$750,000. In the organization of each of these credit corporations a portion of the capital stock was supplied by interested farmers, ranchmen, bankers, and cooperative marketing associations, the balance being furnished by the Farm Board through loans made to the National Livestock Marketing Association. Loans of these credit corporations and direct loans from the National Feeder and Finance Corporation, amounting to approximately $15,000,000, had been made to thousands of livestock producers and feeders in 28 States up to April 1, 1932. There has been a growing recognition of the fact that financing and marketing are inseparable. Consequently, in the organization of the National Livestock Marketing Association the plan was drawn to include a provision for adequate finance and credit for the entire livestock industry. Most of the money loaned by the Farm Board to livestock cooperatives has been used in establishing a credit structure, which, by utilizing the discount facilities of the intermediate credit banks, pyramids the initial amount of money loaned and has made available to individual producers and feeders a line of credit totaling approximately $25,000,000. PROGRESS IN COORDINATION OF COOPERATIVE MARKETING ACTIVITIES The National Livestock Marketing Association has been instrumental in bringing about a closer relationship between the range livestock producer and the Corn Belt feeder. The organization of the national association has resulted in a recognition of the national aspects of the livestock industry. There is less inclination on the part of livestock producers to regard the industry from a purely local standpoint. Producers are beginning to recognize that many of the problems of the industry are mutual, rather than individual, and that they, as individuals, are powerless to solve them without organization and cooperation. Brought together in the national organization are found interests from every section of the country, and to-day there is a closer integration of the cooperative agencies engaged in the marketing of livestock than ever has existed in the past. Centralization of the financing structure in the National Feeder & Finance Corporation has exercised a strong influence in coordinating the marketing activities of all agencies. In territories where two agencies overlap plans have been worked out whereby the field service has been coordinated and the cost of its maintenance prorated. EXPANSION OF NATIONAL The National Livestock Marketing Association has gradually expanded its functions in numerous ways. Its research department has been developed and reports on current and prospective supply and demand conditions are regularly and widely circulated bimonthly among producers, member associations, agricultural colleges, extension workers, and vocational agricultural teachers. This information is becoming greatly appreciated and is proving to be of inestimable value. The financing services of the National have been greatly enlarged and, in place of one relatively small credit corporation, the National Feeder and Finance Corporation has six large regional credit corporations operating throughout the Corn Belt and the Western States. The National Livestock Marketing Association has represented the livestock industry before the Interstate Commerce Commission and, in cooperation with other livestock agencies, has been instrumental in preventing marked increases in livestock freight rates. Through the medium of its monthly paper, the National Livestock Producer, wide publicity has been given to the cooperative movement. The publicity department of the National has furnished regular radio programs over a nation-wide network furnishing farmers with reliable and timely market information. Increasing demands are being received from teachers, extension workers, and others for up-to-date information as to the cooperative marketing of livestock. The national association was instrumental in getting the packers and the United States Department of Agriculture to establish practical and uniform grades for hogs. Likewise, it has cooperated with other branches of the trade in promoting the demand for meat and solving other problems confronting the entire livestock and meat industry. The growing need for a clearing house for information and coordination of activities of the various member agencies has emphasized the importance of developing a sales advisory service within the National Livestock Marketing Association. The research department of the National is cooperating with the Farm Board in collecting and analyzing information preparatory to setting up such a service. Due to their large volume of business, livestock cooperatives have been able to employ competent and experienced salesmen specializing in the selling of each class of livestock. They are better able to trade with the highly trained packer buyers. With improved bargaining power and by selling on the basis of grade unnecessary speculation has been curtailed. Increased selling on quality and grade basis reflects more fully true market values of livestock to producers. The development of a system of a more direct movement of livestock from range to feed lot is bringing about greater economy in the production and feeding of livestock. Cooperatives have established competent claim departments and have collected hundreds of thousands of dollars in loss, damage, and overcharge claims at no extra cost to the producer. At several markets they have been instrumental in securing more adequate operating facilities such as unloading chutes, scales, and other yardage facilities. They have improved railroad service through additional trains and changes in running time and have aided producers in obtaining more favorable freight rates. Livestock cooperatives have been rendering satisfactory and efficient service by reducing costs of handling by increasing the volume of business, by savings returned through patronage dividends, and by building up substantial reserves. COOPERATION OF LIVESTOCK INDUSTRY The livestock advisory committee selected by cooperatives to represent the livestock industry, as provided for in the agriculturalmarketing act, has done much toward securing increased cooperation and improving working relations between the various groups of the livestock and meat industry. This advisory committee consists of seven men, two of whom are processors or handlers of livestock, the others being livestock producers or representatives of livestock producers. Since its establishment, the livestock advisory committee has met from time to time and has made recommendations to the Farm Board as to matters of concern to the entire industry. At the request of the livestock advisory committee, the Farm Board named a council group on livestock production and meat distribution, consisting of 100 men and women representing all branches of the industry-producers, packers, retailers, railroads, bankers, breed associations, marketing associations, stockyard companies, representatives of agricultural colleges, extension services and the United States Department of Agriculture, and agricultural editors, home economic experts, and others. The first meeting of this council was held in Chicago on March 25, 1932. Important problems affecting the entire industry were discussed and a permanent organization was set up. The critical situation facing the livestock industry, the need for closer cooperation of all branches of the industry and an equitable distribution of returns, and some of the outstanding defects of our present