FIGURE 12.-BULK STATION AND TRUCK FACILITIES WITH STAFF IN FOREGROUND. direct relationship between the volume of business and the required investment in physical facilities. The 168 associations, with annual sales of less than $20,000 each, own facilities with an average value of $2,070 per association while the 14 associations, with sales in excess of $300,000, have an average investment in facilities of $50,579 per association. On the basis of per dollar of sales, the investment in physical facilities as well as in total assets was highest in the smaller organizations. The group of smallest associations had an average investment in facilities equal to 17 cents for each dollar of sales during the year. On the other hand, associations with sales of more than $40,000 had an investment in facilities of only 10 or 11 cents for each dollar's worth of products handled. (See table 10.) Accounts Receivable If there is one factor that stands out above all others in the failure of retail it is lack of credit control. Credit sales are costly. First of all, they tie up assets which are sorely needed for other purposes and, second, they almost invariably result in some uncollectible accounts. Also, there is the cost of additional bookkeeping which credit sales make mandatory. Credit sales by retail petroleum associations have a noticeable effect upon both operating costs and net income. Associations which have accounts outstanding equal to 60 or more days' sales generally show higher operating costs and smaller net gains than associations with smaller amounts in accounts receivable. In table 11, the associations have been divided into three groups according to the volume of sales: (1) Associations with sales of less than $50,000, (2) associations with sales from $50,000 to $99,999, and (3) associations with sales of $100,000 or more. In each of these groups operating costs were highest for the associations concerns, either private or cooperative, which had outstanding accounts equal TABLE 9.-AVERAGE GROSS MARGIN, EXPENSES, NET INCOME, AND PATRONAGE DIVIDENDS AS A PERCENTAGE OF SALES FOR 875 SPECIALIZED PETROLEUM ASSOCIATIONS CLASSIFIED BY SIZE GROUPS, 1936 Source of data: Compiled from original data obtained in a Nation-wide survey of agricultural cooperatives made by the Farm Credit Administration in 1937. TABLE 10.--RELATIONSHIP OF INVESTMENTS IN FACILITIES TO ASSETS AND SALES FOR 875 SPECIALIZED PETROLEUM ASSOCIATIONS, 1936 Source of data: Compiled from original data obtained in a Nation-wide survey of agricultural cooperatives made by the Farm Credit Administration in 1937. Wholesale Sources of Supply THE HE establishment of cooperative wholesale associations designed to render a wholesale service in petroleum distribution did not lag far behind the growth of retail associations. The first wholesale petroleum association, now the Midland Cooperative Wholesale, was established in Minnesota in 1926. The following year the Illinois Farm Supply Co. was organized to provide a wholesale petroleum service for countywide associations in the State. The extent to which farmers' cooperative petroleum associations have united to form wholesale associations is indicated by the fact that about 30 large-scale cooperative purchasing associations provided a wholesale service in petro FIGURE 13.-COMBINATION PETROLEUM AND GRAIN HANDLING FACILITIES IN retail petroleum associations were members of wholesale federations. This number does not include many farmers' marketing associations engaged in petroleum distribution who are members of such wholesale federations. At first the wholesale associations served largely as brokerage agencies to enable member associations to obtain the advantages of large-scale purchasing. Many now operate on a purchase-andsale basis, as well as on a brokerage basis. Several of these wholesale associations have provided extensive services in oil blending and in petroleum transportation while the Consumers Cooperative Association of North Kansas City is constructing (August 1939) a refinery plant at Phillipsburg, Kans. 8 The federation of local associations into cooperative wholesale associations has been supplemented also by the formation of such "super" bargaining associations as National Cooperatives, Inc., Chicago, Ill., and United Cooperatives, Inc., Indianapolis, Ind., which federate groups of wholesale associations for the purpose of negotiating purchasing contracts and promoting a program of mutual development such as the promotion of nationally known trade-marks. The United Cooperatives, Inc., operates two large oil-blending plants for the service of its component associations, one at Indianapolis and the other at Warren, Pa. 8 These two organizations have the following member associations: National Cooperatives, Inc.: Central Cooperative Wholesale, Superior, Wis.; Consumers Cooperative Association, North Kansas City, Mo.; Farmers Union Central Exchange, St. Paul, Minn.; Midland Cooperative Wholesale, Minneapolis. Minn.; Consumers Cooperatives, Associated, Amarillo, Tex.; Pacific Supply Cooperative, Walla Walla, Wash.; Farm Bureau Oil Co., Indianapolis, Ind. United Cooperatives, Inc.: Ohio, Indiana, and Pennsylvania Farm Bureau Cooperative Associations; Michigan Farm Bureau Services; Cooperative G. L. F. Exchange, Ithaca, N. Y.; Southern States Cooperative, Richmond, Va.; and Farmers Cooperative Exchange, Raleigh. N. C. U. S. GOVERNMENT PRINTING OFFICE: 1939 In addition to this circular, the following publications on farmers' cooperative organizations are published by the Farm Credit Administration: Cooperative Purchasing of Farm Supplies Bulletin No. 1, Joseph G. Knapp and John H. Lister Accounting Principles for Cooperative Cotton Gin Associations Bulletin No. 2, Otis T. Weaver Cooperative Marketing of Agricultural Products Bulletin No. 3, Ward W. Fetrow Cooperation in Agriculture, a Selected and Annotated Bibliography, Bulletin No. 4, Chastina Gardner Organization and Operation of the Illinois Livestock Marketing Associations, Bulletin No. 5, H. H. Hulbert Statistics of Farmers' Cooperative Business Organizations, 19201935, Bulletin No. 6, R. H. Elsworth Cooperative Marketing of Range Livestock Bulletin No. 7, L. B. Mann *Mutual Irrigation Companies in California and Utah Bulletin No. 8, Wells A. Hutchins. Washington, D. C. 25 cents Superintendent of Documents. *Marketing Policies of the California Walnut Growers Association Bulletin No. 10, Harry C. Hensley and Neil H. Borden. Superintendent of Documents, Washington, D. C. 20 cents Organization and Operating Problems of Nebraska Cooperative Creameries, Bulletin No. 11, T. G. Stitts and Gordon C. Laughlin Analysis of the Business Operations of Cooperative Cotton Gins in Oklahoma, 1933-34, Bulletin No. 12, Otis T. Weaver and Omer W. Herrmann Transportation of Milk in the Philadelphia Milkshed Bulletin No. 13, John J. Scanlan Cooperative Organization of Iowa Farmers' Creameries Contract Feeding and Pasturing of Lambs and Cattle Bulletin No. 15, C. G. Randell Milk Cooperatives in Four Ohio Markets Bulletin No. 16, W. C. Welden and T. G. Stitts Commercial Trucking of Fruits and Vegetables in Nine Atlantic Coast States, Bulletin No. 17, Nephtune Fogelberg and Herbert W. Mumford, Jr. Use of Motortrucks in Marketing Fruits and Vegetables Bulletin No. 18, Marius P. Rasmussen Business Analysis of the Utah Poultry Producers' Cooperative Association, Bulletin No. 19, John J. Scanlan Farmers' Purchasing Associations in Wisconsin Bulletin No. 20, Rudolph K. Froker and Joseph G. Knapp Farmers' Mutual Windstorm Insurance Companies Cooperative Purchasing of Farm Supplies in Mississippi |