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Developments in the
Consumers’ Cooperative Movement
in 1947
Bulletin N o. 932
U N IT E D S T A T E S D E P A R T M E N T O F L A B O R
L. B. Schwellenbach, Secretary
BUREAU OF LABOR STATISTICS
Ewan Clague, Commissioner
For sale by the Superintendent o f Documents, U. S. Government Printing Office, Washington 25, D . G.
P rice 15 cent
Letter of Transm ittal
U nited S tates D epartment of L abor,
B ureau of L abor Statistics ,
Washington, D. O., April 15, 1948.
The Secretary
of
L abor :
I have the honor to transmit herewith a report on developments in the consumers’ coop
erative movement in 1947, prepared by Florence E. Parker of the Bureau’s Office o f Labor
Economics.
E w a n Clague, Commissioner.
Hon. L. B.
SCHWELLENBACH,
Secretary o f Labor.
Contents
Page
Developments among local associations_____________________________________________
Housing associations------------------------------------------------------------------------------------Medical and hospital associations___________________________________________
Other service associations___________________________________________________
Central structure and f u n c t i o n s ------- -----------------------Commercial federations--------------------------------------------------------------------------------------Joint activities of wholesales________________________________________________
Regional wholesales_________________________________________________________
District wholesales__________________________________________________________
Service federations__________________________________________________________
-Problems of structure and organization__________________________________________
Insurance associations___________________________________________________________
Relationships with other groups--------------------------------------------------------------------------Rural-urban relationships___________________________________________________
Churches and other groups--------------------------------------------------------------------------Education, recreation, and publicity-------------------------------------------------------------------Laws and court decisions------------------------------------------------------------------------------------State legislation--------------------------------------------Court decisions_______________________________________________________________
International developments-------------------------------------------------------------------------------------
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Developments in Consumers’ Cooperative
Movement in 1947
T h e outstanding development in the coopera
tive m ovem ent during 1947 was undoubtedly the
unusual and widespread interest displayed b y
organized labor. This was awakened and spurred
b y pronouncements from the Am erican Federation
o f Labor and the Congress of Industrial Organiza
tions, favoring cooperatives as a means of helping
to hold the economic gains m ade through collective
bargaining. R esults have been tw ofold: N ew co
operatives to provide n ot only food b u t also (less
frequently) m edical care and housing; and greater
understanding and m utual respect between the
local leaders of the tw o m ovem ents.
N ex t in im portance was the attack upon the
cooperative m ovem ent centering on the tax
exem ptions granted to farm er cooperatives in the
Federal incom e-tax law ,1 as bestow ing an unfair
business advantage. T h e m atter was taken up
in hearings b y
tw o Congressional com m ittees.
N o bills have thus far been introduced to change
wholesales.
E ven w ith increased sales, how ever,
1947 proved to be a difficult period for those han
dling groceries only or m ainly, and a t least tw o
sustained a loss on the year’s operations.
A m on g
the wholesales which have gone into petroleum re
fining, difficulties in obtaining sufficient supplies o f
crude oil m ade it difficult or im possible to operate
refineries a t
capacity, and resulted in further
efforts toward ownership or control o f sources o f
supply.
Developments Among Local Associations
Although the
1947 experience was generally
good am ong the distributive associations, a num
ber of liquidations occurred am ong the urban asso
ciations handling groceries only.
These resulted
in m ost cases from losses on less-desirable inven
tory acquired during the period o f com m odity
the law .
A s regards operating results, 1947 appears to
shortages, higher operating costs, price uncer
have been a fairly good year for consumers’
cooperatives. T he petroleum associations had
one of the best periods in their history, in spite o f
shortages o f supplies in som e areas. A m ong the
other distributive cooperatives, those w ith the
greatest diversity o f business seem to have m ade
the best showing.
Am ong the service associations, student co
operatives were again expanding, and several
m ent.
bought new buildings to house their members.
tainties, and unsuspected weakness in m anage
A considerable part o f these liquidations
occurred am ong the eastern associations, b u t there
were som e am ong the consumers’ cooperatives o f
farm er membership in the M id d le W e st also.
Others are reported to be in financial difficulties.
Am ong this latter group, som e are asking for
m anagem ent assistance from either the regional
wholesale or the area federation.
T h is situation is
leading to renewed consideration o f closer integra
Prelim inary reports also indicate a substantial
tion n ot only am ong associations in a m etro
pick-up in business am ong the credit unions and
politan area, b u t also between retail associations
insurance
and the regional wholesale.
associations.
H ousing
and
medical
care— two subjects o f great current interest—
both showed some progress in 1947.
Record sales and substantial earnings are re
ported for a num ber of the regional cooperative i
i Cooperatives of nonfarm membership have no exemptions.
784485°—48
In spite o f econom ic uncertainties, how ever,
m any cooperatives opened new stores or new
departm ents, and added new services.
A num ber
of mergers and negotiations for further action in
this regard were also reported.
Num erous new
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DEVELOPMENTS I N CONSUMERS’ COOPERATIVES
associations were form ed, including a num ber of
veterans’ cooperatives. Some of the latter are
Housing Associations .— H ousing projects reported
grocery
associations for which data are available the size
of project ranged from 30 to 1,800 dwellings, with
cooperatives
to
serve
the fam ilies
of
student ex-servicem en; m ost of them w ill probably
be tem porary only and will dissolve when the
students leave, on graduation.
A notew orthy feature of the new growth has
been the widespread participation b y organized
labor, greater than a t any tim e during the nearly
30 years in. which the Bureau of Labor Statistics
has been follow ing the developm ent of the cooper
ative m ovem ent. Although, in m any cases, noth
ing concrete m ay result from this interest, reports
indicate th at from Verm ont to Florida, and from
N ew Jersey to the Pacific C oast, local unions and
their m em bers are taking action.
In some cases, medical care or housing is the
service proposed. Generally, however, the aim is
a full-scale cooperative store or even supermarket,
and the collection in advance of funds sufficient
to operate it. In the meantime, high living costs
have led to case-lot sales at union halls and head
quarters, or at depots opened for the purpose.
Such sales have been widely reported through
out the East and Midwest.
Cooperative leaders, though welcoming labor
participation in the cooperative movement, have
expressed uneasiness over the case-lot sales (or
buying club) idea, for a number of reasons:
(1) Such sales lend them selves only to staple
groceries (m ainly canned goods), whereas it is the
perishables that have increased m ost in price;
(2) the grocery business is one of narrow m argins,
and it is feared th at union m em bers expect greater
savings than are possible; (3) unless sales are m ade
a t prices sufficiently high to provide n ot only
savings for the purchaser, bu t also a surplus from
which to build capital for a full-fledged business,
nothing perm anent results; and (4) if sales are
are of all sizes and in all stages of progress.
For
an average of about 350. Som e associations had
obtained the full number of m em bers for which
the project was designed; others were still in the
recruiting stage.
Controls on building m aterials were lifted in
June 1947, and this enabled other than veterans’
groups to proceed w ith construction, bu t continued
high prices were a deterrent. Another hindrance
was the cessation of sale of public housing to co
operatives on a long-term m ortgage b asis; the all
cash requirement adopted put a brake on nego
tiations unless private financing could be found.
