a ..____ _______
__________________________
U ta h ..._____ _____________________________________
N evada............. ............................... ............. .................

158
14
20
14
46
11
8
42

127
10
18
11

3

3

1,019, 342
35,175
23, 768
17,172
616,221
17,294
35,123
273,032
1, 557

1,048,188
45,014
24, 684
19,000
613,333
31, 294
3 36,178
3 277,128
1, 557

Pacific________________________________________________
Washington______________________________________
Oregon___________________________________________
California____ _________ _________________________

423
110
275

334
98
27
209

4,676, 792
769,595
408,172
3,499,025

5, 232,000
795,000
437,000
4,000,000

19

15

13,853

4 13, 853

Hawaii________________________________

_____________

55

38

4,694 $82,139,281
3,031 73,048,636
1,663
9,090, 645

33

7
7
38

$88,012,706
78,600,900
9,411,806

1 Figures in this column represent in most cases the total number of credit unions in existence.
2 Includes 77 credit unions chartered but not yet in operation at end of year.
3 Only partly estimated; i. e., complete coverage either for State or for Federal associations.
4 Actual figure; i. e., complete coverage—for all associations in operation at end of year.
3 Revised figures.




130

CONSUMERS’ COOPERATION IN THE UNITED STATES

The statement following shows the distribution of the reporting
credit unions according to the amount of their assets at the end of
1936. The largest group of the State associations (some 30 percent)
had assets of between $1,000 and $5,000 and nearly 80 percent had
assets of less than $25,000. More than 45 percent of the Federal
credit unions had assets of between $1,000 and $5,000 and about 87
percent had assets of less than $10,000. However, there were 115
associations whose assets at the end of 1936 totaled $100,000 and
over, and, of these, 5 State credit unions each had assets of 1 million
dollars or more.
.

.

-

A s s e t s OI

State
Federal
associations associations

■

Under $1,000__________________________________
$1,000 and under $5,000______________________
$5,000 and under $10,000_____________________
$10,000 and under $25,000___________________
$25,000 and under $50,000___________________
$50,000 and under $100,000__________________
$100,000 and over_____________________________

289
710
377
459
236
126
112

444
763
237
161
44
11
3

Total________________________________________

2 ,3 0 9

1,6 6 3

Share capital and net worth.— The amount of paid-in share capital
and the net worth of the reporting associations are shown in table 61.
T able

61.—P a id -in

Share C apital and N e t W orth o f Credit U n ion s , 1 9 3 6 , b y States
Paid-in share capital

Geographic division and State

United States. __ _ _ . . . __________________________
State associations ___________________________ . . .
Federal associations_______________________________

Associa­
tions re­
porting

Amount

4,718 $62, 592,591
3,048 54,171, 564
8,421,027
1,670

Net worth
Associa­
tions re­
porting

Amount

3,626
1, 964
1, 662

$52,007,044
43,144,285
8,862,759

N ew England----------------------------- ------------------------- ------M aine______ _______ _____________________________
N ew Hampshire________________________ _________
Vermont__________________________________________
Massachusetts____________________________________
Rhode Island____ ______ _________________________
Connecticut________ _____________________________

622
20
7
3
379
23
90

12,822,562
173, 622
116, 358
2,041
11,073,344
909,504
547, 693

344
20
6
3
206
19
90

8,938,995
117,839
159,443
2,158
7,021, 513
1,054,743
583,299

M iddle Atlantic------------------------------------------ ---------------N ew Y ork------------------------------- ---------- ------------------N ew Jersey-----------------------------------------------------------Pennsylvania_____________________________________

715
338
117
260

11,777,932
8, 416,874
1, 249,104
2, 111, 954

625
270
101
254

9, 575,839
6,895,412
670,397
2,010,030

East N orth Central___________________________________
Ohio................. ................... ................................... ..........
Indiana___________________________________________
Illinois_____ ______________________________________
M ichigan._____ ______________________ ___________
Wisconsin____________ _____________ ____ ________

1,316
194
136
381
149
456

17, 450, 573
1, 721, 514
1,448, 240
8, 217,865
1,920,120
4,142,834

922
185
133
380
111
113

14,538,679
1, 604,039
1, 226, 667
8, 724,698
1,469,163
1,514,112

West N orth Central.____ _____________________ _____ _
M innesota_____ _________________________ ______ _
Iowa----- ------- --------------------------------------------------------Missouri__________________________________________
N orth Dakota____________________________________
South Dakota______________________ ____ ________
Nebraska_____ ____________________________ ____ _
Kansas.................. ........................ ......... - ............ - .........

779
229
173
88
26
13
187
63

6,845,081
2,495,947
1,192, 362
1, 775,597
55,616
54,493
785,188
485, 878

480
135
99
80
26
13
80
47

5,309,179
1,738,493
884,768
1,784,887
58, 510
58,338
384,478
399, 705




131

CREDIT UNIONS

T able 61.— P a id -in Share C ap ita l and N e t W orth o f C redit U n ion s , 1956, b y States—
Continued
Paid-in share capital
Geographic division and State

Associa­
tions re­
porting

Amount

Net worth
Associa­
tions re­
porting

Amount

South Atlantic--------------Delaware___________
M aryland---------------District of Columbia.
Virginia____________
West Virginia_______
N orth Carolina_____
South Carolina_____
Georgia_____________
Florida............ ............

451
5
36
70
54
37
56
14
95
84

$4,198,804
1,921
395, 649
917,012
582,889
280,842
316,474
53,475
1,139,398
511,144

385
5
26
66
53
30
49
14
60
82

$4,241,287
1,804
353, 693
916,830
564,387
302, 315
258, 375
59,917
1, 228,021
555,945

East South Central-------Kentucky__________
Tennessee___________
Alabama-----------------Mississippi---------------

164
42
74
34
14

2,340,976
948,779
991,183
339,886
61,128

154
41
71
29
13

2,459,654
928,044
1,090,047
385,915
55, 648

West South Central____
Arkansas___________
Louisiana___________
Oklahoma__________
Texas-----------------------

291
21
53
37
180

2,290,636
67, 738
518, 527
169,303
1, 535,068

257
21
52
36
148

2,150,002
72,955
563, 303
199, 693
1,314,051

M ountain.____ _________
M ontana___________
Idaho_______________
W yom ing___________
Colorado-----------------N ew M exico________
Arizona_____________
Utah_______________
N evada____________

127
10
18
11
33
7
7
38
3

845,708
31, 556
21,333
16, 579
491,140
15,867
29, 764
237,912
1, 557

122
10
18
11
34
7
7
32
3

807,702
20,048
21,916
17,158
477,918
16,532
33, 954
218,681
1,495

Pacific__________________
Washington________
Oregon_____________
California__________

338
99
27
212

4,007, 267
704,914
345,479
2,956,874

322
93
26
203

3,972,629
677,419
388,190
2,907,020

15

13,052

15

13,078

Hawaii.




132

C O N S U M E R S ’ COOPERATION I N

THE

U N IT E D

STATES

The share capital, total assets, and net worth of the associations
reporting as to field of membership are shown in the following table:
T

able

62.—

Share C apital, T otal A sse ts , and N e t W orth o f C redit U nions o f Specified
M em bersh ip , 1 9 3 6
Share capital

Field of membership

A ll fields of membership_____________________

Asso­
cia­
tions
re­
port­
ing

Amount

3,932 $45, 732,361

Employees of specified com pany_____________ 2,394
Coal mining--------------------------------------------1
Public utilities___________ _______ _______
516
Telephone and telegraph_________ _
95
Electric light and power, water, and
gas-------------------------------------------------170
Steam railroads______________________
192
Street railways and buses____________
36
Other________________________________
23
Trade—wholesale and retail______________
193
Manufacturing. ..................... ........................
708
Automobiles______ __________________
20
Food products_______________________
142
M achinery___________________________
78
Metals and metal products__________
160
Paper and paper products___________
48
Rubber and rubber products_____ . . .
12
S h o e s _______________________________
22
Textiles and textile products_________
54
Miscellaneous________________ _____
172
Hotels___ _____ _________________________
30
Laundries and dyeing and cleaning______
15
B an ks..
________ _______ ___________
4
Brokerage____________
________________
1
Insurance__________ _______ ____________
42
Building construction____________________
21
Loan companies__ __ _________________
2
Printing and publishing_________________
124
Slaughtering and meat packing__________
140
Petroleum products____ _________________
228
Cooperative associations 1_______ _______
77
Industrial com pany, not specified___ _____
76
Miscellaneous_______ __________________
216
Employees of specified organizations_________
139
Clubs____________________________________
16
Colleges or universities___________________
15
Farm organizations_____ _____ __________
32
Fraternal orders___ _____________________
70
Hospitals or sanitariums_________________
6
Public employees____________________________
971
Federal__________________________________
536
State______________ ____________________
54
C ounty or m unicipal____________________
381
Firemen_______
_________________
28
Police_______________________________
18
Teachers and other school____________
208
Other________________________________
127
Specified occupation___________________ _____
7
Members of specified labor organizations.._ .
63
Specified nationality___________________ ____ _
15
Residents of specified locality______ _____ ___
128
Residents of specified locality and members
of specified religious sect or church................
90
Professional and other self-employed:
2
Dentists. ____ _____ ____________________
4
M eat dealers____________ ________ _______
N o restrictions_________ ____________ ________
119

Asso­
cia­
tions
re­
port­
ing

Amount

3,893 $56,007,481

N et worth
Asso­
cia­
tions
re­
port­
ing

Amount

3,418 $40, 775, 464

26,425,465
20, 792
6,033, 799
1, 552,555

2,386
1
510
95

30,524,631
21, 716
7,239, 260
2, 058,967

2,062
1
475
89

22,563,152
923
5, 545,367
1,098,494

1, 743,888
2,164, 298
323,088
249,970
1, 747,008
8,438, 901
148,027
1,488, 234
1,414, 612
2,150,838
315,834
50, 391
202, 648
587, 291
2,081,026
75, 032
55, 227
11,037
968
248, 835
73, 652
35, 945
1,142, 587
2,171,827
1, 531, 366
248,048
1, 746,161
2,844, 280
927,403
175, 718
79, 252
136,962
518,143
17, 328
13,407, 363
8,482,857
494, 563
4, 429, 943
320,206
397,911
1,893,168
1,818, 658
97,218
604,144
308, 275
1,935,851

168
188
36
23
192
711
20
142
77
162
48
12
22
55
173
30
15
4
1
42
21
2
124
141
224
76
75
217
139
16
15
30
72
6
956
528
54
374
26
18
206
124
6
63
15
125

1,792,891
2,722,927
358,019
306,456
2, 229,352
9,394,113
165,999
1, 732, 662
1, 533,166
2,406,916
368,400
55,181
219,877
664, 254
2, 247,658
82,142
61, 905
12,138
1,076
298, 777
78,689
54,177
1,342,511
2,412,677
1, 706, 085
281,161
1,866, 797
3, 442,055
1,083, 687
234, 215
89, 913
156, 624
569, 553
33, 382
16,406,029
10, 207, 078
509,179
5, 689, 772
326,825
453,172
2, 534, 539
2, 375, 236
83,439
825,976
658, 526
3,340, 558

164
166
34
22
178
657
19
137
68
154
34
12
15
51
167
28
14
4
1
40
21
2
107
127
218
53
55
81
122
13
12
27
64
6
887
504
46
337
24
15
192
106
3
61
9
113

1,507,777
2,336,147
319,817
283,132
1,615,457
7,365,093
91,594
1, 271, 235
1,005,975
2, 257, 548
235,478
52,868
113, 275
344,882
1,992, 238
78, 326
41, 910
11,676
1, 014
198,180
72,292
48,870
920,397
1,933,310
1, 600, 262
157,206
1, 698, 577
1, 274, 292
752,859
129, 398
35, 578
104, 283
464, 625
18, 975
13,061,871
8,871, 870
225, 303
3,964, 698
297, 619
436,381
1,976,401
1, 254, 297
64, 920
461,155
119, 736
1,919,248

528,162

87

756,627

63

490,933

7,745
92, 111
1, 398,624

2
4
110

8,390
102,890
2,216, 728

2
3
93

8,225
7, 551
1,325,814

1 Includes organizations open to members as well as employees.




Total assets

CREDIT U N IO N S

133

Losses From Bad Debts
There were 3,311 credit unions which reported on the question of
losses sustained through failure of borrowers to repay their loans. Of
these, 2,697 (or nearly 82 percent) had never had any losses at all
from this cause.
Of the 614 associations reporting losses, 383 had suffered such
losses in 1936, in a total amount of $92,318, or 0.38 percent of the
loans made by them in that year ($24,134,408).
The total amount lost through bad debts during their entire period
of operation was reported by 608 associations. These sums aggre­
gated $509,356. Data are not available as to the loans made by
these associations in the same period. On the basis of their loans in
1936, however, these losses would amount to about 1.4 percent of the
total business done. Considering the fact that, for many of the asso­
ciations, the period of operation reported upon included the worst
depression this generation has ever known, this is a remarkable record.1
For individual associations the percentage of loss reflects not only
the general economic conditions and the employment situation among
the members, but also the alertness and efficiency of the credit-union
officers and committee members. A New England association, whose
total losses were next to the highest reported, had to write off nearly
$21,000 in 1936. It is extremely doubtful whether this was one year’s
loss, especially as its total losses during 22 years’ operations amounted
to $27,500; the 1936 figure probably represents an accumulation of
doubtful accounts. In this connection it might be mentioned that
many associations reported a large proportion of recoveries on amounts
previously written off as uncollectible, and undoubtedly some part of
the losses noted above will eventually be collected.
One of the largest associations has a most excellent record. During
its whole 20 years’ operation, its losses from bad debts amounted to
only $603. Its loans in 1936 were over $2,000,000.
1 One association reported that it had had no losses from bad debts during its 9 years’ operation, but had
lost $465 in 1932 through a bank failure,




Chapter 6.— INSURANCE ASSOCIATIONS
Insurance in the Consumers’ Cooperative Movement
During the past decade the organized cooperative movement has
been increasingly aware of the value of cooperative insurance. As
early as 1926 the subject of insurance received a place on the agenda
of the congress of the Cooperative League. In that year it consid­
ered the question, Should the League undertake the organization of
a cooperative insurance society, or should it throw its support to
existing societies? No answer was reached at the congress, but a
committee was appointed to study existing organizations with a view
to determining whether to authorize the League to undertake insur­
ance itself.
The 1928 congress gave qualified endorsement to the New Era
Life Association,1 conditioned upon its reorganization on an entirely
cooperative basis and upon its securing a legal status in other States
than its home State of Michigan. The subject of fire insurance was
referred to a committee with power to enter into negotiations with
the Workmen’s Furniture 2 Fire Insurance Association when it could
comply with the cooperative terms.
Indorsement of these organizations was continued by the 1930
cooperative congress, which also authorized the creation of a broker­
age agency through which to consolidate the casualty and fire insur­
ance needs of the cooperative associations. This agency was accord­
ingly formed, under the name Clusa Service. Writing no insurance
risks itself, this organization acts as an insurance-purchasing service
for cooperators and cooperative associations, in the lines of fire,
automobile, and life insurance and employees’ fidelity bonds. Most
of its business is done within the New York Metropolitan Area,
though in obtaining fidelity bonds for cooperative employees, it
operates on a Nation-wide basis.
At the 1934 congress of the League it was reported that the League
had been circularizing the various cooperative insurance associations.
This was being done with a view to working out some plan whereby
their resources and activities could be mobilized. It was hoped that a
general service could be organized so that instead of many small
societies writing various kinds of insurance, one society in each field
1 N ow the Michigan Union Life Association.
* This word has since been dropped and the word “ mutual’ ' substituted, with the enlargement o f the
association’s coverage to houses as well as their contents.

134




IN S U B A N C E

ASSOCIATIONS

135

could specialize in the type of insurance for which it was best fitted,
and could eventually become the national society of the consumers’
cooperative movement in that field.
The subject of insurance came up again at the 1936 congress, and
the executive board of the League was directed to call a meeting of
insurance associations with a view to the elimination of competition.
A representative from the Ohio Farm Bureau Cooperative Association
described the insurance activities of the Farm Bureau groups in his
State. In 1926 the Farm Bureau Mutual Automobile Insurance Co.
was formed, with $10,000 capital furnished by farmer members.
Successful from the start, in 1934 it furnished the capital to start the
Farm Bureau Mutual Fire Insurance Co., and also $300,000 with
which it purchased a controlling interest in the Cooperative Life
Insurance Co. of America. At the end of 1936 the Farm Bureau
life and automobile insurance companies were operating in 8 States
and the fire insurance company in 6 States.
As explained to the congress, it is the policy of these organizations
to enter a new territory only when they have the sponsorship of the
local cooperatives. The insurance is sold through the local cooper­
ative associations, which act as agents. The fees so earned have
formed a source of revenue, from which over $500,000 has been used
in cooperative education work and to furnish capital for other enter­
prises. This line of cooperative activity has had a wide acceptance
both among farmers’ cooperative groups and those of urban dwellers.
As yet the 1934 program of the League, calling for national asso­
ciations specializing in various fields, has not been realized. This
may be due in part to the realization of the difficulties of obtaining
effective member control in organizations operating over a very wide
area. To some extent this difficulty is being met, where cooperative
insurance associations are linked up with the consumers’ cooperative
movement, by giving representation through the local cooperative.
New organizations continue to be created, serving areas of one or
two States, but real efforts appear to be made to prevent competition
and overlapping of territory. Thus, it is reported that the Midland
Mutual Fire Insurance Association (Minneapolis, Minn.), formed to
write fire insurance on cooperative store and other property not cov­
ered by township mutual insurance, and the Mutual Cooperative
Insurance Association (Superior, Wis.) have agreed between them­
selves to restrict their sales activities to Minnesota and Wisconsin
respectively, although each is authorized to do business in both States.
The Michigan Union Life Association (formerly the New Era),
having failed to enlarge its territory beyond its one original State, can
not qualify as a national association, and that position may eventually
be filled by the Ohio life-insurance association mentioned above.




136

C O N S U M E R S ’ COOPERATION I N

THE

U N IT E D

STATES

Meanwhile, Minnesota cooperatives have formed the Cooperators’
Life Association, which covers that State only.
Other associations not writing insurance themselves, but acting as
agencies, which have been formed by consumers’ cooperative groups
are the Cooperative Insurance Association, which handles all kinds
of insurance for the cooperative associations in Minnesota and Wis­
consin, and the Cooperative Management Association, acting as
manager for the Cooperative Insurance Mutual, an agency writing
all kinds of insurance through the local cooperative stores as agents.

All of the associations mentioned above are connected, directly
or indirectly, with the cooperative distributive movement. The
credit-union movement has its own insurance association. This is
the Cuna Mutual Society, formed in Wisconsin in 1935. This asso­
ciation writes insurance on outstanding loans of member credit unions.
This insurance protects the credit union from losses arising from the
death of a borrower during the term of his loan.
Few general cooperative laws are phrased in such a way as to per­
mit the incorporation of cooperative insurance associations under
them. Therefore, practically all of these insurance associations are
organized as mutuals, as in this way the nearest approach to genuinely
cooperative principles can be made.

Scope of Bureau's Insurance Survey
The insurance associations present a situation different from that
in most other forms of cooperative activity. In order to obtain safe
operation, either extreme selection of risks or wide coverage (to
equalize the risks) is necessary. Thus the township fire associations
have achieved success because, operating in a small area., all of the
members know each other and can judge whether an applicant for
insurance is a good moral risk. The larger companies, though for­
feiting this intimate knowledge of policyholders, attain financial
safety by spreading the risk over a broad area. It is undoubtedly
true, however, that the larger the area of operation the greater the
difficulty of insuring actual control by the membership of the opera­
tions and policies of the organization.
As the general principles of mutuality afford a close approach to
cooperative principles, questionnaires were sent to all of the mutual
insurance associations of which the Bureau had record. A certain
percentage of the returns had to be discarded, either because the
insurance w^as not consumers’ insurance (i. e., covered such things as
plate glass in stores of private dealers, growing crops, etc.) or because
the association was insufficiently cooperative. However, usable re­
turns were obtained from 1,334 associations, distributed bv States
as follows:




IN S U R A N C E
T able

137

ASSOCIATIONS

63.— N u m ber o f In su ra n ce A ssocia tion s R ep ortin g, 1 9 3 6 , b y States
Number
reporting

State

T otal.......... .................

........

__ _

1,334

Arkansas_______ _________ ________
California____ ______ ______________
Colorado_________ . . . ________________
Connecticut__________________________ Delaware____________ _ __ ___ _ _
_
District of Columbia______ ____ . . .
Georgia_____ _____ ___________
____ _
Idaho____________ ___ _______ ______
Illinois___ ____ __ _
_______ . _____
Indiana___________ _ __ _ ________
Iowa_______ ______
____ _______
Kansas______ _________________ _____
Kentucky______ ___ ________
_______
M aine________________
__ ___________
M aryland______ _______ _______ ___
Massachusetts__ _____ __________ _ M ichigan_______ ____ ____________ _ _
Minnesota_____
______ ___________
Missouri____________________ __________
M ontana_______________________________

9
24
7
6
2
1
7
7
162
49
127
12
13
24
10
9
64
142
27
8

State

Nebraska___
N p,w Hampshire
N ew Jersey_______
.
__ _
N ew Y ork __ __
North Carolina___ _ _ _ _____ ______
North Dakota___________ _____________
Ohio_____ __
____
O r e g o n .._____________
____ _
Pennsylvania.. ___________ _______
_
Rhode Island_____ _______
______ __
South C arolina... . . .
_____ __ _
South Dakota
Tennessee __ _ .
Texas_________ . . . . .
_____
Utah_________ . .
Verm ont____
_____
V ir g in ia ..___
____
W ashington__________ _ _ ________
West V ir g in ia ._____
____
W isconsin.......
W yom ing____ _____
_
_ ___

Number
reporting
41
9
9
91
5
34
72
1
140
2
10
39
21
18
1
8
23
5
10
82
3

Year of Formation of Reporting Associations
That the large majority of insurance associations dated from
before 1900 is shown in the following statement covering the 1,317
associations that reported year of formation:
Number of
associations

Number of
associations

442
92
142
156
109
82
69
70
42
34

1880 or earlier
1 8 8 1 -8 5 _______
1 886 -9 0_______
1891 -9 5_______
1896-1900____
1901 -0 5_______
1906-10______
1911 -1 5______
1916 -2 0______
1921-25_______

1926-29
1930
1931
1932
1933
1934
1935
1936

__________
__________
__________
__________
__________
__________
__________

Total

31
9
4
7
14
6
6
2

1,3 1 7

Membership, and Insurance in Force
The membership of the insurance associations consists of the policy­
holders. More than 4% million persons held policies at the end of
1936 in the 1,248 associations reporting on this point. Insurance in
force totaled more than 10% billion dollars, of which over nine-tenths
was in fire insurance.

90621°— SO-




lO

138
T

able

CONSUMERS’ COOPERATION IN THE UNITED STATES
64.— Policyholders and Insurance in Force in Insurance Cooperatives Writing
Specified Kinds o f Insurance, 1936
Policyholders
Associations writing—

Associa­
tions
reporting

Number

Insurance in force
Associa­
tions
reporting

Amount

----------------------

1,248

4, 774, 854

1,261

$10, 592,480,605

Fire insurance._ . _______________ ._
_____ _____
Life insurance____ _____ ______________ _______ ____Sickness insurance
_ _ _ ________ . . ________
General accident insurance------------------------------------------Automobile insurance______________________ ________
Storm insurance
____ ___ ______ ________ ______
Hail insurance (not on crops)---------------------------------------Tinan insurance
__ ______________

1,167
31
1
5
20
21
2
1

3, 283, 260
211,936
49, 555
32,038
949, 590
162, 664
12,333
73,478

1,205
27
1
2
0)
24
2

9,848, 238,114
182, 511, 649
12,657, 760
20,038
0)
537, 554, 686
11, 498, 358

All types of insurance-------------------

..

1 Automobile insurance is written on actual value of car.

The distribution of policyholders and of insurance in force, by
States, is shown in table 65. More than 60 percent of the total was
in the North Central States.
T

able

65.— Geographical Distribution o f Policyholders and Insurance in Force, in
Insurance Cooperatives, 1936
Policyholders
State and geographic division

United States.

Associa­
tions
reporting

Insurance in force
Associa­
tions
reporting

Am ount

1, 248

4, 774,854

1, 261

$10, 592,480,605

43
18
9
5
5

205,435
16,707
8,318
54,816
40,704

777, 605, 704
47,025, 659
13,009,638
201,850,900
219, 580,873
181,935,059
114, 203, 575

6

84,890

53
20
8
8
9
1
7

M iddle Atlantic. _
N ew Y o r k ...
N ew Jersey. _
Pennsylvania.

214
87
6
121

1,184,395
618,964
14, 540
550,891

225
89
9
127

2,097,221,372
784, 727,406
57, 663, 845
1, 254, 830,121

East North Central.
Ohio___________
Indiana________
Illinois_________
M ichigan______
W isconsin_____

408
69
49
151
62
77

1,966,948
543, 784
157, 731
678,779
292, 506
294,148

402
67
50
153
58
74

3, 348, 295,671
740, 271,439
495,183,031
983,020,116
531,082,821
598,738,264

West North Central.
M innesota_____
Iowa___________
Missouri_______
North D akota...
South D akota...
Nebraska______
Kansas................

