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Developments in
Consumers’ Co-ops
in 1948
A Record of
the Year’s Events




Bulletin N o. 964

UNITED STATES DEPARTMENT OF LABOR
Maurice J. Tobin, Secretary
BUREAU OF LABOR STATISTICS
Ewan Clague, Commissioner




Developments in
Consumers’ Co-ops
in 1948




Bulletin N o. 964

UNITED STATES DEPARTMENT OF LABOR
Maurice J. Tobin, Secretary
BUREAU OF LABOR STATISTICS
Ewan Clague, Com m issioner




Letter o f Transmittal
U nited States D epartment of L abor ’ s
B ureau of L abor S tatistics ,

Washington, D. C., Aug. 17,1949.
The S ecretary of L abo r :

I have the honor to transmit herewith a report on events in the consum­
ers’ cooperative movement in 1948, a portion o f which was printed in the
M onthly Labor Review, April 1949. This report was prepared by Florence E.
Parker, of the Bureau’s Office of Program Planning.
E w an C laque , Commissioner.
Hon. M aurice J. T obin ,
Secretary o f Labor.
lm i

For sale by the Superintendent o f Documents, U. S. Government Printing Office, Washington 25, D . C.




Price 15 cents

Contents
P a ge

Progress in 1948-----------------Cooperative congress--------------Local associations_________________________________________________________________
Health plans---- ---------Housing associations__________________________________________________________
Student cooperatives.......................— -------- -----------------------------------------------------Insurance associations--------- --------------Commercial federations___________________________________________________________
Joint activities of wholesales________
Regional wholesales___________________________________________________________
District wholesales____________________________________________________________
Service federations____________________________________________________________
Productive federations________________________________________________________
Noncommercial federations________________________________________________________
Legislation affecting cooperatives__________________________________________________
Credit unions_________________________________________________________________
Medical and hospital care____________________________________________________
Other-----------------------------Education, recreation, publicity___________________________________________________
Labor and cooperatives_________________________
Retirement plans_____________________________________________________________
Bonus plans____________________
International developments......... .......................................... — -----------------------------------




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Developments in Consumers’ Co-ops in 1948
Progress in 1948
tion for persisting in “ practices which cast serious
discredit upon consumers’ cooperation generally
and upon CCW and its member societies in par­
ticular.” On the national level, the Cooperative
League of the USA announced in a statement of
policy its opposition to both communism and
fascism and its belief that cooperatives were justi­
fied in refusing to admit the adherents of either,
because their beliefs make it “ impossible for them
to desire the success of cooperatives as a basic
solution to human problems.”
Credit unions had one of their most successful
years, bringing their membership, loans, and
assets to new high levels. Scattered reports
indicate that insurance associations also had a
good year.
One of the most significant events of 1948 was
the holding of the sixteenth biennial congress of
the Cooperative League of the U. S. A., bringing
together delegates from distributive, housing,
health, and other cooperatives from all over the
United States.
The Farm Credit Administration reported 1that
the formation of new cold-storage locker coopera­
tives— almost all of which are of farmer member­
ship— slowed down in the second half of 1948.

For the consumers’ cooperative movement as
a whole, the picture in 1948 was one of gener­
ally favorable operations, though with larger and
more frequent areas of difficulty. The whole­
sales in 1947 had warned their member associa­
tions that retail distributive cooperatives were
facing “ the toughest competitive battle in years”
and this proved to be the case. Although the
supply situation had greatly improved, prices
were uncertain and net margins narrowed. The
more stringent business conditions also revealed
many instances of undercapitalization, member­
ship apathy and resultant lack of patronage and
support, and weakness in management, sometimes
of fatal proportions. M any of the stable and
successful cooperatives fo u n d th e ir earnings
smaller than in previous years.
Among the wholesale cooperatives, one of the
most important activities consisted of steps to
insure adequate supplies of petroleum products
through the purchase of sources of crude oil.
Several wholesales extended their holdings of
producing oil wells and oil-bearing land.
Threats of trouble from Communists within
cooperative ranks were indicated in scattered
reports, and Central Cooperative Wholesale ex­
pelled a Communist-dominated member associa­

JNews for Farmer Cooperatives (W ashington), January 1949.

Cooperative Congress
The sixteenth biennial cooperative congress
was held in Minneapolis, November 9-11. It
was preceded by the convention of the Coopera­
tive Health Federation.
The League president praised the starting of
cooperatives by labor-union members, as a great




step in cementing “ the social and economic bonds
between farmers and labor.” He recommended
establishment of a national research organization
for cooperatives.
The national secretary warned that “ the next
few years will decide whether cooperatives in
(1 )

2
America are to remain a comparatively small
segment of our economy and national life” or
whether they are to become a “ vital and sig­
nificant factor.” He pointed out that their fate
will be decided primarily by the following factors:
(1) The success of cooperative business enter­
prise, (2) the relations of cooperative members
with their fellow citizens in the local communities,
(3) the effectiveness of their national public rela­
tions program, and (4) the general attitude of the
American Nation toward cooperatives, and the
consequent action of the United States Govern­
ment with respect to them.
Relative to petroleum, the congress adopted res­
olutions (a) recommending that the Cooperative
League make a national survey to determine the
5-year requirements of cooperatives with respect
to crude-oil refining and distribution, and the cost
and means of financing such a 5-year program,
reporting from time to time to the League board
and finally to the next cooperative congress; (b)
urging the Federal Government to foster the de­
velopment of synthetic fuels and to pass legisla­
tion enabling cooperatives to participate in such a
program; (c) opposing any legislation quit-claim­
ing to the States the tideland oil, and urging the
Eighty-first Congress to pass legislation providing
for equitable access to such oil and for its conser­
vation; and (d) supporting the request of the In­

ternational Cooperative Alliance for a United
Nations study of international oil resources and
distribution.1
On the subject of taxation, the congress reaf­
firmed “ the fundamental right of any group to
conduct a nonprofit business and to refund its
earnings to the patrons without taxation of such
refunds,” and urged the President and the Con­
gress of the United States to appoint a tax com­
mission to examine and reconstruct the national
tax structure. It also authorized the appointment
of a League committee composed of tax experts and
others to study the subject.
Regarding finance, the congress recommended
the elimination of credit business in cooperatives,
formation of community cooperative credit unions,
establishment of regional cooperative lending
agencies and of loan-rediscount facilities, and
functioning of the National Cooperative Finance
Association as a brokerage agency for the sale and
exchange of cooperative securities.
A resolution on public relations noted that the
objective should be to inform the public that co­
operatives furnish the means to benefit both pro­
ducers and consumers; authorized conferences on
area, regional, national, or other bases; and urged
coordination of the testimony of nonfarm groups
before the United States Congress.*
* See M on th ly Labor Keview, December 1948, p. 600.