T he Adm inistrator of the Federal H ousing and
H om e Finance A gency announced late in the year
th at, in the disposal of Governm ent-ow ned hous
ing, preference would be given to veterans’ coop
eratives in cases where it is n ot feasible to subdivide
a project for sale to individual buyers.
H ousing associations were reported to be nego
tiating for the purchase of G overnm ent-built
houses in Com pton, C alif. (500 u nits), Audubon,
N . J. (531 u nits), andG reenbelt, M d . (1 ,8 0 0 u n its).
In W ashington, D . C ., a veterans’ cooperative
which had contracted for a 748-u nit developm ent
obtained final ratification of the sale early in 1948.
Veterans’ groups are also sponsoring new
projects in a num ber of places. T hus, in N ew
Brunswick, N . J ., a veterans’ cooperative, form ed
in the spring of 1946, bought a tract of 54 acres
of rolling land which it subdivided into 206 plots
of 70 b y 110 feet, leaving 2 acres for a business
area and 9 acres for parks and playgrounds.
Ground was broken in January 1947. B y A u gust,
16 houses had been com pleted and were occupied,
and 46 others were under construction; the asso
made a t cost, or below the regular current retail
ciation had 167 m em bers and a w aiting fist (con
prices, the antagonism o f local retailers is bound
struction had had to be slowed dow n u ntil the
to result.
necessary utilities could be installed).
Cooperators are therefore endeavoring to see
that distributions take place through cooperative
channels (to maintain the open-membership prin
ciple); that sales are made at or near current
prices, with patronage refunds at stated intervals
and the rest of the earnings put into a reserve for
a future store; and that distribution is accom
panied by educational work, to promote member
ship in a permanent cooperative.
the association is reported to have run into finan
cial difficulties later in the year. T he m utual-
H ow ever,
ownership plan was abandoned, the members in
the com pleted houses were to be given title to
their dwellings, and a t la st reports new construc
tion had been stopped.
is uncertain.
T h e future of the project
A t the Circle Pines development near New
Brighton, Minn.— a project planned to provide
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DEVELOPMENTS I N CONSUMERS’ COOPERATIVES
som e 1,800 homes eventually— about 55 dwellings
were expected to be ready for occupancy b y the
end of 1947. T he cooperative shopping center
was opened in Septem ber.
In Illinois, a cooperative association had com
pleted the roads in its 60-fam ily developm ent, 22
miles w est o f Chicago, and 2 of the 45 m em ber
fam ilies had begun construction of their hom es.
In Indiana, m em bers of an autom obile workers’
union organized a housing cooperative in 1946;
b y A ugust 1947 it had 467 m em bers and was
nearing construction. L abor organizations are
also behind housing projects being developed in
public relations of cooperative housing groups in
the State. T he housing associations, five of which
are m em bers of the wholesale, agreed to finance a
housing coordinator on its staff. A third con
ference, in N ew Y ork , considered w ays in which
the regional wholesale’s Q u sa Service (giving realestate brokerage and insurance service) and its
housing consultant could be utilized m ore exten
sively b y housing groups.
M edical and H ospital Associations.
m ade as regards m edical care.
Progress was
R eports indicate
T he building contract was let in N ovem
th at a t least 20 cooperative hospitals were in
operation a t the end o f 1947, as compared w ith 9
a t the end o f the preceding year. Three other
new associations had buildings in process o f con
struction, and several o f the older organizations
ber.
Cooperative apartm ent buildings were planned
enlarged their facilities. A t least 30 other associa
tions were under w ay, conducting membership
or under w ay in a few cases. In N ew Y ork ,
Am algam ated H ousing Corporation finished con
drives and collecting funds, but the Bureau has
received no reports regarding them . Texas was
struction o f a new building— its fifth project in
the Bronx— which provided dwellings for the
fam ilies o f 30 veterans. Several m onths earlier it
announced plans for another developm ent, also in
the B ronx, to consist o f seven buildings providing
som e 700 apartm ents. T his association, as re
ported previously,2 is carrying on a slum -clearance
and redevelopm ent project in downtown M anh at
tan, which w ill contain nearly 800 apartm ents;
ground was broken in m id-N ovem ber 1947.
still the leading S tate (30 associations chartered),
w ith the next States— M innesota (7 associations)
and Oregon (5 associations)— far behind. R eports
from W isconsin indicate th at the 1947 law author
izing the form ation o f cooperative m edical-care
associations w ill result in activity there.
A m ong the associations w ith hospitals in opera
K enosha and R acine, W is. In the latter city, b y
A ugust 1947, some 200 members had been secured
and financing had been obtained for a 370-house
project.
In addition to the above-m entioned associations
which have progressed to the construction stage,
others (m ore numerous) had b y the end of the
year drawn up their com m unity and architectural
plans and some were engaged in im proving the
site, preparatory to construction.
Several regional housing conferences were held
during the year, for the exchange of experience
and inform ation. A t one o f these, held in Racine,
W is ., organization of the N orth Central C o
operative H ousing Service was com pleted. A t
tion, the reported membership ranged from about
400 to 2 ,5 0 0 , w ith an average o f about 1 ,350.
T h e num ber of persons (members and dependents)
eligible for treatm ent would be three or four times
these figures.
I t is estim ated th at organizing a cooperative
hospital association requires from IK to 2 years.
T he large am ount o f capital needed for equipm ent
and building, the technical knowledge required,8
and the large membership base th at is essential
for efficient operation are delaying factors. In a t
least two cases, it has been reported th at these,
plus local opposition from noncooperative sources,
have caused the project to be dropped.
first only an inform ation clearing house, the new
T he Cooperative H ealth Federation o f Am erica
regional is legally empowered also to render direct
held its first annual m eeting a t E lk C ity , O k la.,
service in coordinating purchases, and to do re
in Septem ber 1947.
search on building m aterials, m ethods, and prob
association’s bylaw s to perm it associate members
lem s.
(including labor unions, regional cooperatives, and
farm organizations) to nom inate 5 persons for
At
another, in California,
the regional
cooperative wholesale was chosen to serve as
coordinating center for financing, purchasing, and
* See Bureau o f Labor Statistics Bulletin N o. 904 (p. 5).
T he convention amended the
membership on the board of directors, subject to 3
3 A id along this line is now said to be available through the Cooperative
Health Federation of America, 343 S. Dearborn Street, Chicago 4, 111.
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DEVELOPMENTS I N CONSUMERS’ COOPERATIVES
approval b y the other board m em bers. T he m eet
ing m apped out a program of technical aid to new
groups on legal, architectural, financial, and per
sonnel problem s, and o f health education through
distribution of leaflets. A link between this
branch of the cooperative m ovem ent and the Co
operative League had already been forged when
the secretary of the latter accepted the position
of executive director of the federation.
Other Service Associations.
N o general statistics
are available as y e t on the 1947 operations. On
the basis o f scattered reports it appears th at, w ith
the lifting o f credit lim itations and the return of
higher-priced consumer goods to the m arket,
credit-union business took a sharp upward spurt.