405
141
121
25
34
36
38
10

1,002,651
330,113
287,008
79,166
63, 579
60,485
132, 867
49,433

404
136
120
27
32
38
41
10

3, 511,158, 354
952, 232,857
1,108, 622,676
124, 057,992
137, 740,908
216, 552,098
822, 279,356
149,672, 467

63
2
9

162,026
1,366
35,465

20
10
5
10
7

58,369
16, 648
4, 689
19, 282
26,207

65
2
10
1
21
10
5
10
6

376, 224,368
4, 331,465
126,049, 575
600, 000
113,685, 718
37,730,329
7, 755, 091
20,169,175
65,903,015

New England______
M aine_________
N ew Hampshire.
Verm ont_______
Massachusetts..
Rhode Island___
Connecticut.

South Atlantic__________
Delaware___________
M aryland___________
District of Columbia.
Virginia_____________
W est Virginia_______
North Carolina_____
South Carolina______
Georgia........................




139

INSURANCE ASSOCIATIONS

T ab le 65.— Geographical Distribution o f Policyholders and Insurance in Force, in
Insurance Cooperatives, 1936 — Continued
Policyholders
State and geographic division

Associa­
tions
reporting

Number

Insurance in force
Associa­
tions
reporting

Amount

East South C en tra l... _____________________________
Kentucky___________________ _____ ____________
Tennessee— ___ _____ ____ _______ . . . . ___ _

32
12
20

38,487
21, 531
16,956

32
11
21

$86, 519,786
59, 668, 068
26,851, 718

West South Central. . _________ _____ . . . _____ _
Arkansas______________________ _______ ________
Texas___________________________________________

27
9
18

44,293
10,476
33,817

25
9
16

47, 335,916
11,051, 024
36,284,892

M ountain----------------------------------------------------------------Montana _ _ ___ _ . . . ___ . . .
__________
Idaho_________ _______ _______________________
W y o m in g ______________________________________
C olora d o_______________________________________
Utah___________________________________________

26
8
7
3
7
1

47,072
4,975
14, 576
992
14, 529
12,000

25
8
7
3
6
1

104, 741, 644
9, 619,339
40,144,188
1, 866,657
39,067,952
14,043, 508

Pacific______________ ___________________ _________
W ashington.. ._
...
...
______ . . . ._
Oregon___ ________________ . _________ _____
California. __________________ _______________ .

30
5

123, 547
28,064
3,179
92.304

30
5

243,377,790
60,172,194
6,974, 895
176, 230, 701

1

24

1

24

Five-sixths of the associations had fewer than 5,000 policyholders,
as the statement below shows:
Percent of
associations

Under 500 members____________________________________________
500 and under 1,000 members_________________________________
1.000 and under 5,000 members_______________________________
5.000 and under 10,000 members______________________________
10.000 and under 25,000 members_____________________________
25.000 and under 50,000 members_____________________________
50.000 and under 75,000 members_____________________________
75.000 members and over______________________________________

19. 5
21. 2
47. 5
5. 7
3. 6
1. 7
.6
.2

Total_____________________________________________________ 100. 0

The distribution of reporting associations according to the amount
of insurance in force at the end of 1936 is shown in the statement
below. As it indicates, somewhat over two-fifths of the associations
fell in the group having in force insurance of from 1 to 5 million
dollars.
Percent of
associations

Under $50,000__________________________________________________
$50,000 and under $100,000____________________________________
$100,000 and under $500,000__________________________________
$500,000 and under $1,000,000________________________________
$1,000,000 and under $5,000,000______________________________
$5,000,000 and under $10,000,000_____________________________
$10,000,000 and under $25,000,000____________________________
$25,000,000 and over___________________________________________
Total




0.
.
5.
8.
44.
20.
15.
4.

6
5
7
3
0
8
1
9

100 . 0

140

CONSUMERS’ COOPERATION IN TH E UNITED STATES

Business Done in 1936
Over 1.4 billion dollars in new insurance was written in 1936 by
the associations reporting, and the net premium income amounted to
more than 50 million dollars, as table 66 shows.
More than half (57.4 percent) of the associations reporting operated
on the assessment plan, levying an assessment only when losses were
incurred, 18.5 percent required advance premiums, and 24.1 percent
operated on the premium basis but with the right to levy an assess­
ment also if this became necessary.
T

able

66.— N ew Insurance W ritten and Gross and N et Incom e, in 1936, by K in d o f
Insurance
Gross premium in­
come

N ew insurance
Major line of insurance written

Asso­
ciations
report­
ing

Asso­
ciations
report­
ing

Am ount

A ll kinds of insurance_________________

1,067 $1,404,240,071

Fire insurance________________________
Life insurance-------------------------------------Sickness insurance____________________
General accident insurance_________ __
Automobile______________________ ____
Storm-------------------------------------------------Hail (not on crops)-----------------------------Loans_____________________________ __

1,020
22
1

1,287, 241, 705
37, 075, 263
1,043, 460

21
2
1

63,872,339
8,008, 650
6,998,654

Amount

N et premium in­
come
Asso­
ciations
report­
ing

Am ount

1 1,171 i $71,925,068

805

$50,605,354

37,292,888
5, 751, 308
754,078
362, 777
26,654,148
662, 554
377,112
70,203

740
23
1
2
21
17
1

25, 551,198
2, 311, 680
754,078
66, 782
21,285,121
421,374
215,121

1,089
29
1
3
24
22
2
1

i Does not include 1 agency association whose gross premium income was $3,448.

The same data are shown on a geographical basis in table 67.
T

able

67 .— N ew Insurance W ritten and Gross and N et Incom e, in 1936, b y States
N ew insurance
State

All States___________
Arkansas----------------California___________
Colorado____________
Connecticut________
Delaware___________
District of Columbia.
Georgia-------------------Idaho----------------------Illinois______________
Indiana............. ..........
Iowa................ ............
Kansas................. .......
K entucky__________
M aine______________
M aryland---------------Massachusetts........
M ichigan-----------------

Associations
report­
ing

Amount

1,067 $1,404,240,071
7
19
3
5
1

2,078,216
24,644,818
3,940,108
21,774,903
69,554

4
7
129
40
99
9
13
17
9
8
64

854,136
3,633,008
82,031,343
30,260, 230
158,376,940
47,681,451
6,021,439
9,810,181
11,995,918
20,238,406
43,674,669

Gross premium in­
come
Associations
report­
ing

Amount

i 1,171

i $71,925,068

805

$50,605,354

8
19
5
6
2
1
7
6
145
47
111
9
12
22

66,524
982,954
125, 531
664,068
23,084
1,535
420,042
89,626
18,146,911
1,444,309
4,946,030
411,642
217, 792
367, 952
457,057
1,691,567
5,542,661

4
20
4
7
1

43, 524
881, 624
59,294
406,666
11, 516

5
5
106
21
76
5
12
14
6
8
36

418,321
39,356
13, 761, 632
752,584
6,425,060
313,488
169,035
146, 716
319,419
1,037, 521
3,977.699

57

i Does not include 1 agencyi n Minnesota with gross income of $3,448.




Net premium in­
come
Associations
report­
ing

Amount

141

INSURANCE ASSOCIATIONS
T

able

67.—

N ew In su ra n ce W ritten and G ross and N e t In com e , in 1 9 3 6 , b y States—Con.

New insurance
State

Minnesota______________________ __
Missouri_____________________ ______
M ontana_____________ ____ __ _____
Nebraska________________________ __
N ew Hampshire_____ ___ ______ ___
N ew Jersey_______________________ _
N ew Y ork___________________ _
North Carolina____________________
North Dakota____ _ _ ____ _ __ _
Ohio................ .
__________ --Oregon_____________ __ _________

Pennsylvania_______ ______ ______

Rhode Island ___________ ________ _
South Carolina____ _________ ______
South D akota. _ . .
________ _
Tennessee_______ __________ ____ _
Texas____________ _______
____
Utah_________ _____________________
Vermont____ ____ ___ _______ ____
Virginia. _________________________
Washington__________ _____ _______
West Virginia_____________________
W isconsin________________
_____
W yom ing_________ _____ _______ _

Asso­
ciations
report­
ing

Amount

121
21
7
38
7
7
73
5
30
55
1
110

$163,623, 034
18,731, 234
682,802
134,230,896
1,285,366
21,785,561
93,145,630
293,075
27,802,651
108,662,147
529,472
143,833,678

8
26
20
10
1
7
15
4
10
64
3

11,804,413
23,124,486
2,324,954
3,088,291
461,969
42,850, 601
4,607,326
22,154,349
5,099,139
106,658, 561
375,116

Gross premium in­
come
Asso­
ciations
report­
ing
128
25
6
37
6
9
79
4
29
62
1
109
2
9
34
17
17
1
8
18
5
10
77

3

Amount

N et premium in­
come
Asso­
ciations
report­
ing

$2,517,300
517,078
29,669
1,380,817
65,528
266,769
7,209, 208
30, 936
1,228,168
8,365,250
25,184
5,055,783
1, 581, 773
322, 630
1,021,042
414,885
507,143
31,550
1,423,360
540,846
278,273
150,310
3,353,621
8,660

80
17
6
28
7
5
57
3
17
39
1
83
2
6
22
11
13
1
8
9
1
4
52
3

Amount

$1,490,534
297,596
29,319
1,171,761
71,222
133,472
3,005,647
19,687
113, 550
5,478,420
25,023
4,135,290
966,147
200,944
336,738
78,107
218,363
18,461
1,046,901
1,230,659
6,445
53,938
1, 709, 752
3,923

The percentage distribution of associations according to amount
of new insurance written in 1936 is given in the following statement:
Percent of
associations

Under $25,000__________________________________________________
$25,000 and under $100,000____________________________________
$100,000 and under $500,000__________________________________
$500,000 and under $1,000,000________________________________
$1,000,000 and under $5,000,000______________________________
$5,000,000 and under $10,000,000_____________________________
$10,000,000 and over----------------

8.
14.
34.
15.
22.
2.
2.

5
0
2
8
9
2
5

Total_____________________________________________________ 100. 0

The distribution according to amount of net income from premiums
and assessments is given below:
Percent of
associations

Under $5,000___________________________________________________
$5,000 and under $25,000______________________________________
$25,000 and under $100,000____________________________________
$100,000 and under $500,000__________________________________
$500,000 and under $1,000,000________________________________
$1,000,000 and over____________________________________________

34.
37.
19.
6.
1.
1.

7
3
3
7
0
2

Total_____________________________________________________ 100.0




142

CONSUMERS’ COOPERATION IN THE UNITED STATES

Relation of Amount of Insurance to Field of Operations
More than 95 percent of all of the insurance associations reporting,
which were sufficiently cooperative to be included in the tabulations,
were writing insurance in a territory of less than one State. Table 68
brings out the relationship between the geographic scope of operations
of the associations and the amount of business done. Thus, about 45
percent of the associations were writing insurance in areas of one
county or less. These organizations had only about one-fourth of the
total policyholders, but almost 35 percent of the total insurance in
force. The associations of widest scope, on the other hand, forming
less than 3 percent of all the associations, had 30 percent of the
policyholders; they had only about one-eighth of the insurance in
force, but this did not include business done in automobile insurance
in which the insurance carrier is obligated not for a fixed sum (as in
other types of insurance) but for a sum equivalent to the value of the
car at the time of the claim. Most of the automobile insurance in the
cooperative field is written by the larger associations (operating in
more than one State), and if it were possible to include this business
in the figures given for them in table 68 it would raise considerably the
relative proportion both of new insurance written and of insurance
in force.
T

able

6 8 .— D istribu tion o f M em bersh ip and B u sin ess , b y S cope o f In su ra n ce F ield o f
R ep ortin g A ssocia tion s
Percent accounted for b y associations of specified
scope

Scope of field in which authorized to write insurance
Number
of associ­
ations

________________________

Insurance
in force 1

New in­
surance
written,
1936 1

13.8
2.5
29.1
5.5
3.1

5.4
1.3
18.2
3.0
7.4

5.9
2.2
25.6
3.8
11.4

8.0
3.6
19.7
5.0
9.6

43.3
2.7

34.2
30.6

37.2
13.9

37.8
16.3

100.0

100.0

100.0

100.0

1 township _______ _____ _____ _______
------M ore than 1 township but less than 1 county__________
1 cou nty______________________________________________
More than 1 county but less than 1 State_________
1 State----- ------- --------------- ------------------------------------------Territory not defined in report, but not more than 1
State________________________________________________
M ore than 1 State--------------------- ---------- -------- ------------All associations_______

Policy­
holders

i Not including automobile insurance which is written on value of car.

Claims Paid
Disbursements for losses during the year 1936 aggregated nearly
14% million dollars, distributed, by type of associations, as shown in
the following table.




143

IN S U R A N C E ASSOCIATIONS

T a b l e 6 9 . — A m o u n t o f C laim s P a id b y In su ra n ce Cooperatives W ritin g S pecified T yp es

o f In su ra n ce , 1 93 6
Claims paid
T ype of insurance

All types of insurance. _

_ ______________ ___

Associa­
tions re­
porting
__ __

_ _ _

Fire insurance_________________ ____ - __________ ________ ______ _
Life in su ra n ce____ ___________ ______- ___ ___ - ___ _ . . . ................... _ _
Sickness insurance_________ ____ _ _______________ _____ ________ ____ _____
General accident insurance - __________________ _______ _________ _ - _ Automobile insurance
_ ________ _ _ _____
Storm insurance __ ______________ _________________________ _______ __ __
Hail insurance (not on crops). ........... ............ ................................. .......

A m ount

760

$14, 469,950

708
16
1
3
11
19
2

11,957,936
278,368
721
210,270
1, 400,867
439, 862
181,926

The same data, for the various States, are shown in table 70.
T a b l e 7 0 . — G eographical D istribu tion o f C laim s P a id b y In su ra n ce C ooperatives , 1 9 3 6

Claims paid

State and geographic division

Asso­
cia­
tions
report­
ing

Clai ms paid

State and geographic division
Amount

United States____ __________

760

$14,469,950

N ew England____ _____ ____
M aine___________________
N ew Hampshire_________
V erm ont____ ___________
Massachusetts___________
Rhode Island______ _ ___
Connecticut_____________

20
9
3
2
4
1
1

699,969
114, 589
42, 781
96,128
112, 833
257, 287
76, 351

M iddle Atlantic.
N ew Y ork__________
New Jersey_____ _ _ ._
Pennsylvania_________

133
62
4
67

2, 368, 677
1, 220, 388
74, 898
1,073, 391

East North Central________
O hio___________ _______
Indiana_____________
_
Illinois______ _____ _____
M ichigan_______________
W isconsin. ............. ..........

259
38
26
100
50
45

6, 001, 451
1,122, 690
826, 225
2,002, 772
1, 265, 961
783, 803

West North Central_________
Minnesota___________ __
Iow a_________________ __
Missouri________________
North Dakota___ _______
South Dakota__________
Nebraska________________
Kansas. _ :_______________

244
78
75
16
18
26
21
10

4,069,158
1, 286,178
1, 506, 004
298, 969
172, 362
327, 328
243, 274
235,043

Asso­
cia­
tions
report­
ing

Amount

South Atlantic______ _______
M aryland. _______ _ _
District of Columbia. _ _ _
Virginia. ______ _______
W est Virginia___________
North Carolina___ _____
South Carolina _______
Georgia_________________

30
5
1
8
6
3
4
3

$410, 356
100, 983
10, 669
82, 714
51, 801
8,554
32, 812
122, 823

East South Central______ .. .
Kentucky ________ _____
Tennessee_______________

16
9
7

151, 620
111, 966
39, 654

West South Central.
__. _
Arkansas______________ _
Texas___________________

16
6
10

145, 561
24, 684
120, 877

M ou ntain.. _______________
M ontana.-------------- . . . _
Idaho___________________
C olorado.. _____________

18
6
5
7

351, 637
17, 995
158,178
175, 464

Pacific______________________
W ashington___________ _
Oregon__________________
California______ ________

24
2
1
21

271, 521
52, 383
9, 748
209, 390

Dividends Returned
Only a few of the associations reporting returned any dividends
for 1936 on premiums paid. This was mainly due to the fact that as
most of the associations operate either at actual cost (i. e., assessing
members only for actual outlays for losses) or at premium rates set
only high enough to cover estimated costs, there is little or no margin
from which to return dividends.




144

C O N S U M E R S * C O O P E R A T IO N

IN

THE

U N IT E D

STATES

T able 71.— A m o u n t o f D ividends P a id b y In su ra n ce C ooperatives W ritin g Specified
T yp es o f In su ra n ce , 1 9 3 6

Dividends paid
Type of insurance

All types of insurance

____________________ ______________ ____-

Fire insurance __ _ ____________________ ______ _____ __________ __
Life insurance ____________ ___ ___ _ _ ____________________________
Automobile insurance. __ _ ___ ______________ ______________ _
Hail insurance (not on crops) __ __ ____ _________________ ___ . - - - -




Associa­
tions re­
porting

Amount

80

$2,155,424

67

1,665,020
204, 511
258, 857
27,036

5

7

1

Chapter 7.— F E D E R A T IO N S

The basis of the consumers’ cooperative movement is formed by the
local cooperative associations, which carry on a wide variety of business
activities.
These local associations are organized into federations of various
kinds. Just as the local associations are owned and controlled by
their individual members, so the federations are owned and controlled
by the local associations. It has been usual in the cooperative move­
ment in the United States for the educational and business activities
to be carried on by separate organizations. Thus, the wholesale dis­
tribution of groceries, petroleum products, etc., is carried on by whole­
sale cooperatives, whose share capital is furnished by the local asso­
ciations and whose policies are determined by them. Federations
may also be formed in the same way to perform specific business func­
tions, such as the provision of burial service, printing service, etc.
The educational and propaganda work is carried on by the Coopera­
tive League of the United States of America and its five regional
leagues.1 Both retail and wholesale associations may affiliate with
the regional leagues; by doing so they become members of the national
league also.
Wholesale Associations

Cooperative wholesaling is now firmly established in the United
States. At the end of 1936 there were in operation 20 regional whole­
sales with a trading area of one or more States, dealing in consumers’
goods.2 In addition there were 2 interregional wholesales formed by
the regional wholesales to pool their purchasing power and obtain the
advantages of large-scale orders; and 9 federations of less than State­
wide scope, specializing in certain commodities.
Data were obtained by the Bureau of Labor Statistics for 19 regional
associations, both of the interregional, and all of the district associa­
tions.
The 19 reporting regional wholesales in 1936 were serving more than
1,700 member associations and over 700 other cooperatives were mak­
ing wholesale purchases from them, though not affiliated. A wholesale
business in excess of 40 million dollars was reported by the regional
1 But there has been some overlapping in educational training of employees; see page 171.
2Several of the wholesales for which data are given herein handle commodities used in farm “business”
(such as fencing, feed, seed, fertilizer, etc.), but none was included here unless it also handled consumers'
goods. A number of farmers’ organizations handle farmsupplies only, but they are not covered here.




145

146

CON SU M ERS’

C O O P E R A T IO N

IN

THE

U N IT E D

STATES

cooperatives, a gain of 24.2 percent over 1935. All but one showed a
substantial increase in business in 1936 over the previous year. Indeed,
8 of these associations in 1936 had the largest amount of sales in their
history. Six associations had sales of more than 3 million dollars
each and 3 of these had sales of over 5 million dollars. Increases were
also shown in net earnings and refunds made on members’ patronage.
Share capital of nearly 2 million dollars, total assets of nearly 6 mil­
lions, and an aggregate net worth in excess of 3% millions were reported.
The year 1936 was a relatively uneventful period in cooperative
wholesaling, though marked by substantial growth. Several organiza­
tions opened branch wholesale warehouses in new localities, others un­
dertook the production of new commodities, and practically all enlarged
their field of merchandising by adding new lines of goods to their
stocks. Almost without exception the wholesales making returns re­
ported a gain in the number of affiliated local associations as compared
with 1935.
Services and Facilities
The goods handled and services rendered by each association are
listed in table 72. As there shown, practically all of the associations
handle petroleum products and nearly all handle automobile tires.
More and more of the associations are beginning to handle household
goods, and this trend is likely to continue, for an increasing number of
the local cooperative gasoline service stations are putting in small
stocks of groceries and household supplies. Field agents for the Bureau
of Labor Statistics also noticed a tendency for the farmers’ local cream­
eries to undertake the purchase of such goods for their members.
The effect of the rural electrification program is shown by the grow­
ing number of wholesales handling electrical appliances.
T able 72.— L in es o f G oods H andled b y W holesale Cooperative A sso cia tion s , and O ther
Services P rovided , 1 9 3 6

Type of association,
State, and city

Name of whole­
sale

Goods handled

Illinois: Chicago.

National Cooper­
atives, Inc.

Indiana:
apolis.

United Coopera­
tives, Inc.3

Petroleum products, auto tires
and accessories, radios, elec­
trical supplies, uniforms, bind­
ery twine, farm machineryA
Petroleum products; servicestation and bulk plant equip­
ment.

Goods manu­ Other services
factured

Interregional

Indian­

Regional

Illinois:
Chicago______ Illinois Farm Sup­ Petroleum products, paints,
ply Co.
solvents, auto tires, and tubes.
Do_______ The Cooperative Groceries, motor oil, auto tires
Wholesale.
and accessories, electrical ap­
pliances.
1None of these goods actually handled; orders of member wholesales are pooled and goods are shipped
directly to them.
3Name originally Farm Bureau Oil Co.; changed to present name in 1936.




147

F E D E R A T IO N S

T able 72.— L in es o f G oods H andled b y W holesale C ooperative A sso cia tion s , and Other
Services P rovid ed , 1 9 3 6 — Continued

Type of association,
State, and city

Name of whole­
sale

Goods handled

Goods manu­ Other services
factured

Regional—Contd.
Indiana
Farm Household supplies, fuel, petro- Lubricating
Bureau Coop­
leum products, auto tires and
oil.
erative Associa­
accessories, farm supplies and
tion.
machinery.
Massachusetts: United Coopera­ Petroleum products, auto tires
tive Farmers.
and accessories, farm supplies
Fitchburg.
and machinery.
Michigan: Lansing. Farm Bureau Fuel, dairy products, petroleum
Services.
products, auto tires and acces­
sories, farm supplies.
Indiana:
apolis.

Indian-

Minnesota:
Minneapolis.

Supervision of
management
of local, if re­
quested.

Midland Coopera- Fuel, petroleum products, auto Lubricating Educational
tive Wholesale.
tires, tubes and batteries, elec­
oil.
department;
trical appliances, paint, steel
merchandis­
and wire, bulk-station equip­
ing advice.
ment.
South St. Paul. Farmers’ Union Petroleum products, auto tires ___ do_____
Central Ex­
and accessories, flour, farm
change.
supplies and machinery, oilstation equipment.
St. Paul.......... Minnesota Farm Petroleum products, farm sup­
plies.
Bureau Service
Co.
Missouri: North Consumers’ Coop- Groceries, petroleum products, Lubricating Educational
erative Associaauto tires and accessories, elecoil, axle
Kansas City.
department;
tion.
trical appliances, paint, farm
grease,
auditing; col­
supplies and machinery.
paint.
lective pur­
chase of emp 1o y e e
bonds.
Nebraska: Omaha. Farmers’ Union Groceries, clothing, shoes, fuel,
Educational
State Exchange.
household supplies, stationery,
department;
students’ supplies, petroleum
auditing.
products, auto tires and acces­
sories, farm supplies and ma­
chinery.
New York: New Eastern Coopera­ Groceries, dairy products, motor
York.
tive Wholesale.
oil, auto tires.
Ohio: Columbus... Farm Bureau Fuel, petroleumproducts, paint,
Educational
electrical appliances, farmsup­
Cooperative As­
department;
sociation.
plies and machinery, raw ma­
auditing.
terials, twine.
Oklahoma: Okla­ Farmers Union Dry goods, fuel, household sup­
Sales Depart­
plies, petroleum products,
homa City.
ment.
farm supplies and machinery,
building materials, twine.
Pennsylvania: Pennsylvania Petroleum products, farm sup­ Feed, fertil­
Farm Bureau
plies.
izer, lubri­
Harrisburg.
cating oil.
Cooperative As­
sociation.
Texas: Amarillo__ Consumers Co­ Fuel, petroleum products, auto­
mobile tires and accessories,
operatives, As­
washing machines, refrigera­
sociated.
tors, farmsupplies, windmills.
W a s h i n g t o n : Grange Coopera- Groceries and meats, limited Feed______ Auditing.
Seattle.
ative Wholesale.
lines of clothing and shoes,
fuel, household goods, petro­
leum products, automobile
tires and accessories, stu­
dents’ supplies, farm supplies
and machinery.
Wisconsin:
Superior_____ Central Coopera­ Groceries, clothing, bakery B a k e r y Educational
tive Wholesale.
goods, petroleum products,
goods, cof­
department;
automobile tires and acces­
fee-roast­
auditing.
sories, farm supplies.
ing, feed.
Madison_____ Farm Bureau Petroleum products, farm sup­ Fertilizer__
Federation Co­
plies.
operative.
Superior_____ Workers and Groceries, clothing, bakery
Farmers Coop­
products, dry goods, house­
erative Unity
hold supplies, hardware, pe­
Alliance.
troleum products, farm sup­
plies, building material.




148

CON SU M ERS’

C O O P E R A T IO N

IN

THE

U N IT E D

STATES

T able 72.— L in es o f G oods H a n d led b y W h olesa le C ooperative A sso cia tio n s , and O ther
S ervices P rovid ed , 1 9 3 6 —Continued

Type of association,
State, and city

Name of whole­
sale

Goods handled

Good smanu- Other services
factured

District

Michigan:
Bruce Crossing- H-O-B Coopera­
tive Oil Asso­
ciation.
Rock................ Northland Coop­
erative Oil Asso­
ciation.
Minnesota:
Cloquet........... Trico Cooperative
Oil Association.
C-A-P Coopera­
Kettle River.
tive Oil Assotion.
Virginia........... Range Coopera­
tive Oil Asso­
ciation.3
Do............. Range Coopera­
tive Federation.
Wisconsin:
Ashland........... A & B Cooper­
ative Oil Asso­
ciation.
Maple.............. Cooperative Serv­
ices.
Prentice........... Price County Co­
operative Oil
Association.

