Full text of Consumers' Cooperation in the United States in 1941 : Bulletin of the United States Bureau of Labor Statistics, No. 725

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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 TISTIC S
Isador Lubin, Commissioner (on leave)
A . F. Hinrichs, A ctin g Commissioner

+

Consum ers’ Cooperation in the
U nited States in 1941

Bulletin 7{o. 725
{Reprinted from the Monthly Labor Review, November 1942, with additional data]

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 : 1943

For sale b y the Superintendent o f Documents, U . S. Governm ent Printing Office
Washington, D . C. - Price 10 cents




CONTENTS
Page

Summary---------------- ------------------------------------ ----------- - -------------------------Geographical distribution of cooperatives, by type______________________
Extent of consumers’ cooperation in 1941_______________________________
Farm and urban consumers’ cooperation____________________________
Operations of commercial federations_____________________________________
Cooperative wholesales_______________________________________________
Service operations of central organizations------------------------------------------Production by central organizations___________________________________
Operations of local associations, 1941______________________________________
Sales of local associations_____________________________________________
Operating results, 1941_______________________________________________
Margins and operating expense_____________________________________
Assets and liabilities_______________________________________________
Credit policies of cooperatives________________________________________
Patronage refunds of local associations______________________________
Trend of sales, earnings, and patronage refunds, 1920-41________________
Membership of cooperatives______________________________________________
Educational activities---------------------------------------------------------------------------Employment and wages in cooperative associations________________________

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LETTER OF TRANSMITTAL

U nited S tates D epartment of L abor ,
B ureau of L abor Statistics ,

Washington, D. (7., December 2,1942.
The S ecretary of L abor :
I have the honor to transmit herewith a report of a survey of con­
sumers’ cooperatives made under the direction of Florence E. Parker
of this Bureau, with the assistance of Tessim Zorach.
A. F. H inrichs ,
Acting Commissioner.
Hon. F rances P erkins ,
Secretary of Labor.
n




Bulletin jN£o. 725 o f the
U nited States Bureau o f Labor Statistics
Reprinted from the M onthly L abor R eview , November 1942, with additional data]

CONSUMERS’ COOPERATION IN THE UNITED STATES
IN 1941
Summ ary

COOPERATIVE development in the United States has generally
followed the economic curve, but in reverse order, expanding with
depression times and usually receding? somewhat as prosperity re­
turned and the necessity for small savings lessened. The latest
period of cooperative expansion, which began with the onset of the
depression in 1929, has, however, been an exception to the general
rule, for it has continued unbroken its upward sweep. It is possible
that war conditions, restricting civilian supplies and consumption,
will force out of operation a certain proportion of associations, notably
those in the petroleum-products business. Such restrictions had not
gone into effect at the end of 1941, the year covered by this report.
For a large percentage of the associations that year was the best in
their history.
The nearly 4,500 primary distributive and service associations had
an estimated paid-up membership of over 1,427,000, in addition to
partly paid members numbering (in reporting associations) nearly
146,000. Thus, over 1}i million persons were full-fledged members
or were on their way to full membership in these consumers’ coopera­
tives at the end of the year
With a retail distributive business of over $345,000,000 and a serv­
ice business of nearly $11,000,000, these local consumers’ coopera­
tives accounted for a total of over $356,000,000 in consumer goods
and services during the year. In addition, the 54 distributive
and service federations had a total business aggregating almost
$105,000,000; of this, $100,760,000 was wholesale distributive,
$2,243,000 was service, and the remainder represented retail and
other business.
For identical associations reporting for both 1940 and 1941, the
latter year showed increases in membership of the local associations
of over 7 percent and in sales of about 23 percent. For the regional
wholesales the increases were 9 and 23 percent, respectively.
The wholesales and the central productive associations owned by
them produced goods, for their own use or for sale to member asso­
ciations, amounting to over $14,000,000.
In addition to these purely consumer cooperatives, there are many
farmers’ marketing associations which do purchasing of consumer
goods for their members. The data available are insufficient to
permit estimates as to the total amount of purchasing of consumer
goods by farmers’ marketing associations in 1941; the 524 associa­




1

2

CONSUMERS' COOPERATION IN 1941

tions of this kind which furnished reports for the year had a combined
business of $119,122,000.
The 1,600 local distributive and service associations reporting had
combined net earnings, for the year, aggregating $11,533,148, after
deducting losses of $216,916 by 103 associations. On the basis of
these reports it is believed that the local associations had net earnings
of at least $17,000,000. If to this sum be added the net earnings by
the wholesale associations, amounting to $4,750,497, the consumers’
cooperative movement saved for its members over 21% million dollars
in this one year.
The distributive and service associations are generally regarded as
forming the consumers’ cooperative movement proper. Telephone,
electricity, and insurance associations, and credit unions, though
also consumers’ cooperatives, both here and abroad form distinct and
separate parts of the movement. Inclusion of their totals with the
data for the distributive and service associations brings the total
number of associations in the United States at the end of 1941 to
nearly 23,000, the consumers’ cooperative membership to almost 16%
million persons, and the total local and retail consumers’ cooperative
business to about a billion dollars in addition to a wholesale business
of nearly $105,000,000. Net earnings are available (among the
special types of associations) only for the credit unions. If these
are added, the net earnings of local and federated associations for
1941 total nearly 36 million dollars.
Patronage refunds (credit unions, retail and wholesale associations)
are estimated to have exceeded $24,000,000.
About 1,400 retail and service cooperatives and the central com­
mercial associations together reported a labor force of nearly 12,000
full-time persons, to whom they paid in wages the sum of $17,879,000.
A considerable number of part-time workers was also reported,
especially by the students’ cooperative rooming and dining associa­
tions. Average yearly wages for full-time employees varied quite
widely, ranging from $635 in the central productive associations to
$2,329 in the regional and State-wide educational federations.
The data here given are based upon a general survey of coopera­
tives made by the Bureau of Labor Statistics, covering all the dis­
tributive and service associations, the pre-REA electricity associa­
tions, the federated commercial and noncommercial organizations,
and credit unions. Data for the REA electricity cooperatives were
supplied by the Rural Electrification Administration. The tele­
phone associations were not circularized; estimates for these are
based upon the Bureau’s 1936 study. The estimates for the insur­
ance associations are based upon the trend of a reporting sample, plus
data from Department of Agricultural reports.
The various types of associations covered in this report are not
equally cooperative, in the accepted Rochdale sense. The coopera­
tive distributive associations follow the principles laid down by the
Rochdale 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



3

GEOGRAPHICAL DISTRIBUTION

other business is that the net amount saved through the operation of
the business (i. e., what would in private operation be termed the
“ net profit” ) is returned to the members, not in proportion to the
amount of capital stock they hold, but in proportion to their patron­
age of the business. Thus, in a store society the member who has
spent $500 at the store in the course of the year would receive in
patronage refunds five times as much as the member whose pur­
chases 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.
Conscious practice of cooperative principles is not so common among
some of the special service associations, as for instance, the telephone
and insurance associations. Some of these are organized as coopera­
tives and run as such, but by far the larger number are cooperative
only because of their conformity to the principles of mutuality, not
because of their acceptance of the Rochdale philosophy. The laws
under which credit unions are formed provide for many of the coopera­
tive principles (membership control, one vote per member, no proxy
voting, etc.), but they also (except in Ohio) provide for division of
earnings on the basis not of patronage but of the members’ investment.
Nevertheless, some credit unions, notably those connected with Roch­
dale cooperatives, practice the patronage-refund principle and make
a refund on interest paid by borrowers at the same rate as is paid on
shares. With the continuance of the affiliation between the central
organizations of these two sections of the cooperative movement—
The Cooperative League and the Credit Union National Association—
this tendency may accelerate.1

,

Geographical Distribution o f Cooperatives by T yp e

Geographically, there is a wide diversity in extent of cooperative
development, but the records of the Bureau of Labor Statistics indi­
cate that there are store associations in every State in the Union
except Nevada. Thanks largely to the educational work of the South­
eastern Cooperative League, the southern and southeastern States
now all have one or more stores or buying clubs for consumer goods.
In some States, however, the development is still meager. Thus, in
Arizona there are only 8 associations, and oLthese 6 belong to Indians.
The store associations are still found in greatest numbers in the
Middle West, with a smaller but growing development in New
England, the Middle Atlantic States, and the Pacific Coast States.
States leading as regards number of store associations are’ in order,
Minnesota, Wisconsin, and Michigan. The greater part of the asso­
ciations handling petroleum products are also in the .Middle West,
i The Credit Union National Association was admitted to the Cooperative League as a fraternal member
in 1939; in the fall of 1942 the central supply association of the credit-union movement, Cuna Supply Co­
operative, became a full member of the League.




4

CONSUMERS’ COOPERATION IN 1941

Mountain States, and Texas; there are still very few in the other sec­
tions of the country. States with the largest number of these associa­
tions are Minnesota, Nebraska, North Dakota, and Wisconsin. A
great many of the associations whose major business is the conduct of
a store business also handle petroleum products.
Buying clubs are difficult to discover, as they generally are informal,
unincorporated groups with no established business premises. The
greater part of those of which the Bureau has records are in New York,
Pennsylvania, Ohio, and Massachusetts.
Cold-storage lockers, in which to store meats, vegetables, etc., until
consumed by members’ families, are growing in popularity. Of the
45 associations known to the Bureau, whose sole business is the opera­
tion of cold-storage plants, over half (24) are in Illinois. In addition,
some store associations have cold-storage departments. In the past
few years, also, farmers’ cooperative creameries (not included in this
report because they are producer, not consumer, organizations) have
in growing numbers been installing locker systems.
Until a few years ago, practically all of the cooperative housing in the
United States consisted of apartment buildings in New York.2 Begin­
ning in 1939, construction of single detached dwellings was undertaken
by a few associations elsewhere— Illinois, Michigan, Minnesota, and
Wisconsin. The total of such associations, however, is still small, and
war conditions will probably prevent much further construction for
the time being, although several associations have been formed with
a view to carrying on educational work and accumulating funds for
post-war building.
Each study made by the Bureau reveals fewer associations whose
sole business is the manufacture and sale of bakery products. Only
5 of these remained at the end of 1941— all in the States of Massachu­
setts, New York, and New Jersey. A few store associations have
bakeries, run as a department of the merchandising business. Several
of the store associations also have a dairy department, but there are
only three consumers’ cooperative associations known to the Bureau
whose only business is the processing and distribution of dairy prod­
ucts.
One or two burial associations are being formed each year, but this
type of organization is still found mainly in the States of Iowa,
Minnesota, South Dakota, and Wisconsin.
An interesting development is that of associations whose purpose is
the operation of a water system. The majority of the organiza­
tions of this type have been started to supply water in suburban
sections of metropolitan districts to which the local city-water system
does not reach. Most of these are in Oregon, Washington, and
Wisconsin.
The opposition of the medical profession and difficulties of financing
the necessary equipment have tended to discourage the formation of
associations providing their own facilities for medical care. At the
end of 1941 there were still fewer than a dozen of these known to the
Bureau. These were scattered throughout the United States. There
is a growing number of cooperative associations whose purpose is to
furnish medical or hospital care on a prepayment or insurance basis,
* Not including building and loan associations which are orlv semi cooperative in nature and which are
regarded by the Bureau as financing rather than housing associations.