T he insurance organizations connected w ith the
consumers’ cooperative m ovem ent also reported
large increases in business, as well as the addition
o f new features and benefits. T he organizations
writing autom obile insurance, however, noted in
creased accident claim s, necessitating higher pre
m ium rates in som e cases.
Central Structure and Functions
ings of N ational m em bers in M arch and M a y
disclosed wide opposition to weakening the whole
sale and also th at this opposition came from m em
ber regionals which were the largest patrons o f the
departm ent in question. T he proposal was tabled
a t both m eetings, and the M a y m eeting adopted a
budget providing $96,000 for education in 1 9 4 7 -4 8
(as compared w ith $48,000 in the preceding year),
subject to the approval of the directors of the
m em ber regionals. I t was proposed th at the
m oney be given to the League, which would then
take over again the educational work and em
ployee training, on a contract basis. T h is pro
posal was agreed to b y the League, and becam e
effective on October 1, 1947.
A further step aw ay from the 1946 decisions w as
taken a t a m eeting of N ation al’s executive board
on January 8 , 1948, when it voted to sell its
chem ical-products plant, m anufacturing cosm etics,
household cleansers, and other chem ical products.
T he reason given was “ insufficient. N ation-w ide
cooperatively organized dem and” for these prod
ucts.4* Opposition to this action is reported to
have developed am ong some of N ation al’s m em
bers, and the m atter m ay be reconsidered.
Tw o im portant steps had been taken in the
cooperative m ovem ent in 1946: (1) T he Coopera
tive Congress voted to m ake N ational Coopera
tives the federation for the distributive branch of
the consumers’ cooperative m ovem ent, com bining
commercial activities w ith the em ployee-training,
educational, and publicity work form erly done b y
the Cooperative League of the U S A . T he latter
was to become a national organization for all
branches of the cooperative m ovem ent, and also
carry on research, com pile statistics, and do pub
lic-relations work. (2) A t a m eeting of N ational’s
T his series of acts alm ost com pletely nullifies
the 1946 decisions, except th at N ational w ill give
som e direct financial assistance to League educa
tional work and th at the League remains an over
all federation.
board of directors, im m ediately preceding
congress, it was decided th at, in future, production
dues-paying individuals as w ell as regional organi
zations.
on a national scale would also be centered in
N ation al.
C om m ercial F ed era tio n s
the
T h e League, m eantim e, has appealed to in
dividual cooperators for contributions to enable it
to broaden its educational work on housing, m edi
cal care, student cooperatives, etc., and to assist in
developing cooperatives in areas th at are now
“ cooperative deserts.”
Cooperative leaders have
also suggested th at League membership be open to
E arly in 1947, how ever, a m ove was m ade to
Joint A ctiv ities o f "Wholesales.— N ational Farm
divorce from N ational the productive departm ent
in which hot-w ater heaters and m ilking machines
M achinery Cooperative, owned b y 12 regional
were m anufactured.
T his action, it later ap
peared, resulted from the opinion, on the part of the
producer-minded members o f the organization,
th at the earnings of this departm ent (which had
been the m ost profitable operation of N ational)
should n ot be used to assist in financing the pro
m otion of consumer cooperation.
H ow ever, m eet
wholesales, built a large addition to its cultivator
plant at Bellevue, O h io, and authorized the erec
tion o f a foundry building.
4 T he same meeting voted to suspend publication o f the Co-op Magazine,
started in January 1945, because of the “ diversity o f needs for technical and
occupational information** and the consequent “ inability o f the C o-op M aga
zine to do a thoroughly satisfactory jo b as a Nation-wide technical journal**
(Cooperative Builder, Superior, W is., Jan. 22,1948).
DEVELOPMENTS IN CONSUMERS’ COOPERATIVES
The National Cooperative Refinery Association,
owned by five regional wholesales, purchased con
trol in a company from which it had previously
been buying some o f its crude oil. The addition o f
the more than 200 wells thus acquired, plus a
number o f new wells brought in later, raised its
total to about 300 by October 1947. It expected to
add thereafter two to four new wells per month.5
B y mid-1947 it was reported to own or control 60
percent o f its crude-oil sources.6 Its refinery was
handling about 20,000 barrels o f crude per day.
The Millers Creek Coal Cooperative, organized
by three wholesales in 1946, was by the fa ll o f
1947 producing 1,000 tons per day at one mine and
was starting production at another.
Northwest Cooperative M ills (owned by four
cooperatives) opened up two new productive units
during 1947—a feed m ill and research laboratory
in St. Paul and a fertilizer plant in W inona,
Minn.
Regional Wholesales.—Associated Cooperatives,
California, dropped the dealer-agent program
which had been adopted to accelerate the organiza
tion o f cooperatives in farm areas.7 The reason
given was that the arrangement had become un
necessary because o f the rate at which rural co
operatives, independent o f the dealer program,
had developed. The wholesale’s directors also
voted to dispose o f the association’s interest in a
privately owned lumber mill. This action was
attributed to changed market conditions and the
unwillingness o f the wholesale to provide the ad
ditional capital that would be needed.
The annual meeting o f another grocery whole
sale, Central States Cooperatives (Illin ois), au
thorized its board o f directors “ to begin—on an
experimental basis—a complete management serv
ice to be provided by contract for those member
associations which voluntarily agree to accept it.”
This association already provided bookkeeping
and auditing service on the same basis. Late in
1947 it decided to open a branch warehouse in
Detroit to supply cooperatives and unions in that
area, when sufficient capital had been subscribed
locally to finance it. By early November, nine
union locals had subscribed $13,560 toward a goal
o f $30,000. Efforts to expand the business opera
6 N eb ra sk a C o o p e ra to r (O m a h a ), O c to b e r 1, 1947.
• C o o p e r a tiv e B u ild e r (S u p e rio r, W i s .), A u g u st 14, 1947.
f S ee B u rea u o f L a b o r S ta tis tic s B u lle tin N o. 9 04 , p . 17.
5
tions in farm supplies resulted in considerably in
creased patronage, mainly from farmers’ coopera
tives not previously patrons.
Indiana Farm Bureau Cooperative Association
constructed an acidulating plant, with an annual
capacity o f 50,000 tons o f superphosphate. It was
reported that this association distributes over 20
percent o f the fertilizer used on Indiana farms,
and about 50 percent o f the high-analysis fertilizer.
Oil property with 80 wells producing an estimated
1,700 barrels daily, owned by the wholesale, was
sold to a private company to “ get capital for fur
ther oil exploration.” These “ explorations” re
sulted in five new wells in Indiana toward the
end o f the year. The wholesale will have the right
to all the output o f these wells as long as they pro
duce. It w ill also have additional output from
the same company, amounting to nearly 25 per
cent o f the previous supply. Its sawmill at Pine
Bluff, Ark., was sold along with some timber
tracts; the reason given was the declining avail
ability o f good pine timber in the area. Having
become part owner (w ith the Midland and Ohio
Farm Bureau wholesales) o f coal-mining property
in Kentucky, this wholesale also disposed o f its
part interest in another mine in the same State.