Petroleum products.
Petroleumproducts, automobile
tires and accessories.
Petroleumproducts, automobile
tires and accessories.
Petroleumproducts, automobile
tires and accessories, farm
machinery.
Petroleum products...................
Automobiles.

Sausage,
butter.

Petroleum products.

Automobile rerepair serv­
ice, insur­
ance, truck­
ing.*

Petroleum products, farm sup­
plies and machinery, building
material, explosives.
Petroleumproducts, automobile
tires and accessories, farm
machinery.

3 Became a department of Range Cooperative Federation, July 1,1937.
<Burial service added, Sept. 1,1937.

Some indication of the plant and facilities of the wholesales is given
in table 73. For 9 associations of regional or greater scope, the value of
such fixed assets at the end of 1936 totaled $847,244; for the individual
associations the value ranged from $2,468 to $187,558.
T able 73.— P la n t and F a cilities o f Cooperative W holesale A ssocia tion s
Association

Plant and operating facilities

Interregional
Illinois: National Cooperatives, Inc...................
Indiana: United Cooperatives, Inc..---------------

Office only.
Office; oil-blending plant.

Regional
Illinois: The Coooperative Wholesale__________ Wholesale warehouse and show room.
Indiana: Indiana Farm Bureau Cooperative 3 warehouses.
Association.
Massachusetts: United Cooperative Farmers___ Retail store, wholesale warehouse; branch of wholesale
at Danielson, Conn.
Michigan: Farm Bureau Services..... .................. 2 wholesale warehouses, 10 retail stores, 2 gasoline bulk
stations.
Minnesota:
Farmers’ Union Central Exchange..... ....... . Wholesale warehouse, 9 retail stores.
Midland Cooperative Wholesale__________ Wholesale warehouse, fuel yard; branch of wholesale at
Milwaukee.
Missouri: Consumers’ Cooperative Association. _ 7 wholesale warehouses,112 gasoline service stations, 12
bulk stations, 20 tank trucks, 1 blending plant.
Nebraska: Farmers’ Union State Exchange......... Wholesale warehouse, 16 retail stores, 7 gasoline service
stations, 7 bulk stations, 7 tank trucks.
New York: Eastern Cooperative Wholesale____ Wholesale warehouse; branch of wholesale at Boston.
Ohio: Farm Bureau Cooperative Association____ 3 wholesale warehouses.
1
At North Kansas City, Mo.; McPherson, Kans.; Lincoln and McCook, Nebr.; Aberdeen, Sioux Falls,
and Rapid City, S. Dak. Additional wholesale warehouses were established in 1937 in Salt Lake City,
Utah, and Denver, Colo.




149

E E D E K A T IO N S

T able 73.— P la n t a n d F a cilities o f C ooperative W h olesa le A ssocia tion s —Continued
Association

Plant and operating facilities

Regional—Continued
Pennsylvania: Pennsylvania Farm Bureau Co­ Wholesale warehouse.
operative Association.
Texas: Consumers Cooperatives, Associated___ Wholesale warehouse, bulk plant.
Washington: Grange Cooperative Wholesale....... Wholesale warehouse, 1retail store; wholesale branch at
Spokane.
Wisconsin:
Central Cooperative Wholesale. .................... Wholesale warehouse, coffee-roasting plant, bakery, feed
mill; wholesale branch at Virginia, Minn.
Farm Bureau Federation, Cooperative........ Wholesale warehouse.
Workers and Farmers Cooperative Unity
Do.
Alliance.

District

Michigan:
H-O-B Cooperative Oil Association....... .......
Northland Cooperative Oil Association_____
Minnesota:
Trico Cooperative Oil Association.................
Range Cooperative Oil Association...............

2 bulk stations, 2 curb pumps.
1 bulk station, 1 gasoline service station.

2 bulk stations, 5tank trucks.
1 gasoline service station, at Hibbing, 1 bulk station, 1
tank truck.
Range Cooperative Federation............. ........ Sausage factory, creamery, truck, insurance agency,
auto-repair garage, auto salesroom.3
Wisconsin:
A & B Cooperative Oil Association________ Bulk station, 2 tank trucks.
Cooperative Services------------------------------- Warehouse, 1 gasoline service station, 1 bulk station, 3
tank trucks.
Price County Cooperative Oil Association__ 1 gasoline service station, 5 curb pumps, 1 bulk station.
* Undertaking establishment added, Sept. 1,1937.

Trading Territory
The 30-odd cooperative federations in the United States that handle
consumers, goods vary considerably in scope. They have been classi­
fied here as interregional, regional, and district.
During the past 15 years, wholesaling in the United States has been
developing mainly on a State or regional basis. The wholesales spon­
sored by the local cooperative associations connected with the various
farm organizations— Farmers’ Union, Grange, and Farm Bureau—
generally function within the boundaries of a single State. The
organizations which are strictly consumers’ associations usually have a
trading territory covering all or parts of several States. All of these
are here classified as regional wholesales.
In order to obtain the advantage of large-scale buying, some of the
regional wholesales have in turn combined to form the two inter­
regional wholesales included in table 72. The main function of Na­
tional Cooperatives thus far has been the pooling of the purchasing
power of its member cooperatives.3 It makes a master contract and
exhibit contracts with manufacturers for the commodities desired.
*The original members of National Cooperatives were Central Cooperative Wholesale, Superior, Wis.;
Consumers* Cooperative Association, North Kansas City, Mo.; Farmers* Union Central Exchange, St.
Paul, Minn.; Midland Cooperative Wholesale, Minneapolis, Minn.; and United Cooperatives, Indian­
apolis, Ind. Consumers Cooperatives Associated, Amarillo, Tex., and Pacific Supply Cooperative, Walla
Walla, Wash., were admitted in 1934; the Eastern Cooperative Wholesale, New York, N. Y., and United
Farmers Cooperative Co., Toronto, Ont., in 1936; and The Cooperative Wholesale, Chicago, in 1937. Thus,
at the end of 1936, National Cooperatives was serving about 1,000 local cooperative associations which were
members of its affiliates.




150

CON SU M ERS’

C O O P E R A T IO N

IN

THE

U N IT E D

STATES

The goods ordered do not pass through the central organization but
are delivered by the manufacturer directly to the regional wholesales.
One of the features of these contracts is the provision that additional
orders may be entered, at the same price. All goods dealt in are put
up under the cooperative label.
United Cooperatives, the other interregional wholesale, was formed
in 1930 (under the name of Farm Bureau Oil Co.) by the Farm
Bureau cooperatives of Ohio, Indiana, and Michigan, to serve the oil
associations in those States. Its scope was later enlarged, additional
associations were admitted, and its name was changed in 1936 to the
present one. At the end of 1936 it was serving farmers’ cooperatives
in 9 States.4
In Michigan, Minnesota, and Wisconsin some of the local associa­
tions in a given district or in one or more counties have formed central
organizations (here termed “district” associations) to handle certain
commodities or services for them. The Bureau of Labor Statistics
knows of 9 such organizations in the United States, all of which are
included in table 72. Of those shown in the table, the Range Coopera­
tive Federation, originally organized as an educational association
which would also provide a medium for the exchange of experience
among the member associations, is outstanding. Its character has
gradually changed and it is now primarily a productive and service
association.
As indicated, the members of these district and regional federations
are the local (retail) associations; with one exception,5 the members
of the interregional wholesales are the regional wholesales.
It is evident from the above and from table 72, that there is a good
deal of overlapping and duplication of wholesale service in some sec­
tions. This arises mainly from the presence of rival farm organiza­
tions, each sponsoring its own cooperatives, and is further complicated
by the presence of purely consumer organizations in the same territory.
AJthough in general each of these reaches a different group of consum­
ers, there has been some conflict, as where a farm organization set up
its own wholesale in a district where its members were already being
served by the wholesale facilities of another organization, or where an
association overstepped its original geographic boundaries. One of
the requirements for membership in National Cooperatives, adopted
with a view to prevention of competition between member wholesales,
is that the prospective member must submit a map showing the trading

*The membership at the end of 1936 consisted of the Farm Bureau Cooperative Association, Columbus,
Ohio; Indiana Farm Bureau Cooperative Association, Indianapolis, Ind.; Farm Bureau Services, Lansing,
Mich.; Southern States Cooperatives, Richmond, Va.; Consumers' Cooperative Oil Co., Sauk City, Wis.;
Maryland Farm Bureau Federation, Baltimore, Md.; Farmers' Cooperative Exchange, Raleigh, N . C.;
Cooperative Q. L. F. Exchange, Ithaca, N . Y.; Pennsylvania Farm Bureau Cooperative Association,
Harrisburg, Pa.
* United Cooperatives, itself an interregional organization, is a member of National Cooperatives which
is also an interregional association.




151

F E D E R A T IO N S

territory claimed by it. This provision probably operates also to keep
out other organizations which might otherwise join but which are
already doing business in territory claimed by present members of
National Cooperatives.
Membership and Resources
Share capital amounting to over 2 million dollars and total assets
of over 6 million dollars were reported by the 30 associations covered
in table 74.
T able

74.—M em bersh ip ,

P a tron s , and R esources o f Cooperative W holesale A ssocia tion s
at E n d o f 1 9 3 6

Association and State

Retail
branches
of
whole­
sale

Unaf­
filiated
cus­
tomer
associa­
tions

Year
of organization

Affil­
iated
asso­
cia­
tions

1933
1930

9
9

$3,600
124,300

$9,778
187,939

18

127,900

197, 717

36

110,768
1,709

562,900
7,788

300

399,700
4,945
71,979

2808,512
39, 358
3614,174

18
22

10
175
(4)
(4)
(7)
124
5
0)

223,278
115,100
(4)
100,000
305,023
5,145
307,988
(4)

728,406
483,139
(4)
527,784
696,635
42,619
673, 770
(4)

I

20
20

25,000
17,785
13,540

50
(4)

183,292
(9)

Paid-in
share
capital

Total
assets i

Interregional
Illinois: National Cooperatives, Inc..
Indiana: United Cooperatives, Inc..
Total .

Regional

Illinois:
Illinois Farm Supply Co............................
The Cooperative Wholesale________ ____
Indiana: Indiana Farm Bureau Cooperative
Association____________________________
Massachusetts: United Cooperative Farmers..
Michigan: Farm Bureau Services____ ______
Minnesota:
Farmers’ Union Central Exchange_______
Midland Cooperative Wholesale________
Minnesota Farm Bureau Service Co_____
Missouri: Consumers’ Cooperative Association.
Nebraska: Fanners’ Union State Exchange__
New York: Eastern Cooperative Wholesale__
Ohio: Farm Bureau Cooperative Association..
Oklahoma: Farmers’ Union Sales Department.
Pennsylvania: Pennsylvania Farm Bureau
Cooperative Association_________________
Texas: Consumers Cooperatives, Associated. .
Washington: Grange Cooperative Wholesale...
Wisconsin:
Central Cooperative Wholesale_________
Farm Bureau Federation Cooperative___
Workers’ and Farmers’ Cooperative Unity
Alliance___________________ ________
Total.

1927
1936

62
36

1921
1927
1920

88
31
118

1927
1926
1928
1929
1914
1928
1933
1922

240
148
30
«342
«275
33
83
0)

1934
1931
1919

10
52
840

1917
1923

109
13

1931

9
(0

(4)

36
1, 746

District

3
3
12

68

(4)
(4)
(4)
481,185
15,171

5

4,156

16,302

745

1,889,408

5,697,743

Michigan:
5,706
12, 740
H-O-B Cooperative Oil Association.........
1932
7
I
2
Northland Cooperative Oil Association... 1930
(4)
(4)
1 Depreciation deducted.
2 1935.
3As of June 30, 1936.
4No data.
6Does not include cooperative wholesales of Estonia, France, and Scotland, which became members
through refunds earned by their patronage.
6And about 6,500 individual members.
7“ Only a few.”
8Under reorganization, Mar. 1, 1937.
Nonstock organization.




152

CON SU M ERS’

T able

74.—M em bersh ip ,

C O O P E R A T IO N

IN

THE

U N IT E D

STATES

P atron s , and R esources o f C ooperative W holesale A sso cia tion s
at E n d o f 1 9 3 6 —Continued

Association and State

Year
of organization

Affil­
iated
asso­
cia­
tions

Retail
branches
of
whole­
sale

1929
1929
1929
1933

14
10
15
15

1

1930
1928
1934

8
5
5

Unaf­
filiated
cus­
tomer
associa­
tions

Paid-in
share
capital

Total
assets

District—Continued
Minnesota:
Trico Cooperative Oil Association----------C-A-P Cooperative Oil Association______
Range Cooperative Oil Association---------Range Cooperative Federation...... ........ .
Wisconsin:
A & B Cooperative Oil Association............
Cooperative Services....... ......... .................
Price County Cooperative Oil Association. _
Total______________________________
Grand total________________________

81

5

$11,603
5,100
9,043
4,703

$43,286
(<)
io29, 111
42, 730

1,850
12,500
2,030

12, 263
41,679
7,870

2

5

52, 535

189,679

70

750

2,069,843

6,085,139

*No data.

ioAs of Feb. 29, 1936.

A combined net worth of over 3 million dollars was reported,
distributed by type of association as follows:

Net worth

Interregional associations_________________________________
Regional associations______________________________________
District associations_______________________________________

$180, 127
3, 370, 807
120, 362

OPERATION OF RETAIL BRANCHES

Some years ago it was almost unheard of in this country for a gen­
uinely cooperative wholesale to be operating retail branches. The
opening of such branches, to serve localities with no local retail associa­
tion of their own, is a comparatively repent tendency. Of 8 regional
wholesales for which data were obtained in 1933, 4 were operating a
total of 50 branches. In 1934, 6 associations (out of 9 reporting)
had 87 retail outlets; and in 1935, 6 (out of 11 reporting) had 67 retail
stores. Of the 19 regional associations covered in the above table,
7 had a total of 68 retail branches. It is, of course, preferable from
the cooperative standpoint for the retail store to be owned by the
local cooperators rather than for these persons to be supplied
through a store over which they have no direct control. In recogni­
tion of this, in some localities local cooperative associations have
been organized to take over from the wholesale the operation of the
retail stores there.
The Farmers’ Union State Exchange is a case in point. The Ex­
change was organized as a department of the Farmers’ Union of
Nebraska in 1914, when there were very few local cooperatives in the
State. It was incorporated in 1917 as a separate organization, but the
Farmers’ Union of Nebraska held all the shares. In 1919 it was rear-




153

F E D E R A T IO N S

ganized, with membership restricted to individual members of the
farm organization. That same year the Nebraska cooperative statute
was amended to permit cooperatives to hold stock in other coopera­
tives, but very few local associations took advantage of this to buy
shares in the wholesale. The usual procedure was for the individual
farmers in a locality to subscribe for shares in the Exchange (the whole­
sale) and the latter would then open up a branch retail store in their
locality. In this way some 15 retail branches were established. The
number of affiliated local associations has gradually increased and
numbered 275 at the end of 1936; membership was also held by over
100 Farmers’ Union locals and about 6,500 individual members of the
Farmers’ Union. The present tendency in that State is toward the
formation of local cooperative associations to take over the operation
of the retail branches operated by the Exchange.
Business Operations
A wholesale business of more than 40 million dollars was reported
by the 19 regional wholesales for 1936, in addition to sales through
their retail branches amounting to $2,847,882. On this business net
savings of over $1,045,000 were realized, of which nearly $637,000
was refunded to member associations on their patronage. As com­
pared with 1935, the associations reporting for both years showed
gains of 24.2 percent in sales, 8.4 percent in net earnings, and 41.8 per­
cent in patronage refunds. Substantial increases in all of these items
were also shown by the district wholesales.
T a b l e 7 5 .— B usiness Operations o f Cooperative W holesale A ssocia tion s, 1 9 3 5 and 1 9 3 6

Amount of business i

Net earnings

Patronage re­
funds

1935

1936

1935

$5,406

$1,991

Association

1935

1936

1936

Interregional

Illinois National Cooperative, In c___________
Indiana: United Cooperatives, Inc_______
T otal.

________ _______ ________ ____

(2)

(2)

$418,000

$468,067

418,000

468,067

3$3,307
(9

(9

(9

(9

3,307

5,406

1,991

(9

Regional

Illinois:
Illinois Farm Supply C o_________ ______ _
6,291, 506 219,160 “ 274,942 180,000 $233,701
(9
The Cooperative W holesale.__________ _
635,276
5916
Indiana: Indiana Farm Bureau Cooperative
Association______ _________ ____ __________
4,403, 858 5,187,457 110, 799 131,336 59,855 93, 291
Massachusetts: United Cooperative Farmers.
491,040
647,941
2, 607
9,048 3,000 4,500
f 1,968,968 2,222, 761 | 75,882 70,757 35,000
Michigan: Farm Bureau Services. __________ \
(9
6917,828 61,087, 409

° Does not include brokerage on direct-invoice sales.
1Unless otherwise noted figures represent wholesale business.
3Not available. Orders of members are pooled and goods are shipped directly to them.
3 From date of organization to May 1935.
4No data.
59 months’ operation.
6 Retail.
9 0621°— 39-




-11

154

CONSUMERS’ COOPERATION IN THE UNITED STATES

T able 75.— Business Operations o f Cooperative Wholesale Associations, 1935 and

1936— Continued
Amount of business1

Net earnings

Patronage re­
funds

1935

1935

Association

1935
R egional —Continued
Minnesota:
Farmers' Union Central Exchange_______
M idland Cooperative Wholesale_________
Minnesota Farm Bureau Service C o..........
Missouri: Consumers’ Cooperative Association.

Nebraska: Farmers’ Union State Exchange —
N ew Y ork: Eastern Cooperative W holesale...
Ohio: Farm Bureau Cooperative Association.
Oklahoma: Farmers Union Sales Department.
Pennsylvania: Pennsylvania Farm Bureau
Cooperative Association___________________
Texas: Consumers Cooperatives, Associated..
Washington: Grange Cooperative W holesale..
Wisconsin:
Central Cooperative W holesale---------------Farm Bureau Federation Cooperative___
Workers and Farmers Cooperative Unity
Alliance_____________________________

J$4,028,087
\ M56,987
2 , 423,107
277, 619
/ 2 , 660,861
\ 6333,649
f 1,635,125
\ 6969,407
206,515
4,216,176
264,402

1936

1936

$3,783,991 }$129,768 $85,241
(4)
(4)
6351,492
3,033,080 63,441
71,574 $27,000 $48,601
397,232
(4)
(4)
(4)
(4)
3,397,809 } 103,838 71,151 31,680
39,810
6358,487
1,721,221
61,050,494 } 71,805 62,903 49, 258 40,847
88 71,617
285, 512
6,781,144 111, 580 162,577 41,395 94,492
288,380
9,698
12,400
511,000
324,121
1,807,443

9,800
14, 646
18,277

11,700
19,461

2,185,245 2,845,741
249, 790
251, 534

37,027
1,724
1,461

284,000
236,895
1,447,334

1936

(8)

(8)

10,895
14,368

18, 338
16,000

56,710
2,609

30,213

44,461

3,714

1, 361

2,832

(4)

197,633
J27,176,655

261,375

»42,026
22,337

" 60,424

146,281
98,950
136,158
123,779

171,996
(4)

17,318
9,673
8,275
1,640

17,673

167,103
230,229

38,660
108, 261
28,059
744, 511

56,606
135,821
37,853
860,032

3,618
5,985
1,208
51,620

2,976
8,187
2,091
52,584

43,062

2,976
6,828
1,450
47,938

623,224

860,032

40,188

52, 584

34,389

46,488

40,074, 524
Total, all associations.......................... \62,677,871 6 2,847,882 } 981,601 1,045,422 484.025 636.873
Total, identical associations report­ /27,176,655 33, 747,742 } 963,324
1,044, 506 449.025 636.873
ing for both 1935 and 1936________ \®2,677,871 6 2,847,882
D istrict

Michigan:
H-O-B Cooperative Oil Association______
Northland Cooperative Oil A ssociation...
Minnesota:
Trico Cooperative Oil A ssociation........... .
C -A -P Cooperative Oil Association_____
Range Cooperative Oil Association______
Range Cooperative Federation___________
Wisconsin:
A & B Cooperative Oil Association______
Cooperative Services_____________________
Price C ounty Cooperative Oil AssociationTotal, all associations____ _____. . . I ____
Total, identical associations reporting
for both 1935 and 1936........................

(4)

2,144
1, 759

3,764

2,144

2,924

(4)

(4)

(4)

11,926
5,967

13, 787
8,673
8,275
1,600

16,034
11,926
5,800

3,618
4, 965

4 N o data,
e Retail.
7 Loss.
s Patronage refund at rate of 2.9 percent in 1935 and 1.87 percent in 1936; amounts not reported.
• Figures for amount of business include a small amount of retail sales.

Of 18 reporting regional organizations which were in operation the
whole 12 months of 1936, the distribution according to amount of
wholesale business done in that year was as follows:

Number

Under $500,000___________________________________________________________________
$500,000 and $1,000,000__________________________________________________________
$1,000,000 and under $2,000,000________________________________________________
$2,000,000 and under $3,000,000________________________________________________
$3,000,000 and under $5,000,000________________________________________________
$5,000,000, and over______________________________________________________________




6
2
2
2
3
3

FEDERATIONS

155

B U S IN E SS W IT H N O N M E M B E R S

Five of the 25 wholesales which reported as to their business with
nonmembers stated that they had sold no goods to them, but only one
of these declared that it refused to sell to nonmembers. Of the
others one stated that it sold “hardly any” goods outside its own mem­
bership, in one 1 percent of its business was done with outsiders, in
two 2 percent, in one 4.5 percent, in two 5 percent, in one 5-10 per­
cent, in one 9 percent, in one 11 percent, in two 15 percent, in two 20
percent (one of these, mainly to new buying clubs), in one 25 percent,
in one 40 percent, and in three 50 percent. One association reported
that 15-20 percent of the business done in its retail branches was
with nonmembers.
It should be emphasized here that although cooperative wholesales
sell to nonmember cooperatives and in some cases to nonprofit or­
ganizations, they do not sell to private retail dealers. The local
member cooperatives, however, are bound by no such restriction
but may and do buy from private sources (even though the goods may
be available through the cooperative wholesale), if they find it ad­
vantageous to do so.
SOURCES OF SU PPLY

Every association was asked how much of the goods handled was
obtained from cooperative sources. The reports indicate that to
some extent the proportion of goods so obtained depended on the
commodities handled. One or two associations pointed out that
there were no sources of cooperative supply for the lines they dealt
in. Six stated that none of their stock of merchandise was obtained
from other cooperatives. Three reported very small amounts so
obtained; one bought tires only and one gasoline and motor oil only.
One association, however, bought “nearly all” of its goods from co­
operative sources. Of those which gave definite percentages, one
purchased 8-10 percent of its goods from cooperatives, one 10 per­
cent, one 10-20 percent, one 15 percent, one 20 percent, one 33 %
percent, one 50 percent, one 65 percent, one 80 percent, one 90 per­
cent, and two 100 percent.6
The associations purchasing the largest proportions of cooperative
goods were mainly gasoline and oil associations in the Middle West.
Four of the wholesale associations have contracted for practically
all of the light oil produced by a refinery in Oklahoma. Their con­
tract with the refinery provides for control not only of the quality but
also of the cost of operation, by a clause which permits the partici« Since the beginning of 1937 several of the cooperative wholesales have added to the merchandise
handled b y them, women’s dresses, suits, and coats manufactured b y a cooperative workers’ productive
association in N ew Jersey. A separate wholesale was formed in 1938 to handle these garments.




156

CONSUMERS’ COOPERATION IN THE UNITED STATES

pating wholesales to maintain an auditor and chemist at the refinery.
The savings made are to be divided between the refinery company
and the wholesales.
GOODS P R O D U C ED

As was evident from table 72, few of the wholesales do any manu­
facturing and these mainly of lubricating oil or feeds. The seven asso­
ciations which reported the value of goods produced in 1936 had a
combined volume worth $1,009,039. The commodities included
butter, sausage, canned goods, coffee (roasted), bakery goods, lubri­
cating oil, feed, and fertilizer. Consumers’ Cooperative Association
(North Kansas City) reported that it was supplying not only its member
organizations but also 2 other wholesales with grease and paint pro­
duced by it. This organization in 1936 joined with other cooperative
wholesales in the production of a “ co-op label” tractor.
O P E R A T IN G E X P E N S E S

Operating expenses formed only 6.4 percent of sales in the whole­
sales handling general lines of merchandise and 6.6 percent in those
handling gasoline and motor oils in 1936. Data on the various
items of expense are shown in table 76.7
T

able

76 .— Operating Expenses o f Cooperative Wholesale Societies, 1936
Percent of sales expended
for specified items
Item of expense
General
Petroleum
merchandise
associations i associations *

Sales expense:
Wages, salaries, and commissions__ ____ _________ ________ ___________
Advertising________________________________________________ 1 ________ _
Wrappings_____________________________________________________________
Total__________ ________ ______ ________ - ____________________________
Miscellaneous delivery expense (except wages)_____ ________________________
R ent_______________________________________________________________________
Light, heat, power, and water. _ ___________________________________________
Insurance, taxes, and licenses_______________________________________________
Interest on borrowed money____________________ _____ _____________________
Office supplies and postage___________ ____ ________ ______ ________________
Telephone and telegraph___________________________________________________
Repairs___________________________________________________ ________________
Depreciation__ ____________________________________________________________
Bad debts__________________________________________________________________
Miscellaneous
____________________________________________________ _____
Inventory, auditing, and le g a l_________________ ___________________________
Warehouse expense (except wages)__________________________________________
Traveling and field expense_________________________________________________
Directors’ fees and expenses. _ _____________________________________________
Collection expenses_________________________________________________________
Education, promotion, and publications________________ __________________
M em bership dues and subscriptions________________________________________
Factory, laboratory, and plant supplies_____________________________________
Grand total_________ __ ______________________________ ____ ________
1 5 associations reporting.