GEOGRAPHICAL DISTRIBUTION’

5

on contract with nonprofit organizations controlled by private physi­
cians.
Until the exigencies of war forced the grounding of private airplanes,
there was a small number of groups whose members united in the
purchase of an airplane for their joint use. The Bureau has record
of 19 such flying clubs—in Maryland, Virginia, and Wisconsin—but
most of them are inactive at present.
Other interesting and rather novel types of associations include the
cooperative houses run by old-age pensioners, one association which
provides steam heat for its 93 members’ dwellings, one association
dealing only in electrical appliances, one dealing in clothing only
(some of which it makes), one doing an automobile repair and storage
business, one doing cleaning and pressing, and one operating a laundry
(this association is the sole survivor of the considerable number of laun­
dry associations formed during the past quarter century). Signs of
the times are the few new associations formed to provide transporta­
tion for members on a cooperative basis, the cooperatives among the
residents of migratory-labor camps, and those in the camps for con­
scientious objectors.
Students’ cooperatives are found in many colleges and universities.
The bookstores are the oldest form of student cooperatives, but an
increasing number of student groups have been taking over large
dwelling houses and there providing room and board. Other groups
are operating dining clubs only. These activities assist the student of
limited means to continue his education—which might be impossible
otherwise. (It should be noted that a considerable proportion of
campus activities reported as cooperative are actually controlled
by the institution, with the students participating only to the extent
of working for their room and board and thus reducing their living
expenses.) During the next year or two the number and size of the
student cooperatives— especially among the male students—will
probably decrease as the students of draft age are called to military
service and as others enter war industries. Already the Bureau has
received reports from associations which state that their enterprise
has closed “ for the duration.”
Under the Farm Security Administration’s program for the rehabili­
tation of the small farmers and farm laborers, many cooperatives have
been formed to serve FSA clients. Most of those that were in opera­
tion by the end of 1941 were in connection with subsistence homestead
projects, where the homesteads formed a distinct community. Many
of these cooperatives are not of the consumer type, but are mainly to
provide producer supplies or market farm produce. Others only
lease farm land or carry on the actual farming operations. However,
among the FSA cooperatives were at least 135 handling consumer
oods or providing some consumer service. These FSA associations
iffer from the usual consumers’ cooperative in that they have been
financed almost entirely by loans from Government funds. Conse­
quently the members’ equity is very small in proportion to the total
assets. Also, the carrying charges and repayments on the Govern­
ment loan tend to reduce the net earnings, so that the operating re­
sults, in terms of dollars and cents, are generally much below those
shown by the Rochdale associations. Considerable improvement,
however, was shown in 1941 as compared with 1940.
In general the independent Negro cooperatives have not been par­
ticularly successful in a monetary way, partly because the members

f




6

CONSUMERS’ COOPERATION IN 1941

were too poor to finance them properly, partly because of managerial
difficulties, and partly because of insufficient patronage and loyalty
by the membership. However, several of the more successful of the
FSA cooperatives are those of Negroes. In these associations the
capital has been provided and a certain amount of supervision and
training supplied, and the results appear to have been quite successful.
Of 68 Negro consumers' cooperatives known to the Bureau, 13 are in
FSA communities, largely in the South. Among the non-FSA Negro
cooperatives, New York has the largest number but there are a
considerable number in the South Atlantic States. Most of the
remainder are in the District of Columbia, Illinois, Michigan, and
Ohio.
Indian cooperatives are usually of the producer rather than con­
sumer type, and have as their function the marketing of crops or
handicraft articles. There are, however, at least 8 store associations,
of the “ trading post” type. All but 2 of these are in Arizona.
Extent o f Consum ers9 Cooperation in 1941

On the basis of reporting associations and of the known trend, esti­
mates of total number of associations, membership, and business for
1941 are given in table 1. In this table the associations are classified
according to then’ major line of business. Further, the data for the
local associations cover only consumers' cooperative activities, i. e.,
provision of consumer goods or consumer services. The water asso­
ciations, for example, furnish water for family consumption; associa­
tions providing water for irrigation of farm land are not included.
Likewise, the cold-storage associations cover only those which have
lockers for family use; those which do quick freezing and storage of
vegetables and fruits raised by farmers, for marketing, are regarded as
producers' processing associations and therefore not appropriate for
inclusion here. Because of the classification according to the main
line of business, the extent of cooperative development of any given
line tends to be obscured. The cold-storage figures, for example,
should not be used as an indication of the extent of cooperative locker
facilities for family purposes. Many associations in other lines of
operation than cold storage are providing locker space as one depart­
ment of the business. This is especially true of farmers' creamery
associations; however, such associations would not be covered in this
study at all unless the creamery also had a purchasing department
handling consumer goods (in which case it would be classified as a
“ distributive department of a farmers' marketing association,” not
as a cold-storage association). Likewise, substantial numbers of
petroleum associations have an automobile-repair department, but as
the gasoline and oil business has been the more important, the associ­
ation would here be classified as a petroleum association.
Although in the tabulations the distributive associations are classi­
fied, according to their main line of business, as “ stores” and “ petro­
leum associations,” actually there is no longer the former clear-cut
distinction between them. Practically all of the general stores and
many of the grocery stores sell gasoline. Likewise, a large proportion
of the petroleum associations have begun to handle groceries, or at least
canned goods; some have opened a grocery department. The wisdom
of this move, which the wholesales and other central organizations
have been urging for several years, is increasingly apparent, as the



7

EXTENT OF CONSUMERS’ COOPERATION

wartime restrictions on cars, gasoline, and tires are broadened, with
corresponding reductions in trade in those lines.
A total distributive and service business, done by local consumers,
cooperatives, amounting to $356,000,000 is shown in the table; of this,
97 percent was in distribution of commodities and 3 percent in services.
The above amount represents over a 90-percent increase in the
5-year period since 1936, when the Bureau’s last previous general
survey was made. Farmers’ marketing or processing associations
having purchasing departments handling consumer goods accounted
for an additional $119,122,000.
T able 1.— Estimated M em bership and Business o f Consumers’ Cooperatives, 1941

Type of association

Esti­
Members
mated
total
number Fully paid Partly
of asso­
ciations (estimated) paid i

Estimated
business,
1941

Individuals Individuals
Local associations
3,850
1,163,200
142,393
$345,150,000
Retail distributive..................................................................
500,000
43,125
160,000,000
Stores and buying clubs................................................... 2,400
1,400
645,000
89,102
179,000,000
Petroleum associations....................................................
18,200
50
10,166
6,150,000
Other distributive associations........................................
Retail distributive or purchasing departments of market119,122,000
156,000
524
ing associations8___________________ _________________
621
264,400
3,416
10,897,000
Service associations....................... -........... ...........................
325
28,000
1,315
4,525,000
Associations providing rooms and/or meals....................
59
2,100
31,575,000
Housing (apartments or dwellings)__________________
Medical and/or hospital care:
24
86,950
2
1,425,000
On contract or insurance arrangement.....................
615
1,125,000
11
14,000
Own facilities.............................................................
Burial:
24,500
35
1,072
255,000
Own facilities, complet* funeral............... .............. .
6
2,500
10,000
Caskets (burial on contract arrangement only)
25,000
900,000
45
141
Cold storage.....................................................................
115
3375,000
33
2,000
Water..................................................... .........................
76,000
58
16
450,000
Printing and publishing.................................................
22
3,000
83
70,000
Recreational facilities............................. *........................
45
1,350
187,000
Miscellaneous......................................... .........................
15
6 33,410,000
825 M,205,000
Electricity associations4_______________________________
3 5,485,000
330,000
Telephone associations_________________________________ 5,000
Credit unions. . __ __ ______________________ ______ 10,425
3,532,000
8362,779,000
Insurance associations_________________________________
2,000 *10,000,000
9 170,000,000
Federations
Wholesale associations:
Interregional:
Wholesale distributive business................................
Other business........................................................... /
Regional:
Wholesale distributive business................................ ]
Retail distributive business......................................
Service business.........................................................
Other business........................................................... ]
District:
Wholesale distributive business................................ 1
Service business________________________________ \
Other business........................................................ . I
Service federations
_______ __ ______________________
Productive federations_________________________________
Noncommercial federations:
Nation-wide
__________ _________ __ _______ __ __
Regional and state-wide ______ ___ ___ __ ____ _____
District., county, and city-wide _

Associations
23

/
1

4,076,221
127,838

3,104

1
1
1
l

94,005,283
1,338,568
1,694,978
234,537

13

w»182

12
7

1,128
18

f
\
(

2,678,347
230,922
119
316,665
5,988,426

5
12
23

414
155

2

27

» Not estimated; figures actually reported by associations making returns.
8 Includes only purchasing departments handling consumer goods; figures are not estimates but data given
by reporting associations.
* Gross income.
* Data furnished by Rural Electrification Administration, plus allowance (partly estimated) for preREA associations.
* Consumers served (mainly members).
* Operating revenues of associations whose lines were in active operation.
7 Amount of loans made during year.
1 Policyholders.
* Gross premium income.
10Should not be added to other membership, as a very large part of these associations are also members
of the regional wholesales.

500941— 43------ 2




8

CONSUMERS’ COOPERATION IN 1941

The federations in the cooperative movement are composed of, and
serve, the local associations, not individual persons.
The commercial federations include organizations formed for the
purpose of rendering one or more special services or producing certain
commodities, and wholesale associations from which the member retail
associations obtain their stocks of goods. Many of the wholesales
also have service or productive departments. Among the commercial
federations the wholesale distributive business of the wholesale asso­
ciations in 1941 accounted for over 96 percent of the total business.
Their service business, though still small in volume, each year shows
an increase.
The central service associations covered in table 1 include those
performing auditing service for local cooperatives, those insuring coop­
eratives’ property or purchasing insurance and employees’ fidelity
bonds for them, trucking their supplies, or providing credit (either in
the form of loans or in the rediscount of trade acceptances). The
productive federations are owned in some cases by retail cooperatives,
but more generally by two or more of the cooperative wholesales
which have joined forces for the production of certain commodities
in which they deal at wholesale.
Most of the noncommercial federations are educational in character.
The “ Nation-wide” group shown in the table includes the Cooperative
League of the U. S. A., the Credit Union National Association, the
Group Health Federation, the National Committee on Student Coop­
eratives, and the National Cooperative Women’s Guild. The mem­
bership of these organizations consists of the regional educational
associations in their particular field (as for instance, Eastern Coop­
erative League, Northern States Cooperative Women’s Guild, the
State federations of burial associations, the State credit union leagues,
etc.). The primary educational associations (such as those covering
a metropolitan area, county, or district within a State) are more or
less informal organizations, often with no specific address except that
of the secretary. As their purpose is mainly that of exchange of
experience and the fostering of joint action among the local coopera­
tive associations, they may meet only sporadically, as some occurrence
or development necessitates, and be more or less inactive between
times.
FARM AND URBAN CONSUMERS’ COOPERATION

Estimates of the proportionate distribution of consumers’ coopera­
tion as between the farm and nonfarm associations are given in
table 2. These estimates are only very rough approximations and
should not be considered as strictly accurate. They are based upon
information supplied by reporting associations for 1941 and on the
Bureau’s records for other years for nonreporting associations,
together with an allowance for possible undiscovered associations.
An association was considered to be a farmers’ association if its
membership and patronage are preponderantly of such producers, even
though it may also serve and admit to membership townspeople or
other nonfarm persons. An example is the group of insurance com­
panies of the Ohio Farm Bureau, writing life, fire, and casualty insur­
ance. These were entirely farmer associations in origin and are still
primarily such. In recent years, however, they have entered the
urban field and under the sponsorship of the local consumers’ coopera­




9

EXTENT OF CONSUMERS’ COOPERATION

tives are writing insurance in an increasingly large urban group.
Nevertheless, these insurance associations, because they are still
predominantly of farmer membership, were here counted with the
farm group.
Hereafter, for convenience, in the discussion the nonfarm group
has been designated as “ urban,” even though it includes many persons
in small towns and even nonfarm families in rural districts.
The estimates indicate that in the retail distributive field, although
the urban cooperatives outnumber the farmers’ cooperatives, they
are considerably smaller in size and therefore both in membership
and in volume of business fell below the farmers’ associations in 1941.
To some extent the averages of the urban or consumer group was low­
ered by the buying clubs, which are found almost entirely in the
urban areas.
In the service field the situation is reversed. The associations
providing meals and rooms, housing (apartments and dwellings), and
water are entirely urban, as are also the “ other” associations (i. e.,
bakeries, creameries, flying clubs, and those providing a miscellany of
services). Practically all of the cold-storage associations are farmers’
organizations, as well as a large proportion of the burial, printing, and
recreational associations. With the exception of a few pre-REA
organizations, the development of the electricity cooperatives is among
farm groups. All but about 10 percent of the insurance associations
and all but about 30 percent of the telephone associations are farmerowned. On the other hand, some 90 percent of the credit unions are
in urban— usually industrial— groups. . In the grand total, the urban
cooperatives’ business in 1941 exceeded that of the farmer groups, but
only because the large volume of business (loans made) of the credit
unions raised the total of all urban types sufficiently to overcome the
farm lead in other types of associations.
T a b l e 2.— Estimated Relative Development o f Local Consumers’ Cooperatives Am ong
Farm and JSonfarm Groups, 1941

Type of association

Total number
of associations

Members

Business

Individuals

All types:
F a rm ........................................................ .....................
Nonfarm........................................................................

8,230
14,491

11,421,150
5,073,450

$391,307,000
$536,414,000

Retail distributive..................................._........... ................
F arm ....................... .....................................................
Nonfarm......... .......... ................................. ...............
Service (except electricity)..................... .............................
F arm .................. .................... ............. ......................
Nonfarm- ................. .......... ..... ........ ...........................
Electricity: Farm .......................... ............ ........................
Telephone............................................................................
Farm_________ _________________ _____ __________
Nonfarm_______________ _________________________
Credit unions...... ........... ............ .............. ..........................
F arm .......... ......... ....................................................
Nonfarm_____ _____ _______________ ______ ________
Insurance...........................................................................
Farm............. ..................... ......... ............................ .
N o n fa r m ............. .....................................................

3,850
1,500
2,350
621
105
516
825
5,000
3,500
1,500
10,425
500
9,925
2,000
1,800
200

1,163,200
675,000
488,200
264,400
135,650
128,750
1,205,000
330,000
230,000
100,000
3,532,000
175,500
3,356,500
10,000,000
9,000,000
1,000.000

1345,150,000
180,000,000
165,150,000
10,897,000
4,057,000
6,840,000
33,410,000
5,485,000
3,840,000
1,645,000
362,779,000
15,000,000
347,779,000
170,000,000
155,000,000
15,000.000

1 The Farm Credit Administration estimates that during the 1941-42 marketing season 2,726 farmers'
cooperatives were doing purchasing of supplies for their members and that the total purchases amounted
to about $600,000,000. This latter figure, of course, includes business of associations which handle farm
supplies only; the Bureau of Labor Statistics' data, above, cover associations which handle some consumers*
goods.