Strenuous effort to increase the supply o f crude
oil for cooperative petroleum refineries was made
during the year. D rilling on its oil leases in Ok
lahoma netted M idland Cooperative Wholesale
10 producing oil wells, bringing the total to 35’
by the end o f November 1947. The association
also has seven natural-gas wells. Midland an
nounced its intention o f selling its property in
Burkhardt, W is., purchased in 1944, as the ex
pansion o f Northwest Cooperative M ills’ feed fa
cilities had made the Burkhardt m ill “ unneces
sary and obsolete.”
Rapid expansion o f the propane (“liquefied” )
gas department o f Farmers Union Central E x
change was noted. This association had, by
February 1947, completed the construction o f
three bulk plants and a fourth was nearly done.
The association was looking forward to the possi
bility, in the future, o f manufacturing propane
gas in its petroleum refinery at Laurel, Mont. The
Exchange joined with the National Cooperative
Refinery Association in “ wildcat” drilling on the
7,000 acres jointly leased by them in northern
Montana.
6
DEVELOPMENTS I N CONSUMERS* COOPERATIVES
Consumers Cooperative Association (M o.)
bought the aviation-gasoline refinery it operated
for the Government at Coffeyville, Kans., making
it the first cooperative to produce high-octane fuel
and bringing to four the number o f petroleum
refineries owned by the association. Several
months later it completed the construction o f a
furfural unit adjacent to the new plant. As a
result o f the purchase o f a private oil corporation
(including 151 oil wells, and leases on 15,398 acres
o f land in K ansas), by November 1947 Consumers
Cooperative Association owned 955 oil wells and
controlled over 140,000 acres o f oil land. Its wells
were reported to be producing about 50 percent
o f the crude oil needed by its refineries. Not in
cluding the octane plant, in 1947 its petroleum
plants were producing at the rate o f 225 m illion
gallons o f refined fuels annually. Contract for a
iy2 m illion dollar dewaxing unit to be built at its
Coffeyville, Kans., refinery was signed early in
December.
In the 12-month period ending August 81,1947,
Consumers Cooperative Association shipped pe
troleum products valued at $2,293,946 to 23 central
cooperatives in 18 countries. This foreign trade
is expected to be taken over and expanded by the
new International Cooperative Petroleum As
sociation.
CCA was reported in the spring o f 1947 to be
planning to buy, jointly with a small Midwest pub
lishing company, a large paper m ill from which
to obtain newsprint for its semimonthly journal
and printing department. A site was purchased
and plans drawn for a branch warehouse in Den
ver. A t Eagle Grove, Iowa, a plant to produce
protein for feed was nearing completion at the
end o f 1947, and construction on a commercialfertilizer plant was started in December. A short
age o f boxcars forced a 2-week shut-down o f its
lumber m ill in Oregon. Altogether, some 70 per
cent o f the goods distributed to members were
produced either in CCA’s own plants or in those
in which it is a part owner. Its annual meeting
authorized the purchase o f a site near Kansas City
for a year-round school to house employee train
ing, member education, youth work, and coopera
tive conferences.
In Nebraska, the Farmers Union State Exchange
bought a privately owned oil-compounding plant
which had been its source o f supply for lubricating
oil for years. The annual meeting o f the associa
tion, held in February, directed the board to ob
tain a jobbing agency for lumber.
Early in 1947, the consolidation o f the Eastern
Cooperative Wholesale and Eastern Cooperative
League in New Y ork was completed, the new as
sociation being named Eastern Cooperatives, Inc.
Heavy operating losses and declining volume led
to a sweeping study o f this association, and re
sulted in a drastic reorganization. Discussion o f
possible ways o f increasing member patronage
and over-all efficiency led to proposals for an in
tegrated operation whereby affiliated associations
which accepted the plan would relinquish their
operation to the wholesale. The plan was still
under discussion at the end o f the year.
Ohio Farm Bureau Cooperative Association
acquired a new chick hatchery, in Jackson Center.
In February 1947 the wholesale bought a six-story
office building for its own use and that o f other
Farm Bureau activities. Several months later
plans were drawn for a new nine-story office build
ing for the Farm Bureau insurance companies, on
the site o f three buildings already occupied by
them.
Pacific Supply Cooperative announced that it
would build a branch warehouse in Spokane to
serve associations in Idaho and eastern Washing
ton. Central Cooperative Wholesale (W isconsin)
opened a branch warehouse in Escanaba, Mich.,
to serve the Upper Peninsula o f that State. Sev
eral wholesales amended their bylaws, to allow
member associations additional votes for increased
patronage.
District Wholesales.—Northland Cooperative Fed
eration (Bock, M ich.), announced plans for a bulk
distributing plant in Nadeau, using a nearby coop
erative as retailer; also fo r a bulk plant at Chatham
as soon as materials and tanks became available.
Eange Cooperative Federation acquired a new
mortuary in H ibbing (it was already operating
one in Virginia, M inn.). The federation also
bought a privately owned creamery containing
also 500 cold-storage lockers and space for the
construction o f as many more. Its annual meeting
authorized the purchase o f land for a summer
camp. Cooperative Services, at Maple, W is., be
gan the construction o f a new building to house
its office staff and repair shop.
DEVELOPMENTS I N CONSUMERS’ COOPERATIVES
Service Federations.— Expanding business forced
the Cooperative Publishing Association (Supe
rior, W is.) to buy additional typesetting and off
set equipment. Federated Co-ops, Inc., o f East
Central Minnesota added propane gas and storage
tanks to the lines handled. Connecticut Coopera
tive Federation—which has provided field super
visory service for the member associations, the
wholesaling o f produce, and a slaughtering plant
for the production o f meat—voted in 1947 to start
a bookkeeping and “ internal auditing” service.
P rob lem s o f S tru ctu re and O rgan ization
The current trend toward amalgamation o f
small associations into a single city-wide coopera
tive has been mentioned in previous reports. An
even broader basis o f integration has been pro
posed and is under consideration in at least two
areas—those serviced by Eastern Cooperatives,
Inc. (Atlantic Seaboard States), and Central
States Cooperatives (Illinois, Indiana, Ohio, and
southern M ichigan). Under the plan suggested,
the local associations which are members o f the
wholesale would enter into a contract with it
whereby management and operation would be con
trolled by the wholesale. The local associations
would retain control o f general policies, member
ship relations, etc., and could terminate the man
agement contract if and when they saw fit. It is
argued, in support o f the plan, that the arrange
ment would provide operating economies, uniform
pricing and business policies, and greater efficiency.
Opponents, on the other hand, express the fear
that removal o f active participation in actual oper
ation w ill lead to an attenuation o f interest by the
local members, with resultant loss o f loyalty and
patronage. There is some evidence that this has
already occurred in the locals o f certain city-wide
associations. The question o f the extent to which
centralization in the interest o f greater business
efficiency can be carried forward without sacrific
ing local and individual interest, participation, and
control—in short, the main democratic feature o f
the cooperative movement—is certain to receive
thorough debate throughout the movement. Also,
the results o f any steps taken in the direction o f
centralization are sure to receive close attention.
The question o f concentration is being pointed
up by the present operating difficulties o f numerous
7
small associations, especially those in urban areas,
already mentioned.