.0 1 1

2.858
. 152
2.009

3.090

3.019

.383
.315

.124

.345
. 157
. 117
.440
.005
.265
. 109
.106
.371
.078
. 141
.046
.074
.727
. 153
.065
.203
. 127
.025

6 . 410

6 . 573

.0 0 1

. 187
. 112
.128
.055
.004
.248
.092
.811
.056
.080
.591
.075
.0 0 1

.045
.0 1 2

2 Includes drum expense.

7For data on em ploym ent and wages in wholesale associations, see p. 159.




2. 885
. 194

FEDERATIONS

157

Cooperative Practice
Membership in cooperative wholesales is now, without exception,
limited to local cooperative organizations. Requirements for mem­
bership in National Cooperatives are that the wholesale applying
must sell at least 75 percent of its goods through cooperatives and at
least 85 percent of its voting stock must be held by affiliated coop­
eratives. Wholesales connected with some farm organization usually,
also, limit the membership to local cooperatives whose members are
also members of the sponsoring farm organization. However, one
such wholesale in 1937 voted to admit local cooperative associations
which had by their patronage earned enough in refunds on purchases
to pay for a share of stock in the wholesale. The question of admis­
sion of nonfarm cooperatives which are patrons of the wholesale has
also been raised in some of the other farmers’ wholesales.
As about one-fourth of the organizations reporting do 20 percent or
more of their business with nonmember cooperatives, the question of
admission of the patrons furnishing this business is one which deserves
consideration.
Voting.— Of 28 wholesales reporting on their basis of voting, in 20
each member association has one vote. In one of these, however, no
member association is entitled to a vote unless it holds at least 52
shares of stock in the wholesale, and the by-laws of another specify
that voting shall be in proportion to patronage— one vote for the
first $10,000 of purchases and one vote additional for every $5,000 in
purchases after the first $10,000.8
One organization allows every member local one vote, plus 1 vote
for the first $1,000 of patronage and 1 vote for each additional $5,000.
In 5 wholesales votes are in proportion to the membership of the
locals. One specifies that, in order to vote at all, the local must
hold 25 shares; it is then allowed 1 vote for every 25 members, or part
thereof, but the total votes may not exceed 5. In another, 10 shares
for every 500 members is a prerequisite; votes are then allowed at the
rate of 1 for each 500 members. In a third the local must have 1
share for every 20 members, being then allowed 1 vote for every 10
members. Of the other 2 organizations voting on the membership
basis, one allows a single vote for every 25 members, and the other
one vote for every 50 members.
The 2 remaining organizations which reported both voted by shares.
Of 28 wholesales reporting, all but 6 prohibited proxy voting and in
one of these the number of proxies was limited.
Interest on capital.— Four wholesales pay no interest on capital
stock and one other pays it only on preferred stock. One association
is a nonstock organization and does not, of course, make any return
8
One of the wholesales which in 1936 was voting on the straight membership basis, in 1937 changed to
vote in proportion to patronage.




158

CONSUMERS* COOPERATION IN THE UNITED STATES

on the membership certificates. Of those which do pay interest on
share capital, 20 impose a definite limit on the rate, and an additional
society limits to 6 percent the rate paid on its preferred stock. Three
percent is the maximum paid by 1 association, 5 percent by 5 associa­
tions, 6 percent by 7 associations, and 8 percent by 5 associations;
1 limits the return on common stock to 3 percent and on preferred to
5 percent. The remaining association did not report the maximum rate.
The rate actually paid in 1936 was 3 percent in 2 associations,
4 percent in 3 associations, 5 percent in 6 associations, and 6 percent
in 4 associations; and an additional organization paid 4 percent on
common and 6 percent on preferred stock.
Credit.— Five associations refuse credit to either members or
nonmembers, 11 allow credit to members but not to nonmembers
(but in one of these members’ accounts must be paid within 7 days),
and 9 allow credit to both (but in 2 of these only in limited amounts).
Pointing out that it was not in the banking business and therefore
not in a position to extend credit to member associations for any
length of time, the Midland Cooperative Wholesale was instrumental
in establishing in 1936 the Midland Credit Corporation. This organi­
zation, as its name implies, provides credit (up to $50,000) upon
trade acceptances, for local associations, enabling them to take their
discounts for cash and to obtain credit at moderate rates.
As aids in solving the problem of credit in local cooperatives,
several of the wholesales are urging the formation of credit unions
among the membership of the locals.
Patronage refunds.—All the wholesales practice the return of patron­
age refunds, though not necessarily in cash. All or part of such refunds
may be retained to be applied on the purchase of stock until the
required amount for full membership is obtained. An increasingly
popular practice is the declaration of such dividends, but with the
proviso that they shall not actually be paid until the end of a specified
period (2-5 years), being retained meanwhile as working capital. One
of the handicaps of the wholesales (as of the retail associations, also)
has been inadequate capital and this method has been adopted to
remedy the situation.
A provision of the by-laws of the Farmers’ Union Central Exchange
(St. Paul, Minn.) sets up a check-off system which prohibits the pay­
ment of any patronage refunds until the members’ dues are paid in
the Farmers’ Union.
Although the financial advantage accruing from membership in
and patronage of the wholesales is evident from the fact that nearly
$637,000 was received by the retail associations on their patronage
during 1936, this becomes even more clear when examination is made
of what the patronage refund means to the individual local association.




FEDERATIONS

159

Data were obtained on this point in the spot study made in St. Louis
County, Minn. There the patronage refunds of 18 associations ranged
from $83 to $3,416. Seven associations saved more than $1,000 each in
1936 through their purchases from central organizations. Naturally,
the societies which obtained large percentages of their merchandise
from cooperative sources were the chief beneficiaries from refunds.
All associations combined realized a net saving of 4.1 percent as a
result of their trading operations and an additional 1.1 percent in
refunds from the wholesales. Altogether the sum received in patron­
age dividends amounted to 27 percent of the amount saved through
the local associations’ own operations, in three associations it was over
35 percent, and in one association over 50 percent.
Employment in Wholesales
The 23 associations for which data were obtained as to employment
and wages were in 1936 employing 747 workers and had a total pay
roll in that year of $845,909. Per capita annual earnings varied
rather widely, but in 10 of the 23 were less than $1,000. For the
group the average was $1,132.
Weekly hours ranged from 36% and 37% hours (for a 5-day week in
both cases) to 60 hours, the weighted average for the group being 42.8.
T

able

77 .— Em ploym ent and Wages in Cooperative Wholesales, 1936
Am ount paid in wages
Num ber of
um ber of
associations N
reporting employees

Type of wholesale

Total

Average
weekly
hours
per
Average per em ployee
i
employee

All associations__________________________

23

747

$845,909

$1,132

42.8

Interregional_____________________________
Regional_________________________________
District__________________________________

1

17
691
39

19,027
789, 520
37,362

1,119
1,143
958

50.0
42.5
47.6

15
7

1 Weighted b y number of employees in each case.

The following statement shows the number of associations in each
classified average annual earnings group:
.

.

.

,

,

N um ber o f

Annual earnings, per employee, of—
associations
$500 and under $600_____________________________________________________
2
$700 and under $800_____________________________________________________
2
$800 and under $900_____________________________________________________
1
$900 and under $1,000___________________________________________________
5
2
$1,000 and under $1,100_________________________________________________
$1,100 and under $1,200_________________________________________________
4
$1,200 and under $1,300_________________________________________________
2
$1,300 and under $1,400_________________________________________________
2
$1,400 and under $1,500_________________________________________________
1
$1,500 and o v e r ,_________ __________________________________________ 2




160

CONSUMERS’ COOPERATION IN THE UNITED STATES

Development of Individual Associations
Available data on membership, business, net earnings, and patron­
age refunds are shown for individual associations in table 78.
T able 78.— Development o f Individual Cooperative Wholesale Associations

Association, State, and year of organization

Year

N um ­
ber of
mem­
ber
associ­
ations

Am ount of
sales i

Net
gain

Patron­
age
refunds

Interregional

Illinois: National Cooperatives, Inc. (1933)_____ _______
Indiana: United Cooperatives, Inc. (1930)______________

1935
1936
1934
1935
1936

7
9

$1,991

5
9

(2)
(2)
$375,000
418,000
468,067

$3,307
5.406
(2)
(2)
(2)

60
62
36

(2)
6,291,506
8 35,276

219,160
274,942
3 916

180,000
233,701

3, 225,827
4,403,858
5,187,457
375,841
491,040
647,941
938,807
1,348,491
1,968,968
2,222, 761

80,059
110, 799
131,336
7,549
2,607
9,048
(2)
37,439
75,882
70,757

57,310
59,855
93,291
(2)
3,000
4,500
(2)
15, 000
35,000
(2)

906, 272
1,678, 346
1, 549, 223
2, 615, 528
4,028,087
3, 783,991
269,863
417, 956
448,013
598, 751
615, 388
883, 736
1,073, 567
1, 751,007
2,423,107
3,033, 080
216,041
277,619
397, 232
309,261
489,437
981,491
1,328,629
1,493,843
1, 776,839
2,660,861
3,397,809
2,387,972
1,468,133
1,148,133
1,335,662
1,347,605
1,521,312
1,512,024
1,618,288
1, 774,143
2,001,725
2,118,212
1,571,028
1,192,838
1, 244,993
1,356,896
1, 635,125
1, 721, 221

4,959
24,014
22,066
98, 788
129, 768
85, 241
3,473
3, 926
7,798
14,804
21,163
26, 906
25,466
44, 799
63,441
71, 574
(2)
(2)
(2)
5, 279
23,679
43,346
27,464
48,373
68,501
103,838
71,151
(2)
* 83,000
* 24,832
9, 655
20,647
36,633
34, 222
49,096
37,930
50, 583
70, 850
64, 732
34, 912
56,082
57, 785
71,805
62, 903

(2)
(2)
15,488
31,948
(2)
(2)
3,436
1,938
4,798
11,811
19,000
21, 906
18,000
18, 500
27,000
48, 601
(2)
(2)
(2)
3,049
14,805
26,135
11,667
14,639
20,346
31, 680
39,810
(2)

(2)

(2)
(2)
(2)

Regional

Illinois:
Illinois Farm Supply Co. (1927)...... ..............................

1935
1936
The Cooperative Wholesale (1936)_______________ __ 1936
Indiana: Indiana Farm Bureau Cooperative Association
(1921)________________________________________________ 1934
1935
1936
Massachusetts: United Cooperative Farmers (1927)____ 1934
1935
1936
Michigan: Farm Bureau Services (1920)............. ................ 1933
1934
1935
1936
Minnesota:
Farmers’ U nion Central Exchange (1927)___________ 1931
1932
1933
1934
1935
1936
M idland Cooperative Wholesale (1926) ............... ......... 1927
1928
1929
1930
1931
1932
1933
1934
1935
1936
Minnesota Farm Bureau Service Co. (1928)_________ 1934
1935
1936
Missouri: Consumers’ Cooperative Association (1929)___ 1929
1930
1931
1932
1933
1934
1935
1936
Nebraska: Farmers’ Union State Exchange (1914).......... 1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936

(2)
88
88

(2)

31
31
30
73
113
118

91
156
172
211

225
240
37
38
40
62
77
92
103
120

137
148
(2)
(2)
30
21

61
90
143
199
259
313
342
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
180

8

(2)
260
(2)
265
275

i Figures relate to wholesale business only; for sales of retail branches in 1935 and 1936, see table 75.
8 N o data.
8 9 months’ operation.
4 Loss.




12,136
22,068
44,142
39, 236
21, 786
35,963
37,891
49, 258
40,847

161

FEDERATIONS

T able 78 .— Development o f Individual Cooperative Wholesale Associations— Continued

Association, State, and year of organization

Year

N um ­
ber of
mem­
ber
associ­
ations

Patron­
age
refunds

Amount of

Net
gain

$1 ,0 0 0
1,490
1,645

1040

$203, 756
175, 534
268,044
233,584
183,374
187,828
206,515
285, 512
4,639,928
4, 573,086
4,470,273
5, 744,189
6,029,044
3,946,889
2, 401,867
3, 265, 702
1, 261,044
4, 216,176
6 , 781,144
199,862
264,402
288,380
284,000
511,000
51,453
8 6 , 662
128,384
251,993
236,895
324,121
53,570
44,254
156,122
135,161
246,096
102,677
(2)
105,880
109,862
116, 721
119,855
243,487
173,854
102,378
» 977,125
8 1,447,334
9 1,807,443

1,617
135,126
112 , 900
134, 244
207,469
4 42,342
4 124,475
4 52,875
4 1, 747
6,228
111, 580
162,577
7,587
9, 698
12,400
9,800
11, 700
10,561
12,473
10,382
10,364
14, 646
19,461
(2)
(2)
(2)
(2)
(2)
(2)
(2)
1,786
1,321
1,074
1,013
1,274
1,984
2,091
1,854
18.277
(2)

15
25
40
48
56
56
56
60
65
74
76
84
90
97
99
98
97
97
99
109

25, 574
132,423
313, 064
409, 591
312,347
337, 567
504,177
613, 215
835, 532
1, 048, 293
1, 255, 676
1, 517, 813
1, 755, 627
1, 767, 760
1, 509, 752
1,309, 698
1,383, 290
1, 787, 556
2,185, 245
2,845, 741

268
2,063
7, 330
6 , 798
3,499
1,183
5,181
5,973
8,869
11, 648
18, 335
23, 894
35, 798
29, 735
12 , 035
9,091
13,133
31,696
37, 027
56, 710

R egional —Continued

N ew York: Eastern Cooperative Wholesale (1928).

Ohio: Farm Bureau Cooperative Association (1933)6.

Oklahoma: Farmers Union Sales Department (1922)___
Pennsylvania: Pennsylvania Farm Bureau Coopera­
tive Association (1934).
Texas: Consumers Cooperatives Associated (1931)______

Washington: Grange Cooperative Wholesale (1919).

Wisconsin:
Central Cooperative Wholesale (1917)

1929
1930
1931
1932
1933
1934
1935
1936
1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936
1934
1935
1936
1935
1936
1931
1932
1933
1934
1935
1936
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936
1917
1918
1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936

7
7
7
8
10
11
11

33
(2)
00
(2)
(2)
(2)
(2)
(2)
(2)

61
78
83
(2)
(2)
(2)
6
10

13
(2)

32
34
45
52
00
(2)
(2)
(2)
(2)
35
(2)
(2)
(2)
6
10
10
22

35
53
73

10

5 $900

778

® 866

88
4

130,827
98,935
125,921
175, 344
190,568
36,436

41, 395
94,492

(7)
(8)
9,185
7,572
6 , 790
7,765
10,895
18,338
(2)
(2)
(2)
(2)
(2)
(2)
(2)

3, 561
14,368
16,000
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
5,506
7, 722
13,752
17, 296
28,266
26, 809
9,158
9, 088
13,129
30, 208
30, 213
44, 461

2 N o data.
4 Loss.
« Accumulated.
6 Data for years prior to 1934 cover operations of Ohio Farm Bureau Service Co., the wholesale depart­
ment of which was purchased b y the Farm Bureau Cooperative Association in that year.
7 2.9 percent; amount not reported.
8 1.87 percent; amount not reported.
8 Including direct-invoice oil sales.
Under reorganization, M ar. 1, 1937.




162

CONSUMERS’ COOPERATION IN THE UNITED STATES

T able

78.—Development of Individual Cooperative Wholesale Associations—Continued

Association, State, and year of organization

Year

N um ­
ber of
mem­
ber
associ­
ations

Amount of
sales

1934
1935
1936

13
13
13

$177, 334
249, 790
251, 534

4 $1, 305
1,724
2,609

1934
1935
1936

(»)
36
36

181, 235
197,633
261,375

21
1,461
3,714

$1,361
2,832

5
6
6
7
7

2
2

13,145
20,412
33,039
42,026
60,424
19, 285
20,175
19,751
24,436
22,337

427
604
2,139
2,144
3,764
735
1, 074
540
1,305
1,759

427
604
2,139
2,144
2,924
(2)
(2)
(2)
(2)
00

6
8
(2)
10
12
(2)
14
14
10
10
10
10
10
10
10
(2)
12
13
14
14
14
15
(2)
15
15

25,000
54, 297
83, 604
87, 669
102, 528
130,035
146,281
171,996
46, 283
73, 876
74,686
79,805
66,161
72, 563
98,950
115, 083
98,605
91,504
93, 798
112,131
136,158
167,103
11,908
123, 779
230,229

3,340
8,915
11,187
11,069
14,020
14, 515
17,318
17, 673
7,076
10, 544
13, 590
14,927
7,640
7,881
9,673
18, 576
10, 483
10, 265
9,000
7,020
8, 275
11,926
191
1, 640
5,967

00
(2)
(2)
(2)
(2)
13,141
13, 787
16,034

(2)
(2)

14, 705
23, 853
25,260
(2)
(2)
38,660
56,606
14,827
30, 739
51, 672
71, 768
76,400
72,221
91,622
108,261
135,821
14, 650
28,059
37, 853

(2)
2,207
3,162
(2)
(2)
3,618
2,976
1,268
4,108
6,022
4,770
6, 077
4,177
8,497
5,985
8,187
865
1,208
2,091

Net
gain

Patron­
age
refunds

R egional —Continued

W isconsin—C ontinued.
Farm Bureau Federation Cooperative (1923)________
Workers* and Farmers* Cooperative U nity Alliance
(1931).............................. ...................................... ..........
District

Michigan:
H-O-B Cooperative Oil Association (1932)___________ 1932
1933
1934
1935
1936
Northland Cooperative Oil Association (1930) ............ 1931
1932
1933
1934
1935
Minnesota:
1929
Trieo Cooperative Oil Association C1929L .... __ _
1930
1931
1932
1933
1934
1935
1936
C -A -P Cooperative Oil Association (1929)
1929
1930
1931
1932
1933
1934
1935
Range Cooperative Oil Association (1929)___________ 1930
1931
1932
1933
1934
1935
1936
Range Cooperative Federation (1933)_______________ 1934
1935
1936
Wisconsin:
A . & B . Cooperative Oil Association (1930) ________ 1930
1931
1932
1933
1934
1935
1936
Cooperative Services (1928)........... - ................................ 1928
1929
1930
1931
1932
1933
1934
1935
1936
Price C ounty Cooperative Oil Association (1934)____ 1934
1935
1936




2

No data.

(2)
(2)
(2)

(2)
(2)

7

8
8
4
4
4
5
5
5
5
5
5

(2)

4
5

4 Loss.

9,832
10,873
6,607
7,742
8,673
(2)
7,750
00
9,000
00
8,275
11,926
1,600
5,800
(2)
00
(2)
(2)
3,618
2,976
1,021
(2)
2,858
3, 507
5,925
3, 677
7,998
4,965
6, 828
1,450

Figure 9.— headquarters

of central Cooperative
Wis.

Wholesale, Superior,

This association also operates a bakery, a feed mill, and a branch warehouse in the same city and a feed
mill and branch warehouse at Virginia, Minn.

Figure 10.—One




of the warehouse departments of the central
tive Wholesale. Superior, wis .

Coopera­

Figure 11.— scene at northern Wisconsin Cooperative Park (Near Brule)
O wned by Cooperative associations in T hat district .

Figure 12.—class (Under Sponsorship of O hio Farm bureau Cooperative
association ) T raining leaders of Recreational activities for Coop­
eratives .




163

FEDERATIONS

Service Federations
Local cooperative associations have formed a number of organiza­
tions to perform services which they were not fitted or did not desire
to undertake themselves. Of 12 such associations for which reports
were received, 5 were publishing associations (including 1 printing
credit-union forms only), 4 were auditing associations, 2 were recrea­
tional associations, and the function of 1 was to organize local asso­
ciations.
The following table shows, for the various types of associations,
the number of members and the total income of the service federations
in 1936.
T able 79.— Membership and Income of Service Federations, 1936

Type of federation

Number of
member asso­
ciations

Num ber re­
porting

Total income,
1936

Auditing associations____ _ ____ _ __________ _ _
Organization associations. _ _____________________ . _
Printing and publishing associations________ _____
Recreation associations________ _________ _______ __ _

4

469

5

2

388

368

1$37,364
(2)
216,905
(2)

T otal__________ __________ _______ _______

12

931

254,269

1

6

1 3 associations.
2 N o data.
3 1 association also has 400 individuals in membership.

Net earnings in 1936 were reported by four printing associations,
and amounted to $16,927. Only one association returned patronage
refunds, which amounted to $1,400.
In addition to separate organizations doing auditing for cooperative
associations, most of the cooperative wholesales have an auditing
department.9 The increasing emphasis upon the importance of
adequate accounting systems in local cooperative associations, and
of the annual or semiannual appraisal of the financial status of the
organization that is furnished by the audit, is one of the encouraging
tendencies in the cooperative movement today.

Noncommercial Federations
As already indicated, the distributive associations have their own
system of wholesaling, although as yet not all sections of the United
States have access to cooperative wholesale facilities.
The distributive associations also have their own regional and
national noncommercial federations; these are educational, propa­
ganda, and defense organizations. To the national association, the
Cooperative League of the U. S. A., may be affiliated (either through
the regional leagues or directly, where no such league exists) any bona
fide consumers' cooperative association. The League in 1936 had in
®See pp. 146-148 of this report.




164

CONSUMERS’ COOPERATION IN TH E UNITED STATES

affiliation, directly or indirectly, such diverse types of associations as
stores, petroleum associations, buying clubs, bakeries, creameries,
laundries, housing associations, telephone associations, credit unions,
insurance associations, organizations providing lodging and meals,
burial associations, garages, medical-care associations, recreational
associations, and such federated associations as wholesales, printing
and publishing associations, and auditing associations.
There is no central cooperative federation especially for the tele­
phone associations, though a few local associations of this type are
members of the cooperative league in their region. The burial asso­
ciations in two States each have a State federation and, as noted,
some of the local burial associations are also members of the Coopera­
tive League of the U. S. A.
Federations in the Distributive Movement
The Cooperative League of the U. S. A., national educational asso­
ciation for the consumers' cooperative movement, was formed in
1916, when the wave of cooperative interest started by the rising
living costs accompanying the World War first began. At that time
there was almost no intercourse between local cooperative associations.
Each association was going its own way, making mistakes that could
have been avoided, and unaware in many cases that there were other
similar organizations with which experiences could be exchanged.
Although the new organization called itself The Cooperative
League, it was not at that time a league in the sense of being a federa­
tion of cooperative associations. The organization reversed the usual
procedure abroad, under which the existing local societies federated
to form a central body. At the time the League was organized, there
were only a small number of consumers, cooperatives in existence and
few of these knew of the League's formation. Much of its early work
was done by the volunteer efforts of a few persons. Its expenses were
met by its president. Only a few of the associations which became
members in those early years were able to spare funds for the League's
support.
A congress called in 1918 received widespread cooperative atten­
tion, and the delegates voted for the formation of a national educa­
tional body or to transform the League into such an organization.
The latter course was followed in the congress of 1920, which organ­
ized the League as the permanent national body of the movement.
Its purposes were to be “ to promote the cause of cooperation; to
develop mutual aid in place of antagonism; to favor the spread of
knowledge of cooperative methods; to unite all consumers of the
United States for the above purposes and for the purpose of inter­
national federation; and to encourage the acquirement of the agencies
of production,” The plan adopted provided for State leagues with




FEDERATIONS

165

local autonomy and for district federations within the State. The
national organization would have no control over the constituent
bodies except that they must be acceptable to it.
The influence of the League has been gradually expanding year by
year. During the early years of its existence its affiliates were mainly
associations in industrial centers. Of late years the farmers7coopera­
tives have shown an increasing tendency to become identified with
the consumers’ cooperative movement through affiliation with the
League. At the end of 1936 it had in membership 1,500 associations.
The network originally planned has been modified somewhat.
Under the present arrangement, regional leagues are provided for.
Thus far, five have been created, and as local cooperative development
warrants it, others will be established. Local societies which affiliate
with the regional leagues automatically become members of the na­
tional league. The five regional leagues are the following:
1. Northern States Cooperative League, with headquarters in
Minneapolis, Minn., established in 1922. Its territory includes
northern Michigan, Minnesota, Montana, the Dakotas, and Wisconsin.
2. Eastern Cooperative League, with headquarters in New York
City,10 established in 1925. Its territory includes the New England
States, New York, New Jersey, Pennsylvania, Maryland, and Delaware.
3. Central States Cooperative League, with headquarters in Chi­
cago, established in 1926. Its territory includes Illinois, Indiana,
Ohio, and lower Michigan.
4. Northern California Cooperative Council, with headquarters in
Oakland and territory covering northern California.
5. California Cooperative Education Association, with headquarters
in Pasadena.
All of these leagues are nonstock associations supported by dues
from local associations, by income from services rendered by them
(legal, auditing, etc.), and by the sale of pamphlets and other printed
material. They are governed by boards of directors elected by the
member associations. Generally, voting is on the proportional-repre­
sentation plan, with each local association allowed one vote by virtue
of membership, plus an additional number of votes based upon the
number of its members.
The leagues carry on general educational work in the theory and
practice of cooperation, give information and advice on cooperative
problems and on organization procedures, issue pamphlets on cooper­
ative subjects, furnish' articles for the press, provide speakers for
meetings, and lecturers and instructors for cooperative schools and
institutes and other interested groups. One important activity is the
giving of short courses for selected young people and technical train­
ing courses for employees and managers of cooperative societies.
io M oved to Brooklyn in 1938.