Local Associations
For the stable consumers’ cooperative associa­
tions, 1948 appears to have been a year fairly
satisfactory from the standpoint of supply of goods
and volume of business done, but yielding in many
cases lower operating savings. However, retail
earnings were supplemented for a substantial pro­
portion of the associations by patronage refunds
from the district and regional wholesales. Excep­
tions were those wholesales dealing largely or
mainly in food; these, it appears, again suffered
losses.
New departments or services were added by
many retail cooperatives. Some of the expan­
sion was part of the present trend toward larger
premises (preferably with parking space), per­
mitting operation of complete food, produce, and
meat departments, and, in some cases, appliance




and service departments.
Other associations
closed departments which were “ in the red” ;
notable among these were many electricalappliance departments.
A rather large number of cooperatives disposed
of one or more of their branches during the past
year. Many of these branches were closed, but
some became independent associations.
In the local distributive field, 1948 ushered in
a comparatively small group of newly formed as­
sociations. Reports received thus far indicate
that these were hardly sufficient in number to
offset the dissolutions, which continued at an un­
usually high rate during the year. M any in the
latter group were associations which had never
been large enough for efficient operation, and some
probably should never have been started. The

3
urban associations— especially those handling food
only— accounted for a large proportion of the
failures.
The cooperative at Greendale, Wis. (one of the
three “ greenbelt towns” ) lost the leases for its
food store, dry-goods store, barber shop, and
motion-picture theater in September, to higher
bidders. It had operated the food store, barber
shop, and movie theater since 1938. The asso­
ciation still runs the gasoline station, auto-repair
garage, and tavern in Greendale.
Some of the associations in flood regions suffered
considerable losses in 1948. Among them were
the veterans’ cooperative at the Vanport (Oreg.)
extension center, which was ruined when the whole
war-bom town was wiped out in the floods of the
Willamette and Columbia Rivers. Reports re­
ceived later in the year indicated, however, that
efforts were being made to refinance and revive
the cooperative.
Among the new cooperatives which went into
operation in 1948 were those of industrial workers
in Bastrop, La., and Baytown, Tex. New Negro
associations were reported in Kansas City and St.
Louis, M o., and New York C ity; others already
were in successful operation in Chicago, 111., Gary,
Ind., Inkster, M ich., and Richmond, Va.
Two department-store organizations, financed
by the Consumer Distribution Corporation (estab­
lished by the late E. A. Filene, of Boston), opened
in March and November, respectively, in Arling­
ton, Va., and Providence, R . I. Eventually, it is
planned, these enterprises will become genuinely
cooperative, as members purchase share capital,
thus retiring the corporation’s investment.
Associations operating warehouse-type units,
handling only a few hundred items, were reported
to be more than holding their own. The M otor
City Consumer Cooperative (Detroit) opened
a second unit in November. Other such ware­
houses were in operation in Flint and Pontiac,
Mich. All these organizations have had the sup­
port of organized labor, especially of the auto­
mobile workers. Plans for similar distribution
centers were reported from Grand Rapids and
Muskegon, M ich., and Toledo, Ohio. Advantages
claimed for this type of retailing are reduction in
handling costs and in investment in fixtures and
'equipment, and rapid turn-over of goods, resulting
in greater savings for patrons.
Of the two union-supported stores in the Hamp­




ton Roads (Va.) area, that at Hampton, whose
first month’s sales (in November 1947) averaged
$8,000 per week “ in an area that had had no co­
operative and had never seen a co-op label,” was
by the end of its first year doing a business of over
$16,000 per week. The other, at Newport News,
which had sales of nearly $19,000 in its first 3 days
of business, had by the*end of 1948 added a clothes
and appliance department to its supermarket and
had an option on a site for a second store.
A new organizational approach is being tried
experimentally in some of the East Coast States,
in communities not yet ready for a full-scale
store.
It is called the “ Co-op Center” or “ CC” plan,
and is described3 as “ in effect a cooperative organ­
ization office with a demonstration sale of co-op
label goods.” It is “ designed to keep all the
advantages of the buying club, but on a scale
nearer the demands of current retailing needs.”
The group chooses a small location away from heavytraffic areas. If it is a store, the windows are promptly
painted to eliminate any resemblance to a retail outlet.
This guarantees that no reliance will be made on business
from passers-by. People will come largely through in­
vitation, as in the buying club, so that patronage is part
of an education in cooperative principles.
As in the Co-op Retail Warehouse, only a limited line
of Co-op label groceries, which can be priced at chain
store “ special” levels, or lower, are carried. The “ CC”
is open only part time in the beginning, probably Fridays
and Saturdays. A part-time paid cashier handles the
sales. Volunteers take care of the educational and organ­
izational affairs.
An order desk for Co-op appliances and automotive
supplies, a library of consumer and cooperative literature,
and a center for collection of payments toward capital
investment are all important parts of the Co-op Center
plan.

One of the difficulties of many cooperatives—
particularly the weak and ailing ones—is lack of
adequate financing. Although this is no new
problem, an analysis made in 1948 by a regional
wholesale reveals the importance of this factor.
Among the affiliates of Eastern Cooperatives,
Inc., that were in trouble, financial problems were
the basic difficulty in 25.8 percent, and personnel
problems in 25.0 percent. An encouraging sign is
the tendency to delay opening any kind of busi­
ness enterprise until adequate capital, sufficient
membership, and suitable facilities are obtained.
Decision to liquidate the three stores (in Greens-*
* T he Cooperator (N ew Y ork), M a y 24, 1948.

4
burg,Lebanon, and Veedersburg, Ind.) operated by
the Cooperative P. & C. Family Foods of Indiana
since 1946, as retail outlets for farm products, was
announced in November, 1948. Reasons given
were (a) the “ huge outlay of capital” that would
be needed to develop the marketing program prop­
erly, and (b) the “ revolutionary changes” expected
in the food-distribution field.4

Health Plans
At the first annual meeting of the Cooperative
Health Federation of America, which preceded
the congress of the Cooperative League in Novem­
ber, the need for State and Federal legislation
authorizing and protecting consumer-controlled
medical-care plans was emphasized. Only Wis­
consin now has legislation approaching the stand­
ards contained in the Federation’s model bill.
About 30 States have laws which prohibit con­
sumer-controlled or community-sponsored plans
and reserve to the medical profession the operation
of group prepayment plans.
The principal obstacles to the growth of co­
operative health plans, according to the report of
the Federation’s executive secretary, are (1) mis­
understanding by the organized medical profession
of the cooperatives’ aims and purposes, (2) dis­
crimination against physicians who participate in
cooperative plans and threats of discrimination
against those contemplating such participation,
(3) “ restrictive legislation denying the people
the right even to organize for the promotion of
their own health care,” and (4) a lack of informa­
tion among the public about the benefits of co­
operative health plans. It was felt that joint
meetings with representatives of the American
Medical Association had resulted in some progress
in remedying the first two situations mentioned
above. Thus, “ voluntary prepayment group
health plans” were recognized m the report of the
National Health Assem bly5as the “ best available
means at this time of bringing about improved
distribution of medical care, particularly in rural
areas” ; an exchange of information on aims, pur­
poses, and standards between the American Med­
4The Hoosier Farmer (Indianapolis), N ovem ber, 1948.
•This was a conference of m any agencies and groups concerned with health
matters, called b y the Administrator of the Federal Security Agency at the
request of President Truman; it was held M a y 1-4,1948,