10

CONSUMERS’ COOPERATION IN 1941

Operations o f Commercial Federations

Local or retail cooperatives have entered into federations in order to
carry on various types of wholesaling, service, or productive activities
Practically all of such of these operations as are connected with the
consuIners, cooperative movement are covered in this report. Tables
3-6 give data for reporting associations only; the figures given in table
1 included estimates, for nonreporting and possible undiscovered
associations.
COOPERATIVE W HOLESALES

The wholesale associations have in recent years widened the scope
of their business and nearly all of the regional organizations provide
some services in addition to the distributive business which is still
their chief activity. Of a total business done by cooperative whole­
sales in 1941, amounting to $104,386,813, the wholesale distributive
business accounted for $100,759,851 (or 96.5 percent), the retail
branches of the wholesales had a business of $1,338,568 (1.3 percent),
and services accounted for $1,925,900 (1.8 percent).
Net earnings by the wholesales on the 1941 business amounted to
$4,750,497, of which $3,681,137 (or 77.5 percent) was declared in re­
funds on patronage. In many, if not most, cases, however, the pa­
tronage refund was not returned in cash. Foreseeing uncertain times
ahead, and wishing to strengthen the cooperative framework to meet
them, the member associations in many cases voted to pay the refunds
in the form of share capital or to place the refunds in a “ patrons1
equity reserve” or in a revolving fund payable several years hence,
thus giving the wholesale the use of the money in the meantime.
Figures showing the business of various kinds done by each of the
reporting wholesales, as well as net earnings and patronage refunds,
are shown in table 3. In the majority of cases, these figures represented
substantial increases over 1940.
T able 3.— B usiness, N et Earnings, and Patronage Refunds of Cooperative Wholesales,
1941

Association, and department of business

Amount of
business 1

All associations__________________________________________
Interregional_________________________________________
Regional__________________________ ____ _____________
District_____________________________________________

2$104,386.813
24,204.059
297,273.366
22,909,388

Net earn­
ings

Patronage
refunds

$4,750,497
238,093
4, 355,875
156,529

$3.681,137
238,093
3,327,138
115,906

Interregional
Tllinnis! National Cooperatives
_ rT
___
___
.
Indiana: United Cooperatives:
T_
.
Distributive, "wholpsalft ____
Other.............................................. ........................... ...........
Regional
Illinois:
Central States Cooperatives................ .................. .... ........
Illinois Farm Supply Co....................................... ..............
Indiana: Indiana Farm Bureau Cooperative Association:
Distributive, wholesale............... .............................. .........
Services:
Auditing_________________________________________
Trucking________________________________________
Auto repair______________________________________
Insurance, bonds, etc_____________________________
Productive departments______________________________
Other......................................................................................

See footnotes at end of table.




(*)
4,076,221
127,838 }

229,394
8, 359. 583
9,498. 598
10.075 |
109. 717 [
8,605
22,568 J
‘ 3,200,005
169,774

38.928

(*)

238,093

238,093

7.230
1,094,408

5,784
883,753

379,371 <
42,072
482,085
8 307,570

588,852

11

OPERATIONS OF COMMERCIAL FEDERATIONS

T able 3.— Business, N et Earnings, and Patronage Refunds of Cooperative Wholesales,
1941— C o n tin u e d
Association, and department of business
Regional—Continued
lowa:
Farmers Elevator Service Co.......................
Iowa Farm Service Co.................................
Cooperative Service C o .,............................
Massachusetts: United Cooperative Farmers..
Michigan: Farm Bureau Services:
Distributive, wholesale................................
Distributive, retail............ .........................
Services: Management-................................
Minnesota:
Midland Cooperative Wholesale.................
Minnesota Farm Bureau Service Co.:
Distributive, wholesale.........................
Productive departments........................
Farmers Union Central Exchange:
Distributive, wholesale.........................
Productive departments...................... .
Missouri: Consumers Cooperative Association:
Distributive, wholesale..........................—
Distributive, retail............. .........................
Services:
Auditing..........................................................................
Trucking.........................................................................
Insurance, bonds, etc.10..................................................
Productive departments.......................................................
Other.....................................................................................
Nebraska:
Farmers Union Cooperative Oil Association of Nebraska...
Farmers Union State Exchange:
Distributive, wholesale..................................................
Distributive, retail.........................................................
Services: Trucking.........................................................
New York: Eastern Cooperative Wholesale:
Distributive, wholesale...................................... .................
Services:
Fidelity bonds................................................................
Insurance......................................... .......... ..................
North Dakota: Northwest Cooperative Society.......................
Ohio: Farm Bureau Cooperative Association:
Distributive, wholesale.........................................................
Services: Trucking...............................................................
Loan...................... ...............................................................
Productive departments.................... .............................. .
Pennsylvania: Pennsylvania Farm Bureau Cooperative Asso­
ciation:
Distributive, wholesale.........................................................
Productive departments...................................................
South Dakota: Farmers Union Cooperative Brokerage:
Distributive, wholesale.........................................................
Services:
Auditing.................................- ......................................
Trucking.........................................................................
Other....................... ......................... ...................................
Texas: Consumers Cooperatives Associated.............................
Utah: Utah Cooperative Association:
Distributive, wholesale.........................................................
Services: Trucking................... ............................................
Virginia: Southern States Cooperative......................................
Washington:
Pacific Supply Cooperative:
Distributive, wholesale..................................................
Services:
Gasoline transport...................................................
Auto repair...............................................................
Wisconsin:
Wisconsin Cooperative Farm Supply Co............................
Central Cooperative Wholesale:
Distributive, wholesale..................................................
Services: Auditing..........................................................
Productive departments........................... ....................
District
California:
Associated Cooperatives of Northern California.
Consumers Cooperative Wholesale.................. .
Michigan:
H-O-B Cooperative Oil Association....................
Northland Cooperative Federation:
Distributive, wholesale.................................
Services: Recreational facilities....................
Other............................................................. .

See footnotes at end of table.




Amount of
business1

$1,500,000
754,359
83,763
1,410,423
3,523,985
206,376
11,413
6, 228, 796

Net earn­
ings

Patronage
refunds

$55,000
35,518
10,888
(0
51,709
32,534 1
4,177 1
124,781

$30,060
9,155
(*)
45,268
102,051

836. ^
\
*448.076 J

33,112

33,112

8,098,812 \
#45,387 /

321,055

174,257

8,677,313
383,450

» 161, 346
12,306

109,644
3,547

7,541
34,421
6,672
«1,826, 257
63,326

00
00
2,110
250, 247
(9)
11,157

11,164

2,398,898
748, 742
99,470

99,741
(<)
00

45,041
(<)
00

2,107,827
214
2, 570
30,944

00
(9)
206,859
00

40,645
15
762

643

9,929, 399
50,185
1,071. 326
•877,006

248,370

105,932

2,604, 327
»1,243, 569

129,903
(•)

76,502
00

595, 762

•1,119

<*)

1,563
1,437
969,762

258,845
26,237
18,080, 714

0 236
(9)
00
25,133

00
00
7,860

15, 717 }
2, 773
603, 709

17,565
535,064

3,191,045
125,351
25,340

228,645

11 200,000

543,649

14,168

9,278

4,792,257 1
21,710 \
*319,764 |

144,113

125,757

190,431
9,987

2,197
375

1,437
(<)

149,581

10,368

7,041

96,372
259
119

6,257

(«)

12

CONSUMERS' COOPERATION IN 1941

T a b l e 3. — Business, N et Earnings, and Patronage Refunds o f Cooperative Wholesales,
1941 — Con tinned

Association, and department of business
District—Continued
Mmnesota:
Trico Cooperative Oil Association.......................................
C-A-P Cooperative Oil Association:
Distributive, wholesale..................................................
Services:
Trucking......................... .......................................
Gasoline transport....... ...........................................
Range Cooperative Federation:
Distributive, wholesale..................................................
Services:
Trucking..................................................................
Auto repair......................... .....................................
Insurance.................. 1.............................................
M ortuary................................ ..............................
Recreational facilities...............................................
Productive departments......................................... ......
Wisconsin:
Fox River Valley Cooperative Wholesale...........................
A & B Cooperative Association __ ........ ...........................
Iron Cooperative Oil Association.........................................
Cooperative Services........................
Price County Cooperative Oil Association.................... ..

Amount of
business1

Net earn­
ings

Patronage
refunds

$254,980

$31,139

$30, 551

145,615

17,054

13,105

14,899
114,390

3,620
834

900.746
16,868
40,243
16,396
24,513
3,320
•261,180
466,416
121,473
125, 351
172,145
45,250

30,931

24,755
8,588
5,855
14,556
(0

27,931

24,210
7,728
(0

3,903
(<)

* Unless otherwise indicated, data are for wholesale distributive business.
* Does not include value of production shown for productive departments, as the wholesale value of these
products was already included in “ distributive, wholesale” figure.
* Business is that of pooling orders and making master contracts; figure for “ business” therefore impossible
to give.
* No data.
* This amount should not be added to other business, in order to obtain figure for total business of associa­
tion, as its value is already included in wholesale distributive business.
* Loss.
TBrokerage income.
* Includes earnings from “ services.”
* Included with “ distributive, wholesale.”
10 Through separate subsidiary organization.
u Approximate.

Based on identical associations reporting for both years, the number
of member associations of the regional wholesales increased 8.9 percent
and that of the district associations 18.6 percent. The wholesale dis­
tributive sales of the regional wholesales rose 23.0 percent during the
year and those of the district associations 26.7 percent.
The regional wholesales in 1941 were operating 50 retail branches,
or 1 more than in the preceding year; there was no change in the figure
for the district wholesales, 5 such branches being operated each year.
Altogether, the regional wholesales had established 54 wholesale
warehouses. Most of them had only 1 each, but five had 2 warehouses,
one had 3 warehouses, one had 4, two had 6, one had 8, and one had
9 such warehouses.
Financial status of cooperative wholesales.— Cooperative wholesales
strengthened their financial position during 1941. The net earnings
rose from 2.7 percent of sales in 1940 to 6.9 percent in 1941. The
return in relation to net worth in 1940 amounted to 18.9 percent but,
for 1941, it rose to 27.2 percent of net worth for identical associations
submitting balance sheets for both years.
Margins were also higher. The combined gross margin of the
regional associations submitting operating statements was 10.1 percent
in 1941 as compared with 9.3 percent in 1940; comparable percentages
for the district associations were 13.5 and 11.5 percent, respectively.
The gross margin for all wholesale associations rose from 9.4 to 10.4




13

OPE RATION S OF COMMERCIAL FEDERATIONS

percent during the year. Average expenses amounted to 6.8 percent
for both years (although regional wholesales reported a slight decrease
in expense ratios, this was offset by a rise in the expenses of district
associations).
mi
mo
(percent)

Gross margin______________________________________ 10. 4
Total operating expenses___ _________________
Net operating margins_______________________________ 3.6

(percent)

9.4
6.86.8
2.5

The total assets of associations for which data were available for
both 1940 and 1941 increased 34.4 percent during the year. Seventeen
percent of this increase was attributable to cash, 23 percent to receiv­
ables, 43 percent to expanded inventories, and 14 percent to capital
assets. The current assets of the wholesale associations submitting
balance sheets increased 77.4 percent as compared with an increase of
70.4 percent in current liabilities, resulting in an improvement in the
amount of net working capital. The current ratio stood at 2.4 percent
at the end of 1941. There was a slight decrease in the amounts re­
ported as invested in other cooperatives. This decrease, however, was
more than compensated for by the increase in other unspecified invest­
ments and undoubtedly represents a difference in classification,
resulting from the failure of a number of associations to differentiate
among their various investments.
Expanding operations continued to be financed largely out of the
savings from business transacted with member associations. Al­
though the net worth of associations submitting balance sheets in­
creased by $3,326,563, share capital and credits represented less than
one-fifth of this amount. A satisfactory growth occurred in the
members’ equity in the wholesale associations, as shown in table 4.
Net worth increased 35.3 percent during the year, accounting for 60.9
percent of total liabilities at the end of 1941 as compared with 35.3
percent at the beginning of the year. With an increase in the relative
importance of reserves in the combined balance sheet of the whole­
sales (general and patrons’ equity reserves amounted to 16.1 percent of
total liabilities at the beginning of the year as compared with 21.1
percent at the end of 1941), share capital decreased in relative
importance from 35.0 to 26.8 percent of total liabilities.
Of the combined increase in total liabilities 43.9 percent was
attributable to payables and other current liabilities. Bonded debt
and mortgages were reduced 17.6 percent during the year and a com­
bined cumulative deficit of $21,484 in 1940 (on the books of a few
associations) was reduced to $1,355 at the end of the year.