166

CONSUMERS’ COOPERATION IN THE UNITED STATES

Other services include legal advice and auditing service for local
associations.
In addition to the regional and national leagues, there are many
lesser educational federations or councils. One of the most interest­
ing developments of recent years has been the creation of such organi­
zations in a metropolitan district, a county, or other district. These
organizations form a clearing house of experience of the different
associations, assist in the solution of local problems, and take over
to some extent the educational work of local associations. Such
federations have also furnished a medium for joint activities such as
an annual picnic, a summer institute, a children’s camp, or a winter
festival.
In some cases membership in a local league is restricted to associa­
tions which are also members of the regional cooperative league;
in such cases only consumer organizations are admitted. Some of
the county-wide federations or councils, however, contain in their
membership all types of cooperative associations in the county,
whether producer or consumer organizations. The Clearwater
County Cooperative Council, at Bagley, Minn., for example, included
in its membership at the end of 1936 one store association, two petro­
leum associations, one casket association, one electricity association,
one telephone association, two grain elevators, six creameries, one
publishing association, two livestock-shipping associations, one wool
pool, and one warehouse association.
The following table gives the membership of the 15 federations
which furnished data. These organizations reported a combined
income, from all sources, of $20,702 for 1936; this figure is not, however,
very significant, for the services they render cannot be measured in
money.
T able

,

8 0 . — M em b ersh ip o f R ep o rtin g E d u ca tion a l F ed eration s 1 9 3 6

Scope of federation

Number
report­
ing

Num ber of
member
associa­
tions 1

General educational federations whose scope is—
National___________________________________
Regional (more than 1 State). ___
State-wide__________ __________
. . . . ___
M ore than city but less than S tate-w id e___
C ity-wide__________________________________

1
2
1
7
2

1,500
396
19
119
26

Federations of special groups:
W om en’s guild___________ _______
______
Youth league______________________________

1
1

62
33

1The figures shown in this column should not be added, as the different classes o f associations are not
mutually exclusive (i. e., the associations which are members of city and State leagues are also members of
the regional leagues).




FEDERATIONS

167

In addition to the federations shown above, the Bureau had reports
for three local educational associations with 2,215 individual mem­
bers.11
SPEC IALIZED F E D E R A T IO N S

There are two organizations, auxiliary to the consumers’ coopera­
tive movement, which are devoted to activities among women and
among young people. Both of these are in the “ Northern States”
region, but local units of the same type are now found in various other
parts of the United States, and it is very likely that eventually both
will expand into national bodies.
Northern States W o m en 's Cooperative Guild .— Organized as an unin­
corporated educational association in 1929, the guild began with 20
local units having a total membership of about 250 individuals. In
1935 there were about 58 units, and at the end of 1936 there were 62.
Membership in the local units varies from 12 to 60 individuals. In the
beginning, the organization was almost wholly made up of Finnish
women, and they still form about 75 percent. There has been a
slow infiltration of younger, Americanized Finnish women, and a few
non-Finns.
The guild cooperates with the educational department of the Cen­
tral Cooperative Wholesale (Superior, Wis.), the Northern States
Cooperative League (Minneapolis), and the Cooperative Youth
League of the North Central States in educational work and financing
of summer institutes and youth camps. A large part of its program
is devoted to cultural activities. The local units have drama, music,
and social-problem groups, and they arrange hundreds of mixed
social get-togethers during the year. In 1936, the income from cul­
tural and social programs was $1,485. Propaganda against war and
against intemperance is carried on, and a woman’s section is main­
tained in the Cooperative Builder and the Finnish Cooperative
Weekly, issued by the Central Cooperative Wholesale.
Meetings of the local units are held either weekly or twice a month,
those of section committees are held semiannually, and those of the
district organization are held annually. Dues of 4 cents per month
for each member of the local unit are paid by the unit to the district
organization. Dues paid to the local unit itself are from 5 to 10
cents per month.
According to the secretary, heavy snows, long distances, and sea­
sonal work on the farm are among the chief obstacles to growth.
Many of the members live in scattered rural areas and cannot afford
travel expense.
The Northern States organization is also taking the initiative in
forming a National Cooperative Women’s Guild.
11 These were included in the figures for “ miscellaneous’ ’ associations shown on p. 62.




168

CONSUMERS’ COOPERATION IN THE UNITED STATES

Cooperative Youth League of North Central States.— Designed to
fulfill the same functions in behalf of youth as the Guild fulfills for
women, the Youth League was organized in 1930 as an unincorporated
association. It was sponsored and fostered by the C. C. W .’s educa­
tional department. The first local unit was started in Superior, Wis.,
from which the league spread throughout Minnesota, upper Michigan,
and upper Wisconsin. The high point was reached in 1932, with 50
locals, embracing a total number of 2,000 individuals. From 1933
on, the movement declined, partly because of the depression and
partly (the secretary of the league believes) because of insufficient
interest and cooperation from the adult cooperators.
In June 1937 the membership consisted of 33 local units (with an
aggregate membership of 780) and 20 individual members. An execu­
tive committee of 9 members is elected at the annual convention in
September, every local unit being entitled to one delegate, and one
additional delegate for every 10 members exceeding the first 10. A
general district committee, meeting twice a year, is composed of the 9
members of the executive committee plus the various secretaries of
the sections (the latter are coordinating units for adjacent locals).
The local units have about 15 or 20 members on the average. They
generally meet weekly or twice a month. They contribute 6 cents
per member per month to the district organization. Only about $72
was raised in 1936 through membership dues, with $319 received as
donations, and $53 as receipts from sale of pins, songs, and the staging
of plays.
A monthly educational bulletin is issued by the league, and a
“ youth page” is conducted in the Cooperative Builder. At the
annual cooperative youth course at Brule, Wis., the aims and program
of the league are further publicized. These aims, according to its con­
stitution, are to “ further the fundamental principles that the cooper­
ative movement is a part of the general labor movement, seeking
with impartial neutrality the cooperation of all workers’ and farmers’
movements for the benefit of the exploited toiler * * * encourage
working-class organization of the youth in other fields—industrial,
political, and cultural— and assist in the class education and organi­
zation of the working-class children.”
Federations in the Credit- Union Movement
Although, strictly speaking, the credit unions are service coopera­
tives intended for the benefit of the consumer of credit, generally that
branch of the cooperative movement has developed separately, along­
side the general consumers’ movement but with very little contact with
it. Few credit unions have regarded themselves as consumer coopera­
tives. The distinct lines of separation have become blurred to some




FEDERATIONS

169

extent in recent years as individual credit unions have become aware
of the basic similarities and have affiliated with regional cooperative
leagues, and as the local cooperative distributive associations have
organized credit unions among their members.
As in the general consumers’ cooperative movement in the United
States, so in the credit-union movement the central educational organ­
ization appeared on the scene when there was only a small number of
local credit unions in existence. Financed by the late Edward A. Filene
to the amount of nearly a million dollars, the Credit Union National
Extension Bureau was formed in 1921. The purposes of this bureau
were to work for the passage of adequate State laws permitting the
formation of credit unions, to assist in the formation of credit unions
on approved methods, and finally to aid in the federation of these local
associations into State credit-union leagues.
To this organization goes the greater share of the credit for the rapid
enactment of State credit-union laws since 1921. Its work was capped
in 1934 with the passage of the Federal act making possible anywhere
in the United States or its territorial possessions the formation of a
credit union. In States where for some reason the State law is not
satisfactory, a credit union therefore has an option of incorporating
under either the State or the Federal statute.
During these years the Credit Union National Extension Bureau
remained, not a federation of local associations, but a privately
financed promotional organization. In 1934 it went out of existence,
and its place was taken by the Credit Union National Association,
which in May 1937 had in affiliation State-wide credit union leagues of
41 States. This national association is governed by a board of 59
directors, consisting of 1 director from each State and 1 additional
director for each 15,000 individual members in the State league.
The Credit Union National Association has its headquarters in
Madison, Wis.
Besides the State leagues, city and district chapters have also been
formed to deal with local problems and perform certain mutual-aid
services. In M ay 1937 there were 250 such chapters.
None of the leagues perform any commercial service. They are
purely educational organizations. There are, however, two associa­
tions which the national association has formed to perform certain
business functions. These are the Cuna Mutual Society— a mutual
insurance organization writing insurance on the outstanding loans of
the credit unions;12 and the Cuna Supply Cooperative— a wholesale
association which deals in accounting ledgers, deposit slips, and other
supplies used by the local associations.
12 See also p. 136, and tables 64 and 66.

90621°— 39-




-12

Chapter 8.— EDUCATION AND RECREATION IN THE
COOPERATIVE MOVEMENT
Continuous educational work is regarded by cooperators themselves
as the keystone of the movement, and this work is the primary function
of the Cooperative League of the U. S. A. and its five regional leagues.
This was pointed out by Dr. J. P. Warbasse, president of the League
since its inception, as follows:
Time and experience have proved that education must precede business and
dominate the general program if cooperation is to be built soundly. The primary
task of the League, it would seem, is not to see how many people can be gotten into
the cooperative movement, but to see how many people can be made to understand
cooperation. Obviously, the first duty is not to increase the size of the League, but
to aid always to improve its quality— to build in this country a body of intelligent
and understanding cooperators. W ith this policy the League should continue to
thrive and our cooperative business to expand.

Education
Educational work in the cooperative movement is of two kinds—
education of the members and the public in the cooperative philosophy;
and education of the employees, not only in the basic philosophy but
also in the technical requirements of their jobs.
General education in cooperation.— During the entire course of its
existence the Cooperative League has centered its attention on the
problem of making genuine cooperators of the members and of broad­
ening the public’s knowledge of the cooperative movement. Through
its many pamphlets on cooperative subjects, answers to letters of in­
quiry, lecturers and speakers, and in later years through radio pro­
grams, it has labored unceasingly in this field.
Since the early years of its existence the Cooperative League has
been giving courses in the theory and practice of cooperation. The
number and variety of subjects have increased year by year, and in
1936 the League established what is now known as the Rochdale
Institute. The curriculum of the first classes (given in the fall of
1937) included a 2-month lecture course on various types of cooper­
ative associations (including visits to associations), followed by 2
months’ field work in which the students did practical work in associ­
ations selected by themselves. Similar courses are planned to be
held annually in the spring and fall.
Study courses in theory and practice have also been given by three
of the regional leagues.
170




EDUCATION AND RECREATION

171

Education and training o f em ployees .— In the early years of the Coop­
erative League, the regional leagues (especially the Northern States
Cooperative League) gave training courses for cooperative employees.
In recent years the tendency has been for the wholesales to take over
this phase of the educational work, although the regional leagues still
collaborate with the wholesales in this activity to some extent.
In the period 1923-31, the Northern States Cooperative League held
six training schools in which, altogether, 156 students received training.
In 1926 a correspondence course was given.1 Since 1931 the league
has held no training school of its own, but has cooperated in those given
by its affiliated wholesales. It has, however, each summer held a 1week institute; these institutes are educational courses given in sur­
roundings offering opportunity for camping, sports, and other outdoor
activities. The league has also furnished instructors for educational
programs and training schools given by central organizations in other
sections of the Middle West.
The training schools of the Central Cooperative Wholesale, in which
the league has participated, have been increasing in length of sessions
and in attendance. Nearly 500 young persons have attended these
schools. In this way the cooperative movement is acting to insure that
the employees in the movement shall have both the cooperative view­
point and the required occupational techniques. The courses run for
about 8 weeks, with a maximum registration of 35 students. These
students include persons already employed by local cooperatives (often
the cooperative assists with a scholarship which it pays for), promising
young people chosen for their abilities, and others who, attracted by
the philosophy of the movement, wish to enter its service.
In addition to the training courses, the Central Cooperative Whole­
sale holds 4-to-6-week summer courses for selected young people, as
well as 1- and 2-week summer institutes for adults, and 1- and 2-week
summer camps for children (combining schooling and vacation).2

Recreation
In recent years cooperative associations have undertaken increas­
ingly to enliven their educational and business activities with various
features of recreation and entertainment, with the aim of making the
cooperative association a factor in the members* social lives as well as
in their bread-and-butter economy. Dinners and social gatherings
in connection with the regular membership meetings, concerts, plays,
and the showing of cooperative films are some of the measures adopted.
1 This activity was taken over and continued b y the National League.
3
Because so m any of the league’ s early duties have gradually been taken over b y the wholesales, the
question of reorganization of the league as a conference b od y for the wholesales in its region was under con­
sideration in the fall of 1938,




172

c o n s u m e r s ’ c o o pe r a t io n i n t h e u n it e d s t a t e s

The greater proportion of such work is carried on by the local store
associations, or by the women’s guilds and cooperative youth leagues 3
formed among their members. There is also a small but growing
number of federations whose only or chief function is the provision of
recreational material or the fostering of social activities.
The Bureau had reports from 11 recreational associations, 4 of which
owned and operated cooperative “ parks” (i. e., tracts of land utilized
for games, camping, fishing, and other recreational purposes), 4 were
operating clubhouses, 2 owned halls used for dances, dramatics, and
other social functions, and the remaining association sold games,
puzzles, books, and other recreational material, besides operating a
farm and a clubroom.
One recreation association was in Michigan, two were in Minnesota,
two in New York, one in Ohio, one in Oregon, and four were in Wis­
consin. Of the associations reporting on this point, one was formed
in 1905 and one each in 1922, 1923, 1924, 1930, 1932, 1933, and 1935.
Their membership totaled 914 at the end of the year, ranging from
27 to 300 and averaging 102.
Among the most interesting of these associations are those which
have purchased land for recreational purposes. Two of these were in
St. Louis County, Minn., one was in Michigan, and the fourth was in
northern Wisconsin. One of the Minnesota associations was started
about 1928 and at the end of 1936 owned a tract of 160 acres (including
a lake). Only local associations were accepted into membership;
40 were affiliated at the end of 1936. Water sports (summer and
winter), games, theatricals, dancing, and summer festivals were
available free to the members of affiliated organizations, but non­
members paid a fee for service. A frame building 50 by 72 feet
provided space for dancing and meals. The development of the park
area had been retarded by the fact that when the Rochdale-Com­
munist split occurred in 1930, this association came under the control
of the Leftist group and after that, although the “ orthodox” groups
still held membership, they had withheld their active patronage.
The other Minnesota association was started in 1932. At the end
of 1936 it owned an 8-acre tract which included a lake. The land
was entirely paid for, but only camping facilities and water sports
were provided; arrangements had been made for serving meals over
the week ends during the summer. The land owned by the Wisconsin
association also contained a lake. Cottages for the use of the mem­
bers, camping facilities, and the usual water sports were provided, as
well as games, lectures, and dances (see fig. 11 facing p. 163).
One of the hall associations owned a three-story building with a
gymnasium, swimming pool, dance floor, study rooms, and dining
3 For a discussion of these associations, see pp. 167, 168.




EDUCATION AND RECREATION

173

room. In this building were held study classes, dances, dramatics,
and other social and educational events.
Most of the recreation associations have been formed among
persons who already had other cooperative ties, but the reporting
associations included two which operated community clubhouses on a
cooperative basis, in communities in which, as far as the knowledge
of this Bureau goes, there were no other cooperative associations.
One association in the reporting group grew out of a study club
among students from graduate schools of religion. At first emphasis
was laid upon party programs, games, and “stunts,” but this was
shifted to “creative activities, folk arts, crafts, music, and hobbies
which give lasting satisfaction.” 4 The association, in its present form,
was the result of a merger of Recreation Cooperative, Inc., with
Church Recreation Service.
It operates an 80-acre farm containing woods, play spaces, a large
colonial house (for living quarters, office, and library), and a large
barn, with fireplaces, which provides space for a shop and a clubroom. Although it deals in recreational materials, the association
emphasizes that it is an educational rather than a merchandising
agency. The idea, promoted by the association, of teaching children
to make their own games was, it reports, so favorably received that
in 1937 more than a hundred shops for making such games were set
up in summer schools and camps.
In the summer of 1936 a 2-week cooperative recreation school was
held in which 51 students from 11 States were enrolled. The primary
purpose of this school was to train leaders from cooperative, farmer,
labor, church, and similar groups in the use of modern recreation
methods and materials. The scope of this school is shown by the
following schedule of subjects covered:
8 :3 0 -9 :5 0 .
10 -1 2.
1 :3 0 -2 :3 0 .
2 :4 0 -3 :3 0 .

3 :4 0 -4 :3 0 .
4 :3 0 -5 :3 0 .
7 :3 0 -8 :1 5 .
8 :1 5 -9 :3 0 .

Lectures and discussions.
Dramatic directing and acting. Instrumental and vocal music.
Group gam es and folk recreation. Puppetry.
Lectures and discussions dealing with administrative policies, tech­
niques of organization, leadership, social-educational function of
recreation.
Advanced folk dancing. Beginners’ class in singing games.
Equipment games.
Group singing.
Play party games and folk dancing.

4 Consumers’ Cooperation (N ew York), Novem ber 1937, p. 172.




Chapter 9.— COOPERATIVE ASSOCIATIONS AS
EMPLOYERS
Summary
In the cooperative movement in the United States there cannot be
said to be any real personnel policy such as has been worked out in
Great Britain and the Scandinavian countries. The young and strug­
gling movement here has been too preoccupied with the primary busi­
ness problems to give much time to consideration of a well-reasoned
policy of industrial relations. The conditions accorded to employees
have depended on the good will of the directors of the individual as­
sociation, the financial status of the association, and the association’s
degree of acceptance of the Rochdale fair-wage standards.
Detailed field studies were made in a number of localities in con­
nection with the Bureau’s survey of cooperative associations. These
revealed that, in general, relationships between the workers and the
associations were good. Certainly, unrest and dissatisfaction as
exemplified by strikes have been infrequent. This may have been due
to a number of factors: The large majority of associations have been
in small rural places where there was little labor organization and no
tradition of concerted labor action; the associations were generally
small and employed only one or two workers; the employees were
cooperators as well as employees and as such were imbued with the
idea of promoting the cause; and they were convinced that it was the
desire of the members to provide as good wages and hours as condi­
tions would permit. With the development of large associations
employing considerable numbers of workers, with the expansion of
the cooperative movement more and more into industrial communities
having a strong labor consciousness, and especially as a result of the
unionization drives, disputes may be expected to occur with greater
frequency unless machinery is adopted to deal with them. That this
is realized by the cooperative leaders is indicated by frequent articles
and editorials in the cooperative papers.
The provision of good wages and working conditions is one of the
approved practices of Rochdale cooperation. That such conditions
are in fact, provided in most foreign countries where the movement is
well developed is borne out by a study recently made by the Inter­
national Labor Office.1 The data gathered by the Bureau of Labor
Statistics in its survey of cooperatives, covering the year 1936, indi­
cate a wide range in both wages and hours among the consumers’
cooperatives in the United States. Further, on the basis of such
figures as are available for private retail trade, both wages and hours
in cooperative employment appeared to be somewhat less favorable
than those in private business in 1936.
1 International Labor Office, Cooperative Information (Geneva), Nos. 1 and 2,1938: Conditions of W ork
of Employees of Consumers’ Cooperative Societies.

174




COOPERATIVE ASSOCIATIONS AS EMPLOYERS

175

Average annual earnings per employee in some 1,500 retail distribu­
tive associations for which such data were obtained amounted to $1,155
for 1936.2 In this connection it should be borne in mind that 72.5
percent of the total cooperative retail trade in that year was done in
places of less than 5,000 population, where living costs are likely to
be lower than in the cities. However, this average included the re­
muneration of the managers as well as clerks. Although there is not
so wide a gap between wages of the manager and those of the clerks
in cooperatives as in private business, inclusion of the manager’s
salary does bring up the general average and the clerks’ earnings
would therefore be below even the average noted above.
As the membership of cooperative associations is composed quite
largely of industrial workers and farmers, undoubtedly the wage levels
in the associations were influenced by the fact that the wages in in­
dustrial employments and the farmers’ incomes fell to extremely low
levels during the depression. As a result, in some cases the earnings
of the workers employed in the cooperative stores were above those
of a considerable proportion of the members. It was hard in such
cases for the membership to bear in mind that their employees’ rates
should be fixed on the basis of the kind of services performed for the
association, and not necessarily in relation to the earnings of the
members in totally different lines of work.
Hours of work were still long in many cases. At the end of 1936
only 26.8 percent of the employees were working the 48-hour week or
less, which is prevalent abroad in cooperative employment.
Cooperative employees do have the advantage of patronage re­
funds on their purchases from the association. It may be that clerks
in private stores have the privilege of obtaining their supplies at re­
duced prices, but there is no information available regarding the preva­
lence of such a practice. Reduced prices to employees are not com­
mon in the cooperative movement.
Such data as are available regarding vacations, absence on account
of sickness, and occasional time off during working hours indicate
that cooperative associations are quite generous in their treatment of
employees in these matters.
From the information at hand it appears, also, that cooperatives
provide relatively stable employment and that the average period of
service of their employees is quite long. Undoubtedly this security
of tenure is a factor of considerable importance.
Personnd Policies
H irin g and firing .— Authority for the employment and discharge of
cooperative employees is generally vested in the board of directors,
1 The average annual earnings of employees of wholesale cooperatives for 1936 were $1,132.




176

CONSUMERS’ COOPERATION IN THE UNITED STATES

but in practice may be delegated by it to the manager. Wage rates
are generally set by the directors, often with the advice of the manager
and in exceptional cases by him alone.
A study of personnel relations in cooperative associations under­
taken by the Bureau of Labor Statistics at the end of 1930 3 indicated
that few even of the larger organizations had any provision for regu­
lar increases in wages or any definite line of promotion within the
organization. One exception was an association whose policy it was
to appoint the managers of departments and the head clerks from
among the employees of the department having the vacancy. In
another association, without a definite policy in this regard, all of the
department managers had in fact arisen from the ranks.
New employees of cooperative associations may be obtained from
among the membership, from students trained in courses given by
the cooperative wholesales and central educational organizations, or
from trade-union sources. In sections where the movement is well
developed, as in the North Central States, there is considerable shift­
ing of employees from one association to another; managers in that
district are quite often drawn from rank-and-file employees of other
associations. Notices of positions open frequently appear in the
cooperative papers. That the entrance wage in such cases may be
largely a matter of individual bargaining is indicated by the frequency,
in such advertisements, of the clause, “please state salary required” ;
the amount offered by the association is almost never mentioned in
the notice.
A djustm en t o f grievances .— The 1930 industrial-relations study
revealed that joint meetings of employees and management were
quite common. These were, however, designed in most cases rather
to increase the employees7working efficiency and their understanding
of cooperative methods than to solve their problems as employees.
The employee in the cooperative movement is in an unusual situa­
tion. In addition to his role of employee, he is in most cases also a
member of the association that employs him. In that association he
is of equal importance with every other member. If his grievances
cannot be ironed out by appeal to the manager and then to the
board of directors, they may be brought before the members at a
general or special meeting. This, of course, is a situation not found
in the ordinary stock company.
In most of the associations visited the wage rate was set by the
board of directors and all complaints regarding remuneration had to
be taken to the board. An exception was an association where the
manager not only hired and fired the employees, but fixed their rates
of pay. In one of the older organizations, where the board of direc­
tors set the wage levels, a special board had been created to deal with
* Increased pressure o f work and lack of funds, because of the depression, prevented the completion of
this study. It was to have covered associations with 10 or more employees.




EDUCATION AND RECREATION

177

complaints regarding wages; this board, which met regularly once a
month, consisted of the general manager and two of the directors.4
Overtime .— Overtime work is uncommon in cooperative associations.
It must be said, however, that certain conditions peculiar to the move­
ment tend to shorten the free time of the employees, and especially of
the manager. Some of the associations hold weekly, biweekly, or
monthly meetings of the employees, at which business problems and
other topics are discussed. The manager must, of course, be present
also at all general and special membership meetings, recreational
activities, etc. Quite often he is invited to speak before the youth
league or the women’s guild, or to take part in other extra-business
activities. It is well known among observers of the movement that
many demands are made upon the time of the manager and workers
outside of working hours.
Vacations .— Information on this point was not requested in the
general survey, but was obtained in the spot studies. It was custom­
ary for the cooperative stores in St. Louis County, Minn., to give em­
ployees a paid vacation. Generally the vacation was 1 week, after a
year’s service. Exceptions were one association which allowed a
2-week vacation, and one in which the period of service required was
only 6 months. One association whose policy it was to give a week’s
vacation with pay had to discontinue the practice, for financial reasons,
during the depression. Four associations gave no paid vacation. Of
the private stores in the same territory for which data were obtained,
only four gave a paid vacation of 1 week; an additional firm used to
to do so but had discontinued the practice. Another store had recently
been sold to a new owner and no vacation policy had been decided
upon. Both private and cooperative stores were lenient with em­
ployees as regards occasional time off during working hours. Gen­
erally, no deduction of pay was made in such cases, or for short periods
of sickness. One of the largest cooperative associations allowed
casual time off, but deducted from the employees’ pay for any time
lost, however short, because of sickness.
All but one of the five associations in the northern Wisconsin district
allowed their employees a week’s paid vacation; two of these required
at least 1 year’s service. One association gave no paid vacations.
Both the Cleveland and Chicago associations included a large pro­
portion of new associations which had not yet formulated a vacation
policy. Of 13 associations reporting in Chicago, 3 gave a paid vaca­
tion of 1 week, 2 a vacation of 2 weeks, and 1 a 1-week vacation after
1 year’s service and a 2-week vacation after 2 years’ service. Of 7
associations which did not give their employees vacations, 2 had
given such leave until the onset of the depression.
4
In some of the foreign countries central wages boards have been created to which wage com plaints
impossible of local adjustment m ay be referred. Usually there is also a provision that in case of a general
strike in any trade the cooperative employees of the craft concerned shall remain at work, the cooperative
associations undertaking in advance to meet any terms won from private employers.