ical Association and the Federation was agreed
upon; the Puget Sound cooperative was placed on
the American Medical Association’s “ approved”
list; and cooperative hospitals were admitted to
membership in the Texas Hospital Association.
Nevertheless, local associations were still re­
porting discrimination at the county level and
difficulty in recruiting medical staff because of
opposition by organized medicine.
The cooperative health convention went on
record as favoring a revision of the financing
formula of the Hospital Construction Act, to
make Federal funds more easily available to areas
of greatest need and to require that bona fide
consumer representatives be included on State
hospital councils.
Other resolutions asked Group Health Mutual
of St. Paul (an insurance association providing
cash indemnity benefits for sickness and hospital
costs) to prepare a proposal for supplemental
insurance coverages for local direct-service plans;
directed the Cooperative Health Federation’s
board of directors to investigate the feasibility
of establishing a publication dealing with medical
subjects of interest to member associations;
and urged that provision for supplementary med­
ical care of employees be made an integral part
of collective bargaining.
Two regional bodies were formed during 1948
to further the expansion of cooperative local health
service in the Puget Sound and Lake Superior
districts. In the Puget Sound area, a plan was
worked out for integrated coverage of the whole
region by nine plans, each serving a “ medical
trade area” ; Group Health Cooperative, Seattle,
took the first step in this plan by establishing
a branch clinic in the nearby town of Renton.
A similar plan was in process for the Lake Superior
district, under the leadership of the Health Center
Services Committee, St. Paul.
Among the local associations, Group Health
Association (Washington, D . C.) reported a mem­
bership of 6,500 and (including their dependents)
15,500 participants; this organization opened a
12-chair dental clinic in December 1948, the first
such plan on a cooperative basis to come to the
attention of the Bureau of Labor Statistics.
Group Health Cooperative of Puget Sound (Se­
attle) reported a membership of 2,900 families

5
and 12,000 industrial workers— a total of 25,000
participants. Arrowhead Health Center (Du­
luth, Minn.) reported a membership of 1,400, with
3,800 participants. Organization of hospital and
medical-care associations was under way in several
places in Wisconsin, as a result of the 1947 en­
abling act, and one hospital (at W ild Rose) was
already in operation.
Group Health Mutual of St. Paul reported a
total coverage o f some 75,000, under its individual
and group policies.
Of 101 cooperative hospital associations reported
as having been chartered by the end of 1948, the
cooperative features or the entire project had
been abandoned in 29 because of inability to raise
funds, local opposition or disinterest, or other
reasons. Altogether, 28 hospitals were in opera­
tion (8 more than at the end of 1947), and 21
others were known to be in various stages of prog­
ress (buying land, collecting funds, building their
hospital, etc.). The exact status of the other 23
organizations at the end of the year was not known.
Texas was far in the lead, with 38 associations
(13 of these had hospitals actually in operation).

Housing Associations
Thirteen of the housing groups formed within
the past few years had one or more houses or units
built or under construction at the end of 1948.
Of the 1,767 dwelling units planned by these
associations, 571 were either finished or under
construction. Two additional associations (with
1,209 units planned) were building their first
group of houses, but did not report the number
involved. Four other housing organizations were
in process of constructing apartment-house proj­
ects, expecting eventually to provide 2,700 living
units. Mutual housing associations had been
successful in reaching agreement with the Federal
Public Housing Administration to take over 8
public wartime housing projects involving over
5,500 dwelling units; 3 other projects (with 830
units) were in process of negotiation and financing.
Group Housing Association (Washington, D. C .),
whose Bannockburn project has been in process
for some time, broke ground for its first group of
24 houses early in January 1949. Its entire proj­
ect, if local zoning regulations can be modified, will
840011— 49------2




include a whole community with varied types of
dwellings (single-family, semidetached, and apart­
ment-house units).
Eight other projects (with 1,900 units planned),
for most of which land has been acquired, have
been halted at various stages of progress by high
prices, financing difficulties, legal troubles, etc.
It appears that few of the housing associations
will be all-the-way cooperatives, with the asso­
ciations retaining titles to the entire properties.
M ost of them (owing, in some instances, to in­
ability to obtain financing on the fully cooperative
basis) provide for individual titles to land and
dwellings. In such co-venture associations, the
cooperative itself will disappear once it has served
the purpose for which it was formed, such as
buying land, obtaining plans, buying materials,
equipment, fixtures, etc. Where there are play­
grounds, community buildings, or other real estate
used for the welfare of the whole group, the co­
operative may be retained to hold title to and
manage the property.
A t a Midwest meeting held in June 1949, cooperators and housing experts reached the con­
clusion that present high costs preclude the build­
ing of any 2-bedroom dwelling at a price within
the means of a family with an annual income of
$3,500 or less. A possible solution of such a
fam ily’s problem was thought to be the construc­
tion of an exterior (or “ shell” ) dwelling, which the
family could then finish inside by its own labor.
In fact, some of the projects are known to be
using self-help methods, with the members doing
a large share of the work themselves.
The Federal Housing Act, as amended in 1948
(Pub. 901,80th Cong., 2d sess.), provided for FHA
mortgage insurance, of not over 90 percent of the
value, for nonprofit cooperative housing projects
(95 percent, if the membership consists primarily
of veterans of W orld War II). B y the end of
1948, it appeared that only one such project had
actually been approved for FHA insurance. The
resumption of the previous 10-percent-down-payment requirement on public housing projects and
on the so-called “ greenbelt towns,” and the author­
ization of FHA insurance on them, has again
brought the purchase of such projects within the
means of mutual housing organizations of project
residents.

Student Cooperatives
Student cooperatives increased in number in
1948. M ost of these provide rooms and/or meals,
but some rim book stores and others (especially
those composed of married veterans) operate
stores handling groceries and household supplies.
Federations of campus cooperatives have been
formed in four regions of the United States.6
These, together with the Canadian Student
Cooperative League, are affiliated with the North
American Students Cooperative League which
was formed in 1946 and has headquarters in
Chicago.
The 1948 conventions of the Pacific Coast
League voted to establish three subsidiary leagues—
for southern C alifornia, northern C alifornia,
and the Northwest area— to carry on more
intensive work for uniting existing cooperatives
and creating new ones. The energies of the
Central League of Campus Co-ops during the
year were devoted largely to raising money for a
revolving fund to be used in assisting local groups
with loans just large enough for an initial payment
on a building or for remodeling or for other
operating facilities.
The annual meeting of the North American
Students Cooperative League was faced with the
problem of making the League self-supporting.
Previously its support had come largely from
National Cooperatives and the Cooperative Lea­
gue of the USA., but was discontinued because of
financial difficulties experienced by those organi­
zations. Besides adopting a budget for the
coming year, the convention voted to incorporate,
as a first step toward building up a revolving fund
to be used for loans to local student cooperatives.
Recognizing the student cooperatives as a
promising source for both future cooperators and
future employees, some of the regional wholesales
have given aid to the campus cooperatives in their
area. Among these have been the Consumers
Cooperative Association which has provided office
and meeting space for the Central League, has
prepared literature and bulletins, furnished a
complete library of cooperative literature for each
student cooperative in its area, assisted with legal
advice, included student leaders in its recreation *
* These are Pacific Coast Student Cooperative League, N orth Central
Students Cooperative League, M idwest Federation of Campus Cooperatives,
and Central League of Campus Co-ops.




school, aided with travel funds, and subscribed
$5,000 to the league’s revolving fund. Midland
Cooperative Wholesale and Franklin Cooperative
Creamery have supplied the N orth Central
League literature and contributed toward the ex­
pense of travel to the regional and national meet­
ings; and the former assumed the expense of the
youth and campus co-op dinner at the Congress
of the Cooperative League in November 1948.
Pacific Supply Cooperative oifer-g free subscrip­
tions to the students’ cooperative paper, Co-ops
on Campus, to all colleges and universities in its
area.