14

CONSUMERS’ COOPERATION IN 1 9 4 1

T able 4.— Percentage Distribution o f the Combined A ssets , Liabilities, and N et Worth
o f Cooperative Wholesale Associations, 1940 and 1941
1941
Assets, liabilities, and net worth

All
whole-

1940

Inter­
Re­
regional gional

Dis­
trict

ciations

All
whole-

Inter­
Re­
asso­ regional gional
ciations

A ssets

10.2

Dis­
trict

30.6
48.4
19.5

15.4
19.2
32.4

12.0
23.1
31.4

10.9
19.9
31.9

61.3
16.6
19.7

19.6
32.7

3.9
25.1

1.5

1.0
4.2
25.2
2.6

4.6
.1
26.1
2.7

2.0
2.7
31.0

2.2
.2

1.9
2.9
31.3
1.4

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

25.0
5.7
3.3
66.0
25.1
1.7
5.3

6.0
2.1

25.2
5.9
3.3
65.6
25.2
1.4
5.7

25.4
3.2

26.1
13.5
1.3
69.1
33.8

20.2

26.3
14.3
1.3
58.1
33.9

23.6
3.2
2.4
70.8
30.2
.5

2.7
21.4

(*)

13.6
7.2
12.5
(»)

100.0

100.0

100.0

Cash....................................................
Notes and accounts receivable1_
*___
Inventories........................................ .
Investments:
In other cooperatives................. .
Other investments not specified.
Net capital assets *........................... .
Other assets........................................

15.3
19.6
32.3

Total.........................................

1.2

2.6

1.6

15.7

24.4

21.8
3.9

(*)

29.4
4.8

L iabilities and n et w orth

Notes and accounts payable 4______
Bonds, mortgages, etc.............. ........
Other liabilities..................... ..........
Net worth.______ ________ _______
Share capital •............................ .
Share credits •.............................
Preferred stock...........................
Reserves:
General reservesT................
Patrons’ equity reserves
Undivided savings. - ..................
Deficit *.......................................
Total liabilities and net worth.

13.5
7.6
12.8

91.9
30.6
37.2

2.6

68.8
23.1
1.3

1.2

79.8
50.4
9.7

13.7
11.3
19.4

10.7
5.4

3.9
15.8

10.4
5.7
4.8
.3

'24."0

100.0

100.0

100.0

100.0

100.0

2.3

6.0
.3

1.1

2.5

16.1

1 Less reserve for bad debts.
•Includes land, buildings, equipment and facilities, furniture and fixtures, less reserves for depreciation.
« Less than half of 1 percent.
4 Includes members’ short-term deposits.
•Fully paid shares less treasury stock.
• Partly paid shares, including patronage refunds in credits toward shares.
TIncludes education reserves and other reserves not otherwise allocated on financial statements.
• Reserves allocated on a patronage basis, including revolving funds.
• Cumulative deficit—deduct.
SE R V IC E O P E R A T IO N S OF C E N T R A L O R G A N IZ A T IO N S

In addition to various types of services provided in service depart­
ments of the wholesale associations, there are several associations
whose whole function is that of a service nature. These service
associations, like the wholesales, are owned and controlled by the
affiliated local associations. Data for each of these associations are
given in table 5, which shows the combined service business done by
cooperatives of the federated type in 1941. As it indicates, services
to the value of $2,242,565 were provided in 1941.




15

OPERATIONS OF COMMERCIAL FEDERATIONS
T able 5.— Service Activities oj Central Cooperative Organizations, 1941

Association

Mem­
ber
ciations

Service

Amount
of
business

Pa-

tron-

Net
earn­
ings

refunds

Service departm ents o f w holesales

Trucking___
Auto repair..
Auditing___
Insurance...

Indiana: Indiana Farm Bureau Cooperative Associa­
tion.
Michigan:
Farm Bureau Services.....................
Northland Cooperative Federation.

Management........
Recreation (coop­
erative park).

Minnesota:
C-A-P Cooperative Oil Association.
Range Cooperative Federation____

$169,717
8,605
10,075 $42,072
22,568
11,413
259

4,177

0)

Trucking.............. 129,289
16,868
.......d o ...................
Auto repair...........
40,243
16,396
Insurance..............
Mortuary..............
24,513
3,320
Recreational facili­
ties.
Trucking..............
34,421
Auditing...............
7,541
Insurance, fidelity
6,672
bonds.8
Trucking..............
99,470
214
Fidelity bonds___
2,570
Insurance agency8.
Loans8.................. 1,071,326
Trucking..............
50,185
1, f “
.do
Auditing—
(3)
Trucking___
26,237
125,351
----- do..........
Auto repair.
25,340

Missouri: Consumers Cooperative Association.

Nebraska: Farmers Union State E xchangeNew York: Eastern Cooperative Wholesale..
Ohio: Farm Bureau Cooperative Association.
South Dakota: Farmers Union Brokerage___
Utah: Utah Cooperative Association.............
Washington: Pacific Supply Cooperative___
Wisconsin:
Central Cooperative Wholesale.......... ......
Iron Cooperative Oil Association...........

Auditing..............
Insurance agency-

8

21,711
34
1,925,900

Total........................................................

0)

57,869

0)
0)
(9

Independent service organizations

Minnesota:
Cooperative Auditing Service.
Consumers Agency................................................
Farmers Union Accounting Services..................

302
110

Farmers Union Cooperative Credit Association..
Farmers Union Agency................................... —.
Midland Credit Corporation................................

108

(*)

20

Montana: Farmers Union Carriers................. ..........
South Dakota: Equity Audit Co............................
Washington:
Grange Cooperative Printing Association...........
Northwest Cooperative Auditing and Service
Association.
Wisconsin:
Central Finance....................................................

Auditing, book­
keeping instruc­
tion, tax service.
Insurance agency..
Auditing, account­
ing.
Loans....................
Insurance agency..
Rediscounting of
trade
accept­
ances.
Trucking............
Accounting, tax
service.

44,258

Printing..............
Auditing, b o o k ­
keeping, t a x
service.

2 Financing of sales

contracts.
Printing................

Cooperative Publishing Association....................

3,090 $2,781
574

19,236
11,976

1

29,291
8,952
1,848

1,853 1,612
947
807 "625

12,636
13,996

1,726

31,151

2,674 2,674
1,043
708

0>5
CO

1,

51,000

290

92,321

1,186

“ft”

Total..................................................................

1,128

316,665

15,786 8.400

Grand total........................................................

1,128

2,242,565

73,655 8.400

1Data not reported separately; included with data for “ distributive, wholesale” (table 3).
8 Through separate subsidiary organization.
* No data.
4 Loss.

o00941— 43— —8




16

CONSUMERS’ COOPERATION IN 19 4 1
PRODUCTION BY CENTRAL ORGANIZATIONS

Nearly all of the production carried on by cooperatives in this
country is done by the wholesales or other federated associations.
Most of the central productive associations shown in table 6 are owned
jointly by two or more of the regional wholesales shown in table 3.
Productive departments of wholesales had an output in 1941 valued
at $8,221,244 and the central productive associations had an output
totaling in value $5,988,426. It will be noted that most of the goods
produced by the central productive associations are producer rather
than consumer goods; they are included here because the owner whole­
sales fall within the scope of this report by reason of their handling
consumer goods. As the table indicates, these associations saved
their owners nearly a million dollars in the one year, 1941.
T a b l e 6 .— Production by Central Cooperative Organizations in 1941
Mem­
ber
Association

ciations

Amount
of busi-

Product

Net
earn­
ings

Pa­
tron­
age
re­
funds

P roductive departm ents o f w holesales

Gasoline, kerosene, $1,973,798
lubricating oil.
17,463 $482,085
Printing. ..............
Fertilizer............... 1,208,744

Indiana: Indiana Farm Bureau Cooperative Asso­
ciation.
Minnesota:
Farmers Union Central Exchange___
Minnesota Farm Bureau Service Co..
Range Cooperative Federation......................
Missouri: Consumers' Cooperative Association..

Ohio: Farm Bureau Cooperative Association..
Pennsylvania: Pennsylvania Farm Bureai
erative Association.
Wisconsin: Central Cooperative Wholesale..

Lubricating oil___
Paint, feed, ferti­
lizer.
Meat products___
Butter.................
Cheese..................
Printing................
Crude oil **.........
Oil pipeline*____
Oil refining *.........
Feed.....................
___ do...................

70,625
173,651
17,004
12,516
*14,704
103,311
1,695,726
877,006
1,243,569

Coffee roasting___
Bakery products..

191,341
128,423

46,387
448,076

8,221,244

Total...

8
(*)
0)

*$4,959
30,639
171,261

8

8
732,332 206.859

J oin t production by w holesales

Indiana: National Farm Machinery Cooperative..
Maryland:
Fertilizer Manufacturing Cooperative.
Cooperative Fertilizer Service..............
North Carolina: Cooperative Mills............
Ohio:
Cooperative Mills...................................
Farm Bureau Chemical Cooperative..,
Washington: Grange Powder Co...............
Total______
Grand total-

*4 Farm machinery,
equipment, and
supplies.

91,428

•2 Fertilizer_____
73 ----- do...................
*2 Feed.................

1,035,074
3,855,402
476,360

•3 .......do........ .

102 Fertilizer....
112 Explosives,
lizer.

18

ferti-

607,162
23,000

413,754

176,637 109,395
34,644 34,644
6,780
396

5,988,426

204,703 144,039

14,209,670

937,035 350,898

* Included with data for wholesale; see table 3. *Through separate subsidiary organization. * 10 months’
operations. * Member-owners are Farm Bureau Cooperative Associations of Indiana, Ohio, and Pennsyl­
vania, and Pacific Supply Cooperative. * Loss. 6 Member-owners are Ohio Farm Bureau Cooperative
Association and Cooperative G. L. F. Exchange (Ithaca, N. Y.).
7 Member-owners are Pennsylvania Farm Bureau Cooperative Association, Southern States Coopera­
tive (Virginia), and Cooperative Farm Services (West Virginia).
* Member-owners are Southern States Cooperative and Farmers Cooperative Exchange (Raleigh, N. C.).
* Member-owners are Farm Bureau Cooperative Associations of Ohio and Pennsylvania, ana Southern
States Cooperative.
18 Member-owners are Farm'Bureau Cooperative Associations of Indiana and Ohio.
u Member-owners are Washington State Grange and Grange Cooperative Wholesale (Seattle).




17

OPERATIONS OF LOCAL ASSOCIATIONS

,

Operations o f Local Associations 1941

Altogether, the more than 1,600 local distributive and service
associations which reported on operating results, resources, etc., had
combined net earnings amounting to $11,533,148, after subtracting
losses of $216,916 by 103 associations.
The data indicate that although the operating margins in the retail
petroleum business have narrowed greatly in recent years, nevertheless
the earnings possibilities still are greater than in retail-store operation.
Among the petroleum associations the average earning for all associa­
tions (including those which sustained losses) was $11,313 per associa­
tion; the corresponding figure for the store associations was $3,474.
Only slightly over 3 percent of the petroleum associations reporting
on earnings, as compared to 9 percent of the stores, showed a loss on
the year’s operations; the average losses per association were $1,248
and $1,503, respectively.
Essential summary averages for the reporting associations operating
stores and petroleum stations are given in table 7.
T able 7.— Average M em bership, A ssets , Sales, and N et Earnings o f Reporting Store and
Petroleum Cooperatives, 1941
Stores and buying
clubs
Item

Petroleum associations

of
of
or Percent
Number or Percent
increase Number
increase
amount
amount
over 1940
over 1940

Membership per association............................................
Share capital par ARSnriAt.irm
_
Total assets ppr Assnr.iAtinn __ __ _
_
_ . .
Vet W^rf-.h ppr Assnnifttinn
..............
Deficit per association_________________________. . . .
Sales per association........ ................................................
Net gain per association (all associations).......................
Net operating loss per association___________________

264
$8,327
$31,226
$20,162
<$4,611
$89,153
$3,474
*$1,503

10.4

21.6
27.1

548
$16,104
$56,528
$33,820
*$626
$156,315
$11,313
4$1,248

5.2

26.4
29.3

<For 2.2 percent of associations reporting on net worth.
* For 0.15 percent of associations reporting on net worth.
* For 9.3 percent of associations reporting on earnings.
4 For 3.2 percent of associations reporting on earnings.

One of the features noted in the returns was the strikingly large
number of associations that by the end of 1941 had already closed
some or all of their branches. This was much more general among
the petroleum than among the store associations, and was partic­
ularly noticeable for petroleum associations serving whole counties.
This may be an indication of retrenchment following overexpansion
or a measure of foresight to prevent losses under increasingly difficult
business conditions. Many additional closures have undoubtedly
taken place during 1942.
Altogether, 1,714 associations replied to the question regarding
branches. Of these 1,305 associations had only one place of business
at the end of 1941. The other 409 associations were operating 1,151
branches (in addition to the headquarters establishment), or an
average of 2.8 branches each.