178

CONSUMERS’ COOPERATION IN TH E UNITED STATES

One association in Cleveland gave a week’s vacation with payeach year. Another had done so until 1935. Most of the other
associations in that city were either buying clubs without paid em­
ployees or were groups which had only recently opened their store.
S pecial fa cilities and services .— Certain of the largest associations
provided special facilities for employees. One provided lunchroom
facilities, lockers, shower baths, and a lounging room for the woman
employees. Another, which ran a lunchroom as one department of a
store and creamery business, gave lunch service to its employees at
reduced rates. In this organization, also, a rest period during which
coffee and rolls or pastry were served at cost was provided morning
and afternoon.5
About half of the associations visited in 1930 had provided life
insurance for their employees, the cost of which was paid by the
association in all but one case; in the exceptional instance half the
premium was paid by the employee concerned.
Wage bonuses are very uncommon in the cooperative movement.
One of the larger Michigan associations had always paid bonuses to
employees at the same rate as the rate of patronage refund to members.
A Wisconsin association in 1936 voted to pay its clerks, in addition
to salary, a commission of 1% percent on all sales over $4,500 per
month. Many of the petroleum association employees were regularly
paid on a commission basis.
Employment in Distributive Associations
Because so large a proportion of the employment in the credit,
telephone, and insurance associations is on a part-time basis, the
average hourly, weekly, and annual earnings there are of little sig­
nificance. For the retail distributive associations— i. e., the stores,
petroleum associations, and associations retailing other commodi­
ties— the proportion of part-time work was reported and could be
allowed for. For this reason the following analysis of wages and
hours of cooperative employees has been restricted to the retail dis­
tributive associations.
Almost five-sixths of the associations reporting in the Bureau’s
survey furnished data as to employment and pay rolls. On the basis
of these reports it is estimated that the retail distributive associations
gave full-time employment to some 15,000 persons and disbursed
about 17% million dollars in wages in 1936.6
Nearly half (47 percent) of the distributive associations reporting
were employing from one to three workers at the end of 1936. There
were, however, slightly over 13 percent which had 10 or more em­
ployees each (table 81). All associations combined had an average of
6.5 employees each.
* This practice appears to be fairly com m on among the larger Finnish cooperative associations in the
United States.
< The wholesale associations had 747 employees and a pay roll for 1936 of $845,909.




179

COOPERATIVE ASSOCIATIONS AS EMPLOYERS
T able

81.—

D istribu tion o f R eta il D istribu tive C ooperatives , b y N u m ber o f E m p lo yees , at
en d o f 1 9 3 6

Store
associ­
ations

Total

Number of employees

Petro­
leum
associa­
tions

Distrib­
utive
depart­
ments
of mar­
keting
associ­
ations

All associations________ ____ _______________________

1, 531

714

680

127

1 employee_____ _________________ ________________
2 employees________________________________________
3 employees________________________________________
4 employees________________________________________
5 em ployees.. _________ _____ _____________________
6 to 9 employees____________________________________
10 to 14 employees__________________________________
15 to 19 employees__________________________________
20 to 24 e m p lo y e e s.__ ___
______ ___ _________
25 to 49 e m p lo y e e s.________ ___ _________________
50 to 99 employees__________________________________
100 employees and over_____________________________

194
259
265
193
120
294
104
46
21
23
9
3

88
123
127
99
52
132
45
20
10
10
7
1

87
103
117
77
59
139
52
25
10
11

19
32
21
17
8
21
5
1
1
1
1

Cream­
eries and
bakeries

10
1
1
2
2
1
1
1
1

Earnings of Cooperative Employees
AVERAGE ANNUAL EARNINGS

For all types of retail distributive associations the average per capita
earnings during 1936 were $1,155, ranging from $990 in the store
associations to $1,749 in the creameries and bakeries. These averages
are based upon full-time workers in associations reporting both number
of employees at the end of the year and the total wage payments
during the year. They include managers’ as well as other employees’
remuneration. Probably the actual averages would be slightly higher
were they based upon the average number of persons employed
throughout the year, for it is known that many associations increased
their labor force during the year.
Table 82 indicates considerably higher wage levels in New England
and on the Pacific coast than in the other sections of the country. In
both cases, however, the average was raised by one large association
paying relatively high wages.
T able

82.— A vera ge

A n n u a l E arnings o f E m p loyees in R eta il D istribu tive C ooperativesy
1936'

Geographic division

Distribu­
All types Retail store Petroleum tive depart­ Creameries
ments of
and bak­
of associa­
associa­
associa­
marketing
tions
tions
tions
eries
associa­
tions

United States................................................ .

$1,155

$990

N ew England____________________________
M iddle A tla n tic___ ____________ ______
East North Central_________ ______ _____
W est North C entral.......................... ............
South A tlantic_____________________ ____ _
East South Central......... ............ .......... ........
West South Central____ _______________
M ountain________________________________
Pacific....... .................................. ...................

1,316
1,001
1,138
1,155
783
869
858
990
1,306

1,337
1,059
963
852
783
856
778
949
1,130

$1,224

$1,208

$1,749

1,186
1,345
1,146

904
891

906
856
1,170
2,054

1,050
916
983
1,024

881
1,382
1,379

1, 263

1 Data are based upon only those associations which reported both number of employees and amount
paid in wages.




180

CONSUMERS’ COOPERATION IN THE UNITED STATES

Although the general average annual earnings were $1,155, over
two-fifths of the associations were paying average wages ranging from
$700 to $1,100 per year.
T able 83.— N u m ber and P ercen t o f R eta il D istribu tive C ooperatives P a yin g A n n u a l
W ages o f C la ssified A m o u n t , 1 9 3 6

Annual per capita earnings

Under $300__________________
$300 to $400.................................
$400 to $500.................................
$500 to $600.................................
$600 to $700.................................
$700 to $800..................................
$800 to $900.................................
$900 to $1.000..............................
$1,000 to $1,100...........................
$i,iont.n$i,2nn
$1,200 to $1,300...........................

Number
of asso­
ciations
3
15
52
71
117
135
146
156
155
111
116

Percent

0.2
1.1
3.9
5.3
8.7
10.0
10.8
11.6
11.5
8.2
8.6

Annual per capita earnings

Number
o f asso­
ciations

Percent

$1,300 to $1,400_____ _________
$1,400 to $1,500...........................
$1,500 to $1,600........... ...............
$1,600 to $1,700................ ..........
$1,700 to $1,800...........................
$1,800 to $1,900...........................
$1,900 to $2,000...........................
$2,000 and over........................

69
44
34
32
20
23
15
36

5.1
3.3
2.5
2.4
1.5
1.7
1.1
2.7

Total.............................. .

1,350

100.0

rAnalysis of the annual earnings of employees in 1,344 associations
in places for which population figures were available showed no con­
sistent correlation between size of city and amount of wages paid.
The distribution is shown below:
Average annual earnings
per employee

Under 100 population________________________________________
100 to 500 population________________________________________
500 to 1,000 population______________________________________
1.000 to 5,000 population____________________________________
5.000 to 10,000 population___________________________________
10.000 to 25,000 population_________________________________
25.000 to 50,000 population_________________________________
50.000 to 100,000 population________________________________
100.000 to 500,000 population_______________________________
500.000 to 1,000,000 population_____________________________
1,000,000 population and over_______________________________

$938
960
1, 031
1, 092
1, 115
1, 188
1, 241
989
1, 261
1, 091
999

AVERAGE HOURLY EARNINGS

Tabulation of average hourly earnings showed that the most com­
mon rate per hour was between 25 and 30 cents; 17.7 percent of the
reporting associations and 16.1 percent of the employees were in
this rate range. Some 43 percent of all the employees were earning
from 25 to 40 cents per hour. More than 80 percent of the total were
being paid less than 50 cents an hour.




in

COOPERATIVE ASSOCIATIONS AS EMPLOYERS

Hourly earnings of—
Under 10 cents_______
10 and under 15 cents.
15 and under 20 cents.

30 and under 35 cents.

45
50
55
60
65
70
75
80
85
90

and under 50 cents.
and under 55 cents.
and under 60 cents.
and under 65 cents.
and under 70 cents.
and under 75 cents.
and under 80 cents.
and under 85 cents.
and under 90 cents.
cents and over_____
Total_______________

Percent
of asso­
ciations
.
0 .3

181
Percent
of em­
ployees
0. 1

_

3. 3

_

7 .7

4. 7

_

1 2 .0

9. 8

_

1 7 .7

16. 1

.

15. 3

13. 9

_

1 3 .4

1 3 .3

_

10. 9

10. 4

_

6. 1

10 . 1

_

5 .3

5. 4

.

2 .2

1. 8

.

1 .8

2. 7

1. 2

3. 4

1. 2

1. 6

. 8

1. 4

_

3. 5

. 2

.2

. 3

0

. 6

1. 5

_ 1 0 0 .0

100 . 0

i Less than Ho of 1 percent.

COMPARATIVE WAGES IN COOPERATIVE AND IN PRIVATE EMPLOYMENT

The Bureau of Labor Statistics has made no general survey of
wages, by occupation, in retail trade. However, reports are received
each month from employers throughout the United States giving the
number of employees and total pay rolls, from which average per
capita weekly earnings are computed. In the statement below, the
information for private employment is based upon these monthly
trend-of-employment reports, and that for the cooperatives is based
upon data obtained in the cooperative survey. The statement shows
comparative weekly earnings in cooperative and private retail stores
and in gasoline service stations in 1936.
Retail stores____________________________________________
Gasoline service stations________________________________

Cooperative
employment

Private
employment»

$19. 04
23. 54

$20. 17
24. 95

1 Computed on basis of returns to the Bureau of Labor Statistics, for December 1936, from 21,897 chain and
independent retail grocery establishments and 1,649 service stations.

This statement indicates that in 1936 the average wage level of
cooperative employees was about 5 percent below that in private
employment in the same lines. Increases in wage rates took place
in many cooperative associations during the spring of 1937, but the
same was true in private employment as well.
The situation shown by the above comparison is confirmed by data
obtained from private and cooperative associations in the course of
the spot studies made in several localities in M ay and June 1937. In
these cases actual rates on an occupational basis were obtained for the




182

CONSUMERS’

c o o p e r a t io n

in

the

u n it e d

states

cooperative associations covered and for private independent and
chain stores in the same locality. In most of the organizations wages
were paid on a monthly basis. Because of the wide variation in
hours worked, all rates were reduced to an hourly basis. The results
are shown, by region covered and by occupation, in table 84.
As the table indicates, with a few exceptions the cooperative asso­
ciations handling groceries were paying lower hourly wages than were
the private stores in the same locality. In some cases there was a
marked discrepancy between the cooperative and private rate. The
employees of the Chicago cooperative restaurant associations, how­
ever, were receiving considerably higher pay than the workers in
nearby private companies.
T

able

84.— A vera g e

H o u rly R ates P a id b y Cooperative and P rivate O rganizations in
M a y 1 9 3 7 , b y O ccupation

Chicago, 111.

St. Louis County,
M inn.

Northern Wisconsin

Occupation

Grocery stores:
Managers____________________________
Branch managers____________________
Bookkeepers, male . ___ ___________
Bookkeepers, female_____________ - ___
Clerks, male_________________________
Clerks, female_______________________
M eat cutters_________________________
Truck drivers________________________
Restaurants:
Cooks, m ale________ ________________
Cooks, female________________________
Dishwashers_________________________
Waiters______________________________
Waitresses___________________________

Coopera­
tive rate

Private
rate

Coopera­
tive rate

Private
rate

Coopera­
tive rate

Cents
44.6

Cents
61.4

Cents
57.5
41.6
41.8
32.4
30.9
24.4
46.6
31.8

Cents
56.8

Cents
60.6

46.9
32.6
31.0
23.3
48.9
36.5

48.6
39.1
34.5
27.7
41.6
43.2

37.8
32.9
26.6
50.8
40.5
50.6
38.9
27.9
39.6
29.2

24.6
34.2
34.4
54.8

Private
rate
Cents
0)
0)
0)

46.3
33.3
66.7
44.4

36.5
19.2
24.9

1 N o data.

The proportion of the total operating cost that was spent for wages
in cooperative and in private stores is shown below:
n

,.

Percent wages formed
of total operating

Cooperatives!
expense
All store associations reporting, 1936________________________59.4
Store associations in St. Louis County, Minn., 1936_______ 56.5
Petroleum associations reporting, 1936_____________________ 62.2
All store associations reporting, 1933________________________ 51.8
Petroleum associations reporting, 1933_______________
59.5
Private dealers:
Country general stores (Dun & Bradstreet), 1935___________61.1
82 chains, 1929______________________________________________ 56.6
All retail stores, Census of American Business, 1933________ 44.8

The 1936 wage bill in cooperative stores in St. Louis County ap­
proximated that in the chain stores in 1929, but that for the whole
group of cooperative stores was smaller than that of the general stores
of private dealers. Comparison of the 1933 data indicates a much




183

COOPERATIVE ASSOCIATIONS AS EMPLOYERS

higher proportion of wage expense in cooperative than in private
stores.
Hours of Labor
The weighted average weekly working time 7 of employees, all types
of associations combined, was 49.5 hours. For the associations in the
different lines of business activity the range was from 44.1 for cream­
eries to 56.2 for distributive departments of marketing associations.
With the exception of the garage associations, all of the service groups
had average weekly hours of 48 or less, whereas in the distributive
group only the creamery employees had hours as short as these. A
slightly longer workweek was found in the farmers, than in the other
distributive associations, as shown in the following statement:
Average weekly
hour8

All types of associations______________________________________ 49. 5
Distributive associations_______________________________________ 54. 5
Stores______________________________________________________ 55. 0
Farmers’ _____________________________________
55. 8
Other consumers’ _____________________________________ 53. 5
Petroleum associations____________________________________ 55. 5
Farmers’ ______________________________________________ 55. 6
Other consumers’ _____________________________________ 55. 4
Distributive departments of marketing associations_____ 56. 2
Bakeries___________________________________________________ 48. 1
Creameries________________________________________________ 4 4 1
Service associations_____________________________________________45. 2
Associations providing—
Meals only____________________________________________ 48. 0
Meals and rooms_____________________________________ 44. 7
Laundries and cleaning establishments____________________ 48. 0
Garages____________________________________________________ 52. 0
Printing and publishing associations______________________ 46. 8
Recreation associations____________________________________ 47. 9

About one-fifth of the employees of cooperative stores and over onethird of the employees of cooperative petroleum associations were
working 48 hours or less per week at the end of 1936 (table 85). The
largest proportions of both types of associations were working 48
or 60 hours. About 62 percent of the store employees and 56 percent
of the petroleum employees were working 54 hours or more per week.
That the larger associations had the shortest workweek is indicated
by the fact that although only 15.8 percent of the stores and 29.1
percent of the petroleum associations had a workweek of 48 hours or
less, they were employing 21.3 and 34.6 percent of the total workers.
7 Weighted b y number of employees in each reporting association.




CONSUMERS’ COOPERATION IN THE UNITED STATES

184
T

able

85.— Percentage Distribution o f Cooperative Associations and o f Employees Accord­
ing to W eekly Hours in 1936
Percent of associations
with specified work­
week

Percent of employees
with specified work­
week

Hours per week
Store as­
sociations
TTnrip.r 4 0
4 0 a n d n n f if t r 4 4
44
_

_ _

............. . . . .
_
_
Over 44 and under 48_________________________ ______
48................................................................................................
Over 48 and under 54_____________________________ ____
54........................................................................................... .
Over 54 and under 60__________________________________
60................................................................................................
Over 60 and under 72__________________________________
72 and over___________________________________________
_____

T o ta l

Petroleum
Store as­
associations sociations

Petroleum
associations

1.3
1.5
1.0
1.5
10.5
8.7
10.0
15.3
24.3
19.6
6.3

0.5
2.5
.5
.9
24.7
5.8
9.7
3.9
27.5
14.1
9.9

0.8
1.7
1.5
2.3
15.0
17.1
8.9
16.0
20.1
13.7
2.9

0.1
1.8
2.4
.4
29.9
9.1
8.4
3.5
24.7
12.7
7.0

100.0

100.0

100.0

100.0

Comparison of working hours in cooperative stores and in the pri­
vate retail stores and gasoline service stations reporting monthly
to the Bureau of Labor Statistics indicated that there was a difference
in favor of the private employees of over an hour a day.
Hours per week—
Cooperative
Private
employment
employment

Retail stores____________________________________________
Gasoline service stations-------------------------------------------------

55. 0
55. 5

46. 1
46. 1

Most of the private organizations reporting to the Bureau of Labor
Statistics are in urban places, whereas the majority of the cooperative
associations reporting are in places of 5,000 population or less. This
would account for some of the spread in hours shown above. How­
ever, that hours in cooperative associations were sometimes longer than
those in private organizations in the same locality is indicated by the
following table showing data collected in the various spot studies.
Males working in cooperatives had shorter hours than those in private
stores in northern Wisconsin and in St. Louis County, Minn. As
regards the woman workers in cooperatives, however, only those in
St. Louis County were working shorter hours than similar employees
in private stores.
T

able

8 6 . — Comparative

Working Hours in Cooperative and Private Employment, M ay
1937
W om en

M en
Locality

Chicago, 111.................... ............... .................... ..................
Cleveland, Ohio ____ ___ ____________________________
Northern Wisconsin______________ ___________________
St. Louis C ounty, M in n .......................... ........... ................

* N o data.




Coopera­
tive stores
56.1
52.9
52.8
54.9

Private
stores
52.8
0)

56.0
56.2

Coopera­
tive stores
56.7
43.7
50.4
53.7

Private
stores
48.9
0)

48.0
56.2

COOPERATIVE ASSOCIATIONS AS EMPLOYERS

185

The Cooperatives and Organized Labor
In Cleveland the older associations and most of the newer cooper­
ative associations were found to be definitely “ prolabor.” Among
the older groups this had found expression in assistance to strikers,
in the form of coal at cost and donations of food. Both old and new
groups expressed preference for union-label goods and for goods made
or sold under good labor conditions. Concerted effort was being
made to bring more wage earners and trade-unionists into the cooper­
ative movement.
In one large association studied in 1930 all employees were union­
ists ; this was in a city where labor organizations had at that time made
little headway. In fact, the office employees of this association formed
practically the whole membership of the local office workers’ union.
The truck drivers received the union scale, and the wages of office
employees were considerably higher than the union scale.
The cooperative associations whose members were industrial workers
were more apt to encourage unionization of their employees than were
the associations whose members were farmers. Some of the former
group, in fact, required their workers to be members of the union of
their craft or to become such within a specified time after being hired
by the association. The bakery and dairy associations were almost
without exception unionized. In fact, a number of them were started
by striking employees of private plants. These associations have
always been strong supporters of organized labor.
C O O P E R A TIV E W O R K E R S ’

U N IO N

In 1930 the workers in the cooperative stores of Virginia, Minn.,
took the initiative in the formation of the Cooperative Workers’
Union, along industrial lines. At that time there was practically no
labor organization of retail clerks in that region.
The preamble to the bylaws of the union stated that the workers
felt “ the need for cooperative employees to create some bond of unity
among themselves, to promote common interests both as wage earners
and as responsible cooperators, and through organizing to assure
acceptable standards of wages and working conditions.” Other
objectives were to act as an employment agency and to do educational
work on cooperation among the members. The union pointed out
that its intention was not to compete against craft labor organizations
where cooperative employees were already organized.
When the national congress of the Cooperative League met in 1930,
the union petitoned for recognition. The petition was tabled, after
much discussion, on the ground that recognition might cause the
cooperative movement to seem to be encouraging dual unionism.
90621°— 39---------- 13




186

CONSUMERS’ COOPERATION IN TH E UNITED STATES

The union reached its peak at the end of 1930, when it had about
450 members. Thereafter it declined considerably and by May
1937 had only from 180 to 200 paid-up members. Several factors
contributed to its decline:
(1) After the formation of the union in 1930, a number of A. F.
of L. locals of retail clerks were formed, and in such places the cooper­
ative employees generally preferred to join the craft union.
(2) Its membership was in small groups scattered throughout the
territory and it was hard to keep up interest.
(3) Some of the cooperators— especially those belonging to craft
unions— were inclined to regard it as a “ company union.,, Realizing
this, the union made overtures for affiliation to the A. F. of L. in
communities where a federation local was not already in existence.
(4) Although several associations gave recognition to the union, in
only a few cases was the union able to obtain a signed agreement.
(5) The plan of the organization to act as an employment agency
never materialized, although openings and plans for changes of per­
sonnel, discussed at local meetings, did result in some members*
obtaining new jobs.
(6) The union was handicapped in not having a full-time organizer.
Its officers, also, worked only part time and on a volunteer basis.
(7) Many of the cooperative stores were in farming districts and
it was hard to get the farmer members to see the value of labor
organization. The officers of the union stated, however, that in most
cases as conditions improved, the farmers* as well as the other cooper­
ative associations took steps to revise the wage scale upward.
(8) The union never had any great strength outside the Northern
States district, although it had a few scattered locals elsewhere.
The Cooperative Trading Co. at Waukegan, 111., for instance, recog­
nized the union and had an agreement with it.
Gradually losing ground, the union late in the fall of 1937 conducted
a referendum among its members as to whether it should be dissolved.
The vote being in the affirmative, the organization disbanded toward
the end of the year.
On February 2, 1938, the employees of the Waukegan Cooperative
Trading Co. and of the Waukegan-North Chicago Cooperative Asso­
ciation met and voted to organize a new union of cooperative workers,
with the same name, to replace the defunct organization. The new
union went into operation M ay 1,1938, and 2 months later was negoti­
ating a collective agreement with these two associations.
C O LLE C TIVE B A R G A IN IN G

The spot studies disclosed few instances in which collective bar­
gaining, as exemplified by a signed agreement, was in force in cooper-




COOPERATIVE ASSOCIATIONS AS EMPLOYERS

187

ative associations. However, practically all either were sympathetic
to the unionization of their employees, or expressed no opposition.
In Chicago, the employees in most of the store associations were not
unionized. Exceptions were two associations where the employees
had joined a C. I. O. union, and one association whose meat cutters
were A. F. of L. unionists. Of three restaurant associations, the cooks
and waitresses in one and the bakers in another belonged to the A. F.
of L. union of their craft. In no instance was there a signed agreement.
In the two long-established associations covered in Cleveland the
butchers were members of the A. F. of L. union, but had no agreement.
In the m ajority of the associations visited in St. Louis County,
Minn., there were or had been locals of the Cooperative Workers’
Union. Some were still active. Although in several instances the
employees were still nominally members of that union, actually they
were not in good standing, and the local was inactive. Others were
in places too small to have a local. Five associations had recognized
the union but had signed no formal agreement with it. In one case
the manager had been pressing for recognition of the local; he was
finally successful in obtaining it, but himself resigned from the union
in order to remove any appearance of company unionism.
In the five local associations covered in the northern Wisconsin
spot study, the truck drivers were, without exception, members of
the A. F. of L. union and union conditions and rates were in force.
Retail clerks, however, were but little unionized in that district. A
unionization drive early in the summer of 1937 resulted in consider­
able gains. Strikes were called against a number of private retail
establishments in Superior, Wis. One of the first organizations to
reach an agreement with the union was the People’s Cooperative
Society (operating two stores, a service station, and an automobilerepair garage), the labor force of whose two stores had long been entirely
unionized. Its agreement, signed with the A. F. of L. retail clerks’
union, provided for minimum scales ranging from $18 for female
clerks (50-hour week) to $25 (55 hours) and $27 (60 hours) for males.
The agreement also provided for pay for holidays, and annual vacations.
The year 1937 also saw considerable strides in the unionization of
cooperative employees in other places. A mail-order cooperative in
New York City, unionized in 1936, renewed its agreement with
Department Store Employees’ Local Union No. 1250 in 1937. The
1938 agreement provided for a closed shop; a minimum weekly wage
of $21; a 39-hour week; pay for vacation, for sick leave, and for 9
holidays; and time and a half for overtime.
A dispute occurred among the employees of a large cafeteria
association in New York City early in 1937. This dispute, which
involved the questions of unionization and wages, dragged on for
weeks and then was referred to a board of arbitration. One question




188

CONSUMERS’ COOPERATION IN TH E UNITED STATES

at issue was how much higher rates than paid by its competitors the
organization could afford to pay 8 and still remain solvent. (During
the dispute it had “ gone into the red” for the first time in more than
15 years’ operation.) In accordance with the decision of the arbi­
trators an agreement with the Cafeteria Workers’ Local Union No.
302 was signed on July 26, 1937, which established wage rates 10
percent above the average rates provided by the 10 best contracts
in force between the union and private cafeterias in the city. This
clause made effective (retroactive to May 1) increases in pay of about
15 percent. Under the agreement all employees must be union mem­
bers or become so within 6 weeks after hiring. Disputes between
management and workers which cannot be settled by negotiation
with the union are to be referred to an impartial chairman.
•It had always paid rates in excess of those paid b y most of its local private competitors.