The possibilities o f merging Central Coopera
tive Wholesale (Superior, W is.), Midland Coop
erative Wholesale (Minneapolis, M inn.), and
Farmers Union Central Exchange (St. Paul,
Minn.) have been under discussion for several
years. Each o f three associations has appointed a
committee to study the matter and report back to
the directors, who must in turn refer the question
to the local associations. The three wholesales
have joined forces on a number o f occasions and
are now joint owners (with Farmers Union Grain
Terminal Association) o f Northwest Cooperative
Mills. Their combined distributive business in
1947 exceeded 59 m illion dollars.
In su ran ce A sso cia tio n s
Another step in the unification o f the coopera
tive insurance program in Minnesota and W is
consin was taken in 1947, with the passage o f
legislation in both States permitting the merger o f
existing companies. The Mutual Service L ife In
surance Co. (Minnesota) and Cooperators L ife
Mutual (W isconsin) merged under the name o f
the former. The next step, expected in 1948, w ill
be the merger o f two casualty organizations, Am er
ican Farmers Mutual (Minnesota) and Cooper
ative Insurance Mutual (W isconsin), into the
Mutual Service Casualty Co. The Central Mutual
Fire Insurance Co. w ill become the Mutual Fire
Insurance Co. The five companies, at the begin
ning o f 1947, were reported to have total admitted
assets o f 2y2 m illion dollars.
In Indiana, the Hoosier Farm Bureau L ife
Insurance Co. celebrated its tenth anniversary, and
announced nearly 50 m illion dollars o f insurance
in force.
In North Dakota, the Farmers Union Mutual
Insurance Co., started in A pril 1944, had at the end
o f 1947 nearly 35y2 m illion dollars o f insurance in
force. It writes fire, lightning, windstorm, and
hail insurance.
The National Farmers Union L ife Association,
started in 1938, in 1947 added to its coverage
patronage life insurance for members o f coopera
tives, as well as insurance against surgical bills.
It is attempting, according to its statement,8 to
develop “ basic life insurances which w ill lend
8 N a tio n a l U n io n F a rm e r (D e n v e r, C o lo .), D ecem b er 1 94 7 .
8
DEVELOPMENTS IN CONSUMERS’ COOPERATIVES
themselves readily” to the development o f co
operative funeral homes.9
The Associated Cooperative Fire Insurance
Companies o f Sullivan and A djoining Counties
(W oodridge, N. Y .) reported nearly 8 million dol
lars o f insurance in force at the end o f 1946.
R elation sh ip s W ith O th er G roups
Rural-Urban Relationships.— Closer farm and la
bor relationships, with emphasis upon cooperatives
as a common ground and as a means o f improving
the economic status o f both, were the subject o f
several conferences during the year. Among those
coming to the attention o f the Bureau were one
held at W inona, Minn., one at Toledo, Ohio, and
several at different places in Wisconsin. Co
operative, farmer, and labor representatives were
present at all o f them. Direct trading between
consumers’ cooperatives and farmers’ marketing
associations has been going on for years. In ad
dition, cooperatives with both farmers and towns
people in membership have been springing up in
creasingly. In 1947, new cooperatives o f this kind
were reported from Indiana, Michigan, Nebraska,
Oklahoma, and several places in California. Con
sumers’ cooperatives in Oakland and San Jose,
with union support, were reported to be spon
soring farmers’ markets; and near Inglewood it
was hoped that such a market, sponsored by labor
and veterans, would grow into a consumers’ co
operative. A t the Farmers Union State Exchange
store at Omaha, it was reported, the m ajority o f
the patrons are residents o f the city, not farmers.
A farm-supply cooperative and a city store in
Ogden, Utah, are reported to have merged.
This trend is receiving much discussion pro and
con within the cooperative movement. One group
points out the interdependence o f the farmers and
the city workers, with the prosperity o f the former
directly related to that o f the industrial workers,
and holds that there is like dependence between
the cooperatives o f the two groups. Commenting
on the present plight o f some o f the city coopera
tives, Midland Cooperator (issue o f December 24,
1947) states: “ It is a serious situation, and one
which deserves and is getting the concentrated
attention o f the leaders, not only o f city coopera9
S evera l F a rm e rs ’ U n ion c o o p e ra tiv e s a lre a d y p ro v id e fu n e ra l
se rvice.
tives, but also o f farmer cooperatives. F or it is
just as true as it ever was that cooperatives, as
a movement, w ill never amount to much until they
are as strong in the cities as they are in the rural
areas.” The membership o f National Coopera
tives and the Cooperative League includes farmer
and city cooperatives. That the consumer phi
losophy is not accepted entirely even in those or
ganizations, however, is indicated by the recent
developments, previously mentioned, in National.
A t the other extreme is the group which favors
relations between producers and consumers on a
business basis only: “ The consumer cooperative
as a customer o f a farmer cooperative is all right.
The relationship should be simply that o f buyer
and seller.” 10* This group opposes any partner
ship with consumers’ cooperatives, on the ground
that the “ farmers and consumers are on opposite
sides o f the national economy,” the one being a
seller and the other a buyer.11 Another point o f
objection on the part o f this group is that “ most
farmer cooperatives feel that the leadership o f
consumer cooperatives is too much concerned in
social reform .” 10
Churches and Other Groups.—The year 1947
saw the form ation o f the Catholic Council for
Cooperative Development, an organization de
signed to coordinate Catholic cooperative activi
ties. The headquarters o f the Council w ill be in
Chicago. Early in the year a series o f six lecture
discussions on cooperatives was held in that city,
sponsored jointly by the Catholic Labor Alliance,
Illinois Credit Union League, and the regional
wholesale (Central States Cooperatives).
A resolution adopted by the Methodist Federa
tion fo r Social Action stated that, “ The economic
problems o f the whole population w ill not be set
tled without the development o f consumer organi
zation in cooperatives, consumer unions, and the
consumers’ use o f purchasing power to keep down
living costs and help prevent inflation.” The New
York East Conference o f the same church went on
record as favoring the investment o f church funds
in cooperative enterprises.
The 1947 convention o f the American Veterans’
Committee urged the “ adoption o f the principle
10 C o o p e ra tiv e D ig e st (I t h a c a , N. Y . ) , A u g u st 1947, p . 37.
n C o o p e ra tiv e N ew s (C h ic a g o ), A u g u st 2 0 ,1 9 4 7 .
DEVELOPMENTS I N
CONSUMERS’ COOPERATIVES
o f cooperative housing to help solve the housing
crisis” ; endorsed the cooperative movement “ as an
effective force in the development o f political and
economic democracy” ; and, in the belief that “ co
operatives should be fostered and encouraged as a
matter o f public policy,” opposed “ the placing o f a
special tax on dividends [i. e., patronage refunds]
o f cooperatives.”
E d u catio n , R ecreation , and P u b licity
Scattered reports coming to the attention o f the
Bureau o f Labor Statistics indicate that a number
o f educational institutions offered courses on co
operatives in 1947. Am ong these were a 2-hour
credit course offered by Cornell University at its
summer school; a course given by the extension
school o f Providence (R . I.) College; an institute
on management o f cooperatives given by the Uni
versity o f Minnesota at its center for continuation
study; a 6-week course in consumers’ cooperation
offered by Wayne University (D e tro it); and an
extension course, intended prim arily fo r union
and church leaders, sponsored jointly by the
Massachusetts Department o f Education and the
New England Cooperative Federation.