18

CONSUMERS’ COOPERATION IN 1941
SALES OF LOCAL ASSO CIATIO N S

As indicated in table 7, the average sales of the petroleum associa­
tions were nearly twice as large as those of the stores and buying clubs.
Table 8, which gives the percentage distribution of the various types
of associations, shows that 70.0 percent of the food stores, 38.6 percent
of the general stores, and 34.6 percent of the petroleum associations
had sales of less than $50,000 in 1941. Only 0.7 percent of the food
stores as compared with 2.5 percent of the general stores and 2.0
percent of the petroleum associations had sales of $500,000 or over.
T able 8.— Percentage Distribution o f Reporting Associations, by Annual Sales
Volume, 1941

Annual sales

Total

Farm
supplies
Petro­ Dairy
and
and
Food General leum
other Buying
stores stores associa­ bakery
clubs
prod­
com­
tions
ucts
modi­
ties

$75,000 and under $100,000...............................
$100,000 and under $250,000..............................
$250,000 and under $500,000..............................
$500,000 and under $1.000,000.............. - ...........
$1,000,000 and under $5,000,000..... ...................
$5,000,000 a n d o v e r _
_

9.3
12.6
21.1
14.0
10.3
23.5
7.0
1.6
.5
.1

21.7
26.2
22.1
9.6
5.2
12.1
2.4
.7

Total.......................................................

100 0

100.0

Under $10,000______________ ____________
$10,000 and under $25,000.... .............................
$25,000 and under $50,000..... ...........................
$50,000 a n d u n d e r $75,000

_

3.8
12.3
22.5
16.8
10.2
22.7
9.2
2.0
.5

1.9
9.7
23.0
15.7
11.9
27.7
8.1
1.5
.4
.1

100.0

100.0

84.4
11.7
2.6

20.0

15.2
8.8
11.7
10.5
14.0
29.8
5.9
2.9
1.2

100.0

100.0

100.0

40.0
20.0
20.0

1.3

Information obtained by the U. S. Bureau of the Census in the 1939
survey of retail trade, indicates that the annual business of cooperative
stores is considerably higher than those of typical private retailers.
This appears to be the case in every line of business for which there
are comparable data (table 9).
T able 9.— Distribution o f Independent Private Retailers and Consumers,
Cooperatives, by Annual Sales V olum e 1
Annual sales of—
Kind of business

All private independent retailers................................
All reporting cooperatives............................................
Food stores:
Private retailers.....................................................
Cooperatives..........................................................
General stores:
Private retailers.....................................................
Cooperatives..........................................................
Petroleum products:
Private retailers.....................................................
Cooperatives..........................................................

Total

Under
$10,000

$10,000
and
under
$50,000

$50,000
and
under
$100,000

100.0
100.0

57.4
9.3

36.0
33.7

4.1
24.3

2.5
32.7

100.0
100.0

61.3
21.7

34.6
48.3

3.1
14.8

1.0
15.2

100.0
100.0

48.4
3.8

43.7
34.8

5.6
27.0

2.3
34.4

100.0
100.0

61.7
1.9

36.6
32.7

1.5
27.6

.2
37.8

$100,000
and over

1 The data for Independent retailers cover the year 1939 (Census of Business, Vol. II, Retail Trade: 1939,
Part 2, tables 10C and 10E, U. S. Bureau of the Census). The data for cooperative associations were obained from the Bureau of Labor Statistics 1941 survey.




19

OPERATIONS OF LOCAL ASSOCIATIONS

Relation of sales to total assets.— Total assets of the typical distribu­
tive association reporting on both net worth and assets amounted to
$37,000. Store associations had median assets of $25,600 and average
sales of $79,800. Among the cooperative store associations the
range was from $35,300 to $169,800. Only 5.9 percent of the associa­
tions submitting data on total assets and volume of business had
annual sales of less than $10,000. The typical cooperative petroleum
association, on the other hand, had an annual sales volume of $80,200
in 1941; the usual range was from $44,800 to $146,300. The rela­
tively large sales volume of petroleum associations is undoubtedly
due to the inclusion of farmers’ associations, which often sell a large
number of side lines, such as farm machinery and other miscellaneous
farm supplies, and the members of which use large amounts of gasoline
in the business of the farm.
As would be expected, a marked relationship was found between
the annual sales volume and the size of total assets. Of the 199 asso­
ciations with total assets under $10,000, 86 or 43.2 percent had annual
sales of less than $20,000. None of the associations with assets of
less than $10,000 had sales of $250,000 and over, although 3 associa­
tions did an annual business of between $100,000 and $250,000,
which is a rather large volume for the small amount of capital in­
volved. Six of the 14 associations with total assets of $250,000 and
over had annual sales exceeding $1,000,000.
O P E R A T IN G R E S U L T S , 1941

Of over 1,500 associations reporting as to earnings or losses, only
103 (6.7 percent) sustained a loss and in only 6 was the loss greater
than $5,000. The distribution of the associations of the various types
b y extent of net gain or loss is shown in table 10.
T able

10.— Distribution o f Cooperatives by Am ount o f N et Saving or L oss , 1941
Farm
Petro­ Dairies supplies
Buy­
leum
and
and
ing
bak­
associa­
other
clubs
tions
eries
goods

Amount of net gain or loss

Total

Food
stores

Gen­
eral
stores

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

1,539

251

306

779

6

115

70

Reporting net gain...........................................
Under $500.......................... ......................
$500 and under $1,000.................................
$1,000 and under $2,500..............................
$2,500 a n d u n d e r $5,000 ________________
$5,000 and under $10,000
$10,000 and under $25,000
$25,000 and under $50,000
$50,000 a n d u n d e r $100,000 ____________
$100,000 and oyer
Reporting no net gain
Reporting net loss.............................................
Under $500
$500 and under $i ,000
$1,000 and under $5,000 ^ $5,000 and oyftr
--

1,402
239
121
289
264
238
187
47
15
2
34
U03
47
20
21
6

201
97
33
36
18
8
7
2

276
29
31
74
52
50
34
4
2

5
1
2
1

113
21
7
23
25
21
11
4

58
53
3
1
1

11
>39
22
4
10
1

7
«23
8
4
5
2

749
38
45
154
168
158
135
37
13
1
5
426
12
8
4
1

i Includes 9 associations reporting loss but not amount.
* Includes 2 associations reporting loss but not amount.
* Includes 4 associations reporting loss but not amount.
* Includes 1 association reporting loss but not amount.




1

1

1

1
4
9
5
1
2
1

7
*5
8

20

CONSUMERS’ COOPERATION IN 1941

The service associations (not shown in the table) showed smaller
earnings than the distributive associations and a wider incidence of
losses. This was due to a large extent to the fact that a high per­
centage of these associations operate at charges set as near cost as
possible. Thus, among the whole service group, about 80 percent
had a net gain averaging $1,620 per association; the 20 percent
reporting losses averaged $1,112 per association.
M A R G IN S A N D O PER AT IN G E X P E N S E

The price-control order issued by the Office of Price Administration
on April 28, 1942, has had far-reaching effects upon all types of retail
enterprises, including consumers’ cooperative associations. The
General Maximum Price Regulation, which became effective for re­
tailers on May 18, 1942, provided that prices charged for numerous
commodities sold at retail should not exceed the highest prices charged
in March 1942. This order has already been amended with a view
to eliminating “ the squeeze” on retailers who have had difficulty in
transacting business under their March ceilings.
It goes without saying that individual retail enterprises have been
affected in a multitude of ways, depending upon the interrelation­
ship of a large combination of factors, including price policies and the
cost of merchandise distributed. Stores with narrow gross margins
have been confronted with many difficulties and it is probable that a
considerable number of inefficiently operated stores may have to close
their doors. For this reason cooperatives, like private retailers, will
have to watch their margins and expenses closely, revising distribu­
tion and operating policies as the need arises. One wholesale associa­
tion recently urged its weaker members to take monthly inventories
so that they can adjust themselves to the trend of operations under
the maximum price regulation.
Operating standards will therefore play an important role in
assisting cooperative managements in the immediate future. In
spite of the fact that no two stores are exactly alike, comparative
ratios serve to assist managers and boards of directors in the conduct
of the business, in the formulation of trading policies, and in making
adjustments to continuously changing conditions. Operating ratios
also are welcomed by the members, many of whom lack business ex­
perience and cannot comprehend an operating statement without
reference to some comparative yardstick.
In this connection data for 272 consumers’ cooperatives which
supplied detailed operating statements in the Bureau’s study are of
interest. The sales of these associations—31 food stores, 65 general
stores, 62 farmers’ supply and other miscellaneous types, and 114
petroleum associations—amounted to $34,627,889. The aggregate
gross margin was $6,384,501 or 18.4 percent of sales, and the net
margin amounted to $1,905,473, or 5.5 percent of sales.
The data for the 272 associations shown in tables 11 and 12 are
classified by type of business and by annual sales volume. The ratios,
which are presented in terms of net sales, are based upon the actual
experience of associations in a large number of States and in various
types of communities, including large industrial areas as well as
sparsely populated rural communities. No attempt has been made




21

OPERATIONS OF LOCAL ASSOCIATIONS

to establish standards of profitable operations. The data show
merely the actual experience of a number of associations of various
types and sizes.
Aside from variations in methods of classifying expenses, a number
of important factors affect the ratios. Operating experiences vary
greatly from one association to another and even within the same
association from one quarter to the next. In addition, stores handle
different lines of merchandise, some of which are more profitable than
others. Credit policies, merchandising policies (including such items
as service or self-service arrangement of the store8), the loyalty of
the membership, relative competitive conditions, the adequacy of
working capital, and the location of the place of business are among
the other elements affecting distributive operations.
T able 11.— Operating Expenses o f Retail Consumers’ Cooperatives, 1941
[In percent of net sales]
Store associations

Item

All
associ­
ations

Gross margin1____________________________________ 18.437
Expenses:
7.544
Wages, salaries, commissions___________________
Advertising__________________________________
.210
Wrappings, drums and miscellaneous selling
.323
expense______________ —--------- ------ --------------.718
Truck and delivery___ ___ ________________ ____
.228
Rent___ ________. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.476
Light, heat, power, water______________________
.373
Insurance and bonds__________________________
.726
Taxes (including pay-roll taxes) and licenses_____
.113
Interest on borrowed money___________________
.194
Office supplies and postage-------------------------------.118
Telephone and telegraph_______________________
.222
Repairs---------------------------------------------------------.865
Depreciation------------------ -------------------------------.103
Bad debts and collection expense____ __________
.112
Inventory, audit, tax expense__________________
.089
Warehouse and plant expense___ _______________
.118
Directors* fees and expenses____________________
.070
Travel___________________ __________ _________
.088
Education and publicity.......... ................ ..............
Meetings, membership dues, and subscriptions...
.018
Other________________________________________
.227

Petro­
leum
associ­
ations

Total

Food
stores

FarmGen­ supply
eral
and
stores other
stores

16.324

16.520

17.716

15.036

22.779

6.894
.204

7.738
.269

7.836
.272

5.934
.135

8.878
.221

.370
.541
.254
.497
.364
.725
.117
.173
.114
.225
.816
.119
.102
.075
.075
.077
.103
.015
.211

.511
.232
1.010
.644
.323
.586
.071
.113
.178
.222
.791
.351
.161
.009
.048
.024
.119
.015
.372

.556
.520
.278
.611
.393
.660
.107
.153
.114
.362
.861
.082
.157
.054
.079
.052
.100
.008
.270

.184
.599
.138
.375
.344
.801
.132
.198
.107
.102
.778
.123
.045
.103
.075
.107
.104
.022
.131

.228
1.082
.174
.434
.391
.730
.105
.236
.125
.214
.966
.072
.132
.118
.207
.056
.057
.023
.261

Total______________________________________

12.935

12.071

13.787

13.525

10.537

14.710

Net margin on operations1 ___ _____________ ___ __

5.502

4.254

2.733

4.191

4.499

8.Q09

i Does not Include patronage refunds from cooperative wholesales.

Gross margins.—The gross margin of a business represents the differ­
ence between tne sales made by the association and the amount paid
for the merchandise distributed. A narrow margin may be indicative
of poor purchasing judgment, insufficient mark-ups, inadequate allow­
ance for shrinkage, or high merchandising costs, but it may also repre­
sent a definite policy adopted at the suggestion of the membership.
* Of over 1,500 associations reporting on this point, 84 percent were on an entirely service basis; 16 percent
had all or part of the store on a self-service basis (where meat was handled, this department was almost
universally on a service basis even though the rest of the store was entirely self-service). Considerations
both of economy and of labor supply may be expected to result in further conversions to self-service in
cooperative enterprises.