Chapter 10.— L E G A L ST A T U S O F C O O P E R A T IV E S
Medical-Care Associations 1
The future of medical cooperatives in America will in large part
depend upon the courts. Two major charges of illegality have been
brought against these cooperatives: (1) That they are actually en­
gaged in the insurance business, without compliance with the in­
surance statute; and (2) that they are practicing medicine in violation
of the rule against a corporation’s practicing medicine.
THE INSURANCE CONTROVERSY

Those who claim that a medical cooperative is engaged in insurance
point out that it is agreeing, in return for periodic payments made to
it (analogized to insurance premiums), to indemnify the member of
the cooperative against the loss which may occur to him upon the
happening of a contingency. And the fact that reparation for the
loss is made not in money but in medical services should, they say,
make no fundamental difference. They feel that the public should
be protected in this situation as it is protected in other insurance
companies— by having the association maintain a large monetary
reserve within the requirements of the insurance statute.
However, many definitions of insurance, the cooperators point out,
are framed in terms of a monetary payment by the insurer, and at any
rate the latter usually makes the payment, not a third party such as
the doctors in this situation. Further, it is said that in an insurance
company the payment is made upon the happening of a contingency,
whereas arranging for the rendering of medical service upon the
happening of a contingency is not the essential function of a medical
cooperative, which emphasizes preventive medicine— the encourage­
ment to members to come in for periodic examinations and to consult
the doctor throughout the year for preventive measures against
illness. In other words, it is a continuing and not a contingent
medical care which is provided for.
Cooperators also hold that the following practical factors which
differentiate cooperative from insurance-company practice should be
considered: The insurance company needs its large reserve mainly
because of the financial danger of an emergency: the maturing upon
an unforeseen scale of the contingencies insured against. In the case
of a health cooperative, the only situation comparable to such an
1 This section was prepared b y Samuel Mermin, Consumers’ Counsel Division, A. A. A ., Department
of Agriculture.




189

190

C O N S U M E R S ’ COOPERATION I N

THE

U N IT E D

STATES

emergency is an epidemic of illness. It is perhaps inferable from the
emphasis of the cooperative upon preventive medicine that the likeli­
hood of an epidemic among its members is negligible. Even if it
be assumed otherwise, it would seem that no such substantial mone­
tary reserve as is needed by an insurance company would be necessary
to cope with the situation. One possibility is an increase in the “ load”
carried by each doctor; at worst, the association would be led to
contract with a few additional doctors for the furnishing of their
services during the brief duration of the emergency. No extraordinary
outlays on a huge scale would be necessary.
Other practical or “ common sense” considerations are also invoked.
The cooperators point to such organizations as typewriter agencies
which agree to maintain typewriters in good condition for a certain
period of time for pre-arranged fees, or the paving companies which
agree, under similar conditions, to keep roads in repair, or any of a
number of associations which will service, or arrange for the servicing,
of machinery and equipment of various kinds on a similar basis.
Also common is the practice of furnishing any needed legal services
over a certain period on a pre-fixed retainer basis, and also, indeed,
the practice of a physician’s agreeing with an individual to furnish all
necessary medical services over a certain period of time, on a pre-fixed
payment basis. Does it suddenly become insurance, cooperators ask,
because more than one individual and more than one physician are
involved?
THE

IS S U E

OF

CORPORATE

P R A C T IC E

OF

M E D IC IN E

The point of view of those who claim that medical cooperatives are
violating the rule against corporations practicing medicine is illus­
trated by the following contention made in the legal brief of a recent
controversy:
Although the corporation may employ licensed physicians to render medical
service to its members, nevertheless this does not afford evidence that the cor­
poration is not engaged in the practice of medicine. A corporation, being an
artificial entity, can only act through agents, and the physicians employed by it
are necessarily its agents. It is the corporation which holds itself out to render
the medical service. In addition, the great weight of authority in the United
States establishes the rule that a corporation cannot engage in the practice of
medicine.

In reply, the cooperators declare that “ making contracts,” as the
Nebraska Supreme Court has declared, “ is not practicing medicine
* * *” ; that there is an obvious distinction between practice and
business arrangements for practice. This principle, it is contended, is
illustrated by such cases as Liggett v. Baldridge (278 U. S. 105 (1928)),
in which the United States Supreme Court held unconstitutional a
State statute requiring all stockholders of a pharmaceutical corpora­
tion to be licensed pharmacists. The Court pointed out that the




LEGAL STA TU S OF COOPERATIVES

191

safeguarding of the public health could not be used as a defense of the
statute, since the public health was related only to the preparation
of the drugs and not to the ownership of the corporation.
The opposition claims that this argument is irrelevant, being nullified
by the fact that though the corporation may not be practicing medicine
directly, it is doing so indirectly through its agents, the doctors.
On the other hand, analysis of the law of agency is said to reveal at
least two factors which weaken the assertion that the corporation is
practising through the doctors as agents. Thus, it is pointed out that
the familiar situation in the law of agency is one where the legal issue of
liability for the acts of the agent is raised, and in dealing with that
legal issue the court creates (in order to effectuate certain objectives
of policy, proper distribution of loss, etc.) the convenient fiction that
the act of the agent is the act of the principal. In those very same
cases, however, when the purely factual question as to who actually
performed the action is put in issue as a preliminary matter, the answer
is not at all fictional. Similarly, the problem here, it is argued, is not
a legal one like liability of the corporation, but essentially the factual
problem: Is the corporation actually practicing medicine? And that
question requires no distortion of facts for its answer.
The second reason for urging the inapplicability of the idea that the
act of the agent is the act of the principal, rests on the lack of control
exercised by the corporation over the professional conduct of the
doctors. Since there is no such control, the doctors are in the position
of independent contractors rather than of agents; hence it cannot be
said that the corporation is practicing through its agents.
In response, the critics of medical cooperatives declare that such a
view empties of any meaning the well-recognized rule against a corpo­
ration practicing medicine. Obviously, the framers of the rule knew
that a corporation could not actually practice medicine; hence, it is
argued, the rule must have been directed against the corporation’s
agents or others bearing a close relationship to the corporation.
This raises the important query as to what actually were the reasons
behind the courts’ enunciation of the rule. Reference to the exact
language of judicial opinions will be helpful. For instance, the
Supreme Court of Iowa has observed:
* * * There are certain fields of occupation which are universally recognized
as “ learned professions.” Proficiency in these occupations requires long years of
special Study and of special research and training and of learning in the broad
field of general education. The law recognizes them as part of the public weal, and
protects them against debasement, and encourages the maintenance therein of
high standards of education, of ethics, and of ideals. It is for this purpose that
rigid examinations are required and conducted as preliminary to the granting of a
license. The statutes could be completely avoided and rendered nugatory if one
or more persons who failed to have the requisite learning to pass the examination
might nevertheless incorporate themselves formally into a corporation, in whose




i9 2

C O N S U M E R S ’ COOPERATION

IN

THE

U N IT E D

STATES

name they could practice lawfully the profession which was forbidden to them as
individuals. * * *.
( Iowa v. B ailey Dental Co., 211 Iowa 781 (1931).)

And more recently, the Supreme Court of Illinois explained:
* * * These requirements are spoken of generically as that good moral
character which is a prerequisite to the licensing of any professional man. No cor­
poration can qualify. It can have neither honesty nor conscience, and its loyalty
must, in the very nature of its being, be yielded to its managing officers, its director
and to its stockholders. Its employees must owe their first allegiance to their
corporate employer and cannot give the patient anything better than a secondary
or divided loyalty. * * * (Dr. A llison , Dentist , Inc. v. John T . A llison , 360
111. 638 (1935).)

The cooperators hold it to be clear, from the above, that the rule
against corporate practice of medicine is not intended to prohibit, as
such, the contractual relation between a corporation and a physician,
but rather to protect the public from (1) medical practice by unqualified
persons who could not obtain a license individually and who therefore
form a corporation in the hope of getting a license in the corporate
name; (2) interference by the corporation with the personal responsi­
bility and loyalty between physician and patient.
The first of these evils is obviously not present in the case of a typical
medical cooperative, contracting with licensed physicians. The second
evil, also is declared to have no existence in the case of a medical
cooperative. Its applicability to an ordinary corporation, organ­
ized for profit, is quite understandable; but how, it is asked, can
there be the above-mentioned undesirable allegiance by doctors to
“ managing officers” or “ stockholders” or the “ corporate employer” as
against the patient, when these “ officers,” “ stockholders,” and
“ employers” are the patients? The medical cooperative is not a profit
corporation interested in exploiting patients through the medium of
doctors; it is a nonprofit organization of patients, and in order to
effectuate its plan for an efficient rendering of medical services to its
members, it contracts with doctors.
Is the personal relationship between physician and patient impaired
by the restrictions in the typical medical cooperative upon “ free
choice” of physician? The cooperators argue that there is no real
restriction, since the member, though he does not choose one doctor
as he does under the system of private practice, does freely choose a
group of doctors, by the act of joining the association. And it is
further claimed that the association, through collective inquiry and
investigation, is better able to engage competent doctors than the
single individual under the present system, who generally chooses his
doctor on the basis of hearsay.
Finally, it is pointed out that many incorporated bodies, such as
hospitals, universities, and business corporations, have customarily
employed salaried physicians without being accused of violating any
rule against corporate practice of medicine.




LEGAL STA TU S

PRESENT

OF COOPERATIVES

LEGAL

193

STATUS

The court cases which have been quoted from above, did not
involve genuine, nonprofit medical cooperatives employing licensed
physicians, and operating on a periodic prepayment basis. In fact,
it was not until very recently that the legal controversy could depart
from merely analogous cases and be concerned with a precedent
squarely in point. This precedent is the decision in the case of
Group Health Association, a cooperative organized in 1937 for em­
ployees of the executive branch of the Federal Government in Wash­
ington, D. C. The United States District Court for the District of
Columbia, in a declaratory judgment proceeding brought by the
cooperative against the District attorney and District Superintendent
of Insurance, ruled on July 27, 1938, that there was “ no reason why
an individual may not without violating the statute [i. e., the Healing
Arts Practice Act of the District of Columbia] contract with a physician
for medical services for a stipulated period or a fixed compensation;
and it would seem that a group of individuals might make the same
arrangement with a group of physicians.”
It would seem that this group of individuals might incorporate themselves for
their own mutual benefit for the same purpose. Such a corporation, not for
profit but for the mutual benefit of its members, is in m y opinion not engaged in
the practice of medicine or in holding itself out as doing so. It is true that a
corporation can act only through its agents and employees, but the physicians
with whom the plaintiff makes contracts are rather in the position of independent
contractors, and the plaintiff does not in any way undertake to control the manner
in which they attend or prescribe for their patients.2

On the heels of this decision, it was charged by the United States
Department of Justice on July 31, 1938, that the antitrust laws were
being violated by the American Medical Association and the District
of Columbia Medical Society by the use of the following methods of
combating Group Health Association: (1) Threatened expulsion from
the District Medical Society of doctors accepting employment with the
association, and of doctors taking part in medical consultations with
doctors on the association staff. (2) The exclusion from Washington
hospitals of the Group Health Association staff doctors. According to
the Department of Justice announcement—
This has been accomplished either in combination with the various hospitals
or by means of influence, which may or may not have amounted to coercion, upon
them. This exclusion has made it impossible for doctors affiliated with Group
Health Association to practice their profession in the hospitals and it has prevented
members of the association who enter the hospitals as patients from having the
services of the physicians of their own choice.

Still another development in the Group Health controversy came
on August 12, 1938, when three doctors of the District Medical
2
An appeal by the Superintendent of Insurance to the TJ. S. Court of Appeals for the District of Columbia
was filed early in October 1938.




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C O N S U M E R S ’ COOPERATION I N

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U N IT E D STATES

Society filed suit in the United States District Court for the District of
Columbia to enjoin Group Health Association from engaging in the
“ practice of medicine.” The doctors took the position that they were
not parties to the “ friendly suit instituted by Group Health Associa­
tion under the Declaratory Judgment Act, and therefore are not
bound by the decree entered by Judge Bailey.”
Participating in the fight for legality of the association, in the case
decided by Judge Bailey, were the Association of Medical Cooperatives
and the District of Columbia chapter of the National Lawyers’ Guild,
both of which filed amicus curiae briefs in the court case (as did also
the District of Columbia Medical Society, for the opposite side).
The campaign to aid medical cooperatives has not been limited to
aiding them in the courts. The Bureau of Cooperative Medicine, in
New York, for instance, gives practical advice in the setting up of
these associations anywhere in the country. Legislative efforts have
also been enlisted. Thus, the Biemiller bill, unsuccessfully introduced
into the Wisconsin Legislature in 1937, declared the public policy of
the State of Wisconsin to be the encouragement of medical coopera­
tives; prohibited discrimination by hospitals or medical societies or
others against doctors or patients affiliated with a medical cooperative;
punished direct or indirect interference with the organization of such
a cooperative; and provided exemption from the insurance laws.
Still a further legislative remedy suggested in some quarters is to
authorize supervision by the public health authorities to safeguard
the quality of the service and adequacy of the fees. This special type
of legislation embodying some features of insurance supervision with­
out its onerous financial requirements (such as very large reserve
funds) is defended as being analogous to special statutory provisions
now existing for fraternal benefit societies and for nonprofit group
hospitalization plans.3
E lectricity A ssocia tion s

The electricity-supply associations are organized under various
kinds of statutes in different States. Some Stales already had
cooperative acts which were broad enough in their terms to permit the
3
Since this was written, two pertinent cases were decided in California. In Peoplev. PacificHealthCorp.r
82 Pac. 2d 429 (1938)—three judges dissenting—a profit corporation supplying medical services through
licensed physicians on a prepayment basis was held to be illegally practicing medicine; but the court indi­
cated the decision would have been different if it were a nonprofit corporation. In Butterworthv. Boyd, 82
Pac. 2d 434 (1938)—one judge dissenting—a medical cooperative for San Francisco municipal employees,
established by amendment to the city charter, was held not to violate the insurance laws or the State
Medical Practice Act, since “general words in a statute which might have the effect of restricting govern­
mental powers are to be construed as not applying to the State or its subdivisions.”




LEGAL ST A T U S

OF COOPERATIVES

195

incorporation of electricity associations, and in others incorporation
was feasible under a nonprofit act. In certain States having neither
of these types of laws, electric-power cooperatives have been obliged
to incorporate under the general corporation act, but have made
provision for cooperative practice through the medium of their bylaws.
A number of States, in which the existing legislation was not
regarded as adequate for the purposes of this new type of cooperative,
have passed laws dealing exclusively with rural electrification. By
July 1937, according to the Rural Electrification Administration,4
14 States had passed electric membership corporation acts. These
were Alabama, Arkansas, Georgia, Indiana, Kentucky, Mississippi,
Nebraska, New Mexico, North Carolina, North Dakota, Pennsyl­
vania, Tennessee, Texas, and Virginia.
These statutes vary somewhat from State to State, but in general
have for their purpose the furthering of the rural electrification pro­
gram and the protection of the cooperative associations formed under
them. Usually, the law authorizes the cooperatives to purchase,
generate, and distribute power, to assist their members in wiring their
premises and in acquiring and installing electrical or plumbing equip­
ment, and to borrow money for these purposes; exempts the members
from personal liability for debts of the association; provides for
maintenance of adequate reserves and for refunds of surpluses in
proportion to patronage, either in cash or lowering of rates; and
exempts the associations from excise taxes, levying instead a small
annual license fee (generally $10). Existing cooperatives organized
under either the nonprofit act or the general cooperative act are
usually given permission to take advantage of the electrification act.
Although most of the acts are liberal in their terms, an occasional
one is so phrased as to hinder the development of the program. Thus,
the New Mexico act forbade the building of fanners’ cooperative lines
in such a way as to interfere with any existing system or to serve
persons in a territory in which any other organization already had any
lines. It was pointed out in the Rural Electrification News (July
1937) that the effect of this was “ to freeze the claims of utility com­
panies to territories which they not only do not now serve but have
no immediate intention of serving” and “ to protect utilities in the
enjoyment of unserved territories.” The immediate effect of the
New Mexico act was to cause the R. E. A. to rescind an allotment of
$56,000 which had been tentatively made for a project in Valencia
County, where a power company, between the time of the allotment
and the passage of the law, built into the territory which was to have
been served by the cooperative.
In order to prevent just such a situation as this, the Wisconsin
Legislature in 1937 passed an act expressly forbidding the construc-

*Rural Electrification News (Washington), July 1937, p. 26.




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C O N S U M E R S ’ COOPERATION I N

THE

U N IT E D

STATES

tion of new lines or a plant in any territory in which a cooperative
electricity association had been incorporated and had filed a map of
its territory, until 6 months after the date of such filing. This
period of prohibition was extended to 12 months if the cooperative
association had entered into a loan agreement with any Federal
agency and had so notified the Wisconsin Authority.
THE

Q U E S T IO N

OF

S T A T E R E G U L A T IO N

The question of whether rural electrification cooperatives should
be subject to public control like privately owned public utilities
operating for profit, and if so, upon what points and to what extent,
has been a subject of considerable controversy.
A small number of the State rural electrification acts specifically
provide for such control. In the absence of specific provision the
private power companies have naturally taken the position that the
cooperatives should be subject to the same control as themselves.
In this view they have been joined by the officials and public utility
commissions of several States. The cooperatives, on the other hand
(and the farmers’ organizations sponsoring them), have contended
that, as the cooperatives serve their own members only and have as
their purpose not the making of profit but the provision of service,
only the reasonableness of their charges should be passed upon by
the public utilities commissions and otherwise they should be subject
only to the same type of supervision as are other forms of cooperative
associations.
The latter stand has been supported by the National Rural Elec­
trification Administration, in the following terms:
R. E. A. feels that rigid control of cooperatives by utility commissions is unde­
sirable and detrimental for several reasons. Commission control was established
to accomplish two things: First, to intervene between the buyer and the seller
of electricity in matters of rates, and secondly, to supervise the issuance of securi­
ties. In the case of cooperatives, the buyer and the seller of electricity are one
and the same, and cooperatives do not issue securities for public distribution.
Rural electrification is extremely simple from the engineering point of view, and
cooperatives need only a minimum of engineering talent and legal advice. But
if these relatively small, nonprofit rural organizations are forced to appear before
a commission to plead their right to serve themselves, they must either equip
themselves with a battery of high-powered and high-priced lawyers and engi­
neers similar to the array of talent which seems to be required in utility cases, or
run undue risks of losing out regardless of the realities of the case.
Perhaps the strongest argument against commission control of cooperatives
is that it may operate to stop the normal development of cooperative action in
electricity distribution.
W ith present technical knowledge and methods, only a minority of our farms
can be served on a profit basis. W ith the elimination of any charge for profit,
in other words by the establishment of cooperatives, lines can be extended into
much leaner territory and serve a much larger percentage of farms on a self-sup­
porting basis.




LEG AL ST A T U S

OF COOPERATIVES

197

But for cooperatives to come into existence, for protection of this still infant
movement which promises so much to the Nation in the immediate future, it is
necessary to give them every reasonable advantage.
Appearances and proceedings before regulatory bodies, petitions for certificates
of convenience and necessity involve legal and engineering fees. The resources
of a budding cooperative are tenuous at best. The mere thought of the lawyer’s
bill is enough to discourage most of them right at the start. There is absolutely
no good which can come of squandering the price of several miles of line to estab­
lish formally the public convenience and necessity of a proposed rural line, when
the mere proposal of the line by the farmers goes far toward establishing that fact
beyond any question.

The attitude of State officials on this point has varied from State to
State, but seems to be swinging toward the more lenient point of
view.
COU RT CASES

The other types of consumed cooperative associations have only
infrequently been parties to legal disputes involving questions of con­
struction, interpretation, and constitutionality of the cooperative
statutes. The electricity associations, however, have already figured
in a number of court cases. Almost invariably these have been
brought by private power companies seeking to prevent the opera­
tion of a particular cooperative association. One or two of these
have been carried to the highest State court. Almost without ex­
ception the right of the cooperative associations to operate and the
constitutionality of the State act have been sustained by the courts.
Recognition of the cooperative association as an agency serving its
own members and therefore not subject to State commission regula­
tion as a public utility has been accorded by at least two State supreme
courts (Alabama and Wisconsin) and a lower court in another State
(North Carolina).
By decision or opinion the associations in other States have been
upheld on such other points as the right of municipally owned plants
to resell power to cooperatives (Alabama) and the cooperatives* right
to permits for the erection of lines along State highways (Illinois).
In Washington State, however, a large cooperative association seek­
ing exemption from the State gross-receipts tax on the ground of
being a nonprofit organization was declared subject to the tax.
T elephone A ssocia tion s

The so-called “Rochdale principles” practiced among the distribu­
tive and service associations are somewhat modified in the telephone
associations by conditions in their field of business, by the wish of the
members, or by the terms of the acts under which they operate.
Although unincorporated associations may operate on any basis they
choose, the business procedure of any incorporated organization is
determined to a certain extent by the statute under which it has




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THE

U N IT E D STATES

been incorporated. Thus, the general corporation acts usually
specify that the stockholder shall have one vote for every share of
stock he owns, that any dividends paid shall be paid on the stock, and
that proxy voting must be permitted— all of which requirements are
in direct contravention of the cooperative principles. Sometimes
also the State constitution contains sections covering such business
procedure as voting by shares or by proxy.
The cooperative statutes vary considerably in their requirements
from State to State. The best ones enumerate the cooperative
principles, in defining what constitutes a cooperative, and specify
adherence to these standards as a requirement for operation under
the act. But by no means can all of these cooperative statutes be
said to be adequate in the sense of defining and compelling compli­
ance with the Rochdale principles. Wide variations from the ac­
cepted practice, and equally unfortunate omissions, are found in the
provisions of the State acts.
Of the 1,292 telephone associations which reported their legal
status, 787 were incorporated and 505 were unincorporated. The
small service lines appeared to be more likely to remain informal asso­
ciations, while the larger organizations giving switchboard service
were generally incorporated. That this distinction was by no means
always true, however, is indicated by the fact that some service-line
associations with as few as half a dozen members were found to be
incorporated. There were, nevertheless, some service-line groups that
not only had not incorporated but had never even had what could be
called an association. One such association reported that there had
never been even a signed agreement among the members. A few
neighbors had assembled, strung their poles and wire, and negotiated
for switching service from the telephone company in the nearest town;
one member acted as secretary in collecting “ switching fees” to be
paid to the company and in carrying on any necessary correspondence.
That was all there was to it.
A great many of the telephone associations were formed before
there was any State cooperative law under which they could be
established and they therefore incorporated as stock companies under
the general corporation act; a good many of these, in practice, how­
ever, have operated as mutuals. Comparatively few appear to have
been established under the cooperative statutes. In 1933, the Wis­
consin Public Service Commission had a check made of the incorpora­
tion records in that State. This revealed that, although the State
cooperative statute is broad enough to cover telephone operation,
only four associations had elected to incorporate under it; most of the
others had been formed as mutuals.
Again, telephone companies are in many States regarded as public
utilities or common carriers and, as such, are subject to regulation by




LEG AL STA TU S

OF COOPERATIVES

199

State commissions. A number of States exempt from such regulation
associations operating as pure mutuals (i. e., serving members only
and having no predetermined rates but assessing all members their
pro rata share of the cost of operation); service extended to even one
nonmember subjects the association to regulation by the State com­
mission. Some of the regulations imposed by these State commissions
also place obstacles in the way of completely cooperative practice.
Thus, in States where operating territory is apportioned, company by
company, and exclusive rights are given therein, State commissions
generally require the companies to serve all applicants for service
whether they are stockholders or not. And in some cases the com­
panies are specifically prohibited from making any distinction in the
rates charged to members and to nonmembers. The result is that
where nonmembers can get the same service as members and at the
same rate, there is little inducement to take out membership in the
cooperative association. Such has been the effect of this that, in
States where this regulation is in force, many associations have a
greater number of nonmember than member subscribers.
As is evident, therefore, the rate of observance of the cooperative
principles among the telephone associations is dependent to a consider­
able extent upon these legal and regulatory requirements.
P U B L IC

R E G U L A T IO N

In order to ascertain to what extent telepnone associations are
regarded as public utilities or common carriers in the various States
and, as such, are subject to regulation by State commissions, the
Bureau addressed an inquiry to the 14 States 6 known to have 50 or
more telephone associations operating on the cooperative or mutual
plan.
It was found that no public regulation of any type of telephone com­
panies was provided for in the States of Iowa and Texas, nor were
such companies required to obtain from the State a certificate of con­
venience and necessity before being allowed to operate. Any tele­
phone company, however, which operated within the corporate
limits of a city or town must generally obtain a franchise from the
municipality. In Oregon, by opinion of the State attorney general,
cooperative telephone companies were held to be not within the
purview of the public-utilities act and were therefore not subject to
regulation.
In some States all telephone companies of whatever type— private
profit, cooperative, or mutual— were regarded as public utilities and
as such were subject to regulation by the State commission. Such
regulation usually covered reasonableness of rates, adequacy of serv* Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, North Dakota, Oregon, South Dakota,
Texas, Virginia, Washington, and Wisconsin.