In W isconsin, the appropriations made for
teaching materials to be used for the courses in
cooperation required by the 1935 law in the State
University and normal schools, were eliminated
during the form ulation o f the budgets fo r the
State departments. A n act finally passed (ch.
595), however, provides fo r “ annual appropria
tions” o f $2,500 and $500, fo r teaching materials.
The year 1947 saw the continuance and accelera
tion o f employee-training work, notably by the
regional wholesales. In Superior, W is., a 4-week
management training school attracted students
(m ostly managers o f local associations) not only
from Central Cooperative Wholesale affiliates but
also from those o f other wholesales. Superior is
also the headquarters o f the correspondence
courses for cooperative managers and employees,
sponsored by several o f the wholesales.12 Central
Cooperative Wholesale also held a series o f “ cir
cuit” schools in problems o f administration for
cooperative directors; and a 3-week course in co
12 F o u r o f th ese cou rses w e r e a p p rov ed b y th e V eteran s A d m in
is t r a t io n fo r v e te ra n s ’ tra in in g .
9
operative leadership for young people at Co-op
Park, Brule, Wis.
Short courses for employees and managers o f
stores and petroleum associations, offered by Con
sumers Cooperative Association (M o.), are ex
pected to develop into a year-round school o f
cooperative leadership. The wholesale’s third 5year plan calls for such a school, with its own
buildings and a full-tim e faculty. It is hoped to
have the school in operation by 1951.
One o f the first acts o f the new International
Cooperative Petroleum Association was the spon
soring o f a school for students sent to this country
from petroleum cooperatives in 10 countries. The
course, which covered petroleum production, proc
essing, and distribution, was given at the head
quarters o f Consumers Cooperative Association,
using the productive facilities o f that organization
for teaching purposes.
In Ohio, the neighborhood discussion groups—
regarded as a most successful adult education
method—were continued. These groups discuss
pro and con any subject interesting them as citi
zens ; to them are also referred any proposed meas
ures fo r expansion or otherwise contemplated by
their cooperatives. In this way information and
understanding are built up among the member
ship, which expresses itself freely. Measures
which they approve can then be inaugurated, with
the foreknowledge o f membership support.
Eastern Cooperatives, Inc., in 1947 sponsored
its eighteenth summer institute, which was held
at H averford College and included sessions on
housing, health, labor and cooperatives, and em
ployee round tables.
Such summer cooperative institutes, common
throughout the cooperative movement—some
sponsored by the regional wholesales or federa
tions, some by cooperative women’s guilds or other
agencies—generally combine instruction with rec
reation, and offer fam ily vacation facilities as
well. In most cases, camp grounds are leased for
the purpose, but in Michigan, Minnesota, and W is
consin permanent associations own parks or camp
facilities which are used for both education and
recreation fo r cooperators o f all ages.
Annually a school for the training o f leaders in
cooperative recreation is held, sponsored by the
Cooperative League o f the U. S. A . and National
Cooperatives.
10
DEVELOPMENTS I N CONSUMERS’ COOPERATIVES
Various recreational activities — concerts,
dances, picnics, etc.— are featured by many o f
the more progressive local cooperatives. Chicago
also has an association, the Cooperative Sym
phony Orchestra, which has given several con
certs. In 1947, the annual cooperative tours spon
sored by National Cooperatives’ Tour Bureau, in
terrupted by the war, were resumed. One group
o f cooperators participated in a 6-week trip
through several European countries, another
group visited cooperatives in Canada and the
North Central States, and a third visited those in
the Eastern States. Several o f the regional coop
eratives also sponsored trips o f varying length.
In the field o f publicity, radio station W R FD ,
owned by the Peoples Broadcasting Corporation
(an organization sponsored by the Ohio Farm Bu
reau Cooperative Association) went on the air
September 8,1947. In Washington, D. C., ground
was broken fo r an FM radio station owned by the
Cooperative Broadcasting Association (sponsored
by the Potomac Cooperative Federation and
other cooperatives in the area), in October 1947.
National Cooperatives’ Film Bureau issued
three new cooperative films for recreational, edu
cational, and propaganda purposes.
L aw s and C ou rt D ecision s
State Legislation,.— Some 42 State legislatures
met in regular session and 3 in extra session in
1947. Only a few enacted any legislation affecting
cooperatives. F or the most part these measures
liberalize the provisions or extend the coverage o f
existing legislation. Rhode Island, in 1947, j oined
the ranks o f the States with comprehensive co
operative laws.
The year was remarkable, however, for the num
ber o f States in which legislative bills inimical to
cooperatives were introduced. Among the States
where restrictive measures or those aiming at in
creased taxation were introduced, but failed to
pass, were Colorado, Kansas, Maryland, North
Carolina, North Dakota, Ohio, and Wisconsin.
In North Dakota, also, restriction o f the Farmers’
Union insurance organizations was the purpose o f
three unsuccessful measures introduced. A c
cording to the Cooperative Builder (issue o f March
27,1947), “ legislation aimed at harming R E A co
operatives” was introduced in 22 States.
Among the measures enacted, Arkansas A ct No.
362, directed especially at cooperative electricity
associations, makes all cooperatives liable and sub
ject to suits for acts o f their agents and employees,
“ committed in the scope o f their employment.”
In California, chapter 1161 authorizes munici
palities to grant a lease for not more than 50 years,
on any property owned or controlled by them, to
nonprofit corporations, to be used fo r housing de
velopments.
The Iowa Multiple Housing A ct (ch. 250)
authorizes the formation o f cooperative asso
ciations to “ build and construct apartment houses
or dwellings.” It specifies that in apartment
buildings, “ the interest o f each individual member
shall be evidenced by the issuance o f a certificate
o f ownership or deed to a particular apartment or
room therein.” Title to the land upon which the
building is erected is to be held by the association’s
trustees. In the election o f directors, each mem
ber has one vote, irrespective o f the number o f
apartments he may ow n; joint owners o f a single
apartment also have but one vote. A three-fourths
vote o f the members and board o f directors is re
quired fo r either selling or mortgaging the prop
erty. For tax purposes, an individual apartment is
deemed to be a “homestead” entitled to the home
stead tax credit; veteran owners are entitled to the
Iowa “ veterans’ tax benefit.”
Several measures were introduced in Kansas, but
the only one that passed was an act (ch. 458) re
quiring all cooperatives (except electricity coop
eratives) to file an annual income-tax return.
In Michigan, insurance on the “ assessment or co
operative plan” is authorized by chapter 111 (p.
178).