production, marketing, and distribution methods were pointed out. At this meeting working committees representing every phase of the industry were named. COOPERATIVE MARKETING OF WOOL AND MOHAIR Before the agricultural marketing act was passed cooperative wool marketing was on the decline. In 1926 approximately 27,000,000 pounds of wool was handled cooperatively. This was the most wool that had been handled cooperatively during any one year in the history of the United States. This amount was handled through 10 large cooperatives and several smaller cooperatives. The 10 larger associations were utilizing six different sales agencies for the sale of their wool. Each of these agencies was selling cooperative wool in competition with every other agency. EARLY ATTEMPTS AT COOPERATIVE WOOL MARKETING Cooperative wool marketing dates back to as early as 1885. That year the Putnam County Wool Growers Association was organized at Greencastle, Ind. All early attempts at cooperative marketing of wool have been local in character and the associations generally were active for only a few months during the year. Few, if any, of these associations employed full-time managers. The year 1909 marked the beginning of large-scale, grower-owned organizations. That year the National Wool Warehouse & Storage Co. was organized and a large storage warehouse erected in Chicago with a capacity of 25,000,000 pounds of wool. The National Wool Warehouse & Storage Co. was the outgrowth of dissatisfaction of western woolgrowers with the arbitrary and exacting methods of eastern wool buyers. This organization made splendid progress until 1920, a year of drastic decline in prices. A total of $3,500,000 had been advanced and, when the wool was sold, proceeds were insufficient to liquidate the advances. The National Wool Warehouse & Storage Co. ceased to conduct its warehousing and commission business with the close of the 1924 season. This failure was a severe blow to growers' marketing organizations. The assembling and pooling of wool under supervision of the Government during the World War demonstrated the savings and advantages of the pooling system so it was to be expected that another cooperative effort soon would be forthcoming. At a conference of woolgrowers and bankers held in Helena, Mont., on November 12, 1924, it was decided to organize a cooperative to be known as the National Wool Exchange. NATIONAL WOOL EXCHANGE The National Wool Exchange was set up with headquarters in Boston and a branch in Chicago for concentration of fleece wools and small western clips. Capital stock was secured by the sale of 2,000 shares of 6 per cent preferred stock at $100 per share and 3,000 shares of common stock of no par value, offered at $1 per share. Seeking to avoid the fate of the National Wool Warehouse & Storage Co., the company did not make direct advances on wool except the freight, but it fostered the organization of cooperative associations in States from which it drew its membership and acted as selling agents for the pools on a commission basis. Pools cooperating with the exchange had the privilege of taking stock in the company on the same basis as woolgrowers. The National Wool Exchange began operations in March, 1925, and marketed wool for growers until its consolidation with the National Wool Marketing Corporation in 1930. From a peak of 27,000,000 pounds of wool handled by all cooperatives in 1926 volume declined to a total of 22,000,000 pounds marketed cooperatively in 1929. This decline in volume was due to declining markets, insufficient capital, and dealer opposition. Cooperative marketing had not been generally successful and growers had only a limited experience in the method. As much of the experience was of an unfortunate character, it naturally was a task of considerable magnitude to overcome this handicap in the development of a national organization. A list of large-scale cooperative wool marketing associations functioning in 1929 is given below: Arizona Wool Growers Association, Phoenix, Ariz. Montana Wool Cooperative Marketing Association, Helena, Mont. Utah Wool Marketing Association, Salt Lake City, Utah. Iowa Sheep and Wool Growers Association, Des Moines, Iowa. North Dakota Cooperative Wool Marketing Association, Fargo, N. Dak. Ohio Wool Marketing Association, Columbus, Ohio. Pacific Cooperative Wool Growers, Portland, Oreg. Minnesota Cooperative Wool Growers Association, Wabasha, Minn. TYPES OF COOPERATIVES There have been two principal types of cooperative marketing associations-county or regional pools, and cooperatives which received wool at a central point, graded it, and sold it to mills. The first type has been the most common. The wool has been concentrated at a country point and offered, in one big pool, for sale to the highest bidder. Occasionally a pool would be split between two or three buyers. Usually the wools were entered and sold in these pools regardless of grade or quality. However, a small percentage of the pools made a rough grading of the wool. As a rule, these pools did not employ full-time managers but merely designated someone to supervise the assembling and selling. County agricultural agents have played an important part in most fleece-wool pools. The second type has operated on a more strictly cooperative basis. The wools were delivered to a central point where they were graded by experts and each clip graded into a line or lines of wool of similar kind and quality and sold to mills on merit. It was necessary under this method of selling to employ full-time management. In many instances salesmen were employed in the wool manufacturing centers. This type of cooperation has pioneered cooperative wool marketing. REASONS FOR NATIONAL WOOL MARKETING ORGANIZATION Economic conditions in the wool industry in 1929 and 1930 and difficulties encountered by growers and the cooperatives were largely responsible for the organization of a national wool marketing agency. With the exception of a temporary rise in 1928, wool prices had declined almost steadily since 1925. Growers felt that buyers were taking larger margins and they were not satisfied with the character of the competition of local dealers. Many growers bitterly complained against the buying tactics of dealers. For example, they stated that when the shearing season was getting under way and growers were selling their wool, dealers would drive down prices. After the wool was in their hands, the dealers would attempt to boost the market so that they could reap a relatively large speculative margin. A study of wool prices from 1900 to 1931 shows that for 17 years prices were lower in June, when the bulk of the wool was being sold to dealers, than in March, when the dealers began to purchase wool. The study also shows that in August wools were higher than in June in 17 different years. Prices were lower in March than in June only 10 years out of the 32-year period, while August prices were lower than June prices in only seven years during this period. The hand-to-mouth method of buying wool which the mills have used for the last few years has been forcing the storing of wool back upon the dealers. Instead of carrying 6 to 12 months' supply, as was the practice in many instances, mills began to purchase only a few weeks' supply. In some cases mills do not purchase the raw stock until orders for finished goods are received. Dealers, of course, made allowance for this fact when buying wool from the growers. When the growers became aware of this situation, they believed it would be 128712-32 |