22

CONSUMERS’ COOPERATION IN 1941

Farmers’ warehouse associations, for example, often endeavor to sell
at something approximating cost and accordingly the cost value of
sales and their gross margins are narrower than for stores selling at
current market prices. In the final analysis, however, it is necessary,
for solvency, that the gross margin completely cover operating expenses
and interest on borrowed and share capital.
Petroleum associations have been particularly active in attempting
to reduce prices. Private companies have occasionally engaged in
unsuccessful price wars in an effort to destroy the cooperatives. Where
prices are cut the members realize a portion of their savings at the
time of purchase instead of receiving the entire amount upon the
distribution of the patronage refund.
T able 12.— Operating Expenses o f Store and Petroleum Associations, 2947,
b y Annual Sales
[In percent of net sales]
Store associations with annual
sales of—
Item

Petroleum associations with annual
sales of—

$25,000 $50,000 $100,000 $250,000
$25,000 $50,000 $100,000 $250,000
Under and
and
and
Under and
and
and
and $25,000
and
under under under
$25,000 under under under
$50,000 $100,000 $250,000 over
$50,000 $100,000 $250,000 over

Gross margin1.............. 16.993 14.839
Expenses:
Wages, salaries,
commissions........ 8.208 6.801
.289
Advertising............ .146
Miscellaneous sell­
.386
ing expenses........ .327
.283
Truck and delivery. .158
.717
Rent........................ .915
Light, heat, power,
.512
.983
water..................
.314
Insurance, bonds__ .473
.622
Taxes,2 licenses....... .533
Interest on borrow­
.105
ed money............. .224
Office su pplies
.129
.190
and postage.........
Telephone, tele­
graph................... .242
.138
.135
Repairs............ ...... .109
.692
.841
Depreciation..........
Bad debts and col­
.099
lection expenses.. .020
Inventory, audit,
.187
etc........................ .237
.046
W a re h o u se and*
plant....................
.115
Directors* fees, etc.. .063
.051
Travel..................... .171
.091
.130
Education, etc.......
M e e t in g s , dues,
.010
subscriptions....... .023
.275
Other...................... .371

16.233

16.290

6.440
.216

6.561
.193

7.162
.202

7.822
.154

.305
.492
.318

.230
.632
.120

.459
.536
.256

.549
.394
.638

.410
.390
.683

Total................... 14.250 12.012
Net margin on oper­
ations 1....................... 2.743

2.827

16.471 18.423 21.449

23.048

21.128

26.069

9.109
.230

9.089
.224

8.142
.171

9.911
.308

.237
1.272
.293

.217
1.494
.339

.170
1.074
.136

.287
1.226
.162

.199
.701
.188

.517
.345
.781

.420
.479
.510

.520
.489
.584

.454
.431
.984

.393
.349
.579

.458
.380
.730
.030

.160

.099

.114

.092

.229

.168

.078

.165

.189

.166

.316

.240

.262

.174

.305

.118
.231
.851

.104
.175
.774

.114
.260
.838

.226
.251
1.119

.163
.191
1.031

.120
.230
1.094

.103
.181
.796

.154
.257
1.071

.090

.174

.100

.006

.084

.080

.067

.144
.071

.112
.097

.077
.072

.277

.212

.168
.028

.113
.082

.085
.343

.112
.068
.037

.091
.088
.066

.054
.077
.140

.259
.031
.022

.314
.023
.042

.241
.076
.033

.174
.047
.035

.185
.057
.135

.015
.298

.011
.199

.018
.181

.012
.179

.014
.371

.033
.292

.020
.258

.018
.198

11.712

11.398

12.469 13,971 15,818

15,391

13.449

15,780

4.521

4.892

7.657

7.679

10.289

4.002

4.452

5.631

1 Does not include patronage refunds from cooperative wholesales.
2 Including pay-roll taxes.

Total expenses.— The lines of business with the broadest margins
often incur the highest costs. Comparison of expenses incurred in the
cost of distributing merchandise must therefore be undertaken with
extreme caution. In individual cases, expenses should be analyzed
in connection with rapidity of bum-over and net savings, as well as




OPERATIONS OF LOCAL ASSOCIATIONS

23

with a large number of somewhat intangible factors, such as the ability
of the association to serve its members and patrons. An expense ratio
larger than average may signify the adoption of definite trading and
operating policies which have been effected on behalf of the members.
On the other hand, a large ratio of total expenses is often indicative
of poor management ana an inability to operate under competitive
circumstances.
The credit problem is especially important for stores operating in
rural areas because of the seasonal nature of farming. A similar
situation arises in mining and one-industry towns where some of the
cooperatives studied are situated. It proved impossible on the basis
of the data available to compare the operating costs of associations
extending credit with those operating on a strictly cash basis. A
large number of associations, however, reported that they were
operating on a cash basis at the end of 1941 (see page 31).
Rent constituted a larger expense item for the smaller associations
than for the larger ones, mainly because of the fact that the older and
usually larger enterprises generally owned their own premises. Natu­
rally the depreciation and tax charges of the latter would be higher.
The size of the community in which the store was situated contributed
to the decision as to whether to own or to rent. Stores in large metro­
politan areas must usually rent their premises and in many instances
share them with some other type of business. The typical cooperative
in a country town generally operates in a relatively low-cost location
and accordingly can afford to purchase its store. On the other hand,
renting has definite advantages to a growing association in a metro­
politan area since it permits moving to more suitable quarters as the
business develops.
Depreciation allowances also varied from one type of association
to another. Average depreciation charges amounted to 0.9 percent
of sales, the general stores having slightly higher ratios than the food
or farmers’ supply stores. Petroleum associations had the highest
ratio; figures for the smaller associations were somewhat higher than
for the larger ones. The general stores, however, spent more for
repairs than did the other types of associations.
Educational expenses were considerably lower than might be
expected. The 272 associations spent only $30,553 on education or
0.09 percent of sales. Store associations on the average spent roughly
0.1 percent as compared with only 0.06 for the petroleum societies.
Stores with smaller annual sales volumes as well as those with annual
sales of $250,000 and over spent more than the associations with sales
ranging from $50,000 to $250,000. Only the largest petroleum co­
operatives, those with annual sales of $250,000 and over, spent as much
as 0.1 percent of sales.
The tendency found among profitable private retailers of deriving
advantage from low expenses rather than high margins was found to
be true of cooperatives also. The ability of managers to maintain
or reduce expenditures, especially in view of the maximum price orders,
becomes particularly important. Sometimes, however, members may
wish to retain certain services even at the cost of smaller savings. This
may be true in the case of delivery service in metropolitan areas where
the cooperative’s membership is scattered over a wide territory. While
cooperative food stores in 1941 on the average had smaller truck and
delivery costs than general stores or farmers’ supply and petroleum




24

CONSUMERS’ COOPERATION IN 1 9 41

associations, a number of individual societies had exceedingly high
delivery expense. Rationing of tires and gasoline will undoubtedly
operate to reduce delivery service.
Net operating margins.— The net operating margin represents the
difference between gross margin and total expenses. Net margin
differs from net savings or net profit in that it does not include other
income, such as interest on capital, and gains from sales of capital
assets. Income from investments, though hardly a factor in the
earnings of the average private store, involved amounts sometimes
running into fairly large sums in the case of cooperatives, since the
majority of them treat patronage refunds from wholesale associations
as “ other income.”
There was a definite relationship between volume of sales and the
size of the net margin. In the case of the store associations, the net
savings on operations ranged from 2.7 percent for associations with
annual sales of less than $25,000 to 4.9 percent for those with annual
sales of $100,000-$250,000. In the case of the petroleum associations
the net margins ranged from 4.5 percent for societies with annual sales
of less than $25,000 to 10.3 percent for those with annual sales of
$250,000 and over.
Comparison of operating ratios of cooperatives and private businesses.—
For comparative purposes, data from a Dun & Bradstreet survey
of private retailers covering the year 1939 4 are shown, for certain
items, in table 13. The data for the private companies cover only
profitable enterprises, for 1939; those for the cooperatives cover all
associations, regardless of net operating results, for 1941.
A larger proportion of the cooperatives than of private retailers had
profitame operation, and in the majority of cases the ratios for co­
operative associations were well above the lower limit of the range
of usual profitable experience of private companies.
On the whole it would seem that the consumers’ cooperatives are
operating on narrower gross margins than private companies, although
this factor is often compensated for by lower operating expenses and
greater savings.
Certain elements tend to reduce the gross margin of cooperatives as
compared with the private retailers. In the first place most coopera­
tive stores are doing business in rural areas where gross margins are
generally lower than in communities with larger populations. In the
case of privately owned grocery and meat stores, a difference of almost
5 percent was found between the gross margins of stores doing business
in towns of less than 20,000 population and the gross margins of
those operating in cities of 100,000 and over. Comparison is com­
plicated by the fact that most private enterprises (with the possible
exception of some of those obtaining their supplies from retailer-owmed
cooperatives) treat discounts received on purchases made through
wholesales as effecting a reduction in the cost of goods sold. The great
majority of the cooperatives included in this study, on the other
hand, treated patronage refunds from their cooperative wholesale
associations as “ other income.” Although much can be said for this
procedure, such refunds actually constitute a reduction in the cost of
goods sold. It is difficult, however, to include the refunds in the gross
margin, since they are usually received following the close of the
4 Dun & Bradstreet.
1940.




Research and Statistical Division. Standard Ratios for Retailing. New York,

25

OPERATIONS OF LOCAL ASSOCIATIONS

annual accounting period and cannot be directly related to the original
purchases. Where patronage refunds from wholesale associations are
combined with “ other income” confusion sometimes arises in differ­
entiating between the financial and merchandising policies of the
association.
The total expense ratios of the private stores covered by Dun &
Bradstreet were somewhat higher than those of the cooperatives
studied. The comparison must be qualified by the fact that the com­
pensation of owners and officers introduces a complicating factor.
For example, the owner of a private retail store often pays himself
more than he would pay a manager, since he is prone to include a
certain element of profit in his own salary. For this reason it is
virtually impossible to allocate the compensation of owners and
officers among its component elements.
It appears that cooperatives spent less on advertising and incurred
fewer losses from bad debts than private retailers engaged in distribut­
ing similar types of merchandise.
T

able

13.— Comparative M argins and Expenses o f Cooperative and Private Business 1
[In percent of net sales]
Gross margin Total expenses

Line of business

Groceries only________ _____
Groceries and meat---------------Groceries and filling station..
Meat only...............................
Country general stores..........
Farm supplies........................
Filling stations.............................. ..

Net margin

Advertising

Bad debts

Pri­ Coop­ Pri­ Coop­ Pri­ Coop­ Pri­ Coop­ Pri­ Coop­
vate erative vate erative vate erative vate erative vate erative
18.9 ]
20.0 fL 1C
10. 0c
18.7
24.2
17.7
19.9
15.0
18.5
25.4
22.8

j

15.5 ]
16.5 l lO Q
14.7 f io . o
20.9
13.5
14.6
10.5
14.4
14.7
21.5

J

f
J
1
l

3.4
3.5
4.0
3.3
5.3
4.1
3.9

9
Z. 74

4.2
4.5
8.1

0.5
.5
.3
.3
.4
.2
.4

A o
9
u.

.3
.1

.2

0.4 ]
.5 l
.5 f
.3
.7
.5
.5

J

A %
A
U.
.1
.1
.1

1The data for private business are based upon reports of profitable companies, for 1939, whereas the
data for cooperatives cover all reporting associations for 1941.
ASSE T S A N D L IA B IL IT IE S

Table 14 presents a combined balance sheet of assets and liabilities
for the 312 associations which furnished such data.
Investments.— Investments in other cooperatives are especially im­
portant in the cooperative balance sheet. The majority of the asso­
ciations included in the Bureau’s study are members of cooperative
wholesale associations or regional federations and therefore have
funds invested in them. Because of their organic connection with
wholesales, retail cooperatives generally invest more than similarly
situated private enterprises. The amounts invested do nob neces­
sarily represent actual contributions to the capital of the wholesale
association, since in numerous cases accumulated patronage refunds
are left in the wholesale to be used as working capital. Total invest­
ments of the 312 associations amounted to $1,988,000 of which
$1,567,000 was reported invested in other cooperatives. The latter
figure is undoubtedly an understatement of the real importance of
cooperative investments, in view of the fact that a number of asso­
ciations failed to differentiate their investments on their balance
sheets.




26

CONSUMERS’ COOPERATION IN 1941
T able 14.— Assets and Liabilities o f Consumers
[In thousands
Liabilities
and net
worth

Assets
Num­
Type of association ber of
and amount of assets assoNotes
ciaand
In­
tions Total Cash ac­
assets
counts ven­
receiv­ tories
able 1

All associations.........
Under $10,000___
$10,000-$25,000__
$25,000-$50,000__
$50,000-$75,000__
$75,000-$100,000_
$100,000-$250,000„
$250,000-$500,000._
$500,000 and over.

312 28,978 3,374
39
238
32
77 1,332
188
94 3,346
526
45 2,818
301
26 2,280
236
24 3,227
315
5 1,677
112
2 14,061 1,663

Store associations___
Under $10,000___
$10,000-$25,000__
$25,000-$50,000__
$50,000-$75,000__
$75,000-$100,000_
$100,000-$250,000„
$250,000-$500,000._
$500,000 and over.

119 6,597
26
148
27m, 470
966
2#
17 1,056
8
703
9 1,238
994
3
1 1,021

Petroleum associa­
tions.
Under $10,000....
$10,000-$25,000__
$25,000-$50,000—
$50,000-$75,000__
$75,000-$100,000...
$100,000-$250,000„
$250,000-$500,000„
$500,000 and over.