Cooperative enactments in Minnesota (chs. 61
and 354) amend the cooperative law to permit
the holding o f annual meetings at places other than
the principal place o f business, and even (in the
case o f federations o f cooperatives) outside the
State. New sections (secs. 308.36 and 308.361 o f
the code), added by chapters 510 and 513 o f Acts o f
1947, permit associations organized defectively,
which have carried on their cooperative business in
good faith, to amend their articles o f incorporation
and bylaws to comply with the cooperative law,
thereby becoming legal and valid corporations de
jure and validating all their previous business
transactions. Chapters 62, 67, and 511 (not
DEVELOPMENTS I N
CONSUMERS’ COOPERATIVES
coded) permit associations which have inad
vertently run past the authorized period o f exist
ence to renew their charter, and chapter 512 (not
coded) gives associations which have failed to file
amendments a 30-day period o f grace in which to
do so.
The New Mexico Legislature by chapter 206
authorizes the formation o f mutual domestic
water consumers5 associations in rural unincor
porated communities, and provides for State
grants for those fulfilling certain conditions.
In Oregon, an amendment (ch. 107) eliminates
a former provision permitting a cooperative to
cover into its funds patronage refunds not called
for by the patron within 1 year, and prohibits
profit-making companies doing business with co
operatives from participating in cooperative divi
dends. Another act (ch. 135) exempts from the
provisions o f the blue-sky law the stock or mem
bership certificates, or patronage refunds, o f co
operative marketing, purchasing, or irrigation
associations.
A new cooperative law (ch. 1976) was passed
in Rhode Island. It permits any three or more
persons to form a stock or nonstock cooperative
to engage in any lawful business permitted under
the general corporation law (General Laws, ch.
116); and also authorizes the form ation o f federa
tions o f cooperatives. Annual meetings must be
held, and special meetings if called fo r by onetenth o f the membership; district meetings are
likewise authorized. A t meetings vote by mail is
permitted if the member receives a copy o f the
measures to be voted upon; proxy voting is pro
hibited. Each member has one vote; other or
ganizations which are members may vote on some
other basis, but not according to the number o f
shares held by them.
In the distribution o f earnings, not less than 10
percent must be placed in the reserve until that
fund equals at least 50 percent o f paid-in capital.
Patronage refunds need not be paid in cash, but
may be credited toward the purchase o f shares.
The association may recapture, fo r its general
funds, any amounts so credited to nonmembers,
provided (1 ) the full amount necessary fo r mem
bership is not accumulated within the period speci
fied in the bylaws, and (2) no action is taken by
the nonmember to become a member, even though
11
the full amount necessary for membership has been
earned.
In case a member fails to patronize the coopera
tive for a period specified in the by-laws, the asso
ciation may call in his shares, thereby terminat
ing his membership. The shares o f any member,
up to the minimum necessary for membership (but
not to exceed $50), are exempt from garnishment
for his debts. Interest o f not over 6 percent may
be paid on share capital; it shall be noncumulative.
Amendments to articles o f incorporation and
bylaws may be made by a two-thirds vote o f a
special meeting called for the purpose.
Except for the special cooperative features, co
operatives are subject to the provisions o f the
general corporation law. They also are subject
to the same franchise taxes as are paid by corpora
tions (the tax varies with the amount o f share
capital).
The law was sponsored by the Rhode Island
Credit Union League.
In South Dakota, renewal o f the corporate ex
istence o f cooperatives is authorized by chapter
34, and the form ation o f electricity associations
by chapter 33.
The Vermont Legislature passed two acts re
lating to cooperatives: No. 106, permitting the
consolidation o f existing associations; and No. 104,
amending the cooperative law to permit the form a
tion o f railroad cooperatives, the members o f
which may be nonprofit organizations, or any per
sons, corporations, or associations using the rail
road’s services.13
A Washington law (ch. 37) makes the payment
o f interest on share capital at not more than 8
percent, form erly mandatory, optional with the
trustees o f an association. Also optional is the
provision for “ reasonable reserves55; form erly the
trustees were required to place in the reserves not
less than 10 percent nor more than 25 percent o f
the year’s earnings. A t the option o f the trustees,
they may distribute “ all or any portion” o f the
earnings in refunds on patronage to members and
nonmembers (the latter to receive the same rate
as m em bers); form erly the distribution o f earn
ings, after provision for reserves, was mandatory
33 I t is u n d e rsto o d th a t th e p u rp o se o f A c t N o. 1 04 w a s t o p e r
m it th e r e o r g a n iz a tio n o f a n e x is tin g ra ilr o a d (t h e 4 0 7 -m ile R u t
la n d R a ilr o a d ) a s a co o p e ra tiv e . U n d er th e co o p e ra tiv e p la n ,
sh ip pers w o u ld b ecom e m em b ers a n d re c e iv e fr o m e a rn in g s re fu n d s
o n th e ir p a tro n a ge .
12
DEVELOPMENTS I N
CONSUMERS’ COOPERATIVES
and had to be paid on wages o f employees as well
as on patronage. Hereafter, the distribution may
be made at different rates on “ different classes,
kinds, or varieties o f products handled.” The
amendment specifically authorizes the payment
o f patronage refunds, if desired, in “ capital stock
or other capital or equity certificates.” The asso
ciations previously had the right to recapture
patronage refunds unclaimed at the end o f 6
months; this period was lengthened to 1 year by
the 1947 amendment, which also made the provi
sion subject to the “ discretion o f the trustees.”
In Wisconsin, chapter 595 provided for continu
ing annual appropriations o f $2,500 and $500 for
the preparation o f educational materials to be
used in carrying out the provisions o f the 1935
law (requiring the teaching o f courses on coopera
tion in the State university and normal schools).
A n act was also passed (ch. 408), with the sup
port o f the medical profession, authorizing the
formation o f nonstock, nonprofit cooperatives to
provide medical and hospital care;14 dental care
may also be added. Under the law the patient
(member) must be given his choice among the
physicians who have agreed to participate in the
plan. No physician may be required to confine his
practice to the plan alone, nor may any duly
licensed physician be excluded who agrees to
participate and conform to the requirements o f
the plan. Further, hospitals are forbidden to dis
criminate against any participating physician by
refusing him the use o f their facilities because o f
his participation.
Property o f associations
form ed under this act is declared exempt from
taxation, as they are deemed to be “ charitable and
benevolent corporations.”
Other Wisconsin acts o f 1947 included one
granting to Dairyland Power Cooperative, La
Crosse, W is., the power o f eminent domain along
the Flambeau River, fo r the purpose o f construct
ing a dam (ch. 615); and one permitting mergers
o f mutual insurance companies (ch. 174).
Court Decisions.— There were comparatively few
court decisions handed down in 1947 affecting
consumers’ cooperatives. Below are summarized
those which were o f general importance or in
14 A s im ila r m easu re w a s in tro d u c e d in M in n esota , b u t fa ile d
t o p ass.
volved some general principle. Most o f these
affected electricity cooperatives.
Probably the case involving Consumers Coop
erative Association (M issouri) was that o f most
general interest. In A pril 1947, the attorney gen
eral o f Kansas filed an “ ouster” suit against the
association, requesting that it be placed in re
ceivership, on the ground that it was exceeding
the powers granted by the Kansas Cooperative
Marketing A ct,15 under which the association was
incorporated. (H e was chairman o f the State
charter board, which had previously refused to
allow the association to increase its capitalization
from 2 m illion to 12 m illion dollars. Shortly
afterward, the association had filed suit against
the board fo r a declaratory judgment.)