Insurance Associations
A new mutual life-insurance organization,
Kansas Farm Life Insurance Co., was reported
to have been chartered at the beginning of 1948.
The final step in the unification of the coop­
erative insurance program in Minnesota and Wis­
consin was taken in November 1948, with the
merger of the American Farmers Mutual Insurance
Co., St. Paul, and Cooperative Insurance Mutual,
Milwaukee, into a new organization, Mutual
Service Casualty. Previous mergers had unified
life and fire insurance. The companies under­
writing these risks are Mutual Service Life Insur­
ance Co. and Mutual Service Fire Insurance Co.
All three companies (known collectively as Coop­
erative Insurance Services) have headquarters in
St. Paul.
It was reported in mid-1948 7 that 102 Minne­
sota and Wisconsin cooperatives had policies with
Mutual Service Life Insurance Co., providing
patronage group life insurance for their members.
The benefits to the member vary with age and his
purchases from the cooperative store during the
preceding year.
The Associated Fire Insurance Cos. (W oodbridge, N. Y .) had the most successful year in
their history, with $6,109,404 of new insurance
written, raising the total in force to $39,292,720.
Policyholders totaled 2,489. A cash refund of 35
percent on the year’s assessments was made.
There has been no national federation of the
insurance organizations connected with the coop­
erative movement in this country, although a
i News for Farmer Cooperatives” (Farm Credit Administration, Washing­
ton, D . C .), July 1948.

7
number of them are affiliates of the Cooperative
League of the USA. In the endeavor to coordinate
insurance activities on a national scale, the
League in 1947 and 1948 sponsored an insurance
conference. A report on the five charter members
of the conference was presented at the 1948
Cooperative Congress. They are {a ) Farm Bureau
Insurance Cos., Columbus, Ohio, writing life, fire,
and casualty insurance in Ohio and in 12 other
States east of Ohio; (6)Cooperative Insurance Serv­
ices, St. Paul, writing life, fire, and casualty policies
in 4 upper Midwest States; (c) CUNA Mutual In­
surance Society, Madison, W is., writing life and
loan-protection insurance throughout the United
States and Canada; (d ) Farmers Union Cos., Den­

ver, Colo., writing casualty insurance in 8 States and
life insurance in 13 States— for members of the
Farmers Union only; and (e) Group Health Mutual,
St. Paul, writing individual and group policies
providing benefits to cover the cost of hospitali­
zation and medical care. These companies had
a 1947 premium income of $42,442,935, admitted
assets of $58,819,461, and capital and surplus
amounting to $14,227,424.
The conference is an informal organization, to
promote better public understanding of insurance,
to act as a channel for discussion, study, and solu­
tion of common problems, and to advance and
protect the interests of the member associations
and their members.

Commercial Federations

Joint Activities of Wholesales
Three regional wholesales— Pennsylvania Farm
Bureau Cooperative Association, Cooperative
G. L. F. Exchange, and Southern States Coopera­
tive— in the autumn of 1948 joined in the purchase
of a controlling interest in a petroleum refinery
and topping plant in Texas. A new corporation,
Petrol Refining, Inc., was formed which immedi­
ately bought three tanker ships with a reported
capacity of over 5 million gallons each. These
will transport crude oil from Venezuela as well as
domestic refined products. The total refinery
capacity was expected to be 30,000 barrels daily.
In mid-1948 another group of wholesales (M id­
land, Farmers Union Central Exchange, and
Illinois Farm Supply Co.) acquired “ a substantial
interest” in five refineries (four in Texas and one
in Louisiana) with a combined daily capacity of
22,500 barrels of crude oil, owned by Premier
Petroleum Co. It was said that the purchase
would not “ immediately” add very much to the
wholesales, present supplies of petroleum products
(presumably because of prior commitments).
Business reverses and operating losses forced
National Cooperatives to make drastic personnel
reductions and curtail its activities. (It was stated
in September that operating losses for the year
ending June 30 would total $401,000; for the first
quarter of the new year (July through September),
however, a net income of $27,084 was reported.)




Statements in the cooperative press made it
evident that among National's difficulties were
differences in viewpoint between the producerminded and consumer-minded regional members
as to the proper functions and policies of National,
personnel difficulties, and lack of clear-cut dele­
gation of responsibility to management. By the
end of 1948, the chemical-products factory had
been returned to its original owner. The flour
mill, milking-machine plant, and hot-water heater
factory were still being operated by the organiza­
tion, as well as the major commodity-purchasing
departments (groceries, appliances, and tires).

Regional Wholesales
In California, Associated Cooperatives added,
as new lines, fertilizer (produced by one of its
affiliates) and insecticides. The wholesale pur­
chased, and took over the operation of, the lumber
mill at Eureka in which it was already part owner.
It decided to sell the land in M aywood (Los
Angeles), purchased as the site for a branch ware­
house, and to rent space instead; local building
restrictions and high costs of construction were
given as the reasons therefor. New membership
regulations were issued, primarily to govern the
admission of farmer and student cooperatives.
The new management service announced last year
went into operation. Among the associations
contracting for the service were three (at Berkeley,

8
Palo Alto, and San Jose) which took an integratedmanagement contract, on an experimental basis,
for 6 months. At the end of that time the project
was dropped, experience having shown that the
50-mile distance to be traveled among the stores
was too great for effective supervision.
The annual meeting of Central States Coopera­
tives (Illinois) endorsed the area-federation plan,
integrating wholesale and retail operations in the
wholesaled territory, that had been under con­
sideration for some time;8 approved the creation
of a special fund (to be financed by voluntary
contributions from local cooperatives) for em­
ployee training and consumer research; decided
that applicants for membership must meet certain
standards as to operations, capital, and member­
ship, and that present members must conform to
those standards within a year. A condition of
wholesale service to newly formed associations
will be the signing of a management agreement
with the wholesale through the appropriate area
organization.
Illinois Farm Supply Co. bought a petroleum
refinery with a capacity of 4,000 barrels a day.
In the same State, the formation of the Illinois
Equity Association was reported, to carry out
for local Equity cooperatives joint buying of
groceries, feed, farm supplies, and other mer­
chandise.
Indiana Farm Bureau Cooperative Association
completed an expansion program which had in­
creased the capacity of its refinery at M ount
Vernon, Ind., from 2,000 to 8,000 barrels per day,
and the capacity of its “ cracking” plant from
2,500 to 3,500 barrels per day. The wholesale
reported that the distribution of petroleum pro­
ducts to its local associations in 1948 was expected
to total 73 million gallons, as compared with
65.6 million gallons in 1947 and 43.5 million
gallons in 1945. Two poultry-processing plants
were added to the wholesaled services. B y vote
of the members, the wholesale will also take over
the Indiana Grain Cooperative (a marketing asso­
ciation) ; the marketing of eggs was begun shortly
after the end of W orld War II.
Because of the threatened shortage of petroleum
products, the members of Farm Bureau Services
(Michigan) authorized the wholesale to take
steps to obtain a source of supply for crude oil.
•See U. S. Bureau of Labor Statistics Bulletin N o. 932, p. 7.