109 17,404 2,271

Other retail distribu­
tive associations.
Under $10,000....
$10,000-$25,000__
$25,000-$50,000__
$50,000-$75,000__
$75,000-$100,000_
$100,000-$250,000„
$250,000-$500,000_

576
13
35
68
112
33
41
61
213

Investments

Net capi­
Notes
tal assets
and
In
(less re­ Other Total
ac­
other
serves
for
assets
counts
coop­ Other deprecia­
paya­
era­
ble 3
tion) 2
tives

6,917 8,397 1,567
32
78
18
238
389
56
459 1,063
175
992
443
186
418
746
95
662
860
155
320
553
47
4,346 3, 717
836
825 2,151
15
59
81
173
105
384
154
393
93
234
160
405
146
317
69
186

384
16
27
63
99
41
95
42

421
(»)
18
32
20
25
72
7
246

7,416
75
408
1,039
838
715
1,092
595
2,652

886 28.978
3
238
34 1,332
52 3,346
39 2,818
46 2,280
70 3,227
42 1,677
600 14,061

50
(9)
2
8
12
(9)
4
2
22

2,480
41
145
320
264
291
512
395
510

132
3
5
18
23
10
22
30
20

6,597
148
470
966
1,056
703
1,238
994
1,021

971
22
72
141
152
88
285
156
56

6,262
38
219
366
329
244
493
281
4,293

5,037 4,634 1,034

296

3,472

660 17,404

4,655

8
62
12
37
618
113
40 1,411
339
10
83
657
7
612
116
5
721
131
1
26
283
1 13,039 1,450

15
12
118
142
200
372
89
219
101
191
171
118
50
66
4,277 3,531

1
26
85
38
14
29
5
836

(9)
12
15
5
11
29
224

20
189
376
216
166
229
134
2,142

1
62
18
618
24 1,411
7
657
14
612
14
721
3
283
580 13,039

9
101
113
51
41
82
21
4,237

84

4,979

527

1,056 1,612

150

75

1,463

94

4,978

636

5
13
26
18
11
10
1

29
244
969
1,105
964
1,268
700

7
40
120
106
87
144
25

4
9
3
14
39
6

13
74
343
358
258
351
66

(9)
10
11
9
22
34
9

29
244
969
1,105
964
1,268
400

6
46
112
126
115
126
105

2
38
153
200
224
331
108

7
74
307
380
321
338
186

1
4
27
48
39
31

i Less reserves for bad debts.
* Includes land, buildings, equipment, furniture, and fixtures.
* Includes patrons’ and members’ short-term deposits.
4Includes fully paid shares and paid-in memberships in nonstock associations less treasury stock.
* Includes partly paid shares and patronage refunds credited toward shares.
* Includes educational reserves and other reserves (including patrons’ equity not otherwise allocated).
7 Keserves allocated on patronage basis, including revolving funds.
« Cumulative or current-year deficit—deduct.
» Less than $500.
i° 6 associations,
u 3 associations.
I2*Less than $500; 1 association.
Is 5 associations.
14 *
1 association.
7
14 Less than $500; 2 associations.




OPERATIONS OF LOCAL ASSOCIATIONS

27

Cooperatives, 1941, by Am ount o f Total Assets
of dollars]

Liabilities and net worth—Continued

Net worth
Bonds, Other
mort­
gages, liabili­
ties
Total
etc.

Capital

Undi­
Pre­
vided
earn­
ferred
Share Share stock Gen­ Patrons’ ings
capital4 credits *
eral 6 equity7
Reserves

891
8
49
234
143
19
238
201

6,714
28
186
440
414
465
436
299
4,446

34
7
23
2
2

All associations.
Under $10,000.
$10,000-$25,000.
$25,000-$50,000.
$50,000-$75,000.
$75,000-$100,000.
$100,000-$250,000.
$250,000-$600,000.
$500,000 and over.

100
4
5
26
14
17
14
19

696
16
45
97
93
117
177
151

19
10 6
n 13
(12)

148

2,305
18
145
235
377
195
299
302
734

Store associations.
Under $10,000.
$10,000-$25,000.
$25,000-$50,000.
$50,000-$75,000.
$75,000-$100,000.
$100,000-$250,000.
$250,000-$500,000.
$500,000 and over.

152

1,260

1,525

456

5,370

8

2
25
52
32
34
8

(9)

4
43
185
36
1
186

1,228

5
103
325
213
600
123
41
614

10
105
262
113
220
113
101
4,446

111

1,322

335

648

7

2
26
43
4
36

6
47
282
225
311
426
25

2
36
81
208
128
146
47

( 15)
144

5,004
114
478
1,055
796
682
771
345
764

415
6
39
103
95
84
66
22

5,089
117
370
717
829
557
846
719
932

1,679
81
182
342
280
211
308
225
50

140
5
6
17
29
16
45
22

1,964

107 10,678

1,923

7
27
57
5
13
15
39
1,800

(#)

7
42
10
24
23

45
483
1,200
590
534
601
224
7,002

23
205
371
197
161
170
81
714

234

173

3,935

1,402

123

4
7
40
43
28
114

1
10
30
16
36
76
3

18
180
786
920
785
952
292

11
91
342
319
309
293
38

379
6
18
88
47
45
86
89

158
2
9
20
28
14
22
30
33




Defi­
cits

5,152
29
295
842
815
606
848
368
1,348

437 19,702
3
180
26 1,033
92 2,704
54 2,340
74 1,876
121 2,399
33 1,235
33 7,934

2,577
17
52
185
95
86
215
128
1,800

Type of association
and amount of assest

7
34
35
33
14

1, 558
(9)
10
32
79
22
40
1,376
187
(9)
36
3

7
6

18

(9)

22
93

38
182

13 0

14 2

Petroleum associations.
Under $10,000.
$10,000-$25,000.
$25,000-$50,000.
$50,000-$75,000.
$75,000-$100,000.
$100,000-$250,000.
$250,000-$500,000.
$500,000 and over.
Other retail distribu­
tive associations.
Under $10,000.
$10,000-$25,000.
$25,000-$50,000.
$50,000-$75,000.
$75,000-$100,000.
$100,000-$250,000.
$250,000-$500,000.

28

CONSUMERS’ COOPERATION IN 19 41

Capital assets.— The net capital assets— land, buildings, plant,
fixtures and equipment less reserves tor depreciation— reflected on the
books of the 312 associations studied amounted to $7,416,000 or 25.6
percent of total assets. There was a slight tendency for the capital
assets of the stores to increase in relative importance with increased
size, but this was not evident in the case of the other associations.
Unfortunately, detailed information on the gross capital assets of
all of the associations covered was not available. For the 157 asso­
ciations reporting detailed data, the original cost of land, buildings,
fixtures, and equipment amounted to over $5,000,000. These asso­
ciations had set $1,972,000 aside as depreciation, leaving a net book
value of $3,108,000. On the average, land amounted to 8.3 percent
of the original investment; buildings, 53.8 percent; and fixtures and
equipment, 37.9 percent. Fixtures and equipment were relatively
more important for the petroleum associations, accounting for as
much as 47.4 percent of the gross capital assets as compared with
36.0 for the stores and 31.7 percent for the other associations engaged
in retail distribution. Buildings, on the other hand, accounted for a
greater proportion of the gross capital assets of the stores than of the
petroleum associations, but were of still greater importance in the
case of the other societies engaged in retail distribution, largely as a
result of the inclusion of marketing associations with distributive
departments, many of which owned elevators and warehouses.
On the basis of information submitted in the reports of 157 coopera­
tives, gross capital assets averaged $3,400 for associations with assets
of less than $10,000, $9,600 for those with assets between $10,000 and
$25,000, and $19,700 for associations with assets of $25,000 and
under $50,000. The larger associations had proportionately larger
investments in capital equipment.
Share capital and total assets.— The need for additional capital is
especially important as a result of current market conditions caused
by the war. Generally, cooperative organizations commence their
operations with only a limited amount of capital. As the business
progresses many associations have developed the policy of returning
a portion of the savings on patronage in the form of shares and credits
toward shares. Examination of data for over 1,500 associations
indicates that the average amount of paid-in share capital per member
has a definite tendency to increase with the size of the association.
The average amount of paid-in share capital per member amounted
to $20.58 for associations with total assets of under $10,000, as com­
pared with $31.66 for associations with total assets of $250,000 and
over. The highest average amount reported for any size class was
$48.39. The average amount of paid-in share capital per member
for the 1,518 associations with fiscal years ending in 1941, classified
by size of total assets is shown below:
Average paid-in
capital per

Total assets Of—
member
Under $10,000..........................................................$20.58
$10,000 and under $25,000____________________ 32. 55
$25,000 and under $50,000____________________ 39. 43
$50,000 and under $75,000____________________ 47. 55
$75,000 and under $100,000___________________ 48. 39
$100,000 and under $250,000.._______ ________
44. 12
$250,000 and over____________________________
31. 66
Average, all associations____________________ 37. 30




OPERATIONS OF LOCAL ASSOCIATIONS

29

Examination of the relationship between the average amount of
paid-in share capital per member and the par value of shares specified
in the bylaws of the associations suggests that even in the case of the
older associations, members seldom subscribe for more than one or
two shares. It should be noted, however, that the relatively larger
amounts of share capital per member found among the larger associa­
tions do not necessarily represent amounts “ put into” the business, in
view of the relatively common practice of paying patronage refunds
in shares.
Working capital.— The ability of cooperative managers to meet
current liabilities in everyday transactions and to supply the needs of
the members depends upon the amount of working capital. In
general the ratio of current assets to current liabilities is considered
the measure of solvency and relative financial strength; the standard
is usually 2 to 1. Four-fifths of the 258 associations reporting in
detail had a ratio of more than standard. In the less than 20 percent
of associations which had ratios under 2 to 1, the working capital was
inadequate for their needs. Although the average for the 258 associa­
tions was 5.5 to 1, in a number of instances cash balances were
insufficient to cover current accounts payable.
Debts of cooperatives.— Long-term debt amounted on average to 8.9
percent of total liabilities for the 312 associations shown in table 14.
The medium-sized associations with assets between $10,000 and
$100,000 had the lowest debt, the percentages not exceeding 5.5
percent in any class. The long-term debt of the petroleum associa­
tions, however, accounted for a greater portion of the total liabilities
(11.3 percent) than did the debt of the store associations (5.7 percent)
and the other societies engaged in retail distribution (4.7 percent).
While the petroleum associations were in a relatively less favorable
situation than the other types, they were apparently considerably
better off than similarly situated private filling stations. Data pub­
lished in the Treasury Department’s Statistics of Income for 1938
indicate that the long-term debt of all filling stations with total
assets of less than $50,000 amounted to 13.5 percent of total liabilities
as compared with 4.4 percent for the petroleum associations shown in
table 14. This is of interest in view of the fact that 78.0 percent
of the petroleum associations had total assets of less than $50,000.
Notes and accounts payable amounted to 21.6 percent of total
liabilities for all of the 312 associations. The stores and other dis­
tributive associations were relatively free of current liabilities as com­
pared with the petroleum associations, the respective percentages
being 14.7, 12.8, and 26.7. Comparable percentages computed from
data to be published in Statistics of Income for 1939 indicate that
notes and accoimts payable amounted to 22.7 percent for all cor­
porations submitting balance sheets in the retail trade group, 19.8
percent for food stores, and 21.8 percent for filling stations.
Net worth.— The largest groups of cooperative associations were
those having a net worth of less than $10,000 (table 15). In this class
were found more than three-fourths of the food stores, nearly a third
of the general stores, and more than a fourth of the petroleum associa­
tions. The accumulation of substantial members’ equity was more
common among the petroleum associations than among the stores.




30

CONSUMERS’ COOPERATION IN 1 9 41

Thus, among the gasoline associations 15.7 percent had a total net
worth of $50,000 or more, whereas only 4.1 percent of the food stores
and 13.6 percent of the general stores were in this group.
T a b l e 15.— Percentage Distribution o f Cooperatives, by Am ount o f N et Worth , 1941

Associations having specified amount of
net worth

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 $250,000..............................
$250,000 and under $500,000..............................
$500,000 and under $1,000,000......... ..................
$1,000,000 and over............................................
Total_ . . .