The association, in its newspaper, pointed out to
its members that, if the suit were granted, every
Kansas cooperative organized under the same law,
which was carrying on any but a marketing busi
ness, would be placed in jeopardy.
The two cases were heard jointly by the Kansas
Supreme Court, early in June. On July 12, the
court, by a unanimous vote refused the writ o f
ouster and receivership requested by the attorney
general {State ex rel. A m {Atty. Gen.) v. Con
sumers Cooperative Association, 183 Pac. (2d)
423) and ordered that the request for increased
capitalization be allowed, as the secretary o f
State had no authority in the matter {Consumers
Cooperative Association v. A m , 183 Pac. (2d.)
453). The association was directed to submit its
stock issue to the Blue Sky Department o f the
State Corporation Commission for a determina
tion as to whether it need be registered.
One o f the grounds o f complaint against the
association being the size and variety o f activities
carried on, the court noted in passing that “I f Con
sumers Cooperative Association had not engaged
in operating its refineries and kindred other activi
ties, it is doubtful if the other activities in which
the State alleged it was engaged would have
brought on as drastic a proceeding as an ouster suit.
In other words, there was no particular attack on
agricultural cooperatives as long as they confined
their activities to the furnishing to their members
o f a few incidental supplies.”
“ A so m e w h a t s im ila r s u it h a d b een b ro u g h t in 194 6 a g a in s t
S ho-M e C o o p e ra tiv e P o w e r A s s o c ia tio n (C o lu m b ia , M o .) .
F or
final d e cisio n , see p. 13.
DEVELOPMENTS I N CONSUMERS’ COOPERATIVES
In Florida, a county solicitor had filed informa
tion charging violation o f law, because an intern
working in the hospital o f a medical-care coop
erative, Centro Espanol de Tampa, had no license
in the State. It was revealed, in an appeal to the
Supreme Court o f Florida, that the intern was a
fully qualified physician who had practiced else
where; he was not practicing medicine in Florida,
but was working under the hospital’s medical di
rector. The decree o f the lower court, staying his
trial on the charges, was affirmed {Watson, Attor
ney General et oil. v. Centro Espanol de Tampa et
al, 30 S. (2d) 288).
The reorganization plan o f the Sho-Me Power
Cooperative was upheld by the Supreme Court o f
Missouri {State v. Sho-Me Power Cooperative,
204 S. W . (2d) 276). In 1946 the same court had
held (191 S. W . (2d) 971) that the association
could not legally operate as a public utility while
incorporated under the cooperative law. It was
given a year in which to reorganize; later the
period was extended indefinitely. In February
1947 the association reorganized as the Sho-Me
Power Corporation under the general corporation
law o f the State. When the petition was filed for
approval, three utility companies intervened,
charging that it was not validly incorporated but
was still in reality a cooperative; that the corpora
tion law did not permit the restrictions on the is
suance and sale o f stock contained in Sho-Mc’s
articles o f incorporation; and that its capital was
“ grossly inadequate” for the obligations and the
size o f the business to be carried on. A ll these
charges were considered, and dismissed as without
merit, by unanimous opinion o f the four judges
sitting in the case.
The employees o f two Minnesota electricity co
operatives were held to be employed in interstate
commerce and therefore subject to the provisions
o f the Fair Labor Standards A ct {Meeker Cooper
ative Light <&Power Association v. Philips et at.,
and Renville-Sibley Cooperative Power Associa
tion v. Walling, 158 Fed. (2d) 698). In Ohio an
electricity cooperative was held to be a nonprofit
organization “ operated exclusively for the pro
motion o f social welfare,” and the judgment o f
the lower court that it was therefore exempt from
Federal income tax was affirmed {United States v.
13
Pickwick Electric Membership Corporation, 158
Fed. (2d) 272).
In te rn a tio n a l D evelop m en ts
From the Freedom Fund raised by cooperators
in the United States fo r the reconstruction o f co
operatives in war-tom countries several allocations
were made in 1947, including the follow ing: $5,000
for the use o f cooperatives in Germany, $5,000
fo r seeds to be distributed through cooperatives in
Poland, $5,000 for sewing machines and other
equipment for cooperative textile factories in
Austria, $15,000 fo r scholarships for students
from abroad, to study cooperatives,16 and $1,000
for educational materials for cooperatives in dev
astated countries.
The Cooperative fo r American Eemittances to
Europe (C A K E ), which the Cooperative League
was instrumental in form ing and for the initial
expenses o f which the first Freedom Fund dis
bursement was made, continued its activities in
1947. The organization reported late in A pril
that to date it had sent packages o f foods to Europe
valued at over 19 m illion dollars, and nearly 36,000 blanket packages. The association also has a
package o f cotton textiles and one o f woolen tex
tiles. Four new countries—Great Britain, Bul
garia, Hungary, and Rumania17—were added to
those to which packages may be shipped, bringing
the total to 15. Two additional agencies (the
Seventh Day Adventists and American R elief for
Austria) were added to the list o f C A R E ’s
sponsors.
Cooperators and their associations, throughout
the United States, also contributed to the Friend
ship Train.
The International Cooperative Women’s Guild
was made a permanent consultant o f the Eco
nomic and Social Council o f the United Nations.
Similar status had been accorded the International
Cooperative A lliancew in 1946.
18 T h e stu d en ts ta k in g t h e co u rse o n p e troleu m p r o d u c tio n ,
p ro ce s s in g , a n d d istrib u tio n w e r e fin a n ced fr o m th is a llo c a tio n .
1T I n D ecem b er 1947, C A R E a n n o u n ce d th a t, b ecause o f u n sa tis
f a c t o r y re la tio n sh ip s w ith th e R u m an ia n G ov ern m en t, it h a d
w ith d ra w n its re p re s e n ta tiv e s fr o m th a t c o u n try a n d w o u ld d is
trib u te n o m ore r e lie f p a ck a g e s th ere.
38 T h e co o p e ra tiv e m o v e m e n t in th e U n ited S ta tes is a m em b er
o f th e A llia n ce .
Bureau o f Labor Statistics Publications on Consumers’
Cooperatives1
Bulletin 665.
25 cents.
Bulletin 821.
Bulletin 843.
Bulletin 850.
Bulletin 858.
20 cents.
Bulletin 859.
Bulletin 890.
Bulletin 894.
Bulletin 896.
Bulletin 904.
Bulletin 922.
Organization and management o f consumers’ cooperatives and buying clubs.
Developments in consumers’ cooperative movement in 1944. 10 cents.
Operations o f consumers’ cooperatives in 1944. 10 cents.
Activities o f credit unions in 1944. 10 cents.
Organization and management o f cooperative and mutual housing associations.
Developments in consumers’ cooperative movement in 1945. 10 cents.
Operations o f consumers’ cooperatives in 1945. 10 cents.
Activities o f credit unions in 1945. 5 cents.
Nonprofit housing projects in the United States. 25 cents.
Developments in the consumers’ cooperative movement in 1946. 15 cents.
Consumers’ cooperatives and credit unions: Operations in 1946. 15 cents.
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