Co-operation Simplified

Farmers National Grain Corp. is the top of a co-operative pyramid. Its 13 stockholders are smaller co-operatives (biggest: Farmers' Union Terminal of Minneapolis and Northwest Grain Association of Minneapolis). Their stockholders are grain elevator companies. And their stockholders, in turn, are some 300.000 farmers. Last week the 13 stockholders of Farmers National met in Chicago and, to the great relief of the farmers at the bottom of the pyramid, voted to dissolve its apex.

Farmers National, the biggest grain-marketing co-operative in the U. S., is eight years old, has always been sickly. Last year it sold more than 66,000,000 bushels of grain for its members, but the only time it made any kind of profit was in 1931, when it was broker for the Grain Stabilization Corp., working for Herbert Hoover's Farm Board. A profit was such a remarkable thing for Farmers National that a few years later it was investigated by the Senate, with no particular result.

Despite the consistent bleakness of its annual statements, the chief loser when Farmers National is dissolved will be the U. S. Government. Newspapers last week estimated that in its short life Farmers

National has cost the U. S. $20,000,000. When it was organized in 1929 by a bald Kansas farmer named Clarence Huff its capital--about $1,000,000--was entirely private. But various Government farm agencies immediately began to lend it money. When it was reorganized in 1936 there were $14,000.000 worth of Government loans to be canceled. It was then lent $7,500,000 more by the Farm Credit Administration. It was supposed to repay this sum by an assessment on every bushel of grain it sold for its members. The members objected.

A great many of them were already objecting to other things, including the expense of national marketing. Foremost among the members who thought that Farmers National should be brought to an end was William Horn, a farmer from Ohio who was just as bald as Clarence Huff. Last year Farmer Horn quietly replaced Farmer Huff as president. And last September Farmers National had the bad luck to be short in the market when there was a squeeze in corn (TIME, Oct. 4). Farmers National paid through the nose to cover its short commitments. So the decision of President Horn and his stockholders last week seemed to be the best way out of a distasteful situation.

When Farmers National first wanted a seat on Chicago's Board of Trade, members protested loudly. It finally got admitted by buying up a Nebraska company which was already a member. Now part of its assets are five memberships, worth some $3,000 apiece. The Farm Credit Administration a year ago took over most of its grain elevators. About all it has left is 3,000,000 bushels of wheat and almost 1,000.000 bushels of corn. This will be sold, said Farmer Horn, "in an orderly manner" during the next five or six months. The ten regional cooperatives--in Chicago; Kansas City; Minneapolis; Amarillo, Tex.; Denver; Enid, Okla.; Omaha; Fostoria, Ohio; Indianapolis and Ogden, Utah--will go on doing business as usual.

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