Another advance toward self-sufficiency in
crude-oil supply was made by Midland Coopera­
tive Wholesale (Minnesota) when it bought,
early in 1948, leases on Oklahoma land with 100
producing wells and “ first call” on any additional
production obtained. This raised to capacity
(5,000 gallons daily) the output of its refinery at
Cushing, Okla., for the first time in several years;
a later addition to the plant increased the capacity
to 6,000 barrels. The general manager noted that
some cooperatives (not members of the wholesale)
had had to pay a premium of some 3 cents per
gallon, in order to get sufficient gasoline to supply
their members.
Midland’s annual meeting directed the whole­
sale to continue to handle groceries (on which it
lost $40,000 in 1947) but to integrate the whole*
sale and retail operations in this field, through
area federations. An addition to the wholesaled
headquarters building, adding 10,670 square
feet of space, was made in 1948.
Consumers Cooperative Association (Missouri)
reported the most successful year in its history.
Earnings of $8,320,206 were distributed at its
annual meeting in November. Of this amount,
$6,172,606 was declared in patronage refunds;
these were allocated to individual member associa­
tions in a revolving fund, to be paid in cash at the
end of 6 years. Four associations were credited
with over $50,000 each; the largest amount to any
association was $66,149. At the same meeting
$445,185 in deferred patronage refunds declared
on purchases for 1941-42 was returned in cash,
plus $9,066 from patrons’ equity reserves allo­
cated in 1933. It was reported that, since 1941,
deferred patronage refunds paid in cash have
totaled $965,616.
CCA constructed additional pipeline between
Coffeyville (where one of its refineries is) and
Valley Center, Kans. The association already
had 912 miles of line. In August 1948 contracts
were concluded with an Iranian oil company for
the importation into the United States of a cargo
of oil from the Middle East. Ground was broken
at Coffeyville for a new solvent dewaxing plant,
expected to be completed early in 1949. Expan­
sion and modernization of the refinery made
possible a 30-percent increase in throughput and
greater production of higher-quality tractor fuel,
kerosene, and distillate burner fuels. The re­

9
fineries at Coffeyville and Phillipsburg, Kans.,
and Scottsbluff, Nebr., handled 20 percent more
crude oil than in the preceding year. Two of the
three operated above rated capacity throughout
the year.
During the 1948 fiscal year, oil properties were
bought in Kansas which included 242 producing
wells with a daily capacity of 4,600 barrels; also
a 2,000-barrel refinery in Wyoming. These ac­
quisitions, with wells brought in on other proper­
ties, raised CCA’s total to 946 active wells, not
including 94 in which CCA holds a controlling
interest. Leases were also acquired on some
115,000 acres of undeveloped land in Colorado,
Kansas, New M exico, Oklahoma, Texas, and
W yoming; these were being explored by 14 geolo­
gists. The association owns a one-seventh interest
in the refinery of Utah Cooperative Association
at Jensen, Utah, and is a member of National
Cooperative Refinery Association.
Additional office space in Kansas City was
leased, and contracts were let for the construction
of a branch warehouse at Denver. In Muskogee,
Okla., construction was begun on a fertilizer­
mixing plant. The CCA printing plant in Kansas
City, damaged by fire, was closed for 2 months.
Goods valued at $31,734,853 were produced in
plants owned by CCA; they constituted over half
of the commodities supplied to patrons during
the year. The president of CCA pointed out at
the annual meeting that the member associations
saved more through the operations (distributive
and productive) of the wholesale than they made
on their local operations. On the average, by
patronizing CCA they saved $1.70 for every
dollar saved locally; for petroleum products the
figure was $2.70. The oil wells owned by the
wholesale are returning, annually, 42 percent on
the amounts invested in them. The total invested
in CCA's productive plants is repaid by them,
from their earnings, 2% times every 4% years.
The members o f the Farmers Union State Ex­
change (Nebraska) were told, early in 1948, that
the two independent suppliers from which the
wholesale obtained its petroleum products had
terminated the arrangement, leaving the exchange
with only the supplies obtainable from the Na­
tional Cooperative Refinery Association, of which
it is a member.
Eastern Cooperatives, Inc. (New Y ork), en­
countered another difficult year in 1948, in spite




of drastic reorganization and reductions in over­
head. Several departments were discontinued. A
substantial part of the association’s difficulties
stemmed from lower volume; the general manager
reported as early as August that 31 member
associations had suspended operations since
January 1.
In December the Farm Bureau Cooperative
Association (Ohio) announced an arrangement
with a private manufacturer for the production of
a new fireproof and verminproof building panel
which would considerably reduce the cost of house
construction. The opening o f another retail
branch store—its seventh—was announced in M ay
by the Oregon Grange Wholesale; the store was
in Klamath Falls.
In Texas, the refinery subsidiary of Consumers
Cooperatives Associated took over the operation
of a number of oil wells in New M exico, raising
to 37 the number operated by it.
The Utah Cooperative Association, also, lost its
source of petroleum supply. As almost 50 percent
of the wholesaled business is in petroleum prod­
ucts, the association was forced to buy a refinery
at Jensen, Utah. The refinery is a “ topping”
plant with a daily capacity of 700 barrels. Man­
agement of the plant was taken over in September.
Shortly thereafter the plant began operating at
capacity. Earnings in the first month of coopera­
tive ownership totaled $6,653; the total invest­
ment in the plant was reported as about $156,000.
Pacific Supply Cooperative (Washington)
changed its capitalization plan from a nonstock
to a capital-stock structure (with both common
and preferred stock). The purpose was to permit
the financing of expansion into production of
petroleum products, fertilizer, etc., and permit
merchandising of other products on a larger scale.
Previously, expansion had been financed mainly
from earnings from the distributive operations.

District Wholesales
Northland Cooperative Federation (Rock,
M ich.) which, in addition to its distributive busi­
ness, operates a cooperative summer camp at
Marquette,9 built six new cabins there. Coopera­
tive Services (M aple, W is.) erected a new building
containing office, showroom, and repair garage.•
• Formerly an independent association known as People’s Cooperative
Park Association.

10
This association also operates the cooperative camp
at Brule, which it took over from an independent
association in 1944.10

Service Federations
Late in 1948 the Cooperative Finance Corpora­
tion was started in California to assist in the
financing of cooperative enterprises; two associa­
tions had already joined when the year ended. A
similar organization, Central Agricultural Credit
Corporation, for the specialized purpose of financ­
ing the purchase of farm machinery by local coop­
eratives. was started in Wisconsin late in 1948 as
an auxiliary to Central Cooperative Wholesale.
Another general finance organization, Central Fi­
nance, Inc. is also in this region.