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C O N S U M E R S ’ COOPERATION I N

THE

U N IT E D STATES

ice, keeping of records, issuance of securities, use of highways, con­
formity with safety regulations, etc. States in this class were Michi­
gan, Minnesota, North Dakota, and Wisconsin. The Michigan
Public Utilities Commission stated that the only two powers of regu­
lation not conferred upon it were the power to prevent the payment
of dividends when conditions did not warrant this, and the power to
fix rates of depreciation.
“ Mutual” associations were found to be exempt from regulation in
Illinois, Indiana, and Missouri; and in California cooperative associa­
tions formed under the State cooperative a c t 6 and doing business
only with members were exempt. In most of these States mutual
associations were defined as those owned by and doing business only
with members; in Illinois they must also operate on the assessment
basis. In Kansas, associations were regarded as mutual only if they
provided a means of communication without profit within their
own membership; if connection was had with the lines of any other
company or if they extended service to even one nonmember they
automatically forfeited their status as mutuals and became subject to
the public-utility regulations. This proviso, of course, operated to
bring the majority of the associations under the control of the State
corporation commission. Associations in that State desiring to
connect with other lines must obtain a certificate of convenience and
authority permitting the erection of lines and the operation of a
switchboard.
No certificate of necessity and convenience was required for tele­
phone companies or associations in Washington State. Farm lines
desiring exchange and toll service from a regular telephone utility
must limit their construction to the exchange area from which con­
nection was desired. One telephone company, however, filed a
foreign exchange rate for farmer-line service which would permit
farmers in one exchange area to receive farmer-line service from
another exchange area that had a reciprocal schedule. “ Farm lines
that are operated only on an intercommunicating basis where no regu­
lar exchange service is desired are not restricted in the areas in which
they operate and may be constructed if franchise can be obtained on
the highways.” Exclusive rights were not given, but a mutual
operating as a common carrier must serve all applicants for service
within a “ reasonable distance” of its lines.
In North Dakota the operating territory was specified at the time
construction of lines were authorized, but might be expanded later
on permission of the board of railroad commissioners. Under the
State constitution no public utility may be granted exclusive rights
in any territory; such a utility may, however, be required to serve all
« This act was repealed in 1931, and associations organized prior to that time are regarded as operating
under general corporation law.




LEGAL

STATUS

OF

C O O P E R A T IV E S

201

applicants for service, either by permitting them to become members
or by making a flat charge upon them for service.7 Under the pro­
cedure in Minnesota and Wisconsin, the territory was strictly limited
at the time authority for operation was granted, and exclusive rights
therein were given. In Michigan the territory was defined at the
time that the franchise was given. Although exclusive rights were
not given, the public utilities commission had refused to allow duplica­
tion of facilities “except upon a clear showing that the public conveni­
ence and necessity would be served by such duplication.” As coop­
erative and mutual associations were regarded as on the same plane
as privately owned telephone companies in Michigan, Minnesota,
and Wisconsin, they were, like them, required to provide service for
all applicants, whether or not they were stockholders.7
The rates of “strictly mutual” telephone associations were not sub­
ject to public determination or review in Kansas; those of associations
giving service to nonmembers or connecting with lines of other com­
panies were, however, subject to the same regulation as the rates of
public utilities operating for profit. In Michigan and Minnesota
the rates were fixed by the commission. In North Dakota and Wis­
consin the commission did not set the rates for telephone service, but
passed judgment upon the reasonableness of those set by the com­
panies themselves. No supervision was exercised over rates of mu­
tuals in Washington unless they operated as common carriers in
which case their rates were subject to review.
7 This fact was taken into consideration in determining the “ cooperativeness” of the associations.

9 0 6 2 1 ° — 3 9 --------14







IN D E X

A
Page
A & B Cooperative Oil Association, Ashland, W is______ ____ _______________________ 148,149,152,154,162
Age of associations_______________ 9,30-32,34,64-66,73-76,80,88,93,100,101,118,119,137,151,152,160-162,172
Amalgamation of cooperative associations_________________________________________________________
40
Assets of cooperatives____________________________ 22, 52, 53, 59,62,63, 78,84, 111, 112,128-130,132,148,151,152
Auditing associations----------------------------------------------------------------------------------------------------------------- 21, 22,163
Auditing service of cooperatives_______________________ ___________________________________ 3,146-148,163
Automobile repair. (See Garages.)
Automobiles, sale of, b y cooperatives___________________________________________________________ 61,74,148
Automobile workers’ cooperatives________________________________________________ 64,119,122,125,128,132

B
Bad debts, losses from _______________ _________ ______ _____________________ ____ ___ _______ _ 43,133,156
Bakeries.________ _________________ ____________ _______________ 21,22,32-36,45,46,50-52, 54,61,64,179,183
Beauty parlor, cooperative--------------------------------- ----------------------------------------------------------------------------- 4, 35
Beer tavern, cooperative------------------------------------------ ----------------------------------------------------------------------- 4,35
Branches, retail, of wholesale associations_____________________________________________________ 151-153
Building and loan associations, number, membership, and statistics of operation, 1936______________
7
Building materials, handling of, b y cooperative associations______________________________________147,148
Building-trades workers’ cooperatives____________________________________________ 83,119,122,125,128,132
Bureau of Cooperative M edicine__________________________________________________________________
194
Burial associations________________________________________________________ 6,21,22,59,61,62,74-80,148,149
Bus service, cooperative___________________________ ___________ ___________________________________
4
Business done b y cooperatives_______________________________ ____________________________________
13,
14,21,40-43, 57-59,61-63,65,76,78,84,95,113,114,123-126,140-142,145,146,153-155,160-163,166,167
15,
Business practice and methods of cooperatives_____ ______ ______________ _________ _______________
16,14, 78, 79, 81,82,85-87,105-108,110,116,117,126,135,136,197-201
Buying clubs______________________________ ___________ 9,21,22,3U-32,36, 37, 41,45,47,49, 51, 52, 54, 58, 59, 74

c
C -A -P Cooperative Oil Association, Kettle River, M in n .......................................................... 148,152,254,162
California Cooperative Education Association, Pasadena, Calif_______________________ __________ 165
Capital of cooperative associations___ 11,17,22,48, 51-52,59, 62-64,78,84,89,105,112,113,127,130-132,151,152
Central Cooperative Wholesale, Superior, Wis__........... ....................... ......... 147,149,151,154,161,167,168,171
Central States Cooperative League, Chicago, 111______________________________ _____ ______________
165
Classification of cooperatives, m ethod used in survey----------------------------------------------------------------------32
Cleaning, dry, establishments__________ ____________________________________________________ 21,22,62,65
Clearwater County Cooperative Council, Bagley, M in n ___________________________________________
166
Cloquet (M inn.) Cooperative Society_____________________________________________________ _____ 41
Clothing, handling of, b y cooperative associations______________________________ 4,23,31,50,65,146,147,155
Club rooms, cooperative___ ____ ________________________________ ___________________________ ____ .3 5 ,6 1
Clusa Service, New York, N . Y _____________________________________________________________ ____ _
134
Coal mining b y cooperative associations__________________________________________________ _____ 4,35
Cold storage____________________________________________________
61
Competition between cooperatives______________ _____ _____ ____________________________________ 135,150
Consumers’ Cooperative Association, North Kansas C ity, M o ___________________ 147,148,151,154,156,160
150
Consumers’ Cooperative Oil Co., Sauk C ity, W is___________________ _____________________________
Consumers Cooperatives, Associated, Amarillo, T ex ____ ______ ____________ ____ ____ 147,149,151,154,161
Consumers’ cooperatives, definition o f_________
17-18
Cooperation, courses in (see also Educational activities)____ _______________________________________
27
Cooperative G. L. F. Exchange, Ithaca, N . Y _ _ ______ _______________________________ ___________ _
150
Cooperative Insurance Association____ _______________________________________
136
CooperativeInsurance M u t u a l __________ __________ ____________________________ ____ __________
136
Cooperative League of U . S. A ____________ ____ _______ _______ ________ 15,21,134,145,163-165,170,171,185
Cooperative Life Insurance Co. of America, Columbus, Ohio............ ...................................... ..................
135




203

204

IN D E X
P age

Cooperative Management Association_______________________________________________________ ______
136
Cooperative practices_____ 38-40,48, 64,69,76, 77,81,82,89,90,95,96,104-106,115,127,135,157-159,174,197-199
Cooperative Services, Maple, W is___________________________________________________ 148,149,152,154,162
Cooperative Trading Co., Waukegan, 111------------------------------------------------------------------------------------------ 41,186
Cooperative Workers* U nion____________________________________________________________________ 185,186
Cooperative Y ou th League of the N orth Central States, Superior, W is__________________ ____ ____167,168
Cooperatives as sources of supply______________________________________________ 34,48,49,64,79,80,155,156
C ©operators’ Life Association, Minneapolis, M in n _________________________________________________
136
Cost-plus operation_______________________________________________________________________________
16
Councils, local cooperative.--_____ _______
166
Court decisions involving cooperatives. ( See Legal status.)
Coverage of studies b y Bureau of Labor Statistics.____________________________________ 5,20,21,24,96,136
Creameries_____________________________________________________ 11,21, 22,32,34-36, 45, 46, 51, 52,54,179,183
Credit, extension of, b y cooperatives, to members--------------------------------------------------------------------- 16,116,158
Credit, sources of, to cooperatives.._____ ___________________________________________________________ 90-92
Credit Union National Association, Madison, W is-------------------------------------------- -----------------------------169
Credit Union National Extension Bureau, Boston, M ass------------------------ ------- --------------------------------169
Credit unions___________________________________________________ 6,12,19,21,22,87,115-133,136,158,168-169
Cuna M utual Society, Madison, W is____________________________________________________ 138,138,140,169
169
Cuna Supply Cooperative, Madison, W is_________________________________________________________
Czechoslovak cooperatives in United States------------------------ ---------------------------- --------------------------------28, 40

D
Depression, effect of, upon cooperatives_______________________________________________________ 11,133,177
Distributive departments of marketing associations_______ 13,21,22,31,36,43,45,47,49,51,52, 54, 58,179,183
Dividends, patronage. ( See Patronage refunds.)

E
Earnings, net, b y cooperatives.............. .
10,14,16, 21,24,44-46,57-59,62,63,78,85,113,114,153-154,160-162
Eastern Cooperative League, N ew York, N . Y ______________ ____ _______________________________
165
Eastern Cooperative Wholesale, N ew York, N . Y ___________________________________ 147,148,151,154,161
Econom y M utual Health Association, E conom y, In d ______________________________________________71,72
Educational activities of cooperatives_________________________________________ 88,146-148,163-169,170,171
Electricity associations____________________________________________________________ 6,61,62,88-92,194-197
Employees, cooperative, training o f______________________________________________________________165,171
Employees, number of, in cooperatives__________________________________________________ 110,159,178-179
Employees, relations w ith ____________________________________ ______ ___________________ 174-178,185-188
Employment, stability of, in cooperatives_____________________________ ___________________________
175
English cooperatives in United States_____________________________________ _______________________
28

F
Farm Bureau Cooperative Association, Columbus, Ohio___ _____ ___________ 135,147,148,150,151,154,161
Farm Bureau cooperative associations____________________________________________ ____ _______ 56,135,149
Farm Bureau Federation Cooperative, Madison, W is________________________________ 147,149,151,154,162
Farm Bureau M utual Automobile Insurance Co., Columbus, Ohio------------------------------------------------135
Farm Bureau M utual Fire Insurance Co., Columbus, Ohio________________________________________
135
Farm Bureau Oil C o., Indianapolis, In d ___________________________________________________________
150
Farm Bureau Services, Lansing, M ich _______________________________________________ 147,150,151,153,160
Farm organizations, attitude toward cooperatives____________________________________ 3,28, 30,39,67,69, 75
67
Farm Security health cooperatives_______________________________________________________________ _
Farmers’ cooperatives_________________________ 17,18,24,28-30,38,39, 57-60,65, 66,74,75,149,150,152,153,183
Farmers Cooperative Exchange, Baleigh, N . C ____________________________________________________
150
Farmers’ Union Central Exchange, South St. Paul, M in n ___________________________ 147,148,151,154,160
Farmers’ U nion cooperative associations___________________________________________________________
149
Farmers’ U nion Cooperative Hospital Association, E lk C ity, Okla_________________________________67-69
Farmers’ Union Sales Department, Oklahoma C ity, Okla_______________________________ 147,151,154,161
Farmers’ Union State Exchange, Omaha, N ebr______________________________________ 147,148,151-154,160
Federations, educational________________________________________________________________ 15, 21,22,163-169
Federations, service_____________________________________________ 21,22, 76,99,100,103-105,110-112,114,163
Federations____________________________________________________________________________________ 12,13, 25
Federations, wholesale____________________ ____ ________________________________ 6,13,15,21,22,40,145-162
Fidelity bonds for cooperative employees__________________________________________________________
134
Finnish cooperatives________________________________________________________________________ 28,33,34, 64
Franklin Cooperative Creamery Association, Minneapolis, M inn____________________________ ______
41




205

INDEX

Page
French cooperatives in United States................................................................. ..............................................
40
Fuel yards, cooperative---------------------------------- --------------------------------------------- 35,36,41,45,47,49, 51, 52, 54, 58
Funeral associations. ( See Burial associations.)

G
Grange Cooperative Wholesale, Seattle, W ash_______
Garages---------------------------------------------------------------------Geographic development of cooperative associations:
Bakeries________________________________________
Burial associations______________________________
Buying clubs___________________________________
Credit unions___________________________________
Electricity associations__________________________
Garages--------------------------------------------------------------Housing associations____________________________
Insurance associations___________________________
Laundries and cleaning establishments__________
Medical-care cooperatives_______________________
Petroleum associations__________________________
Printing and publishing associations_____________
Recreation associations__________________________
Service associations______________________________
Store associations________________________________
Telephone associations__________________________
Water-supply associations_______________________
Goods handled b y cooperatives______________________
Grange cooperatives_________________________________
Grievances, adjustment of employees, in cooperatives.
Group Health Association, Washington, D . C .......... ..

__________ 147,151,154,161
21,22,35, 61, 62, 73, 74,149,183
_____ _____— -......... 7,32
___________
75,76,78
_ ....
37
.. 8,120,121,124,127,129-131
______________ 8,88,89,91
__________________
73
________________ 7,8,80,85
_________________ 137-141
__________________
65
__________________
66
7, 8,36,37,40,42,45,46,51-53
__________________
74
__________________
172
_____________
63
______ 7,37,42,45,46,51-53
8,97-101,103,104, 111, 112
__________________
34
_________ 4,31,32,146-148
__________ 3,28,30,39,149
_________________ 176-177
......................... 67,193,194

H
H-O-B Cooperative Oil Association, Bruce Crossing, M ich __________________________ 148,149,151,154,162
Halls, cooperative____________________________________________________________________________ 61,172,173
Hospital, cooperative_______________________________________________________________________ 61,66, 68,69
Hours of work in cooperatives_______________________________________________________________ 175,183,184
Housing associations____________ ___________________________________ ____ _____ _____ 6, 21,22,61, 62,80-88

T
Illinois Farm Supply Co., Chicago, 111___________________________
Indiana Farm Bureau Cooperative Association, Indianapolis, Ind.
Insurance agencies, store associations as__________________________
Insurance associations___________________________________________
Insurance controversy over medical cooperatives_________________
Iowa State Federation of Burial Associations____________________
Italian cooperatives in United States......................... . . .......................

................... 146,151,153,160
. . . 147,148,150,151,153,160
________
135,136
6,19, 21, 22,134-144,189,190
__________________ 189,190
____________________
76
............................... 28,33,40

J
Jewish cooperatives in United States______________________________________________________________

33

K
3

Knights of Labor cooperatives

L
Labor banks, number, membership, and statistics of operation, 1936.
Laundries_________________________________________________________
Lawn mowing, cooperative________________________________________
Legal status of cooperatives________________________________________
Legislation affecting cooperatives__________________________________
Lithuanian cooperatives in United States____________ ____________ _
Litigation involving cooperatives. ( See Legal status.)
Lodgings. ( See Rooms, associations providing.)
Losses, operating, b y cooperative associations----------------------------------




_______________________
7
__________ 21, 22, 59, 61, 62,64, 65,183
____________________________
4
________________________ 75,189-201
27, 67,88, 89,116,136,153,169,189-201
............
28,33,40

45, 59, 73, 74,85,113,114,142,143

206

IN D E X

M
Manufactures, cooperative. (See Production b y cooperatives.)
Page
Maryland Farm Bureau Federation, Baltimore, M d ______________________________________________
150
Meals, associations providing______________________________________ 6,21,22,35, 59,61,62,64,65,182,183,187
Medical profession, attitude toward cooperatives-----------------------------------------------------------------------------67
Medical service______________________________________________________________ 6,21,22, 62,65-73,88,189-194
Membership of cooperatives_______ _______________________________________ 10,13,21,35-40,58,62, 63,65,68,
69, 76-78,88,99,101-104,120-123,137-139,142,151,152,160-162,163,166-168
Michigan Union Life Association, Grand Rapids, M ich__________________________________________134,135
M idland Cooperative Wholesale, Minneapolis, M in n ------------------------------------------- 147-149,151,154,158,160
158
M idland Credit Corporation, Minneapolis, M in n _________________________________________________
M idland M utual Fire Insurance Association, Minneapolis, M inn__________________________________
135
Miners* cooperatives__________________________________________________ 26-28,38,74,75,119,122,125,128,132
Minnesota Farm Bureau Service C o., St. Paul, M in n ___________________________________ 147,151,154,160
M utual Cooperative Insurance Association, Superior, W is______________________ _____ ______ _____
135
Mutual savings banks. (See Savings banks, mutual.)
Mutuals, cooperative features of_________________ _______________________________ 5,19,98,105,136,198-201

N
National Cooperative Wholesale-------------. ---------------------------National Cooperatives, Inc., Chicago, 111___________________
Needle-trades workers’ cooperative--------------------------------------Negro cooperatives------ ------- -------------------------------------------------N ew Cooperative C o., Dillonvale, Ohio_____________________
N ew Era Life Association, Grand Rapids, M ich -------- ---------Nonmembers, business w ith ________________________________
Northern California Cooperative Council, Oakland, Calif___
Northern States Cooperative League, Minneapolis, M in n —
Northern States W om en’s Cooperative Guild, Superior, Wis.
Northland Cooperative Burial Association, Cloquet, M in n ..
Northland Cooperative Oil Association, R ock, M ich________
Northwestern Cooperative Burial Association...........................

____________________________ 15,28
__________ 146,148-151,153,157,160
____________________________
80
_____________________________ 29,30
____________________________
41
___________________________ 134,135
34,42,43, 63, 65,102-104,117,155,157
____________________________
166
______________________ 165,167,171
_____ ______________________
167
_____________________________ 75,76
______________ 148,149,151,154,162
..... ............................................
76

o
Operating expenses____________________________________________________________________________ 43,44,156
Operating plant and facilities________________ 35,61,64,65,68,69,78,79,82,83,93,94,107,108,146-149,172-173
Opposition to cooperatives______ ____ __________________________ ____ _________________ 67,75,189-194,197
Organized labor, attitude of cooperatives toward----------------------------------------------------------------------- 33,185-188
Organized labor, attitude toward cooperatives_______________ _______ _____________________ ______3,28,29
Overtime work in cooperatives.................................................... .......................................................................
177

P
Pacific Supply Cooperative, Walla Walla, W ash----------------------- ---------- -------------------------------------------149
Parks, cooperative_________ ____ ____________________________________ _____ __________________ 61,172,173
Patronage refunds_______________ _______________________________ 10,11,14,22,24,33,46-48,59,62,69,85,90,
105,106,127,128,143,144,153,154,158,159,160-163
Pennsylvania Farm Bureau Cooperative Association, Harrisburg, Pa------------------- 147,149,150,151,154,161
People’s Cooperative Society, Superior, W is_________ ___________ ______ ______________ ___________
187
Personnel policies of cooperatives___________________________________ ____ ____ ____ _____________ 175-178
Petroleum associations____ ____ _____ _____ _________________ 6,13,14,21,22,30,31,35-37,40-61,179,181-184
Polish cooperatives in United States_____________________ ________ ________________________ _____ 33,40
Population, cooperatives in relation t o ........... . .................................................. ....................................... 56,57,180
Prices and charges, level of, among cooperative associations............................. 10,34,68,70,72,76,78,79,85-87,
90,95,106-110,126,196
Principles, cooperative. (See Rochdale principles.)
.......... 21,22,59,62,74,163,183
Printing and publishing associations.._____ _______
_____________ 43,44,179-183
Private stores: Wages and wage expenses--------------_____________
17,18
Producer cooperatives, definition of________________
____ 22,23,50,60,146-148,156
Production b y cooperatives..........................................
Profits. (See Earnings, net.)
...... ...........
27,88-92,195
Public assistance to cooperatives------ ------- -------------81,83,116,119,122,125,128,132
Public employees’ cooperatives------------------------------________ 93,117,118,189-201
Public regulation of cooperatives---------------------------...........
119,122,125,128,132
Public-utility employees’ cooperatives...... .............. .

R
Railroad workers’ cooperatives________________________
Range Cooperative Burial Association. Virginia, Minn.




28, 38,116,119,122,125,128,132
__________ ___________
75

IN D E X

207
P age

Range Cooperative Federation, Virginia, M inn_____ __________________________ 75,76,148-150,152,154,162
Range Cooperative Oil Assn., Virginia, M inn_______________________________________ 148,149,152,154,162
Recreation associations----------------------------------------------------------------------------------- 21,22,61,62,163,172,173,183
Recreation Cooperative, In c_______________________________________________________________________
173
Recreation in cooperative m ovement__________________________________________________ 34,88,167,171-173
Restaurants, cooperative. ( See Meals, associations providing.)
170
Rochdale Institute, N ew York, N . Y ____ ______________ ____ _____________________________________
Rochdale principles........ ........ 2,18,19, 38-40,48, 64,76,77,81, 82,89,90,96,104-106,115-117,135,157-159,197-201
Rochdale Society of Equitable Pioneers-------------------------------------------- ------------------- ------------- ------- 1,2,18,19
Rooms, associations providing_____ ___________ ____ __________ ____ ____________ 6,21,22,35,62,64,65,183
Rural cooperatives_______________ ______________ ______ ____ ________ ___________________ 8,9,50-60,75,93
Rural Electrification Administration, cooperatives under program of_________________ 8,90-92,146,195-197
Russian cooperatives in United States____ ___________ ____________________________ ____ __________
64

S
St. Louis County, M inn., cooperation in___________________ ________ _______ 4,5,159,172,177,182,184,187
Sales. ( See Business done b y cooperatives.)
San Diego Beneficial Society, San Diego, Calif______________ _____ ________________ ____ __________ 69-71
Savings banks, mutual, statistics for 1936__________ ______________________ ____ ___________________
7
Scandinavian cooperatives in United States......... ....................................... ......... .............................. .......... 28, 64
Self-help cooperatives__________________________________ ____ _____ _______ _____________________ 29,83,84
Service associations____ ______ ________ ___________________ ____ _____ ______ ____ 4,6,21,22,30,61-92,183
Share capital. (See Capital.)
Shoe-repair cooperatives_______________ _______ _______ _____ _____ ______ ________________________ 61,65
Size of associations______________ _____ 10,12,34,36,41, 58, 59,74-78,88,94,101-104,122,123,126,139,141,154
Slovenian cooperatives in United States______________ _______________ ____ ____________ __________
28
Southern States Cooperatives, Richm ond, V a_______________________________ ____________ ____ ____
150
Steel Workers’ cooperatives___________________________ __________ _______ ________________________
64
Stock turns____ ________ ___________________________________________________ ______ _______________ 16,49
Store associations_____ ______________________________ 1,4,6,13,14, 21,22,31,35-37,40-61,74,179,181-184,187
Students’ cooperatives_______________________________________________ 29,36,40,41,45,47,49,51,52,54,64, 65
Subsistence-homesteads projects, cooperatives in______________________________________ ______ ______
29
Supply, sources of, cooperative associations as. ( See Cooperatives as sources of supply.)

Teachers’ cooperatives__________________ ____ _________________________________ 32,38,119,122,125,128,132
Telephone associations_____________________ ______ _________________________ 6,12,19,21,22,93-114,197-201
Textile workers’ cooperatives___________ ____ ____________________ ____________ 28,38,119,122,125,128,132
The Cooperative Wholesale, Chicago, 111________________________________________ 146,148,149,151,153,160
Trico Cooperative Oil Association, Cloquet, M inn____ ___ _____ ______ _____________ 148,149,152,154,162

u
Ukranian cooperatives in United States_________
Unionization of cooperative em ployees............ .
United Cooperative Farmers, Fitchburg, M a ss..
United Cooperatives, Inc., Indianapolis, In d ____
United Farmers Cooperative Co., Toronto, Ont.
Urban cooperatives_____________________________

_____________
64
_________
185-188
147,148,151,153,160
146,148-151,153,160
_____________
149
. . . 9,28,29,56,57,65

Vacations for cooperative employees.
Voting in cooperative associations___

_______________________ 175,177,178
2,18, 66,69, 70, 76, 81,105,116,117,157

w
Wage Earners’ Health Association, St. Louis, M o ______________________________________
____ 72,73
Wage and wage expense in cooperatives_____________________________ 43,44,79,110,156,159,175, 176,178,183
Water-supply associations______ __________________________________________ 21,22,32,34-36,45, 46, 51, 52, 54
Waukegan-North Chicago Cooperative Association, North Chicago, 111_________________
_____
186
White-collar workers’ cooperatives_______ _______ ______________________________________
28,38,64, 80
Wholesales. (See Federations, Wholesale.)
Workers and Farmers Cooperative U nity Alliance, Superior, W is____________________ 147,149, 151,154,162
Working conditions in cooperatives_________________________________________ 43,44,82,106,107, 159,174-188
W orkm en’s Furniture Fire Insurance Association, Brooklyn, N . Y ___________________________ ____
134
W orth, net, of cooperatives............................................ ....................... 22, 53-55,59,62,63, 78,110-112, 130-132,152




O