_

_ _____ . ____

Total

41.2
27.3
18.8
9.6

Farm
Petro­ Dairy
and supplies Buying
Food General leum bakery
and
stores stores associa­ prod­ other
clubs
tions
ucts
goods
77.9
15.4

2.6
3.1
1.0

32.8
28.0
25.6

28.7
33.8

25.0
50.0

30.6
24.7

22.1
23.5
11.2 11.2
16.5
2.6
1.6
3.6
3.5
.2
.2
.8
.2
.2 25.0
1.2
.1
.2
100.0 100.0 100.0 100.0 100.0 100.0

96.8
3.2

100.0

Relation of net savings to net worth.—The ratio of net savings (before
payment of patronage refunds and income taxes) to net worth was
computed for over 1,000 individual associations. Forty-seven of the
associations, or 4.7 percent of the total, reported a loss for the year.
Percentages were not computed for the associations with losses, since
in practically every instance the amounts were small and in only a
few cases was the original capital impaired. The average ratio of net
savings to net worth was most satisfactory, being 24 percent for all
associations, 20 percent for the stores, 27 percent for the gasoline
stations, and 21 percent for the distributive departments of marketing
associations. The range of usual experience for all associations com­
bined was 13.4 to 36.1 percent. One hundred and twenty associa­
tions, or 12.6 percent of the total with gain, had ratios in excess
of 50 percent. Undoubtedly the high ratios reported by the smaller
associations reflect the small amount of original capital invested in
the business. One association with assets of over a million dollars
earned between 60 and 70 percent on its invested capital. Petroleum
associations were apparently more profitable than stores— the typical
range of experience for the stores was 11.6 to 30.0 percent as compared
with 16.8 to 42.9 percent for the petroleum cooperatives.
Relation of net worth to total assets.— Data showing the relation­
ship between net worth and total assets were available for 1,034 asso­
ciations. On the average, members’ equities amounted to 71.8 per­
cent of total assets; the range of usual experience was from 55.0
to 88.8 percent. In only 186 associations, or 18.0 percent of all those
reporting, were the members’ equities less than 50 percent. In 140
associations net worth ranged from 30 to 50 percent of total assets.
The average was 72.6 percent for the stores, 70.7 percent for the
petroleum associations, and 72.0 percent* for the marketing associa­
tions with distributive departments. Cooperative accountants often
suggest 75 percent as standard.
The members of 94 stores, 98 petroleum associations, and 49 market­
ing associations, or 20 percent of all associations studied, had an




31

OPERATIONS OF LOCAL ASSOCIATIONS

equity of 90 percent and over. The data suggest that despite the
limited amount of original capital, cooperatives have nevertheless
attained a comparatively high degree of economic self-sufficiency and
financial independence.
Net worth as percent of total assets:
Under 10_______________________________________
10 and under 20_________________________
20 and under 30_________________________
30 and under 40________________________________
40 and under 50________________________________
50 and under 60________________________________
60 and under 70________________________________
70 and under 80________________________________
80 and under 90________________________________
90 and over____________________________________
T otal. ............................................

Number of associations
Store Petroleum

__
8
10
28
33
62
61
77
71
94

1
4
11
15
36
57
71
67
40
98

444

400

CREDIT POLICIES OF COOPERATIVES

Considerable numbers of associations are extending credit, although
many reported to the Bureau that they are changing to a strictly cash
basis in view of the uncertainty of present economic conditions.
Analysis of the returns of almost 2,000 consumers’ cooperative
associations reporting to the Bureau indicates that 27.7 percent were
on a strictly cash basis and the others extended credit in varying
degrees. For the various types of associations the relationship was
as follows:
Strictly cash
0percent)

Extending credit
(percent)

70. 7
43. 2
27. 0
19. 9
12. 3

29.3
56. 8
73.0
80.1
87. 7

Major line of business:
Food stores_______________________________
Food and petroleum products_____r_______
General stores__________________________
Petroleum associations____________________
Farmers’ supplies____________ _____ ______ -

Data published by Dun & Bradstreet, based upon the experience of
more than 13,000 private retailers in 1939, indicate that 69 percent
of the private grocery stores, 75 percent of the grocery stores with
filling stations, and 76 percent of the filling stations and farmers’
supply companies extend open credit. In the case of combined
grocery and meat stores the proportion allowing credit is even higher,
being 81 percent.5
A special study undertaken by the Farm Credit Administration
indicates that the credit problem is especially important in rural
areas largely because of the seasonal nature of farming.6 This
undoubtedly explains why so many petroleum associations operate
on a credit basis. Losses as a result of the extension of credit are,
however, restricted to a certain degree in cooperatives which limit
credit to members. Credit to nonmembers is opposed by many
cooperators on the ground that it is unfair that the cash-paying
members pay higher prices or receive reduced patronage savings as
the result of the higher cos Is incurred in extending credit to non members.*•
* Dun’s Review, November 1940 (pp. 26-28): How Expenses and Profits Vary with Retail Credit
Policies, by Walter L. Mitchell, Jr.
• Knapp, Joseph G.: Preliminary Report on Credit Practices and Problems of 68 C. C. A. Local Petroleum
Associations. Washington, Farm Credit Administration, 1938.




32

CONSUMERS' COOPERATION IN 1 9 41
PATRONAGE RFFUNDS OE LOCAL ASSOCIATIONS

The questionnaire covering 1941 operations did not ask for data on
patronage refunds of the various associations. Nevertheless 172
cooperatives furnished information on this point. These associations
together returned to their members the sum of $2,962,263, on total
sales for 1941 amounting to $68,119,542. Omitting the data for one
very large association, the figures for which distort the general average,
the associations returned an average of $8,111 each.
The aggregate patronage returns and sales for each type of associa­
tion, together with the rate of return in relation to sales, are shown
in table 16.
T able

1 6 . — Patronage refunds to 172 associations, in relation to sales, 1941

Associa­
tions re­
porting

Type of association

Stores (including buying clubs)__________________
Stores having gasoline stations__________________
Petroleum associations__________________________
Marketing associations with purchasing depart­
ments ___________________ __________________
Total___________________________________

41
7
109

Patronage
refunds1

$161,037
22,341
2,659,501

Amount of
sales

Patronage
refunds
as percent
of sales2

$4,418,361
701,449
59,080,165

3.6
3.2
4.5

15

119,384

3,739,567

2.9

172

2.962,263

68,119,542

4.3

1Includes those not reporting sales.
2 Based only on those reporting sales.

The reporting associations were, of course, too small a proportion
of the total for accurate use in estimating for the entire group of
associations; they may also have been better than average. Again,
not only did some associations in each type group barely make ends
meet; there were also some associations (9.3 percent among the stores
and 3.2 percent among the petroleum associations) that sustained
a loss on the year’s operations. Allowing for all these factors, it is
believed that it can be conservatively said that the local distributive
associations returned in patronage refunds about $12,000,000 on the
1941 business.

,

Trend o f Sales, Earnings and Patronage Refunds 9 1 9 2 0 -4 1

The effects of depressions and prosperity are strikingly shown in
table 17, which gives index numbers of sales, net earnings, and patron­
age refunds for the store and petroleum associations. As it shows, a
drop in sales of the store associations occurred in the depression years
of 1921 and 1922. From that point onward a steady rise occurred
through 1929, the year in which the great depression began. Continu­
ous decreases took place thereafter, until a low^point vTas reached in 1933.
Although a slight recession occurred in 1938, with that exception each
year since 1933 has shown an increased volume of sales. By 1937
the 1929 level had been reached and passed and the 1941 sales attained




33

MEMBERSHIP OF COOPERATIVES

a, point nearly 30 percent above the 1929 “ prosperity level.” As was
to be expected, net earnings fell more steeply than volume of business
during the recent depression, but it is noteworthy that even in the worst
years— 1932 and 1933— cooperatives were still making such earnings.
The period of recovery sent earnings soaring over 40 percent above
the 1929 level. Patronage refunds more than kept pace with earnings
and in 1941 were nearly twice as large as in 1929.
The petroleum associations, which experienced no drop in either
volume or in earnings, had regained the 1929 level in sales by 1934
and in earnings by 1936. Patronage refimds, whether in cash or in
shares, never fell below 1929 during the whole period shown in the
table.
The data in the table show strikingly the earning power— and
consequently the economic importance to the members— of both the
store and petroleum associations.
T able

17.— Indexes 1 o f Sales, N et Earnings, and Patronage Refunds o f Store and
Petroleum Associations, 1920-41
[1929=100]
Retail store associations
Year
Sales

Net
earnings

Patron­
age
refunds

Petroleum associations

Sales

Net
earnings

Patron­
age
refunds

......................................................
......................................................
...................................................
.................. ...................................
.................... ...................... ...........

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
52.0
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..........................................- ...........— .
1937...........................................................
1938.............................................................
1939.............................. ..............................

75.2
87.5
101.4
95.5
100.0

60.8
87.6
90.8
86.3
96.6

92.5
129.8
149.3
129.7
177.7

142.9
168.8
203.7
209.0
214.6

94.7
115.7
146.0
143.1
143.4

142.7
173.9
212.2
226.4
233.9

1940............................... .......... ..................
1941.................................... .............. ...........

113.6
129.5

112.3
142.2

173.3
192.4

232.0
293.2

165.1
213.0

288.4
363.1

1920
1921
1922
1923
1924

1 Chain indexes computed on reports from identical associations from one year to the next.

M em bership o f Cooperatives

The membership of the nearly 2,000 cooperative associations report­
ing on this point ranged in number from a buying club composed of 3
families to 6 associations with over 5,000 members each. The largest
group of the store, petroleum and farm-supply associations was that




34

CONSUMERS’ COOPERATION IN 19 41

of 100-250 members (table 18). Among the petroleum associations,
however, considerable proportions of the total number were in the
250-500 and 500-1,000 groups. Seventy percent of the buying clubs
had fewer than 50 members.
T able

18.— Distribution o f Cooperatives, by Number o f F u lly Paid M em bers and
T yp e of Association , 1941

Total

Number of members

All associations...... ...................
TTndpr 50
.. . _
SO u n d e r 100
__

_ ___
_ _ ____

100 under 250.............................
250 under 500.............................
500 under 1,000.._____________
1,000 u n d e r 2,500
2,500 u n d e r 5,000
5,000 a n d n v er

_.

__

Food
stores

General
stores

Petro­
leum
associa­
tions

1,969

288

365

1,050

226
281
658
437
246
101
14
6

59
66
103
43
10
6
1

34
54
139
86
36
13
3

45
108
343
285
188
72
6
3

Farm
Dairy
supplies Buying
and
and
other clubs
bakery
products commod­
ities
5

1
1
1
1
1

162

99

18
35
66
19
10
9
3
2

70
18
6
3
2

An increase in membership, amounting to 7.2 percent was reported
by associations furnishing data for both 1940 and 1941. Of the re­
porting associations, 86.2 percent gained new members; the rate
of increase in membership amounted to 12.4 percent for the petro­
leum associations, 15.9 percent for the store associations as a whole,
and 42.4 percent for the buying clubs. Among the 13.8 percent of
the associations that reported net losses in membership, the decrease
amounted to 6.1 percent for stores, 6.4 for petroleum associations,
and 18.7 percent for buying clubs.
Educational Activities

Of the 1,972 associations reporting educational activities, 750
made specific appropriations from earnings to be used for educational
purposes. The other 1,222 did more or less educational work but
had no specific fund for the purpose.
Altogether, 631 associations reported that one or more active study
groups had been formed among the members; these had a combined
total of 1,864 such groups.
Em ploym ent and Wages in Cooperative Associations

The 1,390 cooperative associations that reported in 1941 employed
an average of nearly 12,000 persons in 1941; wages paid amounted to
nearly 18 million dollars. The employees and wages for each type of
association, and the average annual full-time earnings in each, are
shown in table 19.




35

EMPLOYMENT AND WAGES
T able

1 9 . — Em ploym ent and

Wages in Consumers* Cooperatives, 1941 , by T yp e o f
Association
Number of Total num­
Total
Average
associa­
amount
ber of full­
full-time
yearly
tions re­
paid in
time em­
porting
wages, 1941 earnings1
ployees

Type of association

Local associations
Retail distributive:
Stores .........................................................................
Petroleum associations..............................................
Other..........................................................................
Service:
Medical and/or hospital care—
On contract.........................................................
Own facilities.......................................................
Burial: Own facilities (complete funeral)............... .
Meals and/or rooms...................................................
Housing (apartments or dwellings).........................
Cold storage................................................................
Water..........................................................................
Printing and publishing............................................
Other..........................................................................
Tntal

621
664
12

3,786
4,009
488

$4,254,505
7,323,042
1,026,549

$1,181
1,363
2,192

6
6
16
67
14
21
5
8
4

156
128
25
347
84
83
23
72
15

221,483
173,228
30,600
345,709
124,961
72,519
50,816
105,231
9,718

1,420
1,353
1,439
1,179
1,558
1,133
2,070
1,462
1,106

1,342

9,216

13,738,361

32
8
6
2

2,079
52
625
6

3,631,265
97,797
397,155
13,975

Federations
Commercial federations:
Wholesales..................................................................
Service associations....................................................
Productive associations..............................................
Noncommercial federations: Regional............................
Total ___

______

Grand total

.

_ - __

_ ____

________

48

2,762

4,140,192

1,390

11,978

17,878,553

1,362
1,881
635
2,329

i Average based only upon associations reporting on both number of employees and amount paid in wages.

During the 5-year interval since the Bureau’s general survey for
1936, average annual earnings of cooperative employees showed
substantial increases, ranging from 11.4 percent in petroleum associa­
tions to 25.3 percent for “ other distributive” (including consumers’
creamery associations, bakeries, etc.). For the whole number of
associations reporting both employees and wages, the average increase
in annual earnings was 14.2 percent. The store associations were still
aying the lowest wages in 1941 and the “ other distributive” the
ighest.
The comparative figures are shown in the following statement, for
the various types of associations.

S

1936

19£1

Percent of
increase'

All retail distributive...................................... $1, 155 $1, 329 14. 2
Stores.................................................................
990
1, 181 19. 3
Petroleum associations___________________
1, 224 1, 363 11. 4
Other distributive______ _______ *_________ 1, 749
2,192 25. 3