Productive Federations
National Farm Machinery Cooperative, owned
by 13 regional wholesales, started the construction
o f new plants at both Shelbyville, Ind., and
Bellevue, Ohio, in order to permit expansion of
10 Northern Wisconsin Cooperative Park Association.

output. It was reported that, although savings
for 1947-48 were about 20 percent over those for
the previous year, “ both the net gain and the
service to associations would have been far greater
had we been able to secure steel without seeking
gray markets and paying a fancy price." 11
The refinery of National Cooperative Refinery
Association at McPherson, Kans., ran at about
capacity throughout the year and handled
6,440,239 barrels of crude oil, or 29.5 percent
more than in the previous year. This association
completed the construction of a 5,000-barrel
catalytic reforming unit. Its 229-mile pipe-line
for refined products was extended 25 miles, from
Council Bluffs, Iowa, to Irvington, Nebr., where
a new petroleum terminal was built. Properties
with 43 producing wells (but from which N CR A
received no oil because of previous contracts)
were sold to a private company. Later purchases
in Kansas (with 99 wells) and in Texas raised its
total to 401 producing wells by the end of 1948,
in addition to leases in 3 sections of Texas on
which were 32 active wells.
11 Pacific Northwest Cooperator (W alla Walla W ash.). N ovem ber 1948.

Noncommercial Federations
The Cooperative League— educational and pub­
lic-relations organization for the consumers’ co­
operative movement in the United States—
accepted two additional associations into member­
ship in 1948. They were Consumers Cooperatives
Associated (Texas) and Franklin Cooperative
Creamery Association (M innesota). The League,
the purpose of which is “ to promote and encourage
the sound development of cooperatives by, for,
and among the people of the United States, and to
develop throughout the Nation an understanding
of the true nature and methods of cooperation,
and the objectives, ideals, and benefits of co­
operatives,” found 1948 a difficult period. This
was caused by curtailment of funds received for
educational work from National Cooperatives.
Previously, only regional cooperatives (such as
wholesale associations) were eligible for regular
voting memberships. Bylaw revisions, made in
1948, now permit the acceptance of local (retail)




cooperatives (a) in an area not served by a
regional wholesale or (6) engaged in a business
not handled by the wholesale of the region. Asso­
ciate (nonvoting) memberships are open to
individuals or local associations which contribute
funds for the League’s work; by the end of the year
400 persons had joined on this basis. In Midland
territory, 79 local associations had become asso­
ciate members. Among the other associate mem­
bers were the Vermont Cooperative Council and
Kansas Cooperative Council. Five retail co­
operatives in California had voluntarily raised
their dues to the League from 7% to 25 cents per
member. A referendum measure, in process at
the end of the year would, if carried, increase the
regular dues from member regionals from 7% to
10 cents per member per year.
Connecticut Cooperative Federation sold its
slaughterhouse and wholesaling of fresh meat to
the local cooperative at Stafford Springs. The

11
federation continues as an educational organiza­
tion of 11 associations in northern Connecticut
and south central Massachusetts.
In Idaho, the Inland Empire Cooperative
Federation was formed to do educational and
social work for local cooperatives in the area, to
coordinate their efforts and efficiency, and to
develop cooperation between producers and con­
sumers. The five charter members are all farm­
ers’ cooperatives, but some of them handle con­
sumer goods.
The Cascade Cooperative League, with head­

quarters in Seattle, was formed to assist in
educational or organizational work, maintain a
library of cooperative literature, and publish a
newspaper. The first issue of the paper was
published in December. Members consist pri­
marily of grocery stores, health plans, and student
cooperatives.
In the Brookings, S. Dak., area, the East
Central Co-op Council was organized to “ help
people of the area get a better understanding of
co-ops and assist local associations in keeping
their members informed.”

Legislation Affecting Cooperatives
Since only a small number of legislatures met in
1948, few laws affecting cooperatives were enacted.
These dealt with credit unions and with hospitaland medical-care associations.

Credit Unions
Massachusetts amended (ch. 65) its credit-union
law to raise the maximum amount of loan per­
mitted to be made by credit unions with assets of
$200,000 or over to $300 for unsecured loans and
to $500 for those on which security is given.
Chapter 509 authorized the establishment of a
retirement fund for credit-union employees by 15
or more credit unions having assets of $50,000 or
more each. The contributions of the credit unions
are limited to not more than the employee’s con­
tributions or 5 percent of his salary, whichever is
less. Retirement for age is 65 years, and for
disability any age after 10 years’ service. The
act also prescribes the formulas to be used in
computing contributions and the resultant an­
nuities.
New Jersey, by chapter 225, amended the creditunion law {a) to permit credit unions to invest in
shares and accounts of savings and loan associa­
tions which are covered by F D IC insurance, the
investment not to exceed the amount of such
insurance, (b) to permit the levying of fines on
delinquent loans at a rate not to exceed one-tenth
of the interest due on such loans, and (c) to raise
the maximum secured and unsecured loan allowed
to $300 (formerly $100).




By chapter 290, Virginia reduced from 20 to 10
percent of gross earnings the amount required to
be put into the reserve fund, and added the further
proviso that this was required only until the total
reserve was equal to 20 percent of the total assets
exclusive of reserves. Losses from any source are
to be charged to the reserve fund, and amounts
later recovered on such losses are to be repaid to it
until the total reaches 20 percent of assets minus
reserves.

Medical and Hospital Care
Three States (Kentucky, Mississippi, and South
Carolina) passed medical-care laws which are of
interest to cooperatives.
A Kentucky act (K y. Rev. Stats., 1948, secs.
303.020-030.080) authorized the formation of non­
profit corporations to contract with hospitals for
service to their members, on a prepayment plan.
Such organizations are required to obtain a cer­
tificate of “ convenience and necessity” and must
deposit $5,000 in cash or bond, for faithful per­
formance of contract. Unlike the 1946 act author­
izing the formation of medical-service plans,12 this
law does not require that the organization be
“ administered by doctors of medicine.” Cooper­
atives, therefore, could probably be formed under
it.
In Mississippi (ch. 349) seven or more persons
may form a nonprofit association to contract for
J* See XT. S. Bureau of Labor Statistics Bull. N o. 904, p. 33.

12
hospital, medical, and/or surgical service for mem­
bers. These are to be nonstock associations,
operating on a prepayment basis, with the directors
elected by the members. The directors are em­
powered to write the bylaws and may permit
proxy voting. All contracts negotiated by such
organizations are subject to review by the State
Commissioner of Insurance. These associations
are exempt from taxation as being charitable
and benevolent institutions.
D octor-controlled plans are authorized under
a 1948 South Carolina law (Act No. 713). This
provides for prepayment, nonstock, nonprofit cor­
porations to provide hospital and/or medical
service. In order to receive a license, an associa­
tion must show that at least 50 percent of the
physicians in the area to be served are partici­
pants. Such physicians are to be compensated at
rates determined by the board of trustees of the

corporation. The board is to be composed of
representatives of the public and of the subscribermembers, and other persons nominated by the
South Carolina Medical Association; the propor­
tionate representation is not specified, but at least
two-thirds of the directors must have the approval
of the State Medical Association. Such organiza­
tions operate under the State Commissioner of
Insurance and are exempt from taxation as chari­
table and benevolent institutions.

Other
Another Kentucky law of interest to cooperators
is one (K y. Rev. Stats., 1948, sec. 303.090) which
specifies that associations writing burial contracts
or policies are forbidden to pay such benefits in
service; payment must be in cash. They must
post a deposit of $100,000 in securities, for faithful
performance.

Education, Recreation, Publicity
In the cooperative movement, education and
recreation usually are combined. Typical were
the recreation schools sponsored in 1948 by Con­
sumers Cooperative Association (Missouri), East­
ern Cooperatives, Inc. (New York), and the Co­
operative Society for Recreational Education;
also the “ institutes” for cooperative members and
directors, labor groups, etc., held in several regions,
usually under the sponsorship of regional whole­
sales or educational federations. In all of these,
leadership training in social and cooperative
activities was accompanied by cooperative living
and recreation at a college campus or a summer
camp.
During the year a joint conference for closer
coordination between church and cooperative
groups was held in Chicago. Rochdale Institute
(national cooperative training organization) spon­
sored three labor-cooperative institutes in Wis­
consin, Michigan, and Pennsylvania. Specially
for the training of cooperative employees were
the in-service programs offered by Eastern Co­
operatives, Inc., and 14 courses given by Con­
sumers’ Cooperative Association. The Cooper­
ative Correspondence School, having found from
experience that the most effective use of its
material was in group study, announced that in.




the winter of 1948-49 such study groups would be
emphasized. The school also offered a course
for the instruction of cooperative directors.
Recreational tours, which also inform the par­
ticipants on the various aspects of the cooperative
movement, were arranged not only by the Co­
operative League but also by the regional whole­
sales. These included visits to cooperatives in
the United States, Canada, and Europe. Co­
operative vacation camps for adults are held
yearly in many places throughout the United
States, from the District of Columbia to Cali­
fornia. Several camps— in Minnesota, W iscon­
sin, and Michigan— are owned by cooperatives.
The other sites are rented, each year, by recrea­
tion associations. In several places, notably the
Lake Superior region and New York, special
camps are conducted for children of cooperators.
Announcement was made by the three regional
wholesales now controlling Premier Petroleum
Co. (Longview, Tex.) that the annual golf
tournament held on the golf course owned by the
company will be continued under cooperative
sponsorship. The Cooperative Symphony Orches­
tra, organized in Chicago in 1946, announced a
series of three concerts for the 1948-49 season.
A rural network of 6 FM stations, sponsored by

13
10 farm organizations (including Cooperative
G. L. F. Exchange, Ithaca, N . Y .) began broadcastingin the spring of 1948. Another cooperative radio
station 18— W CFM in Washington, D . C.— went
on the air on October 20. Articles of incorpora­
tion for a radio station were filed in June 1948 by
the Nebraska Rural Radio Association; funds
were still being raised at the end of the year.
Central Cooperative Wholesale (Superior, W is.),
l# The first such station was W R F D , sponsored by Farm Bureau Cooper­
ative Association, Columbus, Ohio, which went on the air on September 8,
1947.

which had bought time on a local radio station,
discontinued its program on June 1. Reasons
given were the necessity for reducing expenses
and the reduction in member contributions to­
ward the cost of the program.
Midland Cooperator (organ of Midland Co­
operative Wholesale, Minneapolis), previously
published twice a month, became a weekly in
October 1948. The only other cooperative weekly
prior to that time was the Cooperative Builder,
published by Central Cooperative Wholesale.

Labor and Cooperatives
In Virginia, Minn., the employees of the Vir­
ginia Cooperative Society organized in October
1948 what was said to be the first union for retail
clerks in that town. It was announced, in the
fall of 1948, that henceforth all the meat products
marketed by the Washington Cooperative Farm­
ers Association (Seattle, Wash.) would bear the
union label of the AFL Amalgamated M eat Cut­
ters and Butcher Workmen.
In mid-1948, during a strike of employees in a
foundry in Muskegon, M ich., the union kitchen
from which the strikers were fed was supplied with
groceries from the local cooperative association.
At the 1948 convention of the American Federa­
tion of Labor, a section of the report of the execu­
tive council, suggesting that union groups might
profit by cooperative warehousing of goods, was
adopted by unanimous vote.
The local cooperatives sponsored by members
of organized labor, and the joint union-cooperative
mstitutes have already been mentioned (pp. 3
and 12).

Retirement Plans
A survey by Central Cooperative Wholesale
revealed that one of the chief reasons for labor
turn-over among cooperative managers was inse­
curity in the job and in old age.
As a step toward meeting the latter situation,
at least five regional wholesales have adopted re­
tirement plans (supplementary to the annuities
under the Social Security A ct). These associations
are Midland Cooperative Wholesale,14 Farmers
h Membership in this plan is also available to Central Cooperative W hole­
sale and its affiliates.




Union Central Exchange, Consumers Cooperative
Association (Missouri), Pennsylvania Farm Bu­
reau CoQperative Association, and Pacific Supply
Cooperative. Two of the plans— those of Midland
Cooperative Wholesale and the Pennsylvania
Farm Bureau cooperative Association— date from
1944, that of Farmers Union Central Exchange
from December 1945, that of Consumers Coopera­
tive Association from September 1946, and that
of Pacific Supply Cooperative from December
1947.
The Pennsylvania plan covers only employees
of the wholesale and of the Pennsylvania Farm
Bureau Federation and that of FUCE only the
wholesale's workers; the others are open not only
to their own employees but also to those of their
subsidiaries and of the affiliated local cooperatives.
The normal age of retirement is 65 years, but
may be earlier (in case of disability) or later under
special circumstances. All but the FUCE plan
accept new members only on the anniversary date
of the plan. In that plan, only the wholesale con­
tributes; in the others, both employer and em­
ployees share the cost. The FUCE plan covers
all permanent employees from the date of adop­
tion of the plan; in all the others, acceptance is
voluntary for the employees, except that in the
CCA scheme, participation is required for all em­
ployees hired after September 1, 1946,
In Midland an employee may join after 6
months' service; in Pennsylvania, after 1 year; in
CCA, after 2 years' continuous service; and in
PSC, after 2% years' service. However, in the
PSC plan, no employee is accepted if over 55%
years of age, and women must also be over 29%
years of age.

14
The employee’s contribution in Midland is 3
percent o f his “ wage classification” (monthly
wage, with credit for years of service), and in
CCA 3.75 percent o f that classification. Under
the PSC plan the payment varies with age, but
is set at a figure designed to purchase 48 percent
of the annuity. Under the Pennsylvania plan,
the employee pays 2 % percent on his annual earn­
ings of $3,000 or less, plus 5 percent on all over
$3,000; however, the 2% percent is covered by an
annual bonus which the employing cooperative
(Pennsylvania Farm Bureau Cooperative Associ­
ation or Pennsylvania Farm Bureau Federation)
pledges itself to pay him. The worker makes
no contribution to the FUCE plan.
Under the Midland and CCA plans, the em­
ployer is required to contribute “ enough to make
the plan actuarially sound” (subject to a maxi­
mum, in CCA, of 6 percent of pay roll); their
1948 contributions averaged 4.57202 and 6.7 per­
cent respectively, of the pay roll for the participat­
ing employees. (As a percent of the entire pay
roll, it was 3.38 and 4.6.) In Pennsylvania, the
plan has cost about 4 percent of pay roll for
participants and about 2K percent of the entire
pay roll. Under the FUCE plan, the wholesale
contributes 5 percent of its net earnings for the
year (after payment of income taxes and interest
on stock). Under the CCA plan the wholesale
pays additionally, for administration, 8 percent
of the combined employer and employee con­
tributions; if actual costs are less than this amount,
savings are returned as “ patronage refunds” (in
1948 the savings so returned totaled $32,191).
Under the Pacific plan, the cooperative pays
varying amounts (according to the wage and age
classifications of employees), but its contributions
are set at a figure expected to cover the purchase
o f 52 percent of the resultant annuity during the
period of the employee’s participation; for years
of service prior to the adoption of the plan it
pays the full cost.
The FUCE contributions are paid to and ad­
ministered by a local bank acting as trustee.
The CCA fund is operated under a self-adminis­
tered trustee plan; until 1948 this was also true
of the Midland plan, but in September 1948 the
plan was insured with the Mutual Service Life
Insurance C o.15 In the Pennsylvania plan the
benefits are purchased under a collective policy




with the Ohio Farm Bureau Life Insurance Co.,
and in Pacific under a policy with the Northwest­
ern Mutual Life Insurance Co.
Benefits include the following:
(a) Monthly income.— In CCA the monthly
benefit equals (a) for service prior to 1946 (year
plan started) 1 percent of the employee’s wage
classification multiplied by his years o f service,
plus (6) for service after 1946, 1% percent of his
wage multiplied by his years of contribution;
this amounts to about half pay after 30-35 years’
service. In FUCE it consists of whatever annuity
is purchasable at the time of retirement with the
amount standing to the employee’s credit (at
the end of each year the employee is credited with
one unit of credit for each $100 of base pay earned
that year; the value of the unit varies, of course,
with the amount placed in the retirement trust,
which in turn depends on the earnings o f the
wholesale for the year). In Midland it consists
of 1 percent of the average monthly wage multi­
plied by the years of service. In Pennsylvania the
employee receives $1 for every $30 o f contribu­
tions. In Pacific he receives 25 percent of his
average monthly salary, plus half o f the salary
during the period of participation— estimated to
figure out at about 40 percent of the average salary.
(5) Survivors’ benefits.— Under the CCA and
Pennsylvania plans an employee may provide for
a survivorship annuity to be paid to a designated
beneficiary in case of his death. In M idland, at
the option of the employee, survivors may benefit
in one o f the following ways: (1) B y a monthly
annuity with 5 or 10 years “ certain” ; i. e., in
such case, if the participant dies in his sixtyseventh, sixty-ninth, or seventy-first year, his
beneficiary would receive the same monthly bene­
fit for the following 8, 6, or 3 years respectively;
(2) a monthly joint and survivorship annuity
under which payments are made while both
participant and beneficiary are living and after
the death o f either are continued in the same
amount to the survivor; and (3) a monthly joint
and two-thirds survivorship annuity under which
payments are made while both the participant
and beneficiary are living and after the death of
either are continued in two-thirds of the original
amount to the survivor. Under the Pacific plan
the annuity of a pensioner who dies prior to age
75 is paid to his survivors until he would have

"See p. #.

15
reached that age or until a total of 10 years’
benefits have been paid. Under the FUCE plan,
the survivors o f an employee dying before re­
tirement receive the full amount standing to his
credit at the time of his death.
(c) Refund o f contributions in case the em­
ployee leaves the cooperative employment before
reaching retirement age. Interest at the rate of
2 percent is paid under the CCA and Midland
plans. Under the CCA and Pacific schemes, an
employee who resigns receives also part o f the
employer’s contributions, the amount increasing
with his length of service. Under the FUCE
plan, to which the employees do not contribute,
a resigning employee receives 50 percent of the
wholesale’s contribution after 3 years’ participa­
tion, 75 percent after 4 years, and 100 percent
after 5 or more years. The Pennsylvania and
CCA plans also offer the employee the option
o f leaving his contributions in the fund and of
receiving at 65 an annuity of whatever amount
these will purchase.
The Midland policy carries two additional
features: (a) Life insurance in the amount of a
year’s salary in case o f death before reaching
retirement age, and (5) in case of total disability
before age 65, the employee’s contribution to the
plan will be paid thereafter by the insurance
company.
On September 30, 1948, the Midland pension
fund totaled $652,224. Under the Midland plan

the employees and cooperatives participating
have increased as follows:
Employees1
Oct.
Oct.
Oct.
Oct.

1, 1945...................

819
1, 1946................... 1,451
1, 1947................... 1,736
1, 1948......... _____ 2,048

Cooperatives1

72
118
131
141

in c lu d e s employees of Central Cooperative Wholesale and its partici­
pating affiliates.

During the year ending September 1, 1948, the
CCA plan had as members only the wholesale,
its subsidiaries, and 17 local cooperatives. The
participating employees numbered 821, o f whom
62 were employees of retail associations and 759
were employees of CCA. The wholesale stated
that “ more than 95 percent of CCA employees
eligible to participate * * * are enrolled.”
The amount in the fund increased from $250,000 in
1947 to $659,369 in 1948. On September 1, 1948,
an additional 21 associations joined the plan,
raising the total participating to 40; on that date
the number of CCA affiliates was 1,411.

Bonus Plans
Another method of making cooperative employ­
ment more attractive is the practice of paying
an annual bonus to the employees. Reports
indicate that such plans are becoming especially
popular among the members of Pacific Supply
Cooperative in Idaho, Oregon, and Washington.

International Developments
The outstanding event in international coopera­
tion was the holding o f the Seventeenth Congress
o f the International Cooperative Alliance in
Prague, Czechoslovakia, September 27-30, 1948.
(See M onthly Labor Review, December 1948.)
Reports to that congress and to the subsequent
annual meeting of the Cooperative League of the
USA revealed that 27 national cooperative organi­
zations in 21 countries had joined the Interna­
tional Cooperative Petroleum Association formed
in 1946. In the United States, National Cooper­
atives and four regional wholesales are members.
The first 7 months’ business of the association,
amounting to $560,088, yielded savings of $19,355,
further increased by $97,000 in patronage refunds
from Consumers Cooperative Association (M is-




souri) from which most of the petroleum purchases
were made.
A t the congress o f the Cooperative League of
the USA, it was reported that the Freedom Fund
of the League received and distributed $46,180
in relief and in grants for rehabilitation to cooper­
atives and their members in 16 countries inl948.
In addition, many cooperatives in the United
States and their members contributed CARE
packages for cooperators abroad, and by October
15 States had each arranged for a carload of food
contributed by farmer cooperatives to be sent
abroad during the holiday season. During the
winter of 1948-49 an additional project got under
way, to provide seeds for family gardens o f foreign
cooperators.
II. S. 60YERNMENT PRINTING OFFICE